WASHINGTON – The Pentagon's chief financial officer admitted on Wednesday that he is "not super optimistic" about Congress reaching a budget deal once the current continuing resolution temporarily funding the federal government expires on Dec. 11.

"What I do worry about is that we're looking at a 'new normal' where people think [a budget being approved] three months late isn't a problem anymore" said Comptroller Mike McCord during an afternoon speech at the TechAmerica defense industry conference in suburban Washington.

Even getting a budget done this year "doesn't seem that likely" since Congress will be locked in a lame duck session after the midterm elections in November. Instead, it's more likely that the looming debt ceiling expiration next spring will be the next best chance for Congress and the White House to reach a deal.

McCord, who did not take questions following his brief remarks, said that Pentagon leadership is "already carrying more risk" than they are comfortable with as the building prepares itself for the possible return of sequestration in 2016.

The fiscal 2016 budget request, which is currently working its way through the civilian Pentagon leadership channels, will likely begin to squeeze modernization accounts for existing platforms, a move that will allow the service chiefs to continue to fund readiness accounts to ensure that troops are properly trained.

Some of this has already happened, as seen in the Army's cancellation of its Ground Combat Vehicle earlier this year, and the Marine Corps slowing down its acquisition of a new amphibious vehicle, both in the name of cost savings.

Both services still plan to move forward with upgrades, but not until later in the decade once they begin to see some budget relief.

As a result of cuts like this, McCord said he is concerned about the larger modernization effort across the services, and what effect such program slippages will have over the long term, since the longer a platform waits for upgrades, the more expensive it tends to be.

"We're probably more concerned about the five years after the next five years being really harder for us as we face some hard bills to modernize the nuclear triad" in particular, he said. The triad modernization includes things like a new long-range bomber for the Air Force and replacing the Ohio-class nuclear submarine, which the Navy has said it will not be able to afford while also modernizing its surface fleet.

For the DoD to afford a sufficient level of readiness while also funding the development and acquisition of truly new technologies that will allow it to dominate increasingly sophisticated potential adversaries, it needs the defense industry's help, said Katrina McFarland, assistant secretary of defense for acquisition.

"Technological superiority is not assured" in the future, she warned, adding that the Pentagon is particularly interested in capabilities that will allow it to counter threats like weapons of mass destruction, electronic warfare attacks, unmanned systems, and a variety of both near-peer and hybrid threats.

"A great deal of emphasis is being put on these areas because we believe that's going to create an advantage and we're very interested in that," she said.

This is at the heart of the new "offset" strategy that Bob Work, undersecretary of defense for policy, and chief weapons buyer Frank Kendall have been pushing in recent weeks.

The Pentagon is looking for new ways to partner with industry and a select group of allies to share the cost burden of research-and-development activities to produce leap-ahead technologies.

McFarland insisted that "if we want to continue to be the superior force we need to take chances, and taking risks is not optional." ■

Email: pmcleary@defensenews.com.

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