The Pentagon and Congress may try to spend more than allowed by law in the forthcoming fiscal year 2014 defense budget–a move that could trigger more of across-the-board, account-by-account budget cuts this fall, a defense analyst said.
The Pentagon plans to unveil on Wednesday its spending request for the fiscal year that starts Oct. 1, and is expected to call for exceeding the spending cap dictated by the Budget Control Act (BCA) of 2011 by more than $50 billion. That 2011 law helped spur the $500 billion in decade-long “sequestration” budget cuts to planned defense spending that started last month.
After those sequestration reductions are factored in for FY ’14, Pentagon spending would be capped at “roughly” $475 billion, according to Todd Harrison, the senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments (CSBA) think tank. Yet news reports have said the Pentagon plans to request a budget that is from $51 billion to $55 billion over that $475 billion cap.
“If that were to be enacted into law for 2014, it triggers another sequester,” Harrison told reporters Friday at CSBA’s Washington office. “If you exceed the budget caps, it triggers a sequester to cut you down to the level of the budget caps….That is the current law in effect.”
Any funding over the $475 billion cap would be cut in the same manner Pentagon spending is supposed to be reduced in FY ’13, starting last month, because of sequestration: by taking a set percentage off of most program, project, and activity (PPA) accounts, he said. (The Pentagon is still assessing precisely how the FY ’13 sequestration cuts will be applied.)
Of course, President Barack Obama’s administration and a significant number of lawmakers oppose the sequestration cuts and are hoping Democrats and Republicans agree on an alternative plan to cut the federal deficit. Yet the two parties remain at odds. Harrison argued the Pentagon must stop presenting budget proposals that do not plan for the sequestration spending limits, charging it is preparing to submit a budget that is “still in denial about the cuts that are going to be required anyway.”
Harrison acknowledged that the White House has directed federal agencies to not budget for future sequestration cuts, in hopes they can be stopped. Still, he faulted the Pentagon for not having a backup plan for the sequestration cuts very far in advance of their March start, saying it was “really caught off guard” when it became clear they would kick in.
“Also, I blame the Pentagon for not having a backup plan for the FY ’14 budget,” he said. “They’re not doing the backup plan for what happens when they need to take another $50 billion out of the budget.”
Harrison added “the administration is not the only body in Washington that’s in denial about these budget caps,” pointing to Congress.
The budget resolutions the Republican House and Democratic Senate passed last month both exceed the FY ’14 Budget Control Act cap for defense-related spending as well. Those contrasting plans both call for roughly $552 billion in broader “national defense” monies–which is the amount of defense-related funding that would have been allowed under the Budget Control Act without sequestration. Pentagon spending makes up the vast majority–95.6 percent–of such “national defense” funding. Thus, Harrison said both the House and Senate budget resolutions call for Pentagon funding to exceed the current $475 billion cap for FY ’14 and thus trigger the across-the-board cuts to any excess funding.
Harrison, though, said he does not expect the administration and Congress to agree on a FY ’14 defense budget before that fiscal year starts Oct. 1.
He said it is more likely that Congress will pass a temporary “continuing resolution” (CR) setting FY ’14 funding at FY ’13 levels. If that happens, Pentagon funding for FY ’14 would be $484 billion, or $9 billion more than the $475 billion Budget Control Act Cap.
“So that would actually trigger a small sequester, even if they just pass a CR,” Harrison said.
He expressed doubt that Democrats and Republicans in Congress and the White House can agree on a deficit-reduction deal to replace the Budget Control Act and sequestration.
He told reporters that the current “fog bank of uncertainty” around the budget is preventing defense planners from tackling tricky structural issues such as reforming military compensation, reexamining the size and structure of the civilian workforce, and closing excess military bases.
Harrison said both the Pentagon and Congress are contributing to the uncertainty.
“A lot of people in DoD talk about how Congress is creating of all this uncertainty in the budget, and that’s preventing them from doing the planning,” he said. “I would argue that they are introducing additional uncertainty by not planning for the budget caps that are in effect right now. They’re introducing additional uncertainty themselves. That much at least can be avoided. You’ll never have complete certainty about your budget with Congress, your long-term budget, because Congress appropriates its budget year by year.”
He added “you can’t expect Congress to make the tough choices”–about military compensation, downsizing the civilian workforce, and closing excess bases–if “DoD isn’t willing to make some tough decisions itself.”
Harrison said the structural issues must be addressed to control spending. Even making major cuts to so-called Cold War weapons programs, he said, “doesn’t cut enough out of the budget to meet these (spending) caps.”
“That’s just the cold reality of it,” he said. He noted that even if Pentagon officials killed major programs, such as the F-35 Joint Strike Fighter and V-22 Osprey, they still would need other equipment to replace them, and thus the full amount of money intended for them would not be saved.