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White House Pushes Budget Hike

Boost Would Start in FY16

Feb. 9, 2014 - 03:45AM   |  
By DEFENSE NEWS STAFF   |   Comments
Sources said the White House has nixed a Pentagon proposal to cut an aircraft carrier and a carrier air wing. The Japan-based George Washington, which is preparing for a mid-life refueling and overhaul, was the most likely candidate for cutting.
Sources said the White House has nixed a Pentagon proposal to cut an aircraft carrier and a carrier air wing. The Japan-based George Washington, which is preparing for a mid-life refueling and overhaul, was the most likely candidate for cutting. (US Navy)
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WASHINGTON — The White House and Pentagon, after weeks of back-and-forth debate, appear ready to expand the Defense Department’s budget starting in 2016.

Administration officials are contemplating a $535 billion DoD budget in 2016, one source said, which is about $36 billion over the sequester cap. The administration would offset the defense increase in other areas of the federal budget, sources said.

Senior White House officials are resisting some of the largest reductions proposed by the Pentagon, including the Navy’s plan to cut an aircraft carrier and slow manpower cuts, according to several sources close to the internal negotiations. It is not clear, however — especially inside the Pentagon — where the money would come from to pay for the items that would have been cut in 2015.

Sources said the new plan would include expanding options outside the formal budget request, including soliciting “wish lists” of unfunded priorities from each of the services, and an expanded war budget request.

White House officials were surprised by the level of the cuts proposed by the Pentagon in the fiscal 2015 submission, sources said. Asking to eliminate one of the Navy’s 11 aircraft carriers would be politically challenging in an election year.

While details continue to be nailed down, the White House will send a roughly $496 billion Defense Department base budget request for 2015 to Congress on March 4.

To make up shortfalls, the services are being directed to significantly enhance their “unfunded priorities list,” a heretofore congressionally-mandated annual requirement that Pentagon leadership severely reduced in recent years, to the point of not being produced at all in 2013. The new plan, however, sees a total of $26 billion in unfunded requirements for 2015 across the services.

Rear Adm. John Kirby, Pentagon press secretary, told Defense News on Feb. 7 that DoD’s fiscal 2015 budget submission will remain under the caps mandated by the budget deal constructed by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis. That deal restored about $30 billion to Pentagon coffers in 2014 and 2015.

Kirby noted that DoD’s 2015 budget will still be about $42 billion less than previous plans and tough decisions lie ahead for the department.

However, the White House might allow the Pentagon to submit projections for 2016 to 2019 that are higher than the Budget Control Act caps that were put in place in 2011, according to sources.

“You have to come at all these things ... from a holistic point of view,” Defense Secretary Chuck Hagel said during a Feb. 7 briefing at the Pentagon.

“Readiness, modernization, capability: Those are priorities that we focus on,” he said. “As you assess your resources, and you match your resources to mission, those are three priorities that always must be in front of everything else.”

Still, Hagel noted there will be “across-the-board” cuts.

“You can’t do it any other way,” he said. “I think it’s a very good plan, [and] it’s an effective plan.”

Carrier Restored - or Not?

The Navy’s plan to eliminate the Japan-based carrier George Washington and one of the Navy’s 10 carrier air wings received major attention, with numerous lawmakers expressing their opposition to the plan after it was reported in Defense News on Jan. 27.

The GW — a relatively young ship after 22 years of service — is scheduled to begin a $3.9 billion, three-year refueling overhaul in 2016, work which will keep the ship running an additional 23 years or so.

While some money has already been appropriated for advanced procurement, the bulk of the funding is still to come.

The Navy zeroed in on the carrier and aircraft as a way to reduce spending while saving money for other ships, including submarines and amphibious ships.

The move would also eliminate more than 5,000 seagoing billets to allow for personnel reductions.

But no ships are more symbolic of American power, and in a political year, the White House has directed the Navy to rescind its request to decommission a carrier.

There’s just one problem: There is no funding for the ship, either to proceed with the reactor refueling overhaul, or to operate it when it’s returned to service.

“The narrative doesn’t match the dollars,” one Pentagon source said of the situation.

The plan now seems to be to proceed with the refueling overhaul, kicking the issue into the following year.

The Navy received $245 million in advanced procurement for the overhaul in the 2014 budget and is programmed to ask for $491 million in advanced procurement in 2015.

In 2016, $1.6 billion would be requested and again in 2017, to complete GW’s overhaul.

Several sources said those funds are not now in the budget. Among the Navy’s options, sources said, would be asking for less advanced procurement funding in 2015, sliding the whole project a year or more and putting off the need for a decision until next year.

The manpower issue is one that the services have struggled with coming after more than a decade at war — none more so than the Army.

Having reached a wartime high of 570,000 troops at the height of fighting in Iraq and Afghanistan, the service has since slimmed to about 530,000 troops, on the way down to a goal of 490,000 by the end of 2015.

The rub for the Army is that reducing its end-strength to 490,000 won’t actually save any money. Force levels above that number are funded through supplemental wartime accounts — which will end in fiscal 2016 — so in order to reap any savings that could then be used to pad modernization accounts, it will have to go below that 490,000 threshold.

“The monies are laid out to give us a 420,000 Army by 2019,” Lt. Gen. James Barclay, the Army’s deputy chief of staff, G-8, said on Jan. 15. But he cautioned that this “doesn’t mean we’re set on going to 420. We’ve got some decision points built in, coming into the ‘16-‘17 timeframe, so we’re taking a hard look at what is the right set.”

One thing was clear Feb. 7 — hundreds of Pentagon budget specialists are trying to figure how to enact all these changes in line-item fashion in budget documents that are due to be submitted in less than a month. ■

Marcus Weisgerber, Vago Muradian, Paul McLeary and Christopher P. Cavas contributed to this report.

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