Defense 2015 Preview: Downturn Ends but Industry Troubles Not Over December 30, 2014 By Sandra Erwin Pentagon contractors are entering the new year with a mix of caution and optimism. Military spending is about to hit bottom and is projected to inch up over the next several years. With Ashton Carter as defense secretary, the […]
DoD Buzz Quotes Angela Canterbury on Defense Bill
Critics: Congress Expands ‘Slush Fund’ in Defense Bill December 12, 2014 By Brendan McGarry …Angela Canterbury, executive director of the Center for Arms Control and Non-Proliferation, said the war budget essentially amounts to a slush fund. “This account has effectively become an unaccountable slush fund and a convenient escape from the Budget Control Act spending […]
2015 Pentagon Budget Busters
By Amanda Waldron
Options for Big Savings from CBO
Each year the Congressional Budget Office (CBO) provides a list of options for potential federal budget savings CBO is careful to point out that the options shouldn’t be mistaken for recommendations, but they do serve as a nudge toward careful consideration of the value of these programs and the possibility for savings.
This year the Defense Department’s roster includes the following six options, totaling over $160 billion in budget authority from 2015-2024. Explanations that follow are taken from CBO’s recommendations.
1) Cap increases in pay for military service members.
Savings = $24.1 billion in budget authority, 2015-2024
“Starting in January 2016, this option would cap basic pay, which accounts for about 70 percent of cash compensation for active duty military personnel, to increases of 0.5 percentage points below the percentage increase in the employment cost index (ECI). Use of the ECI is the default for military pay raises under current law.”
CBO cites recent analysis that shows that compensation for enlisted personnel is currently greater than the wages and salaries of 90 percent of their civilian counterparts. Officers earn more than 83 percent of their civilian counterparts.
While smaller pay raises could make it harder to retain personnel, CBO suggests that the impact would be too minor to require additional incentives such as reenlistment bonuses.
2) Replace some military personnel with civilian employees.
Savings = $20.6 billion in budget authority, 2015-2024
“According to data from the Department of Defense (DoD), thousands of members of the military work in support roles or in “commercial” jobs that could be performed by civilians. Under this option, over four years, DoD would replace 80,000 of the more than 500,000 uniformed military personnel in commercial jobs with 53,000 civilian employees and, as a result, decrease military end strength (the number of military personnel on the rolls as of the final day of a fiscal year) by 80,000. Those changes would reduce the need for appropriations primarily because fewer civilians would replace a given number of military personnel. (Civilians have fewer collateral duties and do not generally rotate among positions as rapidly as military personnel do.)”
According to CBO, this option could result in decreases in job-specific training, since civilians are not subject to the same frequent transfers as military personnel. This advantage relies, however, on the assumption that greater efficiency could be achieved with fewer personnel. If end strength is not also reduced, total personnel costs could increase.
3) Replace the Joint Strike Fighter program with F-16s and F/A-18s.
Savings = $41.0 billion in budget authority, 2015-2024
“The Department of Defense (DoD) has ordered 179 F-35 Joint Strike Fighters and plans to purchase 2,264 more. Under this option, DoD would cancel the F-35 program and instead purchase the most advanced versions of fighter aircraft already in service. The Air Force would acquire 1,763 Lockheed Martin F-16s, and the Navy and Marine Corps would buy 680 Boeing F/A-18s.”
CBO notes that if equipped with upgraded radar, precision weapons, and digital communications, new F-16s and F/A-18s would be sufficient to meet the threats that the United States is likely to face in the future. Unfortunately, CBO says, the “extreme sophistication” of the F-35 has contributed to cost growth and schedule delays. Lesser technical challenges related to F-16s and F/A-18s would be less likely to incur such growth.
One disadvantage of this option is that F-16s and F/A-18s aircraft lack stealth capability, but the Air Force would maintain such capability in the B-2 and F-22.
4) Stop building Ford Class Aircraft Carriers.
Savings = $19.9 billion in budget authority, 2015-2024
“Under this option, the Navy would stop building new aircraft carriers after completion of the U.S.S. John F. Kennedy, which lawmakers authorized in 2013. (All years mentioned in this option are fiscal years.) Thus, the next two aircraft carriers the Navy intends to purchase under its shipbuilding plan, the U.S.S. Enterprise in 2018 and another carrier in 2023, would be canceled.”
