Debt Deal Nails DoD Budget; HAC Must Cut Another $19B

UPDATED Washington: Few things seem certain at this point from the budget deal struck yesterday. One point that three Hill sources agree on is that the Defense Department budget may well be frozen at or near 2011 levels. That means, a professional Hill staffer says, that the House Appropriations Committee will need to find another $19 billion in cuts from the base budget above and beyond the $9 billion already whacked from the administration’s request. For more news and information on the swiftly-changing defense industry, please sign up for the Breaking Defense newsletter. You can also catch us on Twitter @BreakingDefense. The next great question looming over the U.S defense world is, will the $350 billion in defense cuts over the next decade called for in the debt deal come on top of President Obama’s $400 billion called for over the next 12 years? The professional staffer and a GOP defense analyst, Mackenzie Eaglen, say the $350 billion substitutes for the president’s cuts. “The debt ceiling deal (which is not a solution to any of our fiscal problems), as best we can tell, calls for $350 billion in base budget defense cuts over 10 years as part of tranche 1 starting in FY 2013 (as part of Obama’s budget coming to the Hill this February). This is basically in lieu of the $400 billion proposed in Obama’s April speech. This would break out to roughly $35 billion from the base budget next yea,” says Eaglen, who follows the Pentagon at the Heritage Foundation. That comports with what the professional staffer has heard. However, a Capitol Hill aide says the $350 billion in cuts over the next decade comes not just from the defense budget. It will be pulled from foreign operations, the Department of Homeland Security,, the Veterans Administration and the Pentagon. Whether national security agencies such as CIA and its military friends are included is not clear, according to the Hill aide. The Armed Services committees have already sent questions to the Congressional Budget Office to get a clearer idea of what cuts are likely to come from which department. Not a great deal more is known with certainty. Former Defense Secretary Robert Gates made much of his concern that the Pentagon be allowed to cut based on its strategic needs. The presidentially-mandated roles and missions review was supposed to make that possible. “It may be that will still help guide us on specific programs,” the Capitol Hill aide said. But most of our sources believe it will serve as cover for a traditional Washington budget exercise: hand out a topline budget number and cut to it. “It’s too soon to know with any precision,” notes Doug MacGregor, a retired Army colonel and strategic consultant. “However, if the past is any guide, the gutless politicians will leave it to the four-stars to make the cuts. If so, it will be a disaster.” Eaglen is similarly skeptical that strategy will guide the Pentagon as it makes cuts. “Unfortunately, the roles and missions review was never set up to be anything more than a paper tiger used to justify whatever cuts are made over the next two years (just like the 2008 NDS and 2010 QDR justified the program kills in the FY10 budget),” Eaglen said in an email. “General (Martin) Dempsey [presumptive chairman of the Joint Chiefs of Staff] admitted what we all already know last month: the roles and missions review is moving in parallel to the budget process. Translation: cuts first, strategy later.” And then there are the defense cuts that may come from the Gang of 12, the so-called Super Congress, who will determine by December where in the government the next $1.2 trillion in cuts will come from. That number is, so far, completely unknown. Expect a loud howl from Rep. Buck McKeon, chairman of the House Armed Services Committee, and many of his GOP colleagues should the Pentagon be called upon to sacrifice more. Finally, the basic question arises as to just whether this debt deal will require the assent of the congressional appropriators or whether they must bow to the budget deal. The two Capitol Hill sources believe the debt deal rules and the appropriators must accept it. “I think the budget agreement will rule everything,” the Capitol Hill aide said. Eaglen disagrees, saying she doesn’t think the deal passes “the smell test. Therefore I don’t give much of this deal any credibility as being “real.” And how many triggers (like the debt ceiling!) has Congress imposed on itself only to ignore or waive them later.” As Monday wore on and defense lawmakers had time to consider the debt deal, the reactions began to trickle out. Rep. Todd Akin, a senior member of the House Armed Services Committee and a member of the House Budget Committee, said he would vote against the deal because it could cost defense almost $1 trillion in cuts. “In the worst case scenario, this bill could result in roughly $1 trillion in cuts to the military. Almost half of the debt ceiling increase may come at the expense of our national defense. I believe that many of my colleagues on the Armed Services Committee share my deep concerns with the defense cuts proposed in this plan,” Akin said in a statement. “We have had problems with deficit spending for much of our history, but we are approaching the point of no return. A balanced budget amendment would force us back on a responsible path. If not now, when? If not us, who? “The plan before us today fails to address the problem at hand, and it threatens to severely degrade our national defense with a trillion dollars in cuts to our military,” Akin said. The chairman of the House Armed Services Committee, Rep. Buck McKeon, reluctantly agreed to vote for the debt plan “with deep reservations.” The plan, which he called “the least bad proposal before us,” could break the military if the second round of cuts go through. With that in mind, he said “it is essential” that “strong national security voices” be appointed to the 12-member panel. (One guess who McKeon would like to see on the Super Congress.) “Defense,” he added, “cannot sustain any additional cuts either from the joint committee or the sequestration trigger.” The Aerospace Industries Association, one of Washington’s most powerful lobby groups, said the second round of cuts — though not mandatory — “are so draconian that it’s hard to believe they are even on the table.” The possible $600 billion in additional cuts, AIA says, “could compromise our national security for decades to come, while at the same time failing to create fiscal stability. Worst of all, they could leave our troops with old, worn-out equipment, diminished capability and vulnerable to threats from across the globe.” These responses may show that the toughest test for this debt deal may be the test of time. UPDATED 6:35 PM Monday

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Doug MacGregor

Debt Deal Nails DoD Budget; HAC Must Cut Another $19B

Posted on August 1, 2011

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