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American Forces Press Service

Work Outlines Budget Priorities, Process

By Claudette Roulo
DoD News, Defense Media Activity

SAN DIEGO, Calif., Feb. 10, 2015 – The president's fiscal year 2016 defense budget request begins the process of restoring future warfighting capacity and capabilities by reversing delays to long-term modernization efforts, Deputy Defense Secretary Bob Work said today.

The request balances lower budgets with higher operational demands, he said during his keynote address at the U.S. Naval Institute's 2015 WEST Conference here, and totals $585 billion in FY 2016, which includes $51 billion in overseas contingency operations funds.

"These numbers are about $36 billion above the FY 2016 sequestration caps -- which remain in effect at this point -- and about $38 billion, or 7.6 percent more than the enacted FY 2015 budget levels," the deputy secretary said.

"These figures are right in line with those that we submitted last year," he added.

How the 'Sausage' is Made

The request is strategy-driven, resource-informed and the result of long months of review, Work said.

In describing "how the sausage gets made at the department," the deputy secretary said the process involves hours upon hours of deliberations in a windowless room in the bowels of the Pentagon.

"That's where we make our strategic priorities and hash out where we will invest our money," he said.

Before deciding where to invest, Work said, the Defense Department had to determine whether the strategies outlined in the 2014 Quadrennial Defense Review were still right for the existing global security environment. Deliberations were disrupted by three global security "surprises," he said.

Global Security 'Surprises'

Russia's illegal occupation and annexation of Crimea actually began with destabilization efforts before the QDR was published, the deputy secretary said. Moscow continued its interference in Ukraine by backing separatist activity in the eastern part of the country, Work said.

"These actions suggested unless we could convince Moscow to change its course, that we and our NATO allies were going to be entering into a period of prolonged and heightened tension with Russia," he said.

In June, terrorists from the Islamic State of Iraq and the Levant launched an offensive out of northeast Syria and into Iraq, the deputy secretary said.

"The threat to our people and our interests, along, most importantly, with the formation of a partner -- a new, more inclusive Iraqi government that we could work with, prompted our leadership ... to forge a counter-ISIL coalition and to use force in Iraq and Syria to confront that threat," he said.

And finally, the Ebola outbreak in West Africa surprised the world in its scale and scope, Work said.

Enduring Challenges Continue

The transition of the mission in Afghanistan, ongoing negotiations over Iran's nuclear program, China's activities in the East and South China seas, and global cyberattacks -- culminating in the hack and theft of data from Sony's networks -- made for an already volatile security environment, the deputy secretary said.

And as the nation called on its international partners and allies to respond to these crises, it quickly became evident that the capabilities and capacities of its allies were tapped out, he said.

"So, like it or not, the United States would remain the global security first-responder," Work said.

Strategy Remains Viable

But, he added, the department's leaders concluded that the strategic decisions arising from the 2014 QDR were, in fact, still viable and the priorities remain intact.

"Now, we recognize that the assumptions that underpin each of these … priorities would have to continually be reviewed, especially with regard to what has happened in Europe and the Middle East,' the defense secretary said.

DoD came to the same conclusion on the strategy's force-planning construct, Work said. "This construct calls for a smaller, leaner, technologically advanced joint force able in peacetime to do three things: defend our homeland, carry out global counterterrorist operations in multiple theaters, and deter aggression and assure allies through forward presence and engagement," he explained.

And if deterrence fails, Work said, this joint force must be able to defeat a regional adversary in a large-scale multi-phased campaign, while at the same time imposing costs on or denying the objectives of another aggressor in another region.

"We concluded that the force we submitted last year in [the president's 2015 budget] remained broadly sufficient to need, with one key exception," the deputy secretary said. "And that was in … intelligence, surveillance and reconnaissance assets."

As a result, he said, the force structure in this year's request is similar to the one proposed by the president for FY 15.

Budget Balancing Act

Even at these elevated budget levels, maintaining the balance between personnel, readiness and modernization is extremely challenging, Work said. Any funding below the levels outlined by this budget request, or a denial of compensation and efficiency initiatives, would place the strategy at risk for a number of reasons, the deputy secretary said.

The department is emerging from 13 years of war that has caused enormous strain on troops and their equipment, he said.

Recent events have highlighted the difficulty of taking a long-planned 2-3 year "reset" to repair and replace war-torn equipment and to train troops, Work said.

"As this last year has shown us, we just cannot be ready for one thing. We can't be a counter insurgency force, we can't be a high-end multi-phase campaign force, we have to be able to do all those things, and it takes time," the deputy secretary said.

Because of this high operational tempo, the department isn't doing a reset, it's doing a 'running reset,' he said. "We're building this airplane while it's flying," Work said.

This is made even more challenging because readiness is only now beginning to recover from the damage caused by sequestration in 2013, the deputy secretary said.

"Our forward-deployed forces are locked and cocked and ready to go … but the surge force, the heavy-duty Sunday punch that you throw when necessary, that's not as ready as it has been in the past," he said.

Time and Money

This is a problem of time as much as it is money, Work said.

Consequently, he said, the department has adjusted service end-strength ramps for the Army and Marine Corps to reduce personnel turbulence and stress on the force.

