22 November RD Bulletin: With Lame Duck Grand Compromise Unlikely, Attention Turns to Short-term Sequester Fix

See: http://www.comw.org/pda/

> From: “Project on Defense Alternatives (PDA)” .> Date: Thu, 22 Nov 2012 13:50:26 -0500
> Subject: 22 November RD Bulletin: With Lame Duck Grand Compromise Unlikely, Attention Turns to Short-term Sequester Fix >
> [1]
> With Lame Duck Grand Compromise Unlikely,
> Attention Turns to Short-term Sequester Fix
> ed. by Ethan Rosenkranz, Abney Boxley | 11/22/12
> [2][facebook.gif] [3][twitter.gif] [4][gif]
> Highlights
> News: Prospects for enactment of a “grand bargain” during the current lame duck
> session of Congress remain dim, with focus now turning to some sort of delay or > “temporary bridge” to avert sequestration.
> News: Despite passage of a six-month Continuing Resolution earlier this year,
> Congressional appropriators are crafting an omnibus spending package that could
> replace the current CR and fund the government for the remainder of Fiscal Year > 2013. Reportedly, appropriators are considering providing the base Pentagon > budget with $518 billion in funding.
> Reports: Last week, the Stimson Center published a new U.S. defense strategy > that outlines ten principles to guide future defense planning, including > avoiding long, protracted ground wars; making robust reductions in nuclear > weapons stockpiles; and halting deployment of U.S. continental-based missile > defense systems.
> State of Play
> Following post-election pledges to work together in addressing the looming > “fiscal cliff” by preventing tax increases and automatic cuts to discretionary
> spending, leadership from both parties met at the White House this week and last > to further negotiations over a compromise budget deal. According to press > accounts, however, the meetings have so far made little progress. Politico
> [5]reports, “Hill Democrats say Republicans aren’t serious about crafting a deal > that President Barack Obama can accept. The GOP’s opening offer, the sources > said, would freeze the Bush-era tax rates, change the inflation calculator for > entitlement programs, keep the estate tax at 2012 levels and authorize a major > overhaul of the Tax Code — although they did not provide a revenue target… > Republicans also want to postpone the sequester.” Meanwhile, [6]CQ Today says > Democrats are pushing for a “down payment” of $1.6 trillion over ten years to > prevent sequestration – half of which would come from increased taxes on > high-income earners. Republicans on the other hand seem more interested in
> providing a smaller down payment comprised mostly of discretionary spending cuts > to domestic programs.
> Pessimism over the prospects of a “grand bargain” coming to fruition during the > current lame duck remains strong. American University professor and Stimson > Center fellow Gordon Adams recently told [7]This Week in Defense News that “I > don’t think you are really going to get a grand bargain. I think you are going
> to get sausage.” Congressional sources confirmed that the most-likely scenario > is that Congress delays the automatic spending cuts until sometime next year
> while perhaps setting up an agreement to have the next session of Congress enact > long-term deficit reduction that could include reforms to earned-benefit > programs and an overhaul of the federal tax code.
> With much of the November election and preceding campaign focused on tax and > entitlement reform, major defense contractors now worry that defense spending
> will take a back-seat in current negotiations over the fiscal cliff. Moreover, > the defense industry is concerned that Congress may embrace the plan put forth
> by the co-chairs of the Fiscal Commission, known as Simpson Bowles, which would > cut defense spending even further than sequestration entails. [8]Unnamed > industry executives told National Defense Magazine that the best-case-scenario
> for a grand bargain would be inclusion of an additional $100 billion in defense > cuts, an idea put forth by Senate Armed Services Chairman Carl Levin (D-MI)
> earlier this year. David Berteau of the Center for Strategic and International > Studies told the magazine that he expects any long-term deal to stave off > sequestration to include at least $30-40 billion in defense cuts per year, but > that they would be delayed until 2016 at the earliest allowing the department > time to budget for the reductions.
