A Whole New Level of Risk
If Congress fails to approve a deficit-cutting plan developed by the bipartisan "supercommittee" and deep, automatic defense budget cuts are triggered, expect "a whole new level of risk" for the American military, Air Force Secretary Michael B. Donley said in October.
Speaking at a Capitol Hill seminar, Donley said the Air Force has all but exhausted efforts to find efficiencies in its way of doing things, having cut personnel, force structure, and overhead for most of the past decade—even while fighting wars in Iraq and Afghanistan. The only places left to shrink are in numbers of aircraft, numbers of people, numbers of bases, and compensation, he said. If force structure is reduced, it will translate to an Air Force no longer able to do all the missions it’s being asked to perform.
"Beyond these numbers, we could face some potentially very, very significant and detrimental cuts to our military," Donley warned.
The Air Force has long since "put the squeeze" on the personnel, financial management, and maintenance fields, has eliminated organizations, "retired over 400 aircraft," terminated programs, reduced its number of bases, cut military construction, cut basic research, and flattened out its command structure, he explained. If the 2011 Budget Control Act kicks in and defense is required to slash up to $600 billion over 10 years—on top of the $450 billion it is already planning to cut—"that introduces a whole new level of risk," Donley asserted. "We would be certainly in the position of having to cancel some programs, to terminate some programs, and delay and defer others."
"We are the smallest Air Force since 1947," he said, and "our sense is, there’s not much [waste] to be found there."
Gen. Norton A. Schwartz, USAF Chief of Staff, told the House Armed Services Committee in early November the effect of a sequester cut could be devastating.
"Sweeping cuts," he said, "would slash our investment accounts; raid our operations and maintenance accounts, forcing the curtailment of important daily operations and sustainment efforts; and inflict real damage to the effectiveness and well-being of our airmen and their families."
Schwartz said heavier reductions would hurt training and readiness and result in a "diminished capacity to execute concurrent missions" around the world.
"We’re talking hundreds of aircraft and thousands of people," he said. USAF would be able to "accomplish fewer tasks in fewer places in any given period of time."
The nation "will have to accept reduced coverage in future similar, concurrent scenarios," Schwartz told the House panel.
The need for airpower is likely about to go up. "Historically, as US forces withdraw from active combat, the relative requirement for airpower typically increases," Schwartz noted. After the 1991 Iraq war, and again after the 1994 and 1999 conflicts in the Balkans, USAF was tasked to enforce no-fly zones or fly air sovereignty missions long after ground troops departed.
The Specter of BRAC Resurfaces
Although Donley stopped short of saying the Air Force will request another base realignment and closure round, the service was left with "excess capacity" in bases even after the last one. As the force shrinks, USAF will find it harder to spread its equipment around excess facilities without paying a senseless financial and operational price.
The service has rejected the idea of going to a "hollow force," which Donley defined as having too few people to fill the stated numbers of units, or not enough spare parts, people, and fuel to operate the amount of equipment on hand.
Having units staffed at only 75 to 80 percent—and "at even lower levels" in the reserve components—would be a dangerous lie, Donley said.
When similar actions were taken in the 1970s, "this provided a false sense of the capability available to the United States military, by having all these units on the books but not manned at adequate levels." He and USAF senior leaders have resolved not to resort to such gimmicks during this decade’s drawdown.
Protected Programs, Perilous Pay
Donley said he doesn’t think the new long-range strike "family of systems" or the new bomber are in budgetary peril. At the level of the whole of the Defense Department, "I believe for the time being they are fairly settled matters" and "I don’t see us changing those decisions."
Likewise, there will be no letup in support for the F-35 Joint Strike Fighter or the recently launched KC-46 tanker program, though there may be some "tinkering at the margins" with the speed at which F-35 production ramps up as the program struggles to meet its overall cost and development goals.
Instead, Donley highlighted military health care and compensation costs as areas that have been going up faster than any other part of the budget. This must be addressed, he said.
"We will do what we need to do on the compensation side to get personnel costs under control," Donley asserted. Though he waved off the idea of a pay cut, he suggested the rate at which compensation and benefits increase will have to be slowed. An overhaul of the retirement program is due and will be dealt with by a special presidential commission by 2013, he said.
Deeper cuts in defense beyond those already in the pipeline will "break the back of our armed forces" and must be avoided, according to an October letter from 32 members of the House Armed Services Committee to the joint supercommittee seeking ways to reduce the nation’s budget deficit.
