Budget Request Shows Careful Balance, Comptroller Says

By Lisa Daniel
American Forces Press Service

WASHINGTON, Feb. 13, 2012 – The proposed $525.4 billion Defense Department base budget reflects a well-thought-out plan for military spending that should be considered in its entirety as it moves through the budget process, the Pentagon’s top budget official said today.

“This is a budget based on strategy and good management,” Robert F. Hale told reporters at a Pentagon news briefing. “It is a package that we put together that we think works well as a whole. We hope Congress enacts it as package, or it will lose the synergies that make it a strong package.”

The fiscal 2013 budget package reflects not only President Barack Obama’s military strategy, but also the wishes of military leaders who had strong input, Air Force Lt. Gen. Larry Spencer, the Joint Staff’s director of force structure, said at the briefing.

“The chairman views this budget as the first installment in a series of budget submissions to shape the joint force the country needs in fiscal 2020,” Spencer said. “During this process, everything was on the table.”

The proposal continues a downward slope in defense spending that began in fiscal 2011 and continues to fiscal 2014 before rising slightly and then leveling off.

“It’s really not that different from past war-time drawdowns,” Hale said, while showing slides of other defense spending cuts following the Cold War and the wars in Vietnam and Korea. “The total defense budget is coming down, freeing up resources for other national priorities.”

Total defense spending peaked at about $730 billion between fiscal 2008 and fiscal 2010. Next year’s total proposed budget of $614 billion -- $525.4 billion plus $88.5 billion for overseas operations -- would be on par with the fiscal 2006 budget, DOD documents show.

In real growth, next year is proposed to be the tightest, with a 2.5 percent decrease to the base budget, compared to zero change in fiscal 2014.

Hale noted that the proposal reflects a transition point in U.S. national security with the drawdown of the wars in Iraq and Afghanistan, coupled with the need to lower the federal deficit.

The proposal was “guided by the commitment by the president that our armed forces remain the best trained, best led, best equipped fighting forces in history,” Hale said.

The budget request adds $60 billion in cuts to meet a congressional mandate of $259 billion over several years, Hale said. “We understand we need to make more disciplined use of our defense dollars,” he said.
The request does not include about $500 billion in across-the-board cuts the department is set to lose from an automatic reduction known as “sequestration” that will go into effect next year as a result of Congress not meeting a November deadline for prescribed reductions to the federal debt.

“We followed guidance that did not anticipate the sequester,” Hale said in response to a reporter’s question. “This is not a good policy. [Sequestration] was intended as a prod –-- [and] it didn’t work.

“Now what we need is [for] Congress as a whole to enact a balanced budget that does not include this meat hacking approach,” he added. “They need to enact changes to replace the sequester.”

If sequestration is not undone, the automatic cuts will take an extra $54 billion from the fiscal 2013 budget. “It won’t be nice,” Hale said. “We’d end up reducing a lot of important programs, and probably end up in a [reduction in force] situation, and it would certainly impact readiness.”

The budget also does not account for a DOD request to Congress for two rounds of base realignment and closure commissions to reduce or realign military installations, Hale said. Department officials are making the requests for fiscal 2013 and 2015, he said.

While BRAC changes have an upfront cost, the last round in fiscal 2005 has saved the department about $5 billion per year, Hale said. “Those are incurred in perpetuity, so it’s still a good deal,” he said.

The proposal would slow the rate of personnel costs in pay and benefits that have increased 90 percent since fiscal 2001, now making up one-third of the budget, Hale said. Still, there are no pay freezes or cuts proposed, but some fee increases in the TRICARE program, he said.

The department can’t copy private-sector standards in pay and benefits and maintain an all-volunteer force, Hale said. The adjustments that are proposed are just enough to prevent needing “overly large cuts” in force structure and modernization, he said.

The proposals on pay and benefits “reflect the counsel of the chairman, the Joint Chiefs, and the military leaders,” Spencer said. And, he added, they “honor our commitment to America’s all-volunteer force and their families.”

The budget proposal calls for reduced civilian pay raises -- 1.7 percent for the next two years, 0.5 percent in fiscal 2015, 1 percent in 2016 and 1.7 percent in 2017.

Also, it requests a 5.5 percent in end strength reductions over five years, mostly in the Army and Marine Corps, which grew to accommodate the wars in Afghanistan and Iraq following the 9/11 attacks.

“We’ll try to do this in as humane a way as we can,” such as through incentives for voluntary departures and tightening re-enlistment standards, Hale said. But, he added, retention has stayed high through years of national economic downturn.

“I don’t think I can stand here and say there won’t be any involuntary separations,” he said.

DOD officials will keep reviewing the impact of personnel adjustments, Hale said. “If we can’t attract and retain people at those numbers, we’ll stop doing it,” he said.