> Regarding the prospects for inclusion of additional defense spending reductions
> in any short-term deal to stave off Fiscal Year 2013 sequestration, scheduled to > occur on January 2, 2013, the Center for Strategic and Budgetary Assessments’ > Todd Harrison [9]predicts that “the defense portion of that deal will be cuts
> [at] about half the level that sequestration would require. Instead of an even > $25 billion across every year for the next 10 years, it could be more > back-loaded and it certainly would give DoD the flexibility to target those > cuts, to allocate them in a thoughtful, strategic manner.” [10]Inside Defense > [11]reports that the Pentagon ended Fiscal Year 2012 with $105.7 billion in > unobligated funds, “exposing modernization accounts to a larger portion” of > sequestration cuts, should they occur as scheduled next year. >
> Meanwhile, House and Senate appropriations aides are working feverishly to > assemble an omnibus appropriations bill that could fund the federal government > through the end of the fiscal year, even though Congress has already enacted a > six-month Continuing Resolution covering half of the current fiscal year. > [12]According to CQ Today, significant progress has been made on crafting the
> Defense and Homeland Security portions of the omnibus, the two highest priority > sections for Congressional appropriators. The [13]topline amount appropriated > for defense under the omnibus is expected to come in at $518 billion – which
> would represent a freeze in funding from last year’s enacted level. Aides also
> confirm that an omnibus spending package could be passed without having resolved
> the debate over coming sequestration cuts. An omnibus appropriations bill could > help Congress achieve additional near-term spending reductions compared to the > six-month CR, because the latter bill funds most federal programs at the level > at which they were funded in the previous fiscal year – even if some programs > are slated for cancellation or reduced funding.
> In a [14]recent report, GAO has taken issue with Air Force and Navy plans to > extend the service life of 300 F-16s and 150 F/A-18s by 2,000 and 1,400 flight > hours respectively. Specifically, the GAO report noted that though the Air > Force and Navy’s cost estimates appear comprehensive, there are a lack of > contingency cost estimations in the event that the program is expanded or > additional upgrades are made. This concern is particularly poignant as the
> services have specifically mentioned that the plan could be expanded to include
> 350 more F-16s and 130 more F/A-18s. GAO has recommended that the Air Force and > Navy include a costs range in their plans to cover these possibilities as well > as potentially soliciting independent estimates. The Department of Defense > agreed with all of the GAO recommendations.
> Stimson Center’s “New Defense Strategy for a New Era”
> In a major release, the Stimson Center has published a new U.S. defense strategy > proposal that recognizes and addresses the fiscal pressures facing the United
> States. Funded by the Peter G. Peterson Foundation, the report, entitled [15]A > New US Defense Strategy for a New Era, was developed by a bipartisan group of > fifteen former military officers, academics, defense strategists, and > diplomats. The report outlines ten principles to guide future U.S. defense > planning, including avoiding long, protracted ground wars; making robust > reductions in nuclear weapons stockpiles; and halting deployment of U.S. > continental-based missile defense systems. It recommends prioritizing “vital” > missions, such as protecting the U.S. homeland and global commons over > “conditional” interests, which include humanitarian missions or stabilization > operations.
> With these principles established, the report examines four separate force
> posture options and how much savings or cost each one involves. The baseline is > President Obama’s FY-13 ten-year plan. The second is a build-up option
> that adds resources to the Obama baseline. The third assumes that sequestration
> occurs; the fourth, assumes an even deeper cut. Complementing these options are > a series of proposed efficiency measures which, if successfully implemented, > would subtract $200-$400 billion from the cost of each option over ten years.
> In the baseline case — the Obama plan — the efficiency savings permit a budget > cut of $200-$400 billion with no reduction in planned forces. >
> In the build-up option, only $230 billion is added to the budget, but the > efficiency savings allow the forces to buy a total of $430-$630 billion new > capability. In the sequestration case, the budget declines $550 billion from
> the Obama level, but the efficiency savings soften the impact on the forces, who > need to cut only $150-$350 billion in capability. And in the fourth option, > dubbed “Historic Drawdown,” budget savings are $790 billion, but force posture > and modernization need be cut by only $390-$590 billion.
> In a commentary, one of the members of the commission that developed the report,
> Gordon Adams, raises doubts about whether the efficiency savings can be realized > to the extent the report assumes. Adams also criticizes the report for > prioritizing the protection of the “global commons,” a responsibility that
> international organizations should uphold instead of requiring the United States > to shoulder this burden.
