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DoD expects up to $100B more in cuts

Mar. 28, 2011 - 06:00AM   |  
By MARCUS WEISGERBER   |   Comments
Defense Secretary Robert Gates issued a memo March 14 calling for more than $13 billion in overhead cuts across the Office of the Secretary of Defense, combatant commands and Pentagon agencies.
Defense Secretary Robert Gates issued a memo March 14 calling for more than $13 billion in overhead cuts across the Office of the Secretary of Defense, combatant commands and Pentagon agencies. (Yoshikazu Tsuno / Agence France-Presse)

With another round of spending cuts on the horizon, top Pentagon officials spent the last week trying to determine exactly how they might trim billions of dollars from the 2013 budget.

The Defense Department is bracing for what senior Defense officials believe will be an order to cut scores of billions of dollars from the five-year Future Years Defense Program (FYDP). This would come in addition to the $78 billion the Pentagon already plans to cut from its planned spending between 2012 and 2016.

"That $70 to $100 billion [in] additional cuts across the FYDP is just the opening gambit in a multiyear story," said Loren Thompson of the Lexington Institute think tank, Arlington, Va.

The top uniformed officers and senior civilians from all of the services huddled in a series of meetings last week in advance of the Pentagon's top-line budget figures from the White House. The Office of Management and Budget is expected to issue the fiscal guidance as soon as this week.

DoD budgeteers, already hamstrung by the lack of a 2011 spending bill, are also trying to forecast the ultimate costs of the Libyan war and the Japanese relief effort.

This week, the Pentagon released its 2012 "Green Book," a document that estimates defense spending over the next five years. The Green Book projects DoD's budget to be $621 billion in 2013 $50 billion less than the $671 billion 2012 budget request.

The 2013 projection slates $50 billion for the combat operations, which pales in comparison to the $118 billion requested in 2012.

The services were able to squeeze $178 billion using various efficiencies during the 2012 budget build. Of that figure, DoD wants to invest $100 billion in high-priority programs, including a new Air Force stealth bomber. The remaining $78 billion would go toward reducing the more-than-$14 trillion national debt. Last year, two independent panels said it would take substantial defense cuts to reduce that figure.

"The government is currently borrowing money at the rate of about $4 billion per day and the Pentagon's share of that is nearly $1 billion," Thompson said. "What you think the cut is going to be as of today, it's likely to be even more when the cuts finally arrive."

On March 14, Defense Secretary Robert Gates issued a memo calling for more than $13 billion in overhead cuts across the Office of the Secretary of Defense, combatant commands and Pentagon agencies.

But if the Pentagon wants to find more so-called efficiencies, it would need to target lower-priority programs, DoD Comptroller Robert Hale said earlier this month. If the White House orders deeper spending reductions, DoD officials would need to consider targeting investment accounts.

"The area that politically and operationally is easiest to cut is the investment accounts," Thompson said.

Since research and development coffers primarily go toward yet-to-be-fielded weapons, they're not missed by the operational force, Thompson said. Also, the economic impact is localized, so it doesn't create an uproar in Congress. Thompson pointed to Gates' 2009 termination or scaling back of a number of programs, including the Air Force's combat search-and-recue helicopter, Army Future Combat System and Marine Corps presidential helicopter. These initiatives and others would have totaled about $300 billion over their lives.

"[T]here was very little reaction from the Congress because almost all that spending was in the future and very few of the weapons were actually fielded," he said. "You can't take that kind of money out of personnel or out of operations and maintenance without people going ballistic."

The Green Book pegs 2013 DoD research-and-development funding levels on par with 2012. It also projects a $4.6 billion increase in procurement over 2012 base budgets level.

The services have been working on the 2013 budget build for several weeks. But with so much uncertainty surrounding the yet-to-be-approved '11 and '12 budgets, the 2013 plan will need some serious amending, according to Defense officials.

Congress has yet to pass a 2011 defense spending bill, instead opting to approve a series of continuing resolutions (CRs) that fund the Pentagon at 2010 levels. This means DoD is prohibited from kicking off programs it planned to start and altering procurement quantities as desired in 2011. On top of that, the Pentagon has been issuing short-term contracts, which experts say is highly inefficient. The latest CR expires April 8.

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