Home » Budget Industry » Expert: Sequestration Spending Caps Will be Major Challenge for Next Administration


Expert: Sequestration Spending Caps Will be Major Challenge for Next Administration

brac_pentagonThe Budget Control Act of 2011 is probably the largest challenge the next administration faces and not just in defense but spending across all the federal agencies,” one of the nation’s leading experts on defense budgets told reporters Tuesday.

Todd Harrison, the director of defense budget analysis at the Center for Strategic and International Studies, a Washington, D.C., think tank, said, the new administration be it under Donald Trump or Hillary Clinton will have to strike a deal with Congress — preferably for four years — on raising the sequestration spending caps set under the 2011 legislation.

In the three compromises worked out so far, Harrison said each side has given a little.

The shorthand for the parties’ positions are:

* Democrats say not only raise defense spending but also raise all other non-defense spending and raise taxes to pay for the increases.

* Republicans say raise defense spending and find the money for that hike by cutting other federal programs, enact no new taxes and keep the spending caps.

The real struggle “has been about non-defense spending — entitlements and taxes. Both sides took defense as a hostage” to force negotiations. When those negotiations broke down, the government was forced to shut down in early 2014.

This is the “is the same budget stalemate we have had for five years,” he said. To get around the spending caps from the 2011 act and avoid the across-the-board cuts called for in that legislation, Congress has created a number of workarounds, including dipping into an emergency spending account to pay for programs that would normally be in the base budget.

The problem with doing that, Harrison said, “It’s for one year,” and the regular defense spending plan covers five. When asked if that account could be put on a five-year model, he smiled and said yes, noting that the regular budget and the Overseas Contingency Operations request were sent simultaneously to Congress this year.

Looking at the Pentagon budget request for Fiscal Year 2017, Harrison didn’t see Congress being able to work out the differences in the two authorization bills or how to find the $18 billion over the agreed upon spending levels before Oct. 1 for the appropriations bill.

The House version would use $18 billion in the Overseas Contingency Operations account to pay for service modernization. That account is used most often to cover costs primarily associated with military operations in Afghanistan and Iraq-Syria.

The Obama administration has threatened to veto the authorization bill if it uses that account to pay for programs that should be in the base budget.

Since there likely will not be an agreement on either the authorization bill or the spending bill, Harrison means that yet again the Pentagon will enter a new fiscal year operating under a Continuing Resolution. That means the department’s spending is frozen at previous year’s levels and no new programs can begin nor old programs terminated.

Looking to the new administration and Congress taking office, “a lot of [possible change] comes down to the makeup of Congress” and “being willing to negotiate.”

Harrison said he expected the current Congress to wrap up the defense authorization and spending bills before it adjourns this year.

But will the emergency spending account go away anytime soon?

“As long as we have budget caps, we’re going to have OCO.” The Budget Control Act caps are to continue for four more years.

The caps have forced Congress to pass some serious reform measures to hold down spending in military health care, the military retirement plan and limiting pay raises for service members and department civilians. How much emerges in this authorization bill from the yearlong review of Goldwater-Nichols is up in the air, he said.

To find more savings, “the number one thing they [in Congress] could do is close excess bases. The number one thing Congress doesn’t want to do is close bases.” This is especially true in an election year. Harrison said the model for a new round of base realignment and closure should be drawn from the experiences of the 1990s, not the 2005 model. There are upfront costs in closing installations, but the “savings in perpetuity” comes from reducing the civilian work force to administer and operate the bases.

The Pentagon’s budget request for at least the last four years has called for another round of realignment and closures. The Army and Air Force say they have most excess infrastructure. Congress has not acted on that part of the request.

“We have stacked up major bills” for the future in weapons programs, Harrison said. “It looks like the Air Force will have the largest ‘bow wave.'” The service is projecting in FY 2022 and 2023 it will be spending on full-scale production of the F-35, a new long-range bomber, tanker, trainer, intercontinental ballistic missiles, nuclear-armed cruise missile, etc.

While the Obama administration doesn’t have to decide which of these long-range programs go forward, the next one will have to decide whether to cut force, delay some items and possibly terminate others to pay for them, Harrison said.

Creating a new budget line for strategic programs, such as the Ohio-class replacement program, doesn’t remove them from the spending caps, Harrison said. “You can cut other programs” such as “whatever is left in Army modernization” to pay for updating the nuclear triad.

  • completely INSANE for the AIRFORCE to be in the ICBM AOR, it is completely STUPID to put ICBM’s in static installations in the USA. it is like painting bulls eyes on AMERICA. Keep the airborne bomber=nuclear capability, and NAVY boomers. GET RID of ICBM static installations. JUST not a good idea now, it was a good idea in the 50’s and 60’s..that money can be better spent.

    • Curtis Conway

      The TRIAD has worked since its inception, and new technology has already negated your concern.

