Pentagon warned steep cuts inevitable

The leaders of the Senate Budget Committee sternly warned the Pentagon on Thursday that it faces a future of budget cuts.

Budget Committee Chairman Kent Conrad (D-N.D.) warned that the Pentagon will have to live with cuts, just like every other agency in Washington, as the federal government deals with record deficits.

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“Every area of the budget is going to have to come under scrutiny,” Conrad said at a Thursday hearing. 

The White House ordered the Pentagon to slash $78 billion over five years from its budget as the Obama administration’s 2010 budget request was being finalized late last year.

Yet if the Budget panel hearing on Thursday is any indication, the Pentagon will be asked to do even more in the near future.

Conrad, who is working with a group of six senators on a possible long-term deficit solution, said he was “delighted” with the savings.

But he then criticized Defense Secretary Robert Gates for taking that freed-up money “and putting it elsewhere” within the Pentagon’s budget. “That’s not a change,” a visibly annoyed Conrad said.

“Can’t DOD come up with savings that are net savings?” Conrad asked Deputy Defense Secretary William Lynn. 

Lynn replied that the Pentagon thinks its proposals to shrink the Army and Marine Corps should produce a net savings. The catch? Those reductions are slated to begin in 2015, after fighting in Afghanistan and Iraq is expected to be over.

Conrad then questioned whether that would really produce a savings, as he said the $78 billion was being cut from an inflated baseline boosted by a decade-long spending boom fueled by the war on terrorism. 

Conrad said he would be focusing his efforts to reduce the deficit on tax reform and entitlement programs, not the Defense budget. But he warned the Pentagon would have to accept more cuts soon.  

“I’m not predicting defense cuts this year or next year. But more cuts are coming,” he said.

Conrad was backed by Sen. Jeff Sessions (Ala.), the ranking Republican on the committee. The nation is moving “very rapidly toward the fiscal cliff,” Sessions said. And that means “we must prepare the Department of Defense to do more with less.”

The Budget Committee’s drive to find more savings was also reflected in a testy exchange between Sessions and Deputy Secretary of State Thomas Nides. 

Sessions questioned why that department was seeking a “10.5 percent” increase in its 2012 request.

Nides replied that most of that proposed hike would go to cover the cost of State taking over U.S. activities in Iraq, and the remainder of his department’s budget “is flat” from proposed 2011 to 2012 levels.

A frustrated Sessions sharply replied that the department’s proposal is “3.6 percent above inflation — that’s not flat.”

The committee leaders’ warning about federal spending and the nation’s debt was not limited to the Pentagon and Foggy Bottom.

Panel members have grown increasingly frustrated in recent weeks listening to senior officials from numerous federal agencies plead for funding increases, Sessions said.

He then read from a list, noting the Education Department is seeking an 11 percent increase, the Energy Department a 9.5 percent bump and the Transportation Department a 62 percent hike.

When Lynn quipped that DOD’s request for a 5.5 percent base budget increase looks “pretty reasonable compared to other agencies’ spending appetites,” Sessions sharply disagreed.

Saying Washington is “in denial,” the Budget Committee ranking member said those budget requests are “not acceptable.”

“And I don’t believe they are going to be approved,” Sessions barked.

“We are on a collision course for a financial crash,” Conrad warned. “These budgets in all of the federal government — this is not going to work.

“The votes are not there to sustain funding at these levels,” Conrad said.

Without a “long-term, comprehensive deal that includes tax reform and entitlement [cuts]” he predicted cuts down the road for the Pentagon and State Department “will be more draconian.”