Sequestering the Jury
What you need to know about OMB's 394-page report on defense cuts.
Well, the new report from the Office of Management and Budget on "sequestration" is out. And, though it will generate lots of coverage, it says almost nothing. Basically, what OMB has done is to dodge the political bullet by producing a dry and minimal analysis of what across-the-board budget cuts would look like — without saying which specific programs would feel the most pain.
This document is not going to satisfy the highly politicized rants that John McCain, Buck McKeon, and the defense industry have been making for months — complete with defense-plant road show — about how bad the sequester would be for our national security. But they didn’t have the specific cannon balls they wanted to fire at the administration; that is, they did not have enough information to say that the sequester would close a certain plant or halt a given production line, thereby showing what jobs might be lost in what valuable political territory. They hoped the report would provide them with that ammo. Instead, it offers them a matchbox, at the most.
Basically, by saying only, as it did, that the Pentagon faces a 9.4 percent drop in funding, the administration is arguing "we need more time" — time that will probably last until January — to go through all the "programs, projects, and activities" that would be affected by across-the-board cuts. For now, it provided an Excel spreadsheet, at the level of budget accounts, about how much funding would be cut that might affect specific programs.
The difference is simple: Programs, projects, and activities are specific things, like F-35 fighters and Stryker vehicles and destroyers. The funding for these items is aggregated and therefore buried in broader accounts, like Air Force aircraft procurement, Army wheeled and tracked combat vehicles, and Navy shipbuilding. Instead of providing the program-level data, OMB provided the account-level data. Doesn’t tell you much about which programs would be affected or how.
There may be some merit to the report’s claim that 30 days was not enough time to produce this level of detail, though doing so is pretty cut-and-dried in defense. But it is safe to assume that the decisions about the report and what it contained were made at a high level in the White House. (I have been told by one source that the Defense Department supplied the numbers but did not see the final draft. And why would they need to? A kid with a calculator could run these numbers.) And on Pennsylvania Avenue, politics certainly prevails, as seems to be the case with the OMB report.
Why would the White House want to provide such a highly aggregated analysis? For the same reason the congressional Republicans want the detail: politics. The administration is doing a good job of seizing the high ground on national security; the Republicans are desperately looking for a foothold, and a sequester looks like one to them.
This is not about defense, really. It is a political shadow play about a sequester in the middle of an election, set up more than a year ago when the Budget Control Act was passed and the deadline for cuts was set for after the election.
A sequester for defense, the report says, as for all of the government, would be a disaster. There are a few of us around who think that cutting $50 billion out of defense next year is actually possible, properly managed, and at no price at all to U.S. national security.
There are even ways to manage a sequester of 9.4 percent of the Department of Defense’s resources, should it happen. Pentagon data show, for example, that DOD has reprogrammed more than $20 billion in funds in six of the last nine years — nearly $50 billion in FY 2008 alone — meaning that every year there are billions of unneeded and unused dollars in various programs. And, should a sequester happen, OMB could use its authority to apportion funds in a way that deferred the overall impact of cuts into the third and fourth quarters of next fiscal year, giving the political system time to fix the problem (which has happened in previous sequesters). Moreover, because the defense industry is working off current contracts (unaffected by the sequester) and because new funds spend out slowly, the impact on the private sector will be nothing like what Lockheed CEO Bob Stevens has been screaming about for months. Really, the sequester would hit the Pentagon’s civilian work force more than anyone else — but nobody is screaming about that.
So the report makes it hard to specify what Armageddon looks like. But that is unlikely to stop the politics around this issue. Some in Congress and Republicans in the campaign want to make some hay here, so they will doubtless give the administration witnesses who are appearing next week before the House Armed Services Committee a hard time about this report. Expect the administration to continue to duck. They want attention to a deal here, but not until after the election.