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There is growing fear that the pain of sequestration, which takes a stronger toll each day on service members and families, could be repeated in 2014.
The Pentagon has quietly set in motion a sweeping rewrite of the military’s budget for next year, the first formal effort to absorb the long-term budget cuts that were triggered in March.
According to an internal memo, Deputy Defense Secretary Ashton Carter ordered the service chiefs to prepare for a 10 percent across-the-board cut in fiscal 2014, which begins in October.
Carter’s memo says the Defense Department will continue to publicly urge Congress to enact the official 2014 budget that President Obama unveiled in April, which essentially ignores the caps imposed by the sequestration law.
Yet for internal planning purposes, the military services should be prepared to run their day-to-day operations on much tighter budgets, the memo says.
“We need to develop options in the event that fiscal realities differ from the funding level in the president’s budget,” according to the memo dated May 29 and obtained by Military Times.
That means preparing budgets assuming a 10 percent cut under two scenarios — one across the board for all accounts, and another that assumes Congress will cap spending but permit some flexibility to move money between military accounts and prioritize some missions and operations.
Under current law, the cuts in 2014 could be bigger than in 2013. This year, DoD’s share of sequestration is $37 billion in reductions. But for 2014, the Pentagon faces a $54.6 billion cut.
And cuts in 2014 would be handled differently. First, Congress would have the opportunity to cut spending on appropriations bills to achieve the savings. If that doesn’t work, across-the-board cuts could be ordered within 15 days after Congress passes a funding bill that exceeds the 2011 spending caps, according to a Congressional Research Service explanation of the complicated law.
Because of this process, personnel programs that were exempted from the 2013 sequestration cuts could suffer in 2014 during the first phase, when Congress adjusts spending to avoid or reduce across-the-board reductions.
Sen. Carl Levin, D-Mich., the Senate Armed Services Committee chairman, is among those worried about how sequestration will affect service members and their families.
“Sequestration may be a victory for the tea party, but it isn’t a victory for the United States, and it isn’t a victory for the men and women of our military and their families,” Levin said May 23.
“These cuts will damage our military readiness, restrict our ability to respond when crisis erupts, and restrict our flexibility in confronting national security threats from Iran to North Korea to international terrorism,” he said.
In the long run, he added, they also hurt taxpayers “because maintaining our military readiness today is far less expensive than rebuilding our military readiness tomorrow after it has been squandered.”
Meanwhile, work on an overall $3.7 trillion federal spending plan for 2014 — crucial to preventing another sequester — has ground to a halt.
The House passed its version of the 2014 spending guideline March 21. The Senate passed the resolution March 23 — a major accomplishment, since it was the first overall budget to pass the Senate in four years and required dealing with 573 amendments, 77 of which eventually passed.
The hang-up is at the next step, where the House and Senate appoint negotiators to work out differences, including an agreement on spending, revenue and borrowing power that would avoid sequestration in fiscal 2014.
A group of senators led by Sen. Ted Cruz, R-Texas, is opposing budget negotiations unless the Senate first agrees to leave out an increase in the $16.4 trillion limit on national debt — a ceiling the government may have already breached.
Senate Democratic leaders have no intention of leaving out the debt limit increase. Senate Majority Leader Harry Reid, D-Nev., called Cruz a “schoolyard bully” for not allowing negotiations to begin.
“We want to meet with the House and go forward,” Reid said. “That is what we have done here for two centuries.”
Cruz, joined by fellow Republican Sens. Mike Lee of Utah and Marco Rubio of Florida, are not budging. Cruz said he is concerned that negotiations could result in a process “that would increase the debt ceiling without sufficient input from the minority party and without addressing the fundamental structural spending problems we have in the federal government that are leading to unsustainable debt.”
“The American people want us to fix the problem and stop digging the debt hole deeper and deeper,” Cruz said.
Passing a 2014 defense budget without an agreement on an overall spending plan is possible. The Obama administration, House and Senate generally agree on a 2014 base defense budget of about $526.6 billion plus $87 billion in overseas contingency funds.
But it’s considered unlikely that DoD could be spared another sequestration round unless the entire federal government escapes. That would happen only with some grand budget agreement, even if just to delay or block the cuts without any accompanying increases in revenue or cuts in spending.
Levin is a co-sponsor, along with Sen. Sheldon Whitehouse, D-R.I., of a bill that would avoid sequestration by closing tax loopholes.
“Over the past two months, the armed services committee has heard testimony from our highest-ranking military leaders,” Levin said. “Each of these military leaders told us that continued sequestration will damage our security and harm the troops they lead.”
The Pentagon appears to hope that Congress may ultimately take some half measure to relieve the pain of sequestration. Carter’s May 29 memo to the service chiefs says the department “may, at a later date,” ask for budgets detailing a 5 percent cut rather than the current directive calling for a 10 percent reduction.
Carter told the chiefs to expect to receive a “ranking” of military missions that will help decision-makers identify “potential break points for capacity, capability and readiness that will be important as you shape your forces.” Meanwhile, U.S. Pacific Command is producing a “rapid turnaround adjustment to plans in the Pacific theater,” according to the memo.