> The Stimson Center’s third and fourth budget options bear some resemblance to
> PDA’s [16]Reasonable Defense proposal, also published last week. PDA’s proposed > reductions fall somewhere in between the two Stimson options. But the PDA
> proposal assumes less in efficiency savings, relying more on force structure and > modernization reductions to achieve assured savings.
> News and Commentary
> TIME: [17]Down in the Weeds with the Pentagon’s Auditors
> “On the floor of the Senate last week, Republican Senator Chuck Grassley of Iowa > continued banging the drum on what he calls weak oversight by the Defense
> Department Office of Inspector General and the Pentagon’s continuing challenges > with achieving private sector-style accounting. ‘This story is about a > difficult audit where the inspector general apparently got a bad case of weak > knees and caved under pressure,’ Grassley said. ‘The inspector general dropped
> the ball on an audit that should be a critical component in Secretary Panetta’s
> effort to bring the Defense Department into compliance with the Chief Financial > Officers (CFO) Act.’” (11/20/12)
> Huffington Post: [18]Cutting in All the Wrong Places
> From the Center for American Progress’ Larry Korb, “As Congress looks for more > areas to cut in this time of austerity, lawmakers must remember that the
> Department of Defense has continued to receive a disproportionate amount of the > nation’s security funding — in spite of unprecedented cost overruns and > incidents of gross mismanagement — while the State Department remains
> chronically underfunded and continually subject to the threat of cuts. Despite > some promising rhetoric from Pentagon officials, rebalancing the international > affairs and defense budgets continues to be more of a talking point than a
> reality. In the last two years, the base — or non-war budget — of the Pentagon > has shot up to an astounding $553 billion in FY 2012 and now easily eclipses > average spending during the Cold War.” (11/19/12)
> Washington Post: [19]‘Fiscal cliff’ threatens the national defense >
> “To avoid further damage, new cuts must skirt areas that affect core U.S. > forces, such as troops, equipment, training and the modernization of weapons > systems. While there is potential for substantial reductions outside these
> areas, achieving them would require a sea change in Congress, which has shielded > the fat of the Pentagon budget. A starting point would be the legions of > analysts and other staff posted to military headquarters and to the Pentagon
> itself; though 100,000 layoffs are not called for, thousands of duplicative jobs > could be trimmed. Next would come changes in costly and wasteful health-care > programs, which consume nearly 30 percent of the budget. Even simple reforms,
> such as giving military personnel incentives to use generic drugs and making the > government a secondary payer for health costs of retirees with private-sector > jobs, could save billions. Last but hardly least, unneeded defense > infrastructure could be shut down if Congress would only allow it: bases, > depots, National Guard facilities and more.” (11/19/12)
> Defense News: [20]Return U.S. Military to Militia Model
> “With no major power threat, no real threat to the American homeland and no
> military that can transit two major oceans without being detected and destroyed > by the most powerful military in history, the Pentagon is in deep denial about > what it really needs… What’s needed is an independent citizens group to review > the Pentagon’s budget one line at a time. The president promised but failed to
> do this himself so he would truly understand the amount of waste in his defense > budget. Programs should be mapped out against the Quadrennial Defense Review > strategy and validated against realistic assumptions about forces, threats, > modernization and costs by those paying the bills instead of vested > interests.” (11/19/12)
> National Defense: [21]More Than One Way to Skin the Defense Budget >
> “There is no shortage of proposals on how the Pentagon could downsize > responsibly. Just this week, defense think tanks, special advisory panels and > lawmakers have unleashed a torrent of studies and recommendations. They all > agree on one fundamental point: The nation’s current defense apparatus will no > longer be affordable, even if sequestration cuts are avoided.” (10/18/12) >
> New York Times: [22]Honey, I Shrunk the Pentagon
> “Budget discipline might finally force the Defense Department to make strategic
> choices and systemic reforms that are worth doing on the merits. Over the years, > think tanks within the military and without have produced an immense, rich
> literature on how to make prudent sense out of austerity. Almost everyone starts > with a significant cut in active-duty ground forces and the heavy vehicles and > artillery that go with them. Keeping America and its allies safe these days > depends more on our formidable array of ships, aircraft and precision-guided > munitions, plus small units of highly trained special ops and drones to combat
> terrorist cells. With the cold war over, we can afford to slash nuclear arsenals > without diminishing our deterrent.” (11/18/12)
> Defense News: [23]Sequestration Or Not, U.S. Firms, DoD Will Take a Hit >
> “Even if the U.S. Congress is able to hammer out a debt deal that avoids
> sequestration in January, the resulting agreement will likely result in billions
> of dollars in additional cuts to the Defense Department — perhaps as much as $25
> billion — likely forcing the military to alter its roles and missions. ‘If they
> come up with a deal to avert sequestration, I think the defense portion of that > deal will be cuts [at] about half the level that sequestration would require,’ > said Todd Harrison, an analyst with the Center for Strategic and Budgetary > Assessments.” (11/18/12)
> Government Executive: [24]Pentagon falls short on savings at joint bases, > auditors say
> “The Defense Department has not made the most of consolidations set in motion > seven years ago by the Base Closure and Realignment Commission, according to a
> new report that found savings have fallen short of projections for joint bases.
