Pentagon officials have prepared a new estimate for defense spending that is $450 billion more over the next five years than previously announced figures.
The new estimate, which the Pentagon plans to release shortly before President Bush leaves office, would serve as a marker for the new president and is meant to place pressure on him to either drastically increase the size of the defense budget or defend any reluctance to do so, according to several former senior budget officials who are close to the discussions.
Experts note that releasing such documents in the twilight of an administration is a well-worn tactic, and that incoming presidents often disregard such guidance in order to pursue their own priorities.
And with the nation’s economy caught up in a global financial meltdown, it remains unclear whether either Sen. John McCain , R-Ariz., Sen. Barack Obama , D-Ill., or a Democratic Congress would support such large increases for defense next year.
“This is a political document,” said one former senior budget official, who spoke on the condition of anonymity. “It sets up the new administration immediately to have to make a decision of how to deal with the perception that they are either cutting defense or adding to it.”
Dov Zakheim, the Pentagon’s top budget official from 2001 to 2004, who is not involved in the current discussions, agreed.
“The thinking behind it is pretty straightforward,” Zakheim said. “They are setting a baseline for a new administration that then will have to defend cutting it.”
The fiscal 2010 portion of the estimate includes a $57 billion increase, out of which $30 billion would go for a vaguely defined contingency fund and $14 billion would go for replacing or fixing existing equipment, called reset, and modernization, the former officials said.
They added that those items reflect the Pentagon’s attempt to anticipate the end of huge supplemental war allotments that have hidden the costs of resetting and modernizing the nation’s war-torn force. Both presidential candidates have pledged to scale back supplemental war spending.
The Pentagon comptroller’s office refused repeated requests for comment on the figures outlined by the former officials stating that it was premature to discuss future budgets because they were still being worked on.
Earlier Budgets Insufficient
The new budget numbers reflect the Defense Department’s acknowledgement that the coming bow wave of ever-rising procurement costs, combined with the nonstop growth of defense entitlement spending, will render its already record- high budgets grossly insufficient in the years ahead.
But the numbers also seem to condradict the National Defense Strategy released recently by Defense Secretary Robert M. Gates , which called for tough tradeoffs in spending in an environment of limited resources.
“We cannot do everything, or function equally well across the spectrum of conflict. Ultimately we must make choices,” Gates wrote.
The new estimate, which has not been publicly released, would raise the fiscal 2010 budget number announced by the administration this year from $527 billion to $584 billion, not counting operations costs for the ongoing wars.
Money to prosecute the ongoing wars is not included in the new estimate, meaning the military would still need significant supplemental appropriations in addition to the increased budget request.
Supplemental appropriations have been used to fund procurement and personnel costs that are predictable and therefore should be placed into the regular budget, said Admiral Michael Mullen, the chairman of the Joint Chiefs of Staff.
“We’re going to have to figure out how to get off supplementals,” Mullen told a group of Washington reporters Thursday. “My strategic approach is to start to implant those things that are in supplementals that we think we’ve got to have into the baseline budget. We need to start doing that. We’re working our way through the next budget now.”
While reset and modernization funds in the new estimate are relatively non-controversial, the $30 billion contingency fund could face stiff opposition on Capitol Hill. That money, if approved, would be available to rapidly deploy active duty forces overseas in the event of an unexpected crisis.
In 2001 and 2002, lawmakers rejected attempts by Pentagon leaders to secure a contingency fund, from which they could draw money without requesting additional permission from Congress.
“The Congress always saw this from their perspective as a slush fund,” said Zakheim, “Whereas the defense department has said it needed this kind of money because it could never project what exactly would be needed in the event of an emergency.”
Presidential Candidates Differ
The candidates differ on whether or not large increases in overall defense budgets are wise or even doable.
McCain has promised to freeze all discretionary spending except for national security, and is pushing for an additional 150,000 troops above current plans, to be paid for within the base budget.
Obama only supports the current planned increase of 92,000 Army and Marine Corps personnel.
Both candidates have called for a wholesale reform of the Pentagon’s acquisitions system in an effort to control procurement costs, which have ballooned in recent years due to mismanagement.
“The practical fact is that these programs can’t all go into production without a very significant increase in the resources for defense, and I don’t think in light of the current fiscal situation that’s going to be possible,” said former Air Force Secretary Whit Peters, who advises Obama.
Supplemental spending bills, which have funded most of the $859 billion appropriated for the Iraq and Afghanistan and global operations to counter terrorism since 2001, are set to be scaled back no matter which candidate wins in November.
“I see the future of supplementals as dramatically reduced to genuinely unanticipated needs, like fluctuations in the price of fuel, not programmatic costs or known spending needs,” said McCain in written responses to questions submitted by CQ. “It’s a bad way to do business, and I will bring it to an end.”
Peters agreed that large supplemental spending packages would end.
“The supplementals have confused things tremendously,” he said, adding that Obama realizes some of the items in the supplementals will have to be folded back into the base budget.
Reasons For Extra Funds Unclear
Exactly how the Pentagon’s new spending estimate will be communicated to Congress or the incoming administration remains unclear.
In April, the White House Office of Management and Budget sent out guidance to all federal agencies that there would be no full budget drill this fall and no formal fiscal 2010 budget submission.
All agencies were directed to project future budgets based on current costs, which OMB will then compile into a budget database. But since OMB won’t go through a formal scrubbing process for the submissions as it has done in previous years, it will be up to the next president to decide what to do with the numbers.
“The 2010 budget will be submitted by the next president, not the current president,” said OMB spokeswoman Corinne Hirsch. “This administration will certainly be sharing its priorities with the incoming administration in a variety of ways, but that will be outside the formal budget process.”
Hirsch said OMB had not received the defense department’s numbers yet, although an OMB memo had said they were due in September.
“What is clear is that these additional funds that the Pentagon wants to include in their budget and their five year plan are way beyond the fiscal guidance that OMB gave the department of defense earlier this year,” one former official explained.
Moreover, the new numbers are not aligned with any long-term strategic or budgetary rationale that might allow OMB or Congress to judge their wisdom or their impact on the nation’s worsening economic situation, the official said.
“The idea that the Pentagon Comptroller’s office wanted these additional funds has been fairly well known,” the former official said. “But there is little out there to give anybody the understanding of why.”
