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Balancing Readiness and Reductions

All attention was on the federal budget yesterday, as Secretary of Defense Chuck Hagel, along with Chairman of the Joint Chiefs of Staff General Martin Dempsey, provided a preview of the fiscal year 2015 defense budget, which will be presented to Congress next week. The reduced budget, which includes cuts for every military service, is designed to be able to defend the homeland and counter the asymmetrical threats of the future, rather than support prolonged overseas operations.

These recommendations will adapt and reshape our defense enterprise so that we can continue protecting this nation’s security in an era of unprecedented uncertainty and change. As we end our combat mission in Afghanistan, this will be the first budget to fully reflect the transition DoD is making for after 13 years of war—the longest conflict in our nation’s history. We are repositioning to focus on the strategic challenges and opportunities that will define our future: new technologies, new centers of power, and a world that is growing more volatile, more unpredictable, and in some instances more threatening to the United States,” Hagel said in his opening remarks.

This repositioning for the future is reflected in the stated defense strategy, which focuses on defending the homeland, using U.S. influence to globally build security and deter aggression, and maintaining the capability to win decisively against any adversary. The department’s planned shift to the Pacific is part of fulfilling this strategy, along with maintaining commitments and engagements around the world and pursuing terrorist networks.

According to Hagel, realities realized through DoD reviews—that technology development in other nations means that American dominance cannot be taken for granted, and that defense spending will likely not reach the levels projected in President Obama’s five-year plan—led the department’s quest to construct a cost-conscious budget for a force that would retain readiness and technological superiority.

“This budget proposal represents a responsible and, more importantly, a realistic way forward. In my view, it represents both sound national security and fiscal responsibility,” Dempsey said. “In short, this budget helps us to remain in the world's finest military—modern, capable, and ready—even while transitioning to a smarter, a smaller, more affordable force over time.”

Budget cuts led to difficult choices, Hagel said, including a reduction in force structure, the termination or delay of some modernization programs, and decelerated growth for military compensation costs. The proposed force structure is tailored to the likely asymmetrical threats of the future, favoring smaller, rapidly-deployable units. Therefore, though every service will see reductions in troop size (with the Army seeing the largest cut, from approximately 520,000 active duty soldiers to approximately 440,000, its smallest size since before World War II), special operations forces are projected to increase by nearly 4,000 personnel.

Military compensation was a major focus, as personnel costs currently accounts for half of defense spending. With force reductions and a civilian pay freeze already in place, military compensation needed to be on the table. A 1 percent pay raise has been proposed for 2015, excepting general and flag officers, whose pay will be frozen for one year. Though raises will continue after 2015, they will be restrained, Hagel said.

Also recommended are a number of changes to personnel programs, including slowed growth of tax-free housing allowances, from 100 percent to 95 percent; a reduction of $1 billion over three years to the annual subsidy for military commissaries; and changes to the TRICARE program, such as consolidating plans and adjusting deductibles, that will encourage members to utilize the most affordable means of care.

Hagel acknowledged that these changes would be controversial, but said that they are necessary not only to allow investment in technology and modernization, but to ensure benefit availability in the future. “A holistic and comprehensive approach must be taken to compensation changes. Continuous piecemeal changes will only magnify uncertainty and magnify doubts … among our servicemembers about whether promised benefits will be there in the future,” he said.

“Our proposals were carefully crafted to reform military compensation in a fair, responsible, and sustainable way. We recognize that no one serving our nation in uniform today is overpaid for what they do for our country. But if we continue on the current course without making these modest adjustments now, the choices will only grow more difficult and painful down the road. We will inevitably have to either cut into compensation even more deeply and abruptly, or we will have to deprive our men and women of the training and equipment they need to succeed in battle.”

While laying out other aspects in the budget proposal, Hagel warned in several instances that far deeper cuts would be necessary should sequestration cuts be re-imposed in 2016, bringing many asset levels down even further than current projections. Some of these key proposals for 2015 include:

  • Reducing the number of Air Force tactical air squadrons, including retiring the entire A-10 fleet in favor of the F-35 and replacing the U-2 with the Global Hawk
  • Half of the Navy’s cruiser fleet will be placed in reduced operating status while they are modernized to achieve a longer lifespan
  • No contract negotiations for the LCS beyond 32 ships will go forward, and the Navy will submit proposals for procurement of a small surface combatant
  • The Marine Corps will draw down from 190,000 to 182,000, with approximately 900 additional Marines devoted to enhanced embassy security around the world
  • Termination of the Ground Combat Vehicle program, with funds redirected toward development of a next-generation platform
  • Reduction and reorganization of the Army’s helicopter fleet, retiring the Kiowa and transferring the Army Guard’s Apache helicopters to active duty units, with Blackhawk helicopters transferred from the Active Army to the Guard.

These changes, Hagel said, do somewhat increase the level of risk for the military, but these risks are anticipated and manageable. However, these risks would grow substantially in the event of 2016 sequestration, if the budget reforms are not accepted, or general budget uncertainty continues. Therefore, he said, it is critical that Congress “partner with the Department of Defense in making politically difficult choices” to ensure the strategic balance in the proposed budget is achieved.

Dempsey reiterated this fact, saying that “If sequestration-level cuts return in '16, the risks grow and the options we can provide the nation dramatically shrink. Now, we're all willing to take risks, but none of us are willing to take a gamble.”

With this in mind, it’s critical Defense leaders, President Obama and Congress all work together to pass a budget that will allow our military to remain at its most successful and secure operational level, meeting fiscal challenges while also safeguarding the necessary capabilities for our nation—not just for FY15, but for FY16 and beyond. As Hagel said, this is an “opportunity to reshape our defense enterprise to be better prepared, positioned, and equipped to secure America's interests in the years ahead”; let’s hope that all of our country’s leadership can rise to the occasion to fulfill this chance. ♦

Last modified on Tuesday, 25 February 2014 13:01
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