American Society of Military Comptrollers

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The FY2013 DoD base budget request, released yesterday, totals $525 billion, $5 billion dollars lower than the FY2012 enacted amount ($531 billion).  The budget also separately requests $88 billion, down $27 billion from the amount enacted for FY2012 ($115 billion).

The president presented a long-term DoD budget plan that cuts $487 billion (over 10 years) from the plan submitted last year in order to meet the funding goals set by the Budget Control Act of 2011.  That plan cuts the FY2013 budget by $45 billion from that assumed last year and by $259 billion and for the period FY2013-17.

In a DoD press statement accompanying release of the budget, Defense Secretary Leon Panetta said the budget plan will “keep America safe and maintain the strongest military in the world.”  Acknowledging the severe budget constraints under which the budget was prepared, Panetta said “we are also redoubling our efforts to make better use of the taxpayer’s defense dollar and meet our fiscal responsibilities.”

The FY2013 DoD budget request is 2.5 percent lower in real terms (budget dollars adjusted for inflation) than the FY2012 enacted level, the third consecutive year of negative growth in defense budgets.   Budget reductions over the next four years will mean no real growth in FY2013, but will allow for minimal growth in FY2015-2017 (almost 1 percent in FY2015 and .2 percent in FY2016 and in FY2017.

Only the Army’s budget increases in FY2013.  The Army’s base budget request is $134.6 billion (25.6%), up $647 million.  The Navy’s budget (including the Marine Corps) totals $155.9 billion (29.7%), declining by $914 million, and the Air Force’s request at $140.1 billion (over 26.7%) is $4.8 billion lower than in FY2012.  The budget request for Defense wide accounts amounts to $94.9 billion (18%), slightly lower than the previous year.

The budget request supports a 1.7 percent pay raise for military personnel and a .5 percent pay increase for civilian employees.  DoD Comptroller Bob Hale told reporters in the press briefing on the budget that planned military pay raises for FY2014 are also 1.7 percent.  But, Hale said after that budget constraints limit planned raises to .5 percent in FY2015, 1 percent in F2016, and 1.5 percent in FY2017.

To meet the lower budget levels called for in the Budget Control Act, DoD reduced force structure, adjusted the investment program, and cut overhead.

The size of the active force will decline over the next five years by almost 103,000.  The Army will drop form a current force of 562,000 to 490,000 (-72,000) and the Marine Corps will go from 202,000 to 182,000 (-20,000).  The Navy force will decline by 6,200 (319,500) and the Air Force will reduce its force by 4,200 to 328,600.  Total reserve end strength will decrease by 22,000 by FY2017.  Only the Marine Corps reserve forces will experience no reduction.

To support the plan to rebalance the global posture and presence toward the Asia-Pacific area and the Middle East, the budget maintains an 11-ship carrier fleet (with 10 air wings) and the current bomber fleet, and sustains Army and Marine Corps Pacific force structure while having a “persistent presence in the Middle East.”  The budget also provides investments including funding for a new bomber and new Afloat Forward Staging Base, and increases cruise missile capability on submarines and upgrades sensors, electronic warfare, and communications.

DOD will invest in programs considered high priorities, especially Special Operations Forces (SOF), the tanker programs, unmanned air systems, cyber capabilities, space, and science and technology.  However, to accommodate these priorities within constrained budget levels, the budget cuts funding by $75 billion in other investment programs for the FY2013-17 period.  For example, funding is reduced for the Joint Strike Fighter (-$15 billion,), shipbuilding program (-$13 billion), and Global Hawk (-$2.5 billion).

Hale said DoD made “more disciplined use of defense dollars” to meet the new lower DoD budget levels.  Rephasing military construction, reducing travel and printing, and using IT better will save almost $13 billion in FY2013-17.  Implementing better business practices, emphasizing strategic sourcing, and streamlining installation support will save another $13 billion.  DoD will achieve further savings by reducing OSD and Defense Agency expenses, (including cuts in contract funding) and improving financial information and audit readiness.  Taken together, these actions are expected to save about $60 billion over the next five years.

The budget also includes a request for congressional approval of another round of Base Realignment and Closure (BRAC).  But, Hale said DoD will not budget any BRAC-related savings or costs until Congress provides authority.

Additional detail on the FY2012 budget request is available on the DoD Comptroller website.

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President Obama will release the FY2013 federal budget to the public and the Congress on Monday, February 13, 2012.  Each year the budget is to be submitted on the first Monday in February.  But, this year the president delayed the submission by one week.  OMB cited the need for more time to make final budget decisions and technical details as the reason for the delay.

The president’s FY2013 budget request is expected to match the total discretionary funding level ($1.05 trillion) called for in the Budget Control Act of 2011.  Some details of the request have already been discussed in public by administration leaders.  Secretary of Defense Leon Panetta recently announced that the FY2013 DoD budget request would be $528 billion, down $22 billion from the enacted $531 billion for FY2012.  The president’s FY2013 request is also expected include a .5 percent federal civilian pay raise.

After the FY2013 budget is released, senior administration civilian and military officials will brief the press and begin testifying before the congressional oversight committees.  Acting Director of Management and Budget  Jeffrey Zients will hold a press conference on the budget on Monday, as will Secretary of Defense Leon Panetta and other agency heads. 

Zients is scheduled to testify on the budget before the Senate Budget Committee on Tuesday, February 14.  Secretary Panetta and General Paul Dempsey, Chairman of the Joint Chiefs, will appear before the Senate Armed Services Committee (SASC) on Tuesday, February 14 and the House Armed Services Committee (HASC) on Wednesday, February 15.  The Military Service Secretaries and Military Chiefs of Staff will begin testifying on their respective components of the DoD budget in March.

Next week, Highlights will include a brief overview of the FY2012 DoD budget request and identify links to official statements and available budget material.

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The automatic across-the-board budget cuts (sequestration) to DoD and other federal agencies that will happen in January next year would be averted under a bill introduced by Senators Jon Kyle (R-AZ) and John McCain (R-AZ).  The Down Payment to Protect National Security Act of 2012 (S. 2065) provides an alternative to the $1.2 trillion in automatic cuts for FY2013-21 required by the Budget and Control Act of 2011. 

The proposed bill would meet the discretionary spending limits for FY2013 to FY2021 by achieving savings from extending the current federal civilian employee and congressional pay freeze through 2014 and reducing the size of the federal civilian workforce by five percent.  The five percent workforce cut would be achieved by replacing every three departing federal employees with only two workers. 

According to McCain, these actions would save more than $110 billion in 2013 that will otherwise be cut from the federal budget through sequestration.  ”We should at least be able to agree to one-year in targeted spending reductions, instead of the draconian, across-the-board cuts resulting from sequestration.”

In December, Rep. Buck McKeon (R-CA), chair of the House Armed Services Committee, introduced a bill (H.R. 3662) to avoid sequestration.  Like its Senate counterpart, McKeon’s bill is in response to concern about the pending $500 billion in automatic cuts to defense budgets through 2021 ($55 billion in 2013).  The House bill calls for a 10 percent reduction in the federal workforce (replacing three leaving employees with one worker), but does not include extending the federal pay freeze. 

Reacting to the Senate bill, McKeon said “no one believes this is a perfect or final solution, but it is a realistic one.  It keeps our national security structure whole through a very political year, giving our military the certainty they need.”

However, even with strong pro-defense member support, both bills will face stiff opposition in the Democrat-controlled Senate.  So, although each day brings sequestration closer to implementation, it Is highly improbable that enough votes can be cobbled together in Congress to pass and send to the president an alternative to sequestration before the elections in November.