Pentagon Comptroller Explains Budget Issues

WASHINGTON, Feb. 16, 2011 — While acknowl­edg­ing a tougher finan­cial real­i­ty, the Defense Department’s top finan­cial offi­cial yes­ter­day warned of a dis­rup­tion in war fund­ing and oth­er like­ly effects if Con­gress con­tin­ues to force the mil­i­tary to oper­ate on con­tin­u­ing res­o­lu­tions instead of ful­ly fund­ed bud­gets for fis­cal 2011 and 2012.

In a “DOD Live” blog­gers round­table yes­ter­day, Pen­ta­gon Comp­trol­ler Robert F. Hale explained Pres­i­dent Barack Obama’s $671 bil­lion fis­cal 2012 bud­get request for the Defense Depart­ment and detailed poten­tial effects if the mil­i­tary must con­tin­ue oper­at­ing with­out a ful­ly fund­ed fis­cal 2011 budget. 

Although DOD offi­cials con­tin­ue to look aggres­sive­ly for oppor­tu­ni­ties to cut and save, Hale said, Con­gress must give the depart­ment suf­fi­cient fund­ing. Bud­getary delays with con­tin­u­ing res­o­lu­tions, he added, would pose a nation­al secu­ri­ty problem. 

“We face a sig­nif­i­cant prob­lem in the cur­rent fis­cal year,” he said. “We are on a con­tin­u­ing res­o­lu­tion, … and a year-long con­tin­u­ing res­o­lu­tion would pose seri­ous prob­lems for us. It would­n’t pro­vide enough resources to prop­er­ly meet our nation­al secu­ri­ty require­ments [and] would fea­ture a $23 bil­lion cut com­pared to our proposal.” 

Hale said fund­ing via con­tin­u­ing res­o­lu­tion would lim­it the military’s dis­cre­tionary spend­ing pow­er, reduc­ing man­age­r­i­al flex­i­bil­i­ty and the pro­cure­ment of assets. Some 50 “shov­el-ready” mil­i­tary con­struc­tion projects con­tin­ue to be delayed by con­tin­u­ing res­o­lu­tion fund­ing, he not­ed, and the Army recent­ly froze hir­ing of civil­ian per­son­nel, leav­ing posi­tions vacant for tank mechan­ics and the like. 

Hale said the depart­ment requires “rea­son­able fund­ing” to avert a fis­cal crisis. 

The fis­cal 2012 bud­get request includes $533 bil­lion in dis­cre­tionary spend­ing author­i­ty, with anoth­er $118 bil­lion to sup­port oper­a­tions in Afghanistan and Iraq, com­pared with an autho­riza­tion this year of $725 bil­lion that includ­ed an addi­tion­al $41 bil­lion for the war effort. 

Total defense spend­ing would decline by $15 bil­lion to $35 bil­lion, depend­ing on whether Con­gress funds war spend­ing — beyond the nor­mal bud­get — with a con­tin­u­ing resolution. 

At the very least, the Pen­ta­gon requires $540 bil­lion in fis­cal 2012, Hale said, not­ing that the “reform agen­da” of the new Con­gress has pro­posed fund­ing of about $532 billion. 

“While we’re accom­plish­ing our nation­al secu­ri­ty goals,” he said, “we rec­og­nize the coun­try has got seri­ous eco­nom­ic prob­lems, and we are work­ing to tight­en our belt.” 

Toward that end, Hale said, Pen­ta­gon offi­cials con­tin­ue to reform the bud­get and acqui­si­tions process. Aside from a 10 per­cent cut in con­tract­ing ser­vices that would save $20 bil­lion or so per year, he said, the mil­i­tary pro­pos­es cuts to ground forces to save anoth­er $6 bil­lion over a five-year peri­od. In a mul­ti-year plan, Hale added, the mil­i­tary wish­es to cut Army end strength by 27,000 while shed­ding 15,000 to 20,000 posi­tions in the Marine Corps. 

In addi­tion, he said, the depart­ment intends to cut the Marine Corps’ expe­di­tionary fight­ing vehi­cle, but would main­tain the service’s amphibi­ous capa­bil­i­ty with a cheap­er vehi­cle and upgrades to the exist­ing fleet. 

Hale also said the mil­i­tary would con­tin­ue to mod­ern­ize equip­ment as plan­ners con­tin­ue to focus on cur­rent wars, ensur­ing prop­er resources for intel­li­gence, sur­veil­lance, recon­nais­sance, rotary-wing air­craft and what­ev­er it takes to build “part­ner­ship capac­i­ty” in the war zones of Afghanistan and Iraq. 

“We’re mod­ern­iz­ing broad­ly for future con­flicts, [with] aggres­sive mod­ern­iza­tion of our tac­ti­cal air fleet, our ships, a new bomber pro­gram, a ground vehi­cle pro­gram and, final­ly, sup­port­ing our deployed troops — espe­cial­ly those in war zones — with all the resources they need, includ­ing finan­cial resources,” he said. 

In fact, he not­ed, the imper­a­tive to “sup­port the troops” rep­re­sents the most dra­mat­ic change to the defense bud­get from this year to the next. The Pen­ta­gon pro­posed spend­ing $8.8 bil­lion next year for fam­i­ly sup­port pro­grams, with about $500 mil­lion in fund­ing shift­ed from exist­ing wartime funds. 

“As we invest these dol­lars to meet our nation­al secu­ri­ty require­ments, we fol­low sev­er­al themes, [but] our most impor­tant goal is to take care of our peo­ple,” Hale said. “We pro­pose a pay raise of 1.6 per­cent, about $8.3 bil­lion in fam­i­ly sup­port spend­ing, and sub­stan­tial fund­ing for our mil­i­tary health care.” 

Still, Hale added, Pen­ta­gon offi­cials would be look­ing for cost sav­ings with­in the Mil­i­tary Health Sys­tem bud­get, not­ing offi­cials like­ly would increase TRICARE Prime health plan enroll­ment fees for work­ing-age mil­i­tary retirees mod­est­ly — by about $5 per month for fam­i­lies and $2.50 per month for sin­gle ben­e­fi­cia­ries. The fees, which haven’t changed in 15 years, would then be tied to a health care index for future infla­tion­ary increas­es, Hale said. 

Also, he said, the mil­i­tary grad­u­al­ly would elim­i­nate sub­si­dies for civil­ian hos­pi­tals pro­vid­ing mil­i­tary health care, cre­at­ing a sin­gle tier of pay­ment for hos­pi­tals. Offi­cials also would increase phar­ma­cy users’ co-pay­ments while encour­ag­ing ben­e­fi­cia­ries to fill their pre­scrip­tions by mail and to request gener­ic drugs. 

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs) 

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