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Hale: Fiscal Cliff Deal Reduces Funding Blow to Defense

Jan. 7, 2013 - 10:53AM   |  
By JOHN T. BENNETT   |   Comments
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The controversial fiscal cliff deal reached last week would deliver a softer blow to the Pentagon’s budget than could have occurred, says Defense Department Comptroller Robert Hale.

The Pentagon’s fiscal 2013 budget would be shrunk by “$45 billion if sequestration kicks in,” Hale said during a Jan. 7 forum at the Brookings Institution in Washington. “It was $62 billion before” lawmakers altered the original sequestration provision included in the August 2011 Budget Control Act.

“The legal changes” in the legislation passed last week “were quite complex,” leaving Pentagon budget officials still working only with what Hale repeatedly called “rough estimates.”

Part of that is a change to 2013 spending caps for national security spending.

Under the sequestration cuts, all Pentagon accounts would be reduced by just more than 9 percent. That leaves Pentagon officials with little say over how to avoid cutting some things they otherwise would shield “unless we can reprogram [funds].”

But the Pentagon comptroller said he doubted Congress would grant the authority to determine how cuts are made under sequestration.: “I suspect we wouldn’t have that option.”

The department has yet to receive guidance from the White House’s Office of Management and Budget (OMB) known as the “pass-back memo” that will drive its 2014 budget build. And the Pentagon “is not ready to transmit data to OMB.”

That means the submission of the fiscal 2014 DoD budget request to Congress, which typically occurs in early February, likely will be delayed. Lawmakers and the White House have until March 1 to decide whether to turn off the $500 billion, 10-year cut to planned defense spending, delay those reductions or allow them to occur.

Without knowledge of what its 2014 funding level will be, OMB and the Pentagon are largely unable to put together a final budget plan. Hale said Pentagon officials will examine a number of options from which they can quickly build a 2014 spending request once OMB provides the much-anticipated guidance.

Notably, Hale said defense officials likely will “have to cut back on weapon programs to meet budget constraints.”

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