Home station training and range infrastructure have received additional funding, Work said, as have efforts to alleviate maintenance backlogs.

Funding toward each of the services' operational and maintenance accounts increased nearly 10 percent over last year, but, he said, achieving full-spectrum combat readiness cannot happen overnight.

"Even if Congress gets rid of sequestration and gives us the full president's budget level, it's going to take until 2020 for the Army, Marines and Navy to get back to full-spectrum combat readiness and it's going to take the Air Force until 2023," the deputy secretary said.

"The second challenge is because personnel and operations and maintenance costs increase faster than the rate of inflation, the department needs to see 1-3 percent real growth per year to maintain balance," Work said. "But we have been at flat budget levels for three years now."

To free up resources, the department has worked to become more efficient and disciplined in its use of resources, the deputy secretary said.

Efficiency Initiatives

Four rounds of efficiency initiatives sought to shift defense spending to the teeth of defense programs, rather than the tail, Work said.

"But these savings often come over time, and they really do not keep up with the increased spending on [operations and maintenance] costs," he said.

In addition, Congress has denied several reform proposals, the deputy secretary said.

For example, even though force sizes are decreasing, "Congress continues to reject our repeated requests for a Base Realignment and Closure round. We project, conservatively, that that would save us about $2 billion, recurring," Work said.

"Maintaining outdated and duplicative systems and unwanted infrastructure drains scarce resources that should go elsewhere into the program. It is wasteful, it's strategically unsound, and it ultimately endangers the readiness of our men and women in uniform," he said.

Technological Advantage Eroding

The erosion of the military's technological edge not only challenges the Defense Department, but it ultimately threatens America's leadership in the world, the deputy secretary said.

This undermines the assurance America provides to its allies, and may undermine deterrence, Work said.

"We're seeing levels of new weapons development that have not been seen since the mid-1980s, near the peak of Soviet Union Cold War defense spending," he said.

Russia is modernizing forces that were once in steep decline, the deputy secretary said. China's defense budget is estimated to have increased by 500 percent between 2011 and 2016, Iran has built up an array of asymmetric capabilities, and North Korea's growing arsenal of nuclear weapons and road mobile ballistic missiles put allies and forces in the region at risk, Work said.

To prevent that from happening, the FY 2016 budget submission is an attempt to reverse years of under-investment in new weapons and capabilities deemed the highest priority in the 2014 QDR strategy, he said.

"Because of the proliferation of guided munitions and other advanced technologies that threaten our ability to project power, we're spending more on … counter anti-access area-denial weapons," the deputy secretary said.

And because the space constellation is under more threat now than at any time before, Work said, the budget request includes increased funding for space resiliency and space control capabilities.

Defense Innovation Initiative

"Trying to tackle this erosion of technological superiority is exactly what Secretary Hagel had in mind when he announced the Defense Innovation Initiative in November," he said. "It's a department-wide effort to identify a third offset strategy … or perhaps more accurately, offset strategies, in order to sustain and advance our military and technical edge into the 21st century."

This will be more difficult now than in the past because threats have become more diffuse, the commercial sector now drives much of defense innovation, and the rapid spread of technology shortens the lifespan of any advantage, Work said.

The FY 2016 budget submission invests in some potentially game-changing new technologies, he said, as well as long-range research efforts.

"For example, we're investing more in unmanned underwater capabilities, high-speed strike weapons, rail guns and high-energy lasers," the deputy secretary said.

The third offset strategy is about much more than technology, Work said. "It really is about what can we do in terms of operational concepts, and what can we do differently to provide us with an advantage," he said.

A big part of the third offset strategy is to find innovative ways to employ promising technologies, Work said.

Severe Consequences if Sequestration Returns

All of this is done with one thing in mind, the deputy secretary said. "Provide our troops with a decisive competitive advantage. Ultimately, if it's not about winning on the future battlefield, I, as the deputy secretary of defense, don't want to waste a moment's time with it," he said.

"Our job is very simple," Work said. "We have a mission. And that mission is to organize, train and equip a joint force that is built and ready for war and operated forward to preserve the peace. Everything else that we do, if it's not focused on that mission, it's a damn waste of time.

"So, every day, when I get up, I ask myself, 'How can we make the future lives of our service men and women better by providing them the tools that they're going to need to prevail at war?''

Returning to sequestration funding levels would be a disaster for that mission, he said.

"It just doesn't make sense," Work said. "Everyone you talk to says it doesn't make sense. But then they say, 'But we can't figure out how to de-trigger it.' Well, that's what you're elected for, all right? Go figure it out."

"… We do this in the Pentagon all the time. Lock yourself in a room, feed you pizzas for six weeks, I guarantee you, at some point you'll say uncle and come out with an answer," the deputy secretary said.

"Sequestration is a blunder that allows our fiscal problems, not our security needs, to determine our strategy. If you want a budget-driven strategy … go to sequestration," Work said.

"The budget we are submitting supports the national defense strategy … we would not submit a budget that nullifies it. The senior leadership of the department is in total agreement with President Obama that sequestration must be overturned," he said.

"In the coming months, we will provide updated details on whatever Congress needs, what we need to do. But we want to work closely with them to get rid of this very destructive and very non-strategic way forward," Work said.

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