      When STRATCOM (Adm Haney) reaches the end of his term, he should be replaced with someone who has borne the mantle of responsibility for the nuclear watch in his career, for it is unique. Not a political appointee ‘whose time has come’.

      A new Unified Joint Commander arena should be created to lead and administer the US military’s use and employment of the Electromagnetic Spectrum in a coordinated fashion (EWCOM).

      • John King

        Normally, Curtis, I agree with you, but the idea that the TRIAD has worked is more accurate from the human perspective that no one is foolish enough to start a nuclear war rather than the type of weapons and tactics employed. I’m a believer that any nuclear war would be limited to a few critical strikes (under our current “measured response” philosophy) rather than an all-out war (which would simply be the end of everything we have worked for 240 years), and so we only need a few of these weapons of mass destruction. Eliminating the land-based is a good idea, especially considering the Air Force can’t afford their new bomber.

        • Curtis Conway

          The political tool of placing nuc bombers at FAILSAFE communicates a very specific and understood message even today. The only folks it will not work against are looking for the return of the 12th Imam, and they are looking to do it first. That is why we have always loathed the concept of an ‘Islamic Bomb’, and we remain actively engaged in Pakistan for that reason.

  • Curtis Conway

    If the next administration adopts the Reagan model and cut taxes and regulations (that has been growing out of hand) to stimulate growth, then a BRAC might be a good idea to provide infrastructure to support some of that growth. One of the huge parts of the problem with the economy today is that a very large part of the population is out of work, and dis-incentived from seeking employment, or starting a new business, because the government (via taxes and cost of regulation) will just take the proceeds for government programs and administration, instead of letting them keep the fruits of their labor. Small business has been a huge part of our economy until the last half decade. Tax revenue associated with that activity has gone away as well. There is your extra cash to fund required defense programs.

  • RobM1981

    Mr. Grady does a fine job in reporting what the “expert says.”

    Of course, the “expert” is deliberately misleading – or totally ignorant.

    I dunno. Maybe it’s me, but I have to wonder how our military can claim to be broke even as they deploy not one but two totally different designs for a ship class that nobody can find a real use for.

    Maybe it’s me, but I hear that over one trillion – that’s one million, million dollars – was spent for a plane that doesn’t do any better in the air than the plane it was meant to replace (the F22), and worse than the attack aircraft it was meant to replace (A10).

    Maybe it’s me, but my local Cabela’s has so many handguns to choose from, in ever caliber, every design, every color, every metal/composite, and most are from seriously large and established companies… and yet I hear that the US Army can’t choose one of those but, instead, will have to spend billions to replace a perfectly serviceable sidearm with a totally new design that cannot be found on the open market today. I dunno, maybe they need it to connect to the internet, or something.

    Like most people here, I have deep respect for the military. Like most people here, I also know that there is nobody better at boondoggling than the US Military. If you don’t keep an eye on them, they will, indeed, spend every cent in the treasury – often on silly things.

    This might be the only reason I’m leaning towards Trump (versus “nobody”). I have to think that he’d turn a trained eye to this, if he can put away his narcissism, and see the boondoggles for what they are.

    The military has *plenty* of money – what they need is lessons on how to use it. Pay the troops, train the troops, replace worn out equipment, replace obsolete equipment (sanely), stop wasting money on social programs that have nothing to do with National Defense…

    The money is there; the leadership is not.

    • Ctrot

      “but I hear that over one trillion – that’s one million, million dollars – was spent for a plane”

      No, it was not.

      One trillion is the figure being bandied about as what the F-35 will cost over it’s entire lifetime, not what has been spent. Even so it’s an idiotic premise to think anyone can have any real idea what such a program will cost decades into the future.

      The rest of your post is relatively correct, but stop buying into the made up crap the media uses to bash military programs while ignoring that we actually do spend over a trillion dollars every year on the American welfare state.

      • Curtis Conway

        The supposed $Trillion that was invested in the F-35 development has yielded a real product and technology that exist today only because of that program. The money that went into the welfare system has generated . . . what? Saving lives and providing opportunities is a laudable cause, but perpetuating the Plantation in the inner cities is not.

        • Ctrot

          The Trillion dollar figure is totally bogus. About $56 billion has been spent on F-35 R&D since program inception. How much will be spent on procurement, maintenance, upgrades, modifications, deployment, training etc. etc. over the entire lifetime of the aircraft is pure conjecture.

          If some media knucklehead had asked in 1950 what will be the total program cost of this new, expensive, eight engine bomber Boeing is working on over it’s entire lifetime he would have been laughed at and rightly so. Today we just take such nonsense seriously and accept the premise instead of pointing out how stupidly ridiculous it is. Except for me, I refuse to play along.

          • Curtis Conway

            Amen Brother!

