PDA Update - August 1, 2012

50+ Congressional Staff Briefed on 
Defense Savings Options

Yesterday, July 31, 2012, Carl Conetta of the Project on Defense Alternatives, Ben Friedman of the Cato Institute, and Larry Korb of the Center for American Progress, presented options and arguments for defense savings to a standing-room-only meeting of more than fifty Congressional staff in the Rayburn House Office Building.   The meeting was moderated by Laura Peterson of Taxpayer for Common Sense and sponsored by the offices of Representatives Keith Ellison (D-MN), Jack Kingston (R-GA), Barbara Lee (D-CA), and John Campbell (R-CA).

A central concern of participants was options for Fiscal Year 2013 defense appropriations and the likely amendment of the Budget Control Act.

Laura Peterson reviewed the debt and deficit challenge as well as the efforts to date to achieve significant defense savings. She noted that the defense industry has mounted a strong defense of current levels of spending, but that recent bi-partisan cooperation on defense budget restraint showed hope for greater savings.

Carl Conetta proposed a goal of reducing National Defense spending for FY 2013 by $15 billion to $18 billion, which would imply a top line of about $535 billion.  Drawing on recommendations outlined in the Defense Sense report, he suggested significant savings could be realized by accelerating personnel reductions, reducing strategic weapon modernization, and selectively cutting conventional weapon programs.  He pointed out that, despite the nation’s fiscal woes, the national defense budget had declined by less than 5 percent in real terms since 2010.

Ben Friedman challenged the notion that defense budget reductions, even at the level implied by sequestration, would imperil the economy or hobble the armed services.  The impact of reduced budget authority in any one year would be spread over several years of outlays, he said.  Greater budgetary restraint would encourage the armed services to compete and find new efficiencies.  And the overall economic effect of debt and deficit reduction would be positive over the long-term.  Funds removed from the Pentagon account would not simply disappear, he said, but could re-enter the economy in ways more conducive to growth.

Reinforcing the point about the delayed impact of cuts, Lawrence Korb pointed out that the Defense Department now holds $80 billion in unspent authorized cash from previous years.  Korb also criticized making defense policy decisions based on industrial interests, noting that the Navy does not really want the F-35, on which it will spend more than $1.8 billion in FY 2013.  Korb also challenged the assertion that significant budget reductions would bring disaster to the Pentagon, recalling that much deeper cuts had been enacted between 1985 and 1994.

Looking to the future, meeting participants saw the recent victory of the Mulvaney-Frank amendment as heralding more bipartisan cooperation in achieving defense savings. And they saw the post-election period – when the sequester threat would loom – as presenting a renewed opportunity for real progress toward a more sensible level of defense expenditure.

PDA Update - July, 2012

It now appears quite likely that following this year’s election the Budget Control Act will be either suspended (“kicked down the road”) or amended in order to avoid the $110 billion sequester of discretionary budget funds, half of which will come out of national security accounts, mostly from the Department of Defense.  The intensive political negotiations on Budget Control Act amendment will begin in November with $50+ billion in DoD budget cuts on the table under current law.  Of course, the composition of future budgets and any fiscal compromise will depend on who is President in 2013 and the balance of power in Congress.

 

Although Pentagon boosters are fond of calling the 9-10% budget cut in the current law “draconian” and “dangerous” it does not amount to much when put in context of what our enemies and potential opponents spend.  A new PDA summary of global military spending called USA and Allies Outspend Potential Rivals on Military by Four-to-One: America Carries Much of the Defense Burden for its Allies tells the story. 

 

 

A $50 billion reduction in U.S. defense spending results in a ratio of 3.8 to 1 (between the U.S. and allies to the un-allied set of current and potential opponents.)  A 4 to 1 spending superiority is extraordinary overmatch, and a 3.8 to 1 overmatch is also extraordinary.  We might want to return attention to this matter when and if the overmatch is merely 2 to 1.  Meanwhile we can continue to make judicious cuts to the DoD spending for quite some time. 

 

When an amended Budget Control program is negotiated later this year and early next PDA believes there should be no less than $12 billion (2.3%) in additional DoD cuts in FY13.  With concern about the still weak economy we favor phasing-in deeper cuts over the next four years.  We think the Pentagon should be trimming back to circa 2006 levels as quickly as the services can reasonably be expected to adapt and the economy can absorb the decline in Federally supported jobs.  

 

The specifics of a readily available set of program cuts worth $17-20 billion in 2013 are listed in PDA's Defense Sense.  