> The Office of the Secretary of Defense ‘has not developed or implemented a plan > to guide joint bases in achieving cost savings and efficiencies,’ Government > Accountability Office auditors said in a report released Thursday. Hence, the > estimated savings from combining necessary base services such as information > technology communication, bus transport, facilities maintenance and emergency > services management have fallen 90 percent.” (11/16/12)
> Foreign Policy: [25]The $68 Billion Question: Sen. Coburn’s plan to save the > Pentagon
> “The defense budget is going down, and the really hard question is how to bring > it down sensibly. Coburn’s [26]”waste” proposals do not get us there because > they do not actually save money — they just spend it on more combat-related
> things. That’s good, but it won’t help manage a defense draw-down.” (11/16/12) >
> The Lexington Institute: [27]Budget Logic Points To Further Troop Cuts >
> Loren Thompson writes, “Whether we get budget sequestration or some alternative
> in the new year, it’s pretty clear that military spending will continue drifting
> downward as our divided political system grapples with deficit reduction. Maybe > that wouldn’t be so obvious if the nation were facing urgent threats, but the
> first lesson of the Petraeus Affair is that Washington isn’t real [sic] worried > about threats right now. With 9-11 and Iraq having receded in the popular > consciousness, politicians are much more likely to keep cutting the Pentagon > than rein in entitlement spending or raise tax rates.” (11/16/12) >
> AOL Defense: [28]The Triad Is Not The Trinity: A Response To Gen. Chambers >
> Via the Center for Arms Control and Non-Proliferation’s Kingston Reif, “Every
> dollar spent to modernize and replace aging nuclear weapons systems is a dollar > that cannot be spent on defense priorities that are far more relevant to the
> 21st century security environment, such as upgrading conventional air and naval
> power projection capabilities. The assumptions that undergird the current U.S.
> arsenal of approximately 5,000 nuclear warheads were devised for a confrontation > with the Soviet Union that no longer exists. As the Obama administration > contemplates its second term defense priorities in a time of budget austerity, > it should not let outdated Cold War constructs such as the triad stand in the > way of reshaping U.S. nuclear policy.” (11/16/12)
> U.S. News and World Report: [29]The Pentagon Will Survive the Fiscal Cliff >
> From the Cato Institute’s Justin Logan, “America is so comparatively wealthy
> that it has spent roughly what the entire rest of the world spent on defense for > 20 years. Even this figure is somewhat misleading, since if you include the
> spending of our allies and partners across the world—whom one presumes we’re not > preparing to fight wars against—we currently spend between two-thirds and
> three-fourths of world military spending. Only the recent fiscal crunch, caused
> by ballooning government spending (including defense), relatively low taxes, and > an economic collapse, made us consider trimming our sails a little. Not much, > though: Even if sequestration happens, which seems unlikely, military spending > would wind up at 2007 levels in 2013—2007 was hardly a lean year at the > Pentagon.” (11/15/12)
> Reports
> Citizens for Responsibility and Ethics in Washington (CREW): [30]Strategic > Maneuvers: The Revolving Door from Pentagon to the Private Sector (11/19/12) >
> Government Accountability Office: [31]Security Assistance: DOD’s Ongoing Reforms
> Address Some Challenges, but Additional Information Is Needed to Further Enhance > Program Management (11/16/12)
> Center for Army Lessons Learned: [32]Decisive Action Training Environment: 2nd > Cavalry Regiment (Stryker): Joint Multinational Readiness Center (JMRC) > (10/30/12)
> Editor’s Recommendations:
> [33]Reasonable Defense: A Sustainable Approach to Securing the Nation >
> Taking a realistic view of security needs, the report advocates a military 20%
> smaller than today’s. It advances a “discriminate defense” strategy that would > focus the military on cost-effective missions and save $550 billion more than > official plans over the next decade. PDA, 14 November, 2012. >
> [34]A Reasonable Alternative to Sequester of DoD Funding Options for gradually > reducing the Pentagon budget. 14 August, 2012.
