Breaking the Chains of the BCA

edited by Charles Knight & Carl Conetta

Reset Defense Bulletin 2014

Changes to national security policy in 2014 will unfold in the context of the extended drawdown
of U.S. military operations in Afghanistan, the problematic strategic legacies of the post-9/11
military interventions, and a sluggish economic recovery from the Great Recession.  Together
these conditions oblige the United States to make substantial adjustments to strategy and
force posture.
PDA Review
As the 2015 budget release approaches (March 11th) it is becoming clear that the Administration is preparing the way for a 2016 Pentagon break-out from the restraints of the BCA.  Defense News reports that the 2016 budget will be projected at:

about $36 billion over the sequester cap. The administration would offset the defense increase in other areas of the federal budget, sources said." 

Sandra Erwin provides the context in National Defense Magazine:

"The Obama administration so far has refused to submit budgets that comply with the budget caps that are set by law. Congress has aggravated the situation by rejecting almost every Pentagon cost-saving recommendation, such as increasing Tricare fees for retirees, taking aging ships and aircraft out of service and closing excess military bases."

Winslow Wheeler points to one of the instigators of higher future budgets -- the inclusion of a 'wish list' to be submitted with the 2015 budget.  Wheeler writes:

"Gates deserved some real praise for stopping the JCS from running behind the backs of defense secretaries (and presidents) to solicit spending above and beyond officially approved defense budgets. For years, the JCS had pre-arranged with high-spending members of the Senate and House Armed Services Committees to be asked at hearings to submit lists of programs for extra spending. The JCS preferred to call these lists "unfunded requirements;" everyone else called them 'wish lists'.  Hagel and the director of the Office of Management and Budget (OMB), Sylvia Mathews Burwell, say they want to revive the old "wish list" process in which the Joint Chiefs of Staff used to connive with each other and Congress, behind the back of secretaries of defense and OMB, to make additions that couldn't cut the mustard in the regular budget review process."

Ryan Alexander writing in U.S. News says:

"... the plan is to allow programs in the investment fund to bust the budget caps set by the Budget Control Act for fiscal years 2016-2019 should they happen to be funded by the Congress. Yes, that’s right. This is a thinly disguised plan to tempt Congress to circumvent the caps set in place to rein in Pentagon spending..."

The other method of avoiding the constraints of the BCA currently employed by the Pentagon is to shift spending from the base budget into the Overseas Contingency Operations (OCO) budget which is exempted from BCA caps.  This method is already in use and may become an habitual work-around for the Administration and Congress. 

The Committee for a Responsible Federal Budget has a useful collection of charts illustrating the effects of budget gimmicks.  They warn that the OCO budget can become a "slush fund to further worsen the debt."

Since the Bush administration the White House has used OCO 'placeholders' in future year budget projections.  Originally these were supposed to anticipate the minimal future operational costs of the 'long war' against global terrorism.   The number they chose, $50 billion, has been used by budget planners ever since, eventhough each year it is replaced by a much higher number. 

It will be instructive whether the future year OCO placeholders included in the 2015 budget ratchet down with the end of U.S. operations in Afghanistan or whether they remain at the Bush-era level, suggesting permanent slush.  And will the 2015 OCO come down substantially reflecting the withdrawal of the majority of American soldiers from Afghanistan by a point only a quarter the way through the fiscal year?

On February 5th four DC think tanks presented their respective "alternatives to the QDR and FY15 defense budget."  They used a costing methodology developed by the Center for Strategic and Budgetary Assessments.  As reported in The Hill by Kristina Wong:

"... participants made clear that these were not 'recommendations,' but decisions they would choose if forced to under two different budget scenarios — one under congressionally-imposed budget caps known as sequestration, and the other under 'half-sequestration.'" 

Wong further reports that:

"... the four teams all decided to cut non-stealthy fighters, shrink the number of the Army’s active duty and reserve infantry brigade combat teams, cut the number of active duty soldiers, reduce carriers and destroyers, downsize the number of civilians, and spend more money on space, cyber, and communications."

Sandra Erwin of National Defense Magazine may have had these studies in mind when she wrote:

"Army Chief of Staff Gen. Ray Odierno fired a fresh salvo last week when he drew a hard line on force reductions that would be necessary to comply with the 2011 Budget Control Act. By the latest projections, the Army would have to dip further to 420,000 to fit within the budget caps. But Odierno drew a hard line at 450,000. With 60,000 soldiers deployed and uncertainty about future U.S. military needs, the Army should not be cut so drastically, he said. He called for a minimum of 450,000 active, 335,000 Guard and 195,000 Reserve troops."

