Earlier this week Politico’s Pro Defense site reported that the House Budget Committee plans on passing a budget resolution in line with the spending limits established by the Budget Control Act. According to Politico’s Jeremy Herb,
The Budget Committee, chaired by Rep.Tom Price (R-Ga.), has not made a final decision yet on spending levels in its budget resolution that’s expected to be unveiled next month. But many throughout the Washington defense community fear there’s little that can be done to convince the House panel to change course.
Defense News highlighted this eventuality back in January when American Enterprise Institute defense policy analyst Mackenzie Eaglen told an audience that a deal similar to the one House and Senate Budget Committee chairs Paul Ryan and Patty Murray crafted in 2013 was unlikely. As Eaglen explained, the framework for that deal, which lifted the spending caps on national defense by $22.5 billion and $9 billion for fiscal years 2014 and 2015, was put in place in January 2013. It was only consecrated in December of that year after lengthy negotiations. No such framework for FY 2016 exists today and neither Republican Senate Budget Committee Chairman Mike Enzi, nor ranking member Bernie Sanders, seem concerned with pursuing one.
Given that this likelihood was foreseeable, how have interested parties adjusted to this reality?
According to the Defense News report from January, the defense industry is adjusting well. The article describes record quarterly profits for defense contractors, despite panicked cries from the Pentagon and predictions of impending doom from some industry lobbyists. Todd Harrison, budget expert for the Center for Strategic and Budgetary Assessments (CSBA) says, “industry saw this coming, and industry did what it needed to prepare. Cutting people, closing facilities, and getting more efficient… industry is reaping the benefits now.” Harrison does warn that those efficiencies will not last forever, but there are signs the defense sector is preparing for that eventuality by making greater investments in research and development.
As mentioned here previously, the only people it seems that are not adjusting to this reality are the White House and Pentagon. While the Pentagon’s FY 2015 budget complied with the Budget Control Act, its FY 2016 request is $35 billion above the caps. Moreover, future spending plans articulated in the administration’s budget request exceed the caps by $169.8 billion.
Worse yet, the Pentagon not only refuses to make plans based on the congressionally-mandated spending limits, its overspending is not even sufficient to meet its chosen strategy. According Harrison’s analysis of the FYDP for CSBA, the Department of Defense would need to spend $200 to $300 billion above the spending caps over the same period to implement the strategy laid out in the 2012 Defense Strategic Guidance and 2014 Quadrennial Defense Review.
American politics has a long history of last second deals, but there is no guarantee that one will be reached over the defense budget. The Pentagon needs to recognize reality. It can start by using the spending limits imposed by the Budget Control Act as a baseline for planning purposes; instead of pretending they do not exist.