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Kendall: Money doesn’t grow on trees, even at the Pentagon

The Pentagon is making the case for an overhaul of its fleet, and according to Undersecretary of Defense Frank Kendall, the nuclear enterprise is at the front of the line. That is, if they can just figure out how to pay for it.

At the Air Force Association’s annual conference this week, Kendall delivered remarks that had been prepared by the Secretary of Defense, who had been pulled away at the last minute. The speech referred to the nuclear enterprise as, “the very foundation of U.S. national security.”

Driving the point home, Kendall repeated twice, “No capability we maintain is more important than our nuclear deterrent.”

Of course, Kendall and Hagel have reason to want to reassure the Air Force that nukes are a top priority, but Kendall’s speech leaves little room for interpretation.

Know that what you do every day is foundational to America’s national security and the top priority of the Department of Defense – the top priority of the Department of Defense.

Secretary Hagel wants you and our entire military to know that comes from him personally.

But paying for those upgrades will take more than reassurance. And there’s the rub. The Pentagon simply does not have enough resources to pay for its entire wish list of upgrades, both nuclear and conventional. And, perhaps surprisingly, Kendall acknowledges that fact, telling reporters that:

There’s been some conversation about that, but at the end of the day we have to find money to pay for these things one way or another, right? So changing the accounting system doesn’t really change that fundamental requirement. We still need the money and it has to come from somewhere.

Kendall’s bout of honesty comes on the heels of some speculation that world events might allow for some wiggle room in the DOD’s budget – or at least OCO. But the acknowledgement of the budget challenges to come is significant nonetheless.

At a time when the Air Force is in need of a multitude of updates more relevant to the current threat environment, the issue is likely much greater than Kendall lets on. The true cost of focusing myopically on the nuclear enterprise is that it will leave other programs to starve in its wake.

Report Illuminates Potential Spending Catastrophe; Nukes Part of Problem

The original version of this post erroneously stated that Todd Harrison’s report states that nuclear weapons are unaffordable. The post has been updated to correct the error.

The U.S. Defense Department is careening towards a seemingly inevitable budgetary catastrophe. On September 4, Todd Harrison, the Center for Strategic and Budgetary Assessment’s well-respected defense budget extraordinaire, released an eye-opening assessment of this year’s defense budget request. Harrison’s report highlights the many ways in which the Pentagon’s current spending plans over the next decade assume the availability of billions of dollars that are unlikely to be available. In other words, these plans are a fantasy.

What the report also shows is that nuclear weapons and missile defense make up a significant portion of this planned spending – contrary to those who argue that nuclear weapons “don’t actually cost that much.” In fact, so staggering are the expected costs of existing plans to build new ballistic missile submarines and nuclear-capable long-range bombers that military planners won’t be able to afford them without gutting conventional forces.

Fortunately, the United States can scale back its current nuclear spending plans while still maintaining a credible nuclear deterrent – and save billions of dollars too.

Assumptions and underestimations = Simply not enough dough

According to Harrison, the Pentagon’s Fiscal Year (FY) 2015 “budget appears insufficient to support the defense program and strategy articulated in the 2012 Defense Strategic Guidance (DSG) and the 2014 Quadrennial Defense Review (QDR)”.

The Pentagon’s five-year spending plan, known as The Future Years Defense Program (FYDP), exceeds the Congressionally mandated budget caps contained in the Bipartisan Budget Act of 2013 by $116 billion over the next five years and $168 billion over the next ten.

Imagine the defense department were planning to build a giant, nay, the MOST giant pizza ever made. While during the prep stage, there may be enough scraps to begin the process, in the end there just won’t be enough dough. That’s the situation the Pentagon finds itself in.

Harrison identifies a litany of unsupportable or unsustainable assumptions built into the budget request. For example:

1) The budget request does not fund Army and Marine Corps end strength and Navy aircraft carriers to the levels outlined by the QDR as necessary – roughly $20 billion short over the FYDP;

2) The budget assumes that some programs and activities typically funded by the base budget, can be moved to the Oversees Contingency Operations (OCO) account, which funds U.S. military operations in Afghanistan and is not restricted by the Congressional budget caps. Based on recent trends, the Pentagon may be expecting $10-$20 billion annually in OCO funding for non-Afghanistan related activities that belong in the base budget, totaling $50-$100 billion over the FYDP;

3) Historically, large acquisition programs are 20 to 50 percent over their planned budget estimates. Harrison approximates that the “acquisition funding included in the budget is likely to be insufficient to execute all of the currently planned acquisition programs”.

4) The biggest assumption in the budget is that Congress will allow the Pentagon to exceed the Congressional budget caps by $116 billion over the next five years. While the caps were raised modestly by Congress for FY 2014 and FY 2015, no relief appears on the horizon for FY2016 and beyond.