 

Rep. Barbara Lee (CA) has introduced an amendment to the FY13 House Appropriations bill cutting DoD’s budget by $19.2 billion.  This is an appropriate and reasonable cut for the coming year.

PDA Update - May, 2012

Defense Sense and the Budget Control Act

After the U.S. economy slid into the Great Recession in 2008, the Federal Government’s deficit spending and the national debt grew rapidly.  President Obama responded to this perceived fiscal crisis by establishing the National Commission on Fiscal Responsibility and Reform which worked through most of 2010 to craft a bipartisan deficit reduction package.  However, the Fiscal Commission failed to find a solution supported by the super-majority of commission members which its mandate required.  What followed in 2011 was a dysfunctional seven months of partisan conflict in Congress over the budget process.  Finally, in August of 2011, Congress passed the Budget Control Act (BCA), which requires at least $2.2 trillion in deficit reduction over ten years.

The two-pronged approach outlined in the Budget Control Act requires two steps: first, the Budget Control Act requires $1 trillion in discretionary spending reductions over ten years.  Congress is currently considering how to achieve the first portion of mandated spending reductions.  It is notable that the National Defense Authorization Act recently passed by the House exceeds BCA caps by $8 billion.   The Senate is expected to mark its Defense Authorization to the Presidents budget which is $4 billion over the caps.

The second portion of the Budget Control Act (sometimes referred to as the “sequester” provision) goes into effect on January 2, 2013, and mandates an additional $110 billion in automatic cuts to federal spending in fiscal year 2013 and similar cuts for each of the following nine years.

Remarkably, both parties in Congress and the Administration have essentially ignored the requirements of sequestration up to this point.  Because Congress refuses to address the spending reductions mandated by the Budget Control Act that will happen on January 2nd, this year’s lame duck Congress returning from recess after the November election faces an unprecedented challenge.

Many in Washington assume that the Budget Control Act will be amended to avoid sequestration.  However, the major political parties are likely to remain at an impasse.  Republicans have pledged not to allow tax increases while Democrats resist reforms to earned benefit programs such as Social Security and Medicare and are reluctant to agree to additional cuts to domestic programs in the discretionary budget.  While each party’s  leadership remains loyal to their respective ideological position, neither currently acknowledge the possibility of compromise that involves further Pentagon spending reductions.

Today, the Pentagon’s “non-war” base budget comprises over 50 percent of discretionary spending.  Since 2000 it has risen by 90 percent in nominal “inflated dollar” terms and 42 percent in real terms.  The Pentagon base budget is currently around $550 billion annually.  There is no realistic compromise on deficit reduction which does not include a substantial contribution from the Pentagon.

Reaching across ideological differences to produce a new report called Defense Sense, analysts from the Project on Defense Alternatives and the Cato Institute have identified 18 specific options that will yield up to $20 billion in additional defense savings in 2013.

http://www.comw.org/pda/fulltext/120515DefSense.pdf 

These are not “draconian” cuts that threaten national security.  They total about 4% of the Pentagon’s current base budget.  Many involve deciding now to end troubled programs and instead use systems that are field-tested, reliable, and much less costly.  Others savings involve making modest shifts in the posture of forces such as making additional reductions to troops stationed in Europe  sixty-seven years after World War II and twenty-two years after the Cold War.

Examples of troubled programs to cancel are the Littoral Combat Ship and the Marine Corps variant of the new F-35 Joint Strike Fighter, both of which are prime examples of the current problems in U.S. defense acquisition.  Deciding to cancel these and to replace them with proven systems at much lower costs will save an estimated $3.8 billion in Fiscal Year 2013 alone.

There are also sensible changes to the United States’ strategic nuclear posture that involve eliminating and reducing capabilities which are excessive and redundant or designed to counter threats which no longer exist.

The options outlined in Defense Sense are modest in scope.   If we are to ensure a stable fiscal future for generations to come, it is imperative that the United States responsibly balance the requirements of military power and national strength.

