Nides: We don’t want to fight DOD for money, but we might have to

Deputy Secretary of State Tom Nides said yesterday that the State Department doesn’t want to get into a budget battle with the Pentagon over funding, but that he’s aware that dwindling national security funding may make competition inevitable.

"We at State and USAID are not trying to rob the Pentagon to pay ourselves," Nides said in a speech at the Center for American Progress. "As everyone knows, we’re facing the process of major budget cuts. These cuts could be the most significant we have had in two decades, and they could have a devastating impact on the work that we do."

Nides, who has only been at State since the beginning of this year, recounted the rise in State Department and USAID funding that began in 2007, but which is now set to be reversed in what promises to be the most frugal spending season in a generation. The State Department’s fiscal 2011 budget turned out to be 13.6 percent below what was originally requested, and the current House appropriation bill would cut that figure by another 18 percent in fiscal 2012.

Talking about the ever increasing role of the State Department in conflict zones and the need to maintain American engagement in a changing world, Nides pointed out that State will get $4 billion more for war operations this year, while the Pentagon budget for war operations will go down by $45 billion.

"It is helpful … [but] we cannot just fund our efforts in the frontline states and gut our base budget for everything else we do in the world," Nides said.

So what’s the solution? According to Nides, there should be a unified national security budget that would join defense, diplomacy, and development into one big pool of cash. And in fact, the government is actually moving in that direction.

Nides noted that the deal to raise the debt ceiling that President Barack Obama struck with Congress last month actually combines diplomacy and development with defense under the heading of "security spending" legislation for the first time, meaning that Congress is getting on board with the idea. "That is the good news," he said.

But there’s a risk that State could get burned in this shift. As we’ve reported several times, GOP leaders might have agreed to this aspect of the deal because they want to disproportionally cut State and USAID while not cutting defense, and still be able to claim they cut spending for "security."

Nides is well aware of the threat. "There is a real risk that Congress could decide to shield defense spending and other categories of spending by cutting everything else, and that, my friends, is the bad news," he said.

Nides’ predecessor Jack Lew, now the head of the Office of Management and Budget, said recently that the debt ceiling deal will cut $420 billion from "security spending" over the next ten years, with $350 billion of that coming from "defense."

But the truth is that future Congresses will determine how much gets cut from "security" and how much from "defense" — and the Pentagon has a lot more friends in Congress than Foggy Bottom.

State does have one friend on the supercommittee that is responsible for making the first round of cuts: Senate Foreign Relations Committee chairman John Kerry (D-MA). So that should solve everything, right?