The Oct. 14 letter penned by HASC Chairman Howard P. McKeon (R-Calif.) to the co-chairs of the Joint Select Committee on Deficit Reduction implored the spending panel to count defense as having already paid its fair share in budget cuts.
If the supercommittee either recommends that the Pentagon reduce spending further, or fails to reach a deficit-cutting deal and a $600 billion automatic cut is levied on defense, it would pose "a serious threat to the nation’s readiness to respond to current and future global security challenges [and] break the back of our armed forces, while slowing our economic recovery, and do little to resolve our debt crisis," McKeon wrote.
The Defense Department has already made $178 billion in program terminations, assorted reductions, and efficiencies since 2010, McKeon noted, with $78 billion of that figure offered up as deficit reduction. Given various threats to national security and necessary reset from the wars in Southwest Asia, the 2012 defense spending request is deemed by the HASC to be "the minimum amount necessary to support our national security requirements," he wrote. "In fact, many members advocated for additional investment."
Even without any further reductions, spending plans already in place will reduce the size of the Army and Marine Corps to "pre-9/11 levels," McKeon wrote, and further shrink the Navy and Air Force, which are "already smaller than they were 10 years ago." Forward based forces "will likely be diminished," offering fewer options to help with humanitarian crises and increasing "the risk of combat casualties." Future conflicts "will likely be longer and more expensive," he added.
McKeon also predicted that the health of the strategic triad "could be jeopardized," as could the ability of the US to meet its deterrence commitments to allies.
He anticipates civilian personnel cuts of nearly 110,000 under current budgeting and that the Air Force will "lose more than 10 percent of its fighters, strategic bombers, and airlift."
If the sequester kicks in, defense would see as much as an 11 percent drop in its budget versus Fiscal 2011 levels, McKeon said. If the President exempts military personnel pay and benefits from this cut, the result would be a hit of "15 to 25 percent" on operating and investment accounts, he wrote, citing figures provided by Defense Secretary Leon E. Panetta. He quoted Panetta as characterizing the sequestration as a "doomsday mechanism."
Although military compensation is the biggest driver of the increases in defense costs over the last 10 years, McKeon urged the supercommittee not to slash existing troop pay, retirement, or health care. He argued that uniformed personnel are under extreme pressures with regard to deployments, physical danger, and prolonged separations from their families and deserve the benefits they receive. Cutting benefits would be "breaking faith" with the troops and potentially cause difficulties with recruiting and retention, he said.
McKeon specifically asked the committee to disregard recommendations from the Simpson-Bowles bipartisan deficit reduction panel regarding the Tricare program, arguing that the panel’s recommendations would unfairly hurt the benefits of retirees.
Increase Revenue to Cut Nothing?
Rep. Adam Smith (D-Wash.), ranking member of the HASC, in a separate letter to the supercommittee, said he believes "further reductions could undermine national security" and recommended no deeper cuts to defense spending. "Sparing the national defense budget, while simultaneously slashing discretionary and nondiscretionary federal spending ... would also be damaging to the country," he added. He suggested that rather than pay for necessary military programs by cutting nondefense spending, the committee instead "include significant revenue increases among its recommendations for satisfying deficit-reduction requirements."
Smith noted that, as operations in Iraq and Afghanistan rapidly wind down, overseas contingency funding will decrease by about $100 billion annually, and while "these reductions may not represent budgetary savings, we should acknowledge that they will represent a significant departure from the deficit-spending patterns of the past decade."
Senate Armed Services Committee Chairman Sen. Carl Levin (D-Mich.) also wrote the supercommittee, and without going into programmatic details, said, "I am unable to recommend further discretionary cuts to DOD’s budget" as part of the deficit reduction plan. Levin supported previously approved defense spending levels and agreed with Panetta that "any sequestration which could trigger as much as an additional $600 billion in DOD cuts ... would be disastrous."
However, Levin supported President Obama’s plan to launch a commission to evaluate military retirement and other forms of compensation, particularly military health care, in their entirety. He specifically endorsed asking beneficiaries to bear a new annual Tricare for Life fee of $200, going up as military health care costs escalate. However, Levin said the fee increase should be the same for both working-age retirees and over-65 Tricare participants.
The next Daily Report will be Tuesday, Feb. 19, due to the Presidents Day holiday.
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