The End of Responsible Budgeting As We Know It

Budget historians, remember Nov. 2, 2015: the day that disciplined defense budgeting died in Washington. On that day, President Barack Obama signed a deal to fund the government through FY 2017, a deal that threw the Pentagon another $33 billion more for defense than it received in FY 2015. But judging from the crocodile tears already flowing from the gatekeepers of defense spending and policy in Washington, you wouldn’t know it.

Just days after the White House and Congress hashed out the budget, Rep. Mac Thornberry (R-Texas), chair of the House Armed Services Committee, turned into a virtual mini-Boehner, crying over the daunting task of getting from the $38 billion defense increase he wanted to the $33 billion he got in the deal. “There will be real programs that are cut.… We are looking at them all and trying to do the least damage, but nobody should be under the illusion that you can do this in a non-painful way,” he said on Nov. 2. On that same day, Deputy Defense Secretary Bob Work doubled down, saying that while the Pentagon might just be able to squeak through with an FY 2016 budget increase of more than 6 percent, the extra $23 billion for defense in FY 2017 resulting from the deal (which raised the FY 2017 cap, as well) would be a real struggle. “We calculate it will be about a $14 billion [gap] in that given year [relative to] what we had planned,” Work said. “That’s going to be a harder target to hit, and we’re working through that right now.”

All this hand-wringing over a defense budget that is more than $100 billion higher than the average, inflation-adjusted, Cold War-era defense budget. A defense budget larger than that of the next ten countries, combined. A defense budget already headed sharply upward after four short years of decline, the shallowest post-war resource drawdown the Defense Department has experienced since World War II.

The Pentagon and its ministers in Congress were already given a mile in the budget request and the congressional budget bill. Now they want even more. Such ingratitude!

There’s also this: Thornberry really doesn’t have to — nor did he — truly “cut” anything by accepting $5 billion fewer dollars. His language is classic Washington-speak, and it’s a wonder that the media still falls for it (cut is a terrible word, one that suggests something awful is likely to happen). On the other hand, if funds continue to grow over the previous year’s budget, as is the case, you have no cut at all.

Free translation service provided here: The House Armed Services Committee wanted an even bigger increase — $38 billion — just as the Obama administration requested (the House and Senate versions of the bill parked the increase in the war budget, which was not subject to the budget caps). They only got $33 billion — what a pity. So now they have to “cut.”

And contrary to what Thornberry would have you believe, his changes were, in fact, pretty pain-free. They were done the old-fashioned way: by changing previous cost estimates, assuming a different rate of spending than what’s forecast, and taking advantage of scheduling delays. The highlights from that list are pretty straightforward.

Thornberry found over 20 percent of his “cuts” — amounting to some $1.1 billion — by taking advantage of the lower cost of fuel, a reduction that hurts no one at all. Another $450 million disappeared in “headquarters streamlining,” an initiative instituted by former Defense Secretary Bob Gates that aimed to achieve a 20 percent reduction in headquarters costs over five years. That initiative is already underway and still on track. Another $350 million was found as a result of “overestimation” or “underexecution” of personnel targets for the three services. These are  paper savings: The number of people involved is just assumed to be smaller than previously projected.

Then there was $595 million in savings from reducing the proposed budgets to support partners in various combat theaters. For example, the administration ended the useless and ineffective train-and-equip program for the moderate opposition in Syria, permitting a reduction in the projected budget to fund it. Estimates of the costs of reimbursing the Iraqis and Afghans for supporting U.S. operations in the theater were also re-estimated. The costs of supplying the Afghan military with fuel were similarly reduced, reflecting lower global prices. Lest one think all that means less effort in the Middle East, there’s still more than $5 billion in the budget for supporting partners in that region. No “pain” here!

The one major program that might have appeared to suffer a real funding cut was for a new Air Force aircraft called the Long-Range Strike Bomber, or LRS-B. Peel off the sticker that claims savings of $250 million on the LRS-B, however, and you’ll find that the Pentagon’s delay in awarding the contract — which went to Northrop Grumman — meant the program was moving slower than planned, saving some upfront money, but inflicting no long-term harm to the contractors. So the money is less than projected for FY 2016, but it is sure to be back next year. No pain for the Air Force or the contractor.

As for Deputy Secretary Work’s problem with FY 2017, it’s the stuff of sheer comedy. The original Budget Control Act caps already increased defense budgets every year after FY 2016. Now, under this new agreement, the FY 2017 cap on defense goes up another $15 billion. In addition, there will be an increase in the war budget of another $8 billion, bringing the total increase to $23 billion.

Uncapped spending also won big. Since 2001, the Pentagon and Congress have used the war budget, known as the Overseas Contingency Operations (OCO) budget, to secure even more funding for defense in excess of the regular, or “base,” budget. The OCO is not subject to the budget caps, making it “free money.” The new budget deal injects another $8 billion into the OCO budget, above the $52 billion already set aside for it. As a special bonus, the agreement even promised another $8 billion-plus for FY 2017, letting the Pentagon know a year in advance that the OCO Holiday Tree would keep on giving for another year.

In case it’s unclear, the new budget agreement imposes no pain on the Defense Department. It signals that Democrats, including those in the White House, will accept any amount of increase for defense, regardless of need, both to ensure they can never be called soft on national security and to use it as a bargaining chip to extract domestic budget increases from Congress. It signals that the much-ballyhooed Tea Party budget discipline is, in reality, a fiction. And it signals that Congress, especially the House under new Speaker Paul Ryan, is never going to look under the hood at the Defense Department.

Rather than complaining that the budgetary piñata had less candy than it hoped for, Pentagon leadership should just shut up and count the chips. But no: In a display of embarrassingly bad taste, it just had to complain. Rather than rending their garments, tearing out their hair, and gnashing their teeth, the stalwart defenders of defense should be running quietly and swiftly to the bank with their winnings.

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