Nuclear weapons and missile defense spending atop the spending charts

In what might come as a surprise to many, the four most expensive Pentagon acquisition programs over the next decade and beyond are all exclusively or partly nuclear weapons related:

a) The F-35 Joint Strike Fighter (some later versions of which will be endowed with a capability to deliver B61 nuclear bombs); estimated cost: $351 billion;

b) The Ohio Class Replacement submarine (exclusively nuclear); estimated cost $90 billion;

c) The Long-Range Strikes bomber (LRS-B) (the Air Force is pursuing a new long-range penetrating bomber primarily for conventional reasons, but the Congressional Budget Office (CBO) estimates 25% of the costs as nuclear-related); estimated cost: $73 billion; and

d) The Ballistic Missile Defense System (BMDS) (key aspects of which are designed to defend against nuclear attacks); estimated cost: over $151 billion.

While some modernization of our nuclear weapons is necessary, the current U.S. nuclear arsenal of approximately 4,800 nuclear weapons greatly exceeds U.S. security requirements. Moreover, both former and current military leaders agree that planned spending on nuclear weapons, which could top $1 trillion over the next thirty years, is unaffordable. Harrison concurs, notes that, given current budget constraints, the Pentagon will not be able to afford its currently proposed buys for the Ohio replacement and Long-Range Strike bomber without making cuts elsewhere.

Ultimately, Harrison concludes that “[i]f the budget caps are not raised by Congress, DoD will be forced to fund this shortfall by making additional cuts to force structure, personnel, acquisitions and readiness beyond what is proposed in the request”, meaning greater risk in implementing the defense strategy. Not only would scaling back current spending plans save billions that could be better spent on more urgent national security priorities, but doing so would not jeopardize our safety or deterrent capability.

Future of OCO Still Uncertain

Inside Defense reports from behind a paywall that the Defense Department will deliver its “migration guidance,” setting out a plan for the services to begin to move war funds back into the base budget, in the fall.

Having missed a July deadline promised to the Government Accountability Office, a DOD spokesman said “This will be a multiyear process that will be refined as [the] Department gets a clearer picture of enduring missions for the theater, as well as the criteria and scope of the future overseas contingency operations budgets.”

The Pentagon plans to have the guidance to the services in time for crafting of the FY16 budget request.

DOD’s overseas contingency operations (OCO) budget comes in at $58.6 billion for FY15, $26.7 billion less than enacted the previous year. But the fund has received increased criticism in Congress as U.S. involvement in the wars has drawn down, largely because it allows the Pentagon to work around the budget caps set forth in the Budget Control Act.

In response to the administration’s OCO request, which came to Congress late, on June 26, Rep. Adam Smith noted that, “Sequestration doesn’t make any sense. However, none of those other areas of our government have an OCO. … The justification for that spending is something that Congress is going to need to hear.”

Rep. Tammy Duckworth went a step further saying that, “It seems this is just becoming another slush fund … without accountability.”

But recent developments in Iraq might throw a wrench into efforts to draw the money down, as the administration continues to pull from the budget for operations overseas. The White House argues that the fund, particularly a new portion aimed at counterterrorism operations, is important to have in case of emergency.

But some members of Congress disagree. “There’s always going to be something unanticipated in the defense world,” Smith said in the same interview. “You try and budget within the parameters of that, and not have a separate budget for ‘if something comes up.’”

Amendments To Fiscal Year 2015 National Defense Authorization Act (NDAA) in the House

Below is a summary of amendments on nuclear weapons, missile defense, and related issues submitted for consideration by the House to the FY 2015 National Defense Authorization Act (NDAA), or H.R. 4435. The bill was debated this week on the House floor and passed this morning by a vote of 325-98.

You can read our early reaction to the full bill here.

Over on the Senate side, the Senate Armed Services Committee has completed its (closed) markup of its version of the NDAA. A summary of the bill could be available later today or tomorrow.

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The numbers to the left of the permitted amendments are the numbers for floor votes. The second number is the original Rules Committee number.

Rejected 192-229 – Floor amendment #1: Blumenauer (OR) #308 – NNSA Nuclear Weapons Spending – Authorizes the Secretary of the Air Force to procure not more than 10  radar upgrades for the Air National Guard F-15C/D aircraft, which is offset by cuts to levels authorized beyond the President’s Budget Request, spread across 9 accounts.

Rejected 194-227 – Floor amendment #3: Sanchez, Loretta (CA) #157 – Nonproliferation Funding  – Gives the Pentagon authority to transfer funds to nuclear nonproliferation, not only to weapons activities and naval reactors. Currently, the bill language limits fund transfers to only weapons activities and naval reactors.

Approved 222-196 – Floor amendment #6: Daines (MT), Cramer, Kevin (ND), Lamborn (CO), Lummis (WY) #76 – ICBM silos – – Strikes subsection (c) of Section 1634 of the bill which terminates in 2021 the requirement that 450 ICBM silos remain in at least warm status.

