The National Guard has lost the budget battle inside the administration. But it has hardly lost the war. “We are disappointed by today’s budget preview, but we are not surprised. Nor are we defeated,” declared retired Maj. Gen. Gus Hargett, president of influential National Guard Association of the United States, in a statement released shortly after Defense Secretary Chuck Hagel’s budget briefing yesterday afternoon. In fact, the odds are looking pretty good for NGAUS because the next fight will be on Capitol Hill, where the Guard’s home-state roots give it a home-field advantage.

That fight will center on the NGAUS-backed proposal to get an independent entity to make decisions about the entire structure of the Army — regular active-duty, National Guard, and Army Reserve. That entity would probably be the same kind of commission a gridlocked Congress has already created for the Air Force and military compensation.

How hot is this issue? One Guard leader, Minnesota Adjutant General Maj. Gen. Richard Nash, formally renounced his membership in the Association of United States Army because AUSA opposes the idea. “It is now clear to me that AUSA does not view the Guard and Army Reserve as full partners,” Nash wrote to AUSA chief retired Gen. Gordon Sullivan, who has written Congress denouncing the independent panel idea. “Why would AUSA oppose an open, transparent commission?”

“We do not need help from outside,” said Sullivan, a retired active duty officer and former Army Chief of Staff himself, when I spoke to him Friday in Huntsville, Ala. at AUSA’s winter 2014 conference. “I don’t think the chief or the secretary need help from the outside from some group that’s not responsible, not accountable, to put the Army together in the future.”

“I’m very well aware that NGAUS is a political powerhouse,” Sullivan told me, hinting vaguely at his own plans to visit “certain select members of Congress” and restore harmony between the regular Army and the Guard. Won’t that be an uphill battle? Sullivan smiled: “Y’know, that never stopped me before.”

While AUSA is categorically opposed to a commission, “we are categorically supportive of it,” NGAUS spokesman John Goheen told me this morning. “We think the nation would benefit from an independent look at the Army….In the interim let’s not do things that are irreversible.”

On paper, the Army structure that Defense Secretary Chuck Hagel outlined yesterday seems to split the difference: Regular Army leaders wanted to cut the Army National Guard from the current 350,000 to 315,000, Guard leaders proposed 345,000, and Hagel said 335,000. The problem is those are magic numbers, castles built on the cloudy prospect that Congress will do away with the 10-year, half-trillion defense cut known as sequestration, which a budget deal in December merely deferred. If the sequester stays, Hagel warned, the Guard would have to go down to 315,000 personnel.

“The number 315 is still there, and it’s only going away if Congress does something that is fairly monumental,” Goheen said, noting how hard it was just to get December’s deferral of sequestration. “When we talked in January, we thought there was a chance” to avoid Guard cuts,” he sighed. “There were some rumblings and chatter that there was a chance late last week. Didn’t work out. I’m not surprised.”

Even in the no-sequester scenario, Hagel has approved the Army plan to strip the Army National Guard of all its AH-64 Apache attack helicopters as part of a general downsizing and reorganization of its aviation.

“Whoa! Do we absolutely have to take all the Apaches out of the Guard?” Goheen said. “Do we have to decide what the Army’s going to look like in five years, six years, in the next two months?….We don’t, and there’s a growing number of people in Congress who feel the same way.”

“Let’s open up this process to all of the stakeholders,” Goheen concluded.

Sullivan sees that as a dangerous diffusion of responsibility. “People have a hard time understanding that when you are responsible, when you are responsible for the outcomes on the battlefield, your brain cells become very focused, and it’s different than just being responsible for writing a report,” Sullivan told the audience at AUSA Winter, to loud applause and the occasional “Hooah!”

While Maj. Gen. Nash’s letter accused the AUSA chief of “driving a wedge between the Active Component and the Guard,” throughout the conference, Sullivan in fact hammered passionately on the need for regulars, Guardsmen, and reservists to pull together.

“We are very supportive of our Guard and Reserve,” Sullivan declared in his first remarks opening the first day. “We’re all one Army,” he declared on the last day. “If there’s any press here who feels inclined to write this,” he said as he closed the conference, “the Army needs active, Army National Guard, and Army Reserve. It is a total Army.”

“He talks about the components need to work together and to come together to find a solution that works for one Army, Goheen told me this morning. “Yeah! That’s the way the process should work, but it hasn’t worked like that.”

Sure, it would have been ideal to have resolved the regular-Guard dispute within the Army family, Goheen said. “It appears to be too late.”