It is national strength in its many facets that will ultimately determine our security and our position internationally.  Military power is but one part of national strength.  The Pentagon’s budget, and our overall federal budget priorities, must reflect this reality.

~~~~~

Defense Sense: 

Options for National Defense Savings in Fiscal Year 2013

Full report
Summary of recommendations

Recommendations focus on seriously troubled weapon programs and on capabilities that significantly mismatch or exceed defense requirements.  This is a practical first step.  More might be saved by rethink­ing our national security commitments, strategy, and missions -- as we and our colleagues at Cato have suggested elsewhere.

In developing our recommendations, we drew on and adapted previous efforts to identify safe and sensible defense savings, including the President's own National Commission for Fiscal Responsibility and Reform and the Sustainable Defense Task Force (of which we were members). 

Defense Sense has already played a significant role in Congressional efforts to amend the National Defense Authorization Act.

PDA Update - February, 2012

It has been a busy winter for PDA with the long anticipated release of the Pentagon's strategic guidance in January followed by the FY2013 budget release in February.  PDA prepared briefing materials for circulation to journalists, analysts, advocates and grass roots activists before each of these official events and was sought after for analysis and comment by journalists as demonstrated by the press citations listed below.

Here are the briefing materials PDA produced:

Defense Strategy Review: Does Obama Run Hot or Cold on Defense?  When analyzing the budget request in 2013 dollars, Carl Conetta finds that the administration’s spending request is still far above the Cold War average of $443 billion per year.  (2/13/12)


The Project on Defense Alternatives: Panetta Releases DoD "Austerity" Budget; Pentagon Retains Most of Post-1998 Increase.  Carl Conetta examines the administration’s FY13 budget request in historical terms and finds that DoD spending, both under current law as well as under sequestration, would still be higher than the inflation-adjusted average for the Cold War years.  (1/26/12)

Recent Press Citations

San Francisco Chronicle: Defense Cuts Are a Drop in the Bucket.  The Chronicle’s Carolyn Lochhead surveys BPWG members Winslow Wheeler, Christopher Preble, and Carl Conetta for their thoughts on the recently released defense budget.  (2/13/12)

Wall Street Journal: White House Proposes Cap on Wartime Spending.  The White House has proposed a $450 billion cap on war fundingover the next ten years, and will use a portion of the savings to fund infrastructure investments domestically.  However, should OCO funding spike in future years, it is unlikely that the lost savings would come out of the DoD base budget.  (2/13/12)

National Defense: 2013 Defense Budget Rollout: Just the Opening Salvo.  Sandra Erwin finds that the Pentagon’s budget request keeps military spending at historically high levels despite persistently high budget deficits, with Charles Knight commenting that the budget “does not signal a new era of ‘restrained military posture for the United States.’”  (2/13/12)

Wall Street Journal: Military Faces Historic Shift.  The Wall Street Journal covers reaction to the strategic review, with Charles Knight pointing out that the “first strategic priority of the United States is getting its economic house in order.  Doing this means spending less on the military in coming years.”  (1/6/12)

Congressional Quarterly: Defense Lobbyists, Contractors Begin to Speculate Where Cuts Will Hit.  Frank Oliveri surveys defense analysts’ predictions on how the defense budget will be trimmed, with Charles Knight forecasting “I don’t think we’re at the end of this.”  (1/6/12) 

BBC: Pentagon Cuts: What Will the New US Military Look Like?  Heather Hurlburt discusses potential policy changes that may emanate from the Pentagon’s strategy review, including decreased Army troop levels, while Charles Knight points out that a smaller Army would increase pressure on the National Guard and Reserves should a large scale counter-insurgency or ground war occur.  (1/5/12) 

Boston Globe: Pentagon Should Do More Cutting, Less Complaining About Budget.  Citing PDA’s figure that the Pentagon has spent $32 billion on cancelled weapons systems, the Boston Globe editorial board urges DoD to be smarter about procurement decisions.   (1/2/12) 

Key Activities

PDA prepared a draft "bottom up" Reasonable Defense posture plan which Carl Conetta presented at Congresswoman Barbara Lee's request to the Congressional Progressive Caucus (CPC) Policy Summit meeting in Baltimore on January 19th.  PDA is currently completing a full version of this post-Iraq/Afghanistan wars posture plan which will help progressives to have a strong and articulate position on national security looking forward.  It also provides guidance to the nation on how to make deeper cuts in the military budget without the disruption built into the 'sequester' provisions of the Budget Control Act.

PDA worked with Progressive Congress and the CPC to organize a strategy and budget briefing for more than a dozen congressional offices.

PDA consulted with the office of Rep. Edward Markey on details of savings estimates for reducing the future number of strategic missile submarines as part of a comprehensive strategic nuclear force reduction legislation the congressman is introducing.  Since 2010 when the Sustainable Defense Task Force proposed reducing the deployed strategic warhead force from 1550 in the New START treaty to 1000, we are gratified to have witnessed this issue open up with new attention to significant cuts.