The Project on Defense Alternatives has called for a 'sustainable' active duty Army of 420,000 since 2012.

Megan Scully reports in CQ Weekly [subscription] that:

"...with the active-duty forces fiercely guarding their budgets to pay for their own priorities, there is a fight within all of the services for resources. If it doesn’t win the battle within the Pentagon, the National Guard will have to circumvent department and military leaders and appeal directly to lawmakers, adding fuel to long-standing intra-service rivalries."

This may already have happened when Rep. Joe Wilson, R-S.C sponsored H.R. 3930 which would establish a “National Commission on the Structure of the Army” modeled on last year's commission on the structure of the Air Force.  This legislation elicited a letter, reported on by Army Times, from former Army chief of staff Gordon Sullivan to House Speaker Rep. John Boehner saying:

“Such a commission is unnecessary, could damage Army readiness, and would impede the Army’s ability to implement spending reductions required by the 2011 Budget Control Act.” 

The Army Times article goes on to say, "On the flip side, NGAUS [National Guard Association of the United States] has called on its members to ask their representatives to support Wilson’s bill."  This intra-service rivalry in now out in the open.  

While the U.S. begins its pivot to Asia in order to confront concerns about China's growing regional power, Taiwan has announced a reduction in its armed forces of between 12 and 21 percent over five years.  While disputes in the South China Sea have received attention recently, since the 1950s the possibility of war over the sovereign political status of Taiwan has been by far the most serious regional war scenario involving the U.S. and China.   It says something worthy of reflection about the 'China threat' in the region that Taiwan now feels secure enough to reduce the size of its armed forces.

This month and last there has a been a slew of reports, many from CRS,  on relevant matters.  These are cited with links below.



Select News and Commentary

Foreign Policy: "The Men Who Really Run the Pentagon," Winslow Wheeler, 14 February 2014.

Foreign Policy: "Great Expectations: Are the Pentagon budget planners encouraging bad behavior?" Gordon Adams, 14 February 2014.

National Defense Magazine: "Defense Officials Step Up Rhetoric Against Cuts," Sandra I. Erwin, 13 February 2014.

CQ Weekly: "A Guarded Future," Megan Scully, 10 February 2014 [subscription]

Defense News: "White House Pushes Budget Hike," 09 February 2014.

The Hill: "At Pentagon, pre-emptive budget strikes," Jeremy Herb, 09 February 2014

National Defense Magazine: "Defense Spending After 2015: It's Anyone's Guess," Sandra I. Erwin, 06 February 2014.

U.S. News: "Zombie Defense Spending Rises Again:Here's how military spending caps will be busted," Ryan Alexander, 05 February 2014.

The Hill: "Defense budget exercise cut soldiers, carriers and fighters," Kristina Wong, 05 February 2014.

Al Jazeera: "Revisiting the Obama Doctrine," Marwan Bishara, 26 January 2014.

Sino Daily: "Taiwan to slash armed forces by up to 20 percent," 21 January 2014.

Key Reports, Journal Articles, and Books

Committee for a Responsible Federal Budget: "Everything Your Need to Know About Budget Gimmicks, in 8 Charts," 11 February 2014.

CRS: "Navy Littoral Combat Ship (LCS) Program," Ronald O'Rourke,  05 February 2014.

CRS: "Navy DDG-51 and DDG-1000 DestroyerPrograms," Ronald O'Rourke,  04 February 2014.

CRS: "Navy Virginia (SSN-774) Class AttackSubmarine Procurement," Ronald O'Rourke,
03 February 2014.

CSIS: "Iraq in Crisis," Anthony Cordesman and Sam Khazai, 29 January 2014.

Center for Strategic and Budgetary Assessments: "Joint Think Tank Event: Alternatives to the QDR and FY15 Defense Budget," 28 January 2014.

CRS: "Instances of Use of United States Armed Forces Abroad, 1798-2014," Barbara Salazar Torreon, 13 January 2014.

CRS: "Marine Corps Drawdown, Force Structure Initiatives, and Roles and Missions," Andrew Feickert, 09 January 2014.