Approved by voice vote – Floor amendment #14 – Kildee (MN) #243 – NNSA Nuclear Weapons Spending – Allocates $10 million dollars to develop additional financial literacy training programs for incoming and transitioning service members, which would be funded by offsetting the $15.1 billion dollar shipbuilding account and a $902.2 nuclear weapons refurbishment account. Along w/Kildee floor amendment #161 (see below), the amendments reduced funding for the W76 and B61 LEPs by $7.5 million each.

Approved 233-191 – Floor amendment #17 – Lamborn (CO) #61 – New START Treaty – Blocks the use of funds for implementing the New START treaty until certification that the Russian Federation is respecting Ukrainian sovereignty and is no longer violating the INF or CFE treaties.

Approved 224-199 – Floor amendment #24 – Blumenauer (OR) #221 – CBO Nuclear Costs Study – Requires Congressional Budget Office to update, on an annual basis, their report on the projected costs of U.S. nuclear forces.

Approved by voice vote – Floor amendment #28 – Hastings (WA) #126 – Defense Environmental Cleanup – Restores $20 million of the proposed cut to defense environmental cleanup by reducing funding for NNSA weapons activities by $20 million.

Approved by voice vote – Floor amendment #84 – Fortenberry (NE) #317 – Nuclear Nonproliferation – Would require a report as to how the Department of Defense will manage its mission related to nuclear forces, deterrence, nonproliferation and terrorism.

Approved by voice vote – Floor amendment #128 – Gibson (NY) and Garamendi (CA) #38 – AUMF for Syria or Iran – States that nothing in the FY15 NDAA shall be construed as authorizing the use of force against Syria or Iran. (Note: Johnson (GA) submitted an identical amendment #255.)

Approved by voice vote – Floor amendment #129 – Gosar (AZ) #24 – Iran – Declares that “it is the policy of the United States to fully support Israel’s lawful exercise of self-defense, including actions to halt regional aggression.”

Approved by voice vote – Floor amendment #131 – Roskam (IL) and Walorski (IN) #5 – Iran – Expresses the Sense of Congress calling on the United States to immediately arm Israel with bunker-buster bombs and refueling tankers “to remove any existential threat posed by the Iranian nuclear program.”

Approved by voice vote – Floor amendment #145 – Turner (OH) #16 – US Tactical Nuclear Weapons in Europe – Limits availability of FY 2015 funds for removal or consolidation of dual-capable aircraft from Europe.

Approved by voice vote – Floor amendment #147 – Polis (CO) and Nadler (NY) #278 – Missile Defense – – Updates a Sense of Congress in the HASC bill to say that the Secretary of Defense should not procure additional capability enhancement II exoatmospheric kill vehicles for deployment until after the date on which a successful operationally realistic flight intercept flight test of the kill vehicle has occurred.

Approved by voice vote – Floor amendment #148 – Brooks (AL), Rogers (AL), and Turner (OH) #165 – INF Treaty – Requires a Plan to Counter Certain Ground-launched Ballistic Missiles and Cruise Missiles and for other purposes.

Approved by voice vote – Floor amendment #149 – Foster (IL) #252 – Missile Defense – Requires the Institute for Defense Analysis (IDA) to study the testing program of the ground based midcourse missile defense (GMD) system. IDA would be required to produce a report on the effectiveness of the testing program and recommendations for how it can be improved.

Approved by voice vote – Floor amendment #155 – Larsen (WA) #191 – Nuclear Verification and Monitoring – Requires the creation of an interagency plan for verification and monitoring relating to the potential proliferation of nuclear weapons and fissile material.

Approved by voice vote – Floor amendment #161 – Kildee (MN) #244 – NNSA Nuclear Weapons Spending – Allocates $10 million dollars to develop additional financial literacy training programs for incoming and transitioning service members, which would be funded by offsetting the $15.1 billion dollar shipbuilding account and a $902.2 nuclear weapons refurbishment account. Along w/Kildee floor amendment #14 (see above), the amendments reduced funding for the W76 and B61 LEPs by $7.5 million each.

GOP REFUSE TO ALLOW TO BE DEBATED:  Quigley (IL) and Garamendi (CA) #147 – Directs GAO to conduct an analysis of the justification and rationale for maintaining the nuclear triad, and to identify any excess that may result in cost savings.

GOP REFUSE TO ALLOW TO BE DEBATED:  Sanchez (CA) and Larsen (WA) #158 – Nuclear Weapons Deployed in Europe – Requires a certification that the cost of sustaining and forward-deploying nuclear weapons in Europe will be shared by NATO members, and not just paid by the United States.

GOP REFUSE TO ALLOW TO BE DEBATED:  Doggett (TX) #238 – Iran – Sense of Congress to say that a comprehensive agreement with Iran relating to Iran’s nuclear program should substantially increase the security of the people of the USand include significant and verifiable constraints sufficient to prevent Iran from acquiring a nuclear weapon. The amendment also expresses the Sense of Congress that existing sanctions related to Iran’s other proscribed activities will continue to be strictly enforced until Iran ceases such activities.