The implausibilities of Panetta’s budget

Defense Secretary Leon Panetta announced last week the main outlines of the Pentagon’s 2013 budget that will implement the $487 billion reduction in spending eventuated by spending limits in the law passed by Congress last summer. Secretary Panetta’s budget represents a sensible set of choices in an environment of budget constraint likely to be of extended duration. Unfortunately, the budget does not constitute a program that carries out the law: DOD has produced a budget that cannot be implemented should any reductions beyond the 2013 topline occur. As Secretary Panetta himself has said, not only the budget choices, but the entire strategy collapses with any further cuts.

Panetta essentially flipped his predecessor’s priorities, accepting risk in the near-term to preserve procurement of systems considered central to long-term risk management (i.e., preserving our technological and innovation edge as China rises). The programmatic choices consist of three main elements: decreasing the size of the force, improving long-range strike capabilities and relying on them to carry the burden of combat, and shifting to special operations the mission of training friendly forces.

However, DOD’s plans contain several elements unlikely to survive contact with reality. First, as the Pentagon not only admits but trumpets, this strategic guidance is unexecutable if further defense cuts occur. On what possible basis does Secretary Panetta believe the law outlining sequestration cuts of an additional $600-800 billion to national security will not be enacted? Congress passed the Budget Control Act by large margins (269-161 in the House, 74-26 in the Senate). The Select Committee proved incapable of reaching a deal that would prevent sequestration. The president has threatened to veto any changes to the distribution of sequestration cuts in the existing law. Secretary Panetta himself has supported the president’s veto threat. Where is the basis for believing the law will not come into effect?

Yet Secretary Panetta produced a budget willfully ignorant of the continuum of reductions, a budget that will be irrelevant before it even becomes law. It is irresponsible for DOD to plan on this basis. At a minimum, during the authorization and appropriations process, Congress should require the Pentagon to incorporate excursions into the Future Years Defense Program that indicate how DOD will adapt this budget to the additional cuts in current law. If this budget cannot accommodate spending levels Congress has established, the Pentagon ought to have to explain how it plans to bring itself into compliance.

Moreover, Congress should seriously question the math of Panetta’s budget submission in two areas: the $60 billion it relies on from cutting waste, and the reductions in personnel expenses. Secretary Panetta’s budget balances only with $60 billion additionally wrung out of DOD by "cutting waste." In a budget of roughly $535 billion a year, this is little more than 1 percent a year, which doesn’t sound like much. But if the Pentagon hasn’t already eliminated waste in the $400 billion in cuts undertaken by Secretary Gates, the inclusion of a sloppy category suggests there is a greater margin for reductions that belies the Secretary’s hyperbole about any further cuts.

Personnel costs account for 30 percent of the defense budget. That is unexceptional: we have the world’s finest military largely because we have the world’s most adaptive soldiers, sailors, airmen and marines. They deserve to be well-compensated not only because they put themselves in harm’s way for us all, but also because we need to keep innovative people in the force.

But military pay has climbed significantly in the past decade as the wars revealed our Army and Marine Corps were too small for the demands of counter-insurgency. The need to recruit an additional 80,000 combatants in wartime understandably put upward pressure on salaries and benefits. Reducing the force ought to generate possibilities for reductions, and the Panetta budget evidently plans to include modest changes in these areas. Any such cuts will be bruisingly difficult to enact, requiring a major effort by both the White House and the Pentagon to build a political coalition that protects lawmakers from pressure by military retirees’ and veterans groups. Yet how will a president who advocates caregiver leave for deploying service members stake out this territory in an election year?

The Obama administration’s reluctance to undertake the defense planning and political lifting that will make Secretary Panetta’s budget a blueprint for enacting legislation means the Pentagon will be scrambling next summer to produce a wholly new strategy and a wholly new budget that conform to spending limits the Congress has already passed.