> [35][gif]
> [36]Defense Sense: Options for National Defense Savings in Fiscal Year 2013 15 > May, 2012
> [37][gif]
> [38]USA and Allies Outspend Potential Rivals on Military by Four-to-One: America > Carries Much of the Defense Burden for its Allies 10 May, 2012 >
> [39]
> [40]Consulting the American People on National Defense Spending Program for > Public Consultation, the Stimson Center, and the Center for Public Integrity. > 10 May 2012.
> [41]Myths vs. Realities of Pentagon Spending Center for International Policy, 17 > July 2012.
> [42]Gunpoint Stimulus: Defense contractors are trying to frighten Americans into
> believing that Pentagon budget cuts will destroy the economy. It’s bogus Foreign > Policy, 2 July 2012.
> [43]The Pentagon Budget and Jobs: How does defense spending rate for job > creation? PDA, 25 June 2012.
> [44]How to Pay for Wars National Interest, 6 March 2012. A war tax or an > effective cap on war spending can serve as a disincentive to reckless war > making.
> [45][jpeg]
> [46]Does President Obama Run Hot or Cold on Defense? Taking the Temperature of > the Pentagon Base Budget Past, Present, and Future. 13 February 2012 >
> [47][jpeg]
> [48]Four Decades of US Defense Spending PDA, 25 January, 2012 >
> [49]Short Tour of Pentagon Mismanagement, Waste, Fraud, and Abuse PDA, 20 > November, 2011
> [50]Going for Broke: The Budgetary Consequences of Current US Defense Strategy > PDA, 25 October, 2011
> [51]The Pentagon’s New Mission Set: A Sustainable Choice? PDA, August, 2011 >
> [52]Strategic Adjustment to Sustain the Force: A survey of current proposals > Five proposals by independent experts for adjusting US global strategy to new > fiscal realities in ways that enhance security and avoid ‘hollowing’ of the > forces. PDA, October, 2011.
> [53]Report of the Task Force on a Unified Security Budget for the United States > Foreign Policy in Focus/IPS, 30 June, 2011
> [54][jpeg]
> [55]The Dynamics of Defense Budget Growth, 1998-2011 PDA, 1 June, 2010 >
> [56]Debt, Deficits, and Defense: A Way Forward Report of the Sustainable Defense > Task Force. The report presents options for reducing DoD’s budget — in sum > saving nearly $1 trillion over the next decade.
> [57]
> [58][gif]
> [59][gif]
> We hope you find the PDA Reset Defense Bulletin both helpful and insightful. If
> you have any questions or comments, please contact Ethan Rosenkranz, PDA program > associate, at erosenkranz@comw.org. You can also visit PDA on the web > at [60]http://www.comw.org/pda/
> Past issues of Reset Defense are archived and can be accessed > at: [61]http://pda-rdb.blogspot.com/. If you would like to sign up to receive > weekly copies of Reset Defense, please [62]click here.
> About the Project on Defense Alternatives (PDA): Since its inception in 1991, > the Project on Defense Alternatives has sought to adapt security policy to the > challenges and opportunities of the new era. Toward this end, PDA promotes > consideration of a broad range of defense options and advocates resetting > America’s defense posture along more sustainable, cost-effective lines. >
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