According to CBO, because they are designed to operate for 50 years, the current fleet and carriers under construction could sustain the size of the carrier force for many years. Further, at some point in the near future, the large aircraft carrier may no longer be considered an effective weapons system. Long-range supersonic antiship cruise missiles, antiship ballistic missiles, quiet submarines, and satellite tracking systems could all threaten the future survivability of the ship.
CBO points out, however, that the aircraft carrier has been the centerpiece of the U.S. Navy since WWII and, with the development of new technology, could prove adaptable to future threats.
5) Reduce the number of Ballistic Missile Submarines.
Savings = $20.9 billion in budget authority, 2015-2024
“The Navy maintains a force of 14 Ohio class ballistic missile submarines (SSBNs). Over the next two decades, the Ohio class submarines will reach the end of their service life. This option would reduce the Navy’s SSBN force to eight submarines in 2021 by retiring one Ohio class submarine a year over the 2016–2021 period. (All years mentioned in this option are fiscal years.) That number would be maintained after 2021 by delaying the start of the Ohio Replacement program from 2021 to 2025 and reducing the number of SSBNs purchased under that program.”
Because a reduction in the number of missiles would not dramatically reduce the total number of warheads that could be deployed, CBO reasons that reducing the SSBN force to eight submarines “would still provide a robust strategic deterrent at sea.” As a bonus, costs associated with extending the service lives of missiles and warheads could be avoided because the SSBNs would be carrying less.
The counterargument to this is that fewer boats would be available for quick deployment in a crisis.
6) Defer development of a new Long-Range Bomber.
Savings = $34.2 billion in budget authority, 2015-2024
“This option would defer until at least fiscal year 2025 the Air Force’s program to develop a new bomber to augment and eventually replace its current fleet of 159 long-range bombers.”
The primary advantage to this option, according to CBO, is that deferment would free up budgetary resources to focus on more pressing needs. As a bonus, a program that begins later could take advantage of newer technology.
One disadvantage is that if service life estimates of current bombers prove to be incorrect or a new bomber takes significantly longer than expected, a capability gap could arise.
Hagel Is Out; Big Spending Is In
The President announced Monday that Defense Secretary Chuck Hagel has resigned, just days after announcing his commitment to increase spending for the U.S. nuclear enterprise by $7.5 billion dollars over the next five years. For a top Pentagon official with a habitually good record on nuclear non-proliferation, this was a pretty bad last move. And it could be a sign of things to come.
William Hartung, the Director of Arms and Security Project at Center for International Policy, posed an important question in an article for Huffington Post this week: what if Hagel had resigned for a reason? Hartung posits that Hagel’s resignation was “a missed opportunity to put our security policy on a sounder footing at a time of increasing uncertainty.” Hagel certainly could have resigned ‘on principle,’ in protest of the administration’s drift toward a more hawkish foreign policy. But it doesn’t look like he did.
Helene Cooper of the New York Times posits that Obama was too close with U.S. National Security Adviser Susan Rice, White House Chief of Staff Denis McDonough and Secretary of State John Kerry to give them the axe; Hagel was the easy pick. In times of trouble, the sad truth is that a scapegoat sometimes has to take the blame. But regardless of the reason for Hagel’s dismissal, a firmer truth remains: a shift is taking place in Washington that’s likely to lead to higher spending.
Hagel assumed office in February 2013 at a time of projected peace. He was brought on to oversee the end of the war in Afghanistan and help trim down the Pentagon budget. Now, whether we like it or not, the U.S. is headed back into war in the Middle East and has revised its exit plan for Afghanistan.
Glen Thrush of POLITICO writes that Hagel didn’t see himself as “the kind of gung-ho, wartime consigliere Obama needed as he recalibrates his national security strategy to deal with a new round of conflict in the Middle East.” It follows that a new leader in the Pentagon would be part of a larger strategic pivot towards ramped up military engagement in Iraq, Syria and Afghanistan.
With an increased wartime spending request and a larger base budget request on the way, the Obama administration seems primed to amp up the pressure on Congress to increase Pentagon spending, a move that could ultimately bust the budget caps.
While there is no obvious front-runner to replace Hagel, Michéle Flournoy and Sen. Jack Reed have already pulled their hats out of the ring. That leaves current and former Deputy Defense Secretaries Robert Work and Ashton Carter. Both men are considered technocrats with experience maneuvering the Pentagon’s bureaucracy. But their mission at the helm of the Pentagon, should they accept, will largely be dictated by a strategy already set in motion by the White House.
So far, that strategy looks like spend, spend, spend.
