Sorry for the long post, but it seems directly relevant based on the "why does such a small cut mean so much?"
Why A Modest Cut To The Budget Will Cause Major Damage To The Military
2/25/2013
Loren Thompson
Forbes
As the March 1 deadline for averting across-the-board cuts to federal spending approaches, the ready and resilient military force that America has spent trillions of dollars creating since 9-11 is beginning to unravel.
The Commandant of the Marine Corps says that if nothing changes, by January over half of his ground combat units and a third of his aviation units “will not be trained to the minimum readiness level required for deployment and crisis response.” The Army says two-thirds of its brigades will be similarly unprepared for combat.
The Navy has five aircraft carriers tied up at its base in Norfolk, Virginia, all subject to various budget constraints. It says by the end of 2013, over half of the fighters flying off carriers will be unavailable for operations due to deferred maintenance. Plans are being made to drastically scale back naval operations in the Middle East and Western Pacific.
The Air Force says it will cancel over 200,000 hours of flight time, forcing whole units to stand down as early as May. The result, it says, will be a “severe, rapid and long-term combat readiness degradation.”
To put it bluntly, the measures military leaders are contemplating to cope with budget cuts amount to a collapse in the global readiness of the joint force. Outside a few combat zones like Afghanistan, the ability of U.S. soldiers, sailors and airmen to cope with unexpected challenges will quickly whither. Needless to say, troublemakers from Pyongyang to Teheran are watching closely.
But how can this be happening? Republican proponents of budget sequestration — formulaic reductions — have correctly pointed out that the cuts amount to a very small portion of the federal budget. Roughly two-percent to be exact. Is it possible the military is using scare tactics to prevent even modest cuts to its oversized budget, which currently represents nearly half of all global military spending?
The answer is “no.” All military leaders are doing is responding to the legal mandates they have been issued by the President and Congress, planning on the very realistic possibility that those mandates will not change anytime soon. Amazingly enough, it only requires modest cuts to the federal budget to severely unbalance the nation’s global military posture, because of the way in which pending cuts are structured and what has come before. Here’s a brief explanation.
First of all, defense spending only represents a fifth of the federal budget, but under the sequestration provisions of the Budget Control Act half of all the mandated savings must come from the military. The other half is supposed to come from so-called discretionary domestic spending, which essentially means programs that aren’t entitlements. In other words, most of the federal budget is exempted from sequestration, and the military bears a disproportionate burden in reducing the deficit.
Second, even before the Budget Control Act became law, military spending was already programmed to decline to a mere 13% of federal spending in 2017, the final year of the second Obama administration. That shrinking share mainly reflected the winding down of foreign wars and the inexorable growth of entitlements. But if you then subtract hundreds of billions of dollars in sequester-driven reductions, the military ends up claiming less than one in eight federal dollars by 2017.
Third, sequestration is not the first big hit that defense spending has taken in the Obama years. The administration’s Pentagon team spent its first two years seeking savings from weapons programs, killing or delaying many of the biggest efforts. Then, the Budget Control Act was passed mandating half a trillion dollars in defense savings over a decade in ten equal, annual increments. Sequestration, the second wave of cuts under the budget law, doubles that amount. So a department that two years ago was planning for a base budget of $600 billion in 2013 now will need to get by on a hundred billion less.
Fourth, the Budget Control Act permits the President at his discretion to exempt pay for military personnel from sequestration, which he announced he would do last July. However, that means the Pentagon’s other accounts then must be cut more to achieve the annual savings required by the law. Defense secretary Leon Panetta says that those other accounts will be debited 9% in fiscal 2013 following adjustments made in the January “fiscal cliff” compromise. But with half of the fiscal year nearly gone, the full-year savings will have to be realized in six months, so it will feel more like an 18% cut.
Fifth, the budget law requires that all accounts not exempted from sequestration in 2013 be cut by the same percentage down to the individual program level. Planners can’t cut weapons more than operations to protect readiness, because the law subjects each category of defense spending to the same formula in imposing reductions. And because the budget authority targeted by the law typically gets spent much faster in operations and maintenance than in other areas, it is there that the pain will be felt fastest.
So the bottom line on how sequestration will play out at the Pentagon is that a full year’s worth of savings must be generated in half a year, and there is little flexibility for allocating cuts in a manner that will ease dislocations. Operations and maintenance, the account most closely tied to readiness, is structured in a way that affords somewhat more flexibility than weapons accounts, but on the other hand budget authority gets spent faster there so the money dries up faster.
If this sounds like a confusing mess, it’s at least in part because it was designed that way. The geniuses at the White House budget office who re-invented sequestration to deal with the challenge posed by the Tea Party figured that both parties would come to their senses and compromise when confronted with the waste and destruction caused by formulaic cuts. Well, guess again. Not only did the parties not compromise — leading to the likely triggering of sequestration on March 1 — but they didn’t even manage to pass an appropriations law for fiscal 2013 to fund the government.
Which brings me to the final factor explaining why modest cuts to the federal budget can cause major damage to the military. The entire government is operating right now under what’s known as a Continuing Resolution, meaning a law that maintains federal spending at last year’s level. Legislators have increasingly resorted to such stopgap measures in recent years to get around the fact that they can’t agree on a budget.
The current resolution is due to expire on March 27. If nothing takes its place, the government shuts down. The smart money in Washington is betting Congress extends the Continuing Resolution to the end of the year, meaning defense spending will have to remain at last year’s level. That would have the effect of giving the military more money than it needs for weapons and less money than it needs for operations; unfortunately, such resolutions typically prevent shifting funds between major accounts.
If Congress does not replace the current Continuing Resolution with one providing more flexibility to move money around in response to urgent needs, then the shortfall in funding for readiness created by sequestration turns into a genuine crisis. The Army, for instance, would be short $18 billion in operations and maintenance funding due to a combination of the Continuing Resolution, sequestration, and unexpected costs in Afghanistan imposed because our good friends the Pakistanis have made it harder to move supplies in and out of the country.
That explains why two-thirds of the Army’s brigade combat teams may not be ready to respond to emergencies by the end of the year. To make sure troops in Afghanistan are not put at risk, the service is draining money out of other accounts including stateside training and maintenance. If the law requires you to debit your operations and maintenance accounts by 9% for the year, and then you have to find all those savings in six months, and then you have to make sure forces in harms way are not subjected to unnecessary risks — well, there just isn’t much money left to train and maintain forces that aren’t headed for war zones anytime soon.
Thus, what looks like a modest cut to the federal budget results in rapid erosion of combat skills across the joint force. Years of spending to achieve high rates of readiness are squandered. The services say that once they start deferring maintenance for aircraft, ships and vehicles, it will take years to get back to the levels of readiness considered prudent in an unpredictable world — unless, of course, the political system decides to give them a lot more money in future years to make up for the shortfall this year. But most observers say the budget is likely to just keep going down until some big new threat comes along to wake up Washington to the consequences of its actions.
And therein lies the greatest danger of the process we now generically refer to as sequestration. As military readiness and overseas presence decline, potential aggressors in Africa, the Middle East, Northeast Asia and elsewhere will be emboldened. With less U.S. forces nearby, it will seem like a good time to take chances. And that means America’s military may have to respond to threats without sufficient equipment or training. Many warfighters may die due to lack of preparedness. It has happened before, and it could happen again. If it does after investing so much money in the joint force since 9-11, the stupidity of Washington’s budget wars will be all too obvious.