    • John King

      Totally agree. Being a retired Pentagon budget analyst who volunteered on the defense budget team for the Simpson/Bowles deficit commission (and wrote a number of the $100 billion a year in cuts to DoD), the Pentagon has plenty of money. They just need to make smarter decisions and change the way they do things, both operationally and in acquisition. In the 1970’s it was the leaders who hollowed out the military, not the lack of money.

      • RobM1981

        Thanks.

        I would point out, just for balance, that “if you think the PENTAGON wastes money, you should see how the REST of government works…”

        😉

    • USNVO

      Well, if even half of your “facts” were true, you would have a good rant going but…
      – Both version of LCS (the duly elected civilian leadership mandated both classes be kept) does maritime security well (it’s primary mission) at a cost less than a FFG-7. All of the combat commanders can find uses for it. The internet pundit that couldn’t spell maritime security and wants more AEGIS destroyers, not so much. Not a perfect solution and certainly numerous problems (massively complicated by having two different ships), but they have real uses.
      – Total expenditures to date on the F-35 are less than $150 Billion (1 Trillion is the entire program cost over 60 years!), but don’t let a few decimal points effect your viewpoint. It is replacing F-16s, A-10s, F-18A-D, and AV-8Bs, not the F-22. And for all its purported flaws, it is vastly more capable of SEAD, Interdiction, Strike, Air-to-Air, and probably CAS as well as the planes it is replacing.
      – Cabela’s may have every handgun under the sun, but unless you want to change the law (you know, something Congress, not the military, made to govern acquisition) the Army can not buy them without a competition. Which they are having. And, since they have to have a competition, they have to detail the criterion for deciding the winner, which they are doing. And, since they have no control over manufacturers they have to let them submit new items in the competition if they want. All the leadership in the world doesn’t trump the law.

      So better to at least get your “facts” in order first, it adds gravitas to the rest of your argument. But you are correct, the money is there if you want to cut the “waste”. But how you define “waste” is the problem. For every program, group, or base that you can identify, I can identify a dozen constituents that think it is more important than something else you don’t identify. And until the civilian leadership makes hard choices (good luck with that) all the leadership in the world is just rearranging deck chairs on the Titanic.

      • RobM1981

        “Not a perfect solution…”

        Care to grease another argument through?

        It’s a dog. To build two completely different hulls for the same mission, at this scale, with taxpayer dollars, is inexcusable. That’s a fact, no matter how much makeup you put on it.

        Maritime Security… can you find a more nebulous term? Anything less specific, such as “shoot bad guys,” maybe? What is the LCS’s mission, again – and this time, please be specific. Is it an ASuW hull? ASW? AAW? Drug interdiction?

        We have a whole group of guys who can lay claim to the general term “Maritime Security.” They’re called the US Coast Guard. The Navy is for defense, last I checked.

        You can argue that the LCS might have made a good cutter, maybe. You can never argue, even if this is true, that you need two completely different hulls.

        The F-35 is arguably superior to the F-16 and 18, overall. It is clearly superior in some ways, but also clearly inferior in several aeronautic measures. If the stealth and sensors are defeated, it’s in a lot of trouble – it’s not a great fighter. Not that there’s a lot of press about it, in any case, but the few articles you can read concede this. The 35 is a high tech sensor platform, designed to kill the other guy before it’s detected.

        And that’s fine… but what if that one trick is defeated?

        For the money we are spending, is it a better bomb truck than the 18? No. Is it a better pure fighter than either the 16 or the 18? No. If it’s carrying any external weapons, the stealthiness is heavily degraded, no? So there’s no question that it’s inferior to the A10 in a true CAS role (presuming you even want to send human pilots into that arena anymore).

        I’m not saying it won’t fly, and I’m not saying it isn’t marginally better, overall than the 16 or 18 (and, clearly, much better than the AV-8B). I’m just saying that it’s far, far too expensive for what we get. For this kind of money, is this all we get?

        And, btw, most estimates I see put the 60 year cost at more like $1.5T. It’s enough that our allies are having second thoughts, which is a tell in and of itself.

        So the Army is having a bakeoff. Great. How much should that cost, again? Nobody is saying back the truck up to the local Bass Pro Shops, but for crying out loud. Put out a spec, bring in the competitors, and make a choice. It’s called a Request for Proposal, and businesses do it thousands of times a day – it doesn’t cost much, and you end up with great results, if you do it right.

        Sorry, but facts are facts. There is plenty of money available – just not a lot of oversight. Just the cost of not buying two LCS hulls, alone, would provide more than this “sequester” consumed. Just that one, glossed over, fact.

  • John B. Morgen

    The Sequester should be repeal because we are at war with ISIS and Al Qaeda; maybe, a brush fire war with China or Russia. We should not be cutting our legs off, and yes we should be spending the defense budget more prudently before President Obama had entered the White House.