New Resource Pages from PDA

·         The Pentagon Budget and Jobs: How Does Defense Spending Rate for Job Creation?
·         A Short Tour of Pentagon Financial Mismanagement, Waste, Fraud, and Abuse

PDA Reset Defense Bulletin

The Project on Defense Alternatives publishes a semi-weekly newsletter, which provides readers with the latest developments and news items pertaining to the reformulation of U.S. defense policy and budgeting.  To subscribe to the PDA Reset Defense Bulletin, please click here.

PDA Responds to Pentagon Strategic Review

On Thursday, January 5th  President Barack Obama, Secretary of Defense Leon Panetta, and General Martin Dempsey briefed the press on the results of an eight-month strategy review that will guide future budget decisions.  The strategic review comes at the behest of President Obama, who, in April 2011, directed senior Pentagon officials to conduct a fundamental review of America’s defense posture in order to identify options for saving roughly $487 billion over ten years relative to the President’s previous budget request.   Last fall, Secretary Panetta cited $260 billion as the savings target for Fiscal Years 2013 to 2017.  (Additional PDA analysis of the administration’s upcoming budget request can be found here).

Reflecting new strategic realities, the review calls for an increased focus on power projection and deterrence in the Asia Pacific region while using “innovative methods” to sustain the U.S. presence in Africa and Latin America.   The review also calls for an evolving military posture in Europe that will enhance the capabilities of America’s allies.  The President acknowledged that shifting priorities will require the United States to eliminate outdated Cold War-era systems as well as altering the size and composition of U.S. ground forces.  Finally, the President made clear that the era of long-term nation building operations has come to a close.

Although the President and his advisors declined to cite specific policy changes during today’s press conference, unnamed Pentagon officials have hinted that reductions in planned procurement of the F-35 Joint Strike Fighter; delay in development of the new Ford-class aircraft carrier; a reduction in Army and Marine Corps end strength; and a decrease in U.S. military’s presence in Europe may be forthcoming.  Additional details will be revealed in the President’s Fiscal Year 2013 budget request, which is expected to be released later this month.

Commentary on the Strategic Guidance:

Charles Knight, co-director, Project on Defense Alternatives

National strategy must always adjust to new challenges and changing resource conditions.   The first strategic priority of the United States today is to get its economic house in order.   Doing this means spending less on the military in coming years.  The changes announced by the President and Defense Secretary are only baby steps forward.  The nation needs more and bigger steps to follow.

It is misleading to fuss about the two war construct as if it were strategic doctrine.  The U.S. did not simultaneously undertake the intense fighting phases of the Afghanistan and Iraq wars.  Its military problems in those conflicts are associated with subsequent commitments to counterinsurgency and nation building.  As with World War II, the long-standing American practice is for sequential focused action in different theaters.  What has been called a strategy of “win, hold, win” is simply being sensible.  It means not falling for the hubris that our military can do everything, everywhere at once.

Carl Conetta, co-director, Project on Defense Alternatives

Despite all the hyperbole surrounding it, the administration’s proposal to roll back the Department of Defense budget for Fiscal Years 2013-2017 by $260 billion doesn’t amount to much of a reduction from recent spending levels – about 4 percent in real terms. The roll back does appear more significant when measured against previous spending plans, however.  But that’s only because, to varying degrees, those plans aimed to continue the real growth in the Pentagon’s base budget that’s been underway since 1998.

Viewed in this light, the new strategic review has less to do with rethinking America’s actual role in the world than with revising some of the ambitions expressed in the 2010 Quadrennial Defense Review and 2011 National Military Strategy.

Relevant Reports

·         Keep Pentagon Cuts in Perspective: What the Administration Proposes is Hardly Dramatic, January 2012, by Carl Conetta
·         Strategic Adjustments to Sustain the Force: A Survey of Current Proposals, October 2011, by Charles Knight
·         The Pentagon’s News Mission Set: A Sustainable Choice?, October 2011, by Carl Conetta
·         Going for Broke: The Budgetary Consequences of Current US Defense Strategy, October 2011, by Carl Conetta
·         Pentagon Cuts in Context: No Reason for “Doomsday” Hysteria, October 2011, by Carl Conetta

Relevant Resource Pages

·         The Pentagon Budget and Jobs: How Does Defense Spending Rate for Job Creation?
·         A Short Tour of Pentagon Financial Mismanagement, Waste, Fraud, and Abuse

PDA Reset Defense Bulletin

The Project on Defense Alternatives publishes a semi-weekly newsletter, which provides readers with the latest developments and news items pertaining to the reformulation of U.S. defense policy and budgeting.  To subscribe to the PDA Reset Defense Bulletin, please click here.