Pentagon’s $527 billion budget includes new base closures, military benefit cuts

President Obama’s Pentagon budget includes a new round of base closures, increases in military healthcare fees and a reduction of the annual pay increase for service members.

The proposals in the Defense Department budget that was released Wednesday are designed to curb long-term defense costs — but all are politically unpopular and will have a tough time getting approval in Congress.

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The 2014 defense base budget is set at $526.6 billion, a slight reduction from the Pentagon’s plans last year for $534 billion in 2014.

But the budget still remains $52 billion above the budget caps set under sequestration, meaning that the Pentagon would take another across-the-board hit in 2014 if sequestration is not reversed.

The president’s budget does in fact reverse sequestration through a mix of tax increases and spending cuts, including to defense, over the next decade.

The Pentagon's budget over 10 years would be cut roughly $150 billion, down from $500 billion under sequestration. However, most of the reductions come in the second half of the ten-year forecast, an accounting gimmick that leaves most of the department’s current budget plans unscathed.

As a result, budget analysts have warned that the 2014 defense budget may not be a realistic approach because there is little will in Congress currently to reverse the sequester.

Defense Secretary Chuck Hagel defended the proposal, saying that it was responsible to give the Pentagon the time and flexibility it needs to make budget cuts.

He noted that the House and Senate budgets, as well as the Obama budget, all don’t take sequester into account and have set defense spending at roughly the same level.

“I don’t think anybody is minimizing the reality of sequestration as law,” Hagel told reporters at a Pentagon budget briefing.

Major adjustments to the defense budget, should sequestration stay on the books, would likely come in fiscal year 2015.

Hagel has ordered a review of the military’s strategy in light of the budget situation, and the department is also going to undertake its Quadrennial Defense Review.

This year’s defense budget still takes steps to cut costs, as it continues the $487 billion, 10-year reduction that began in fiscal year 2013 under the initial caps set by the Budget Control Act in 2011.

The budget includes a request for one new round of the Base Realignment and Closure (BRAC) Commission in 2015, with base closures beginning in 2016.

Last year’s request also included two rounds of base closures, but there was no funding set aside for the upfront costs, and the request was dismissed by Congress.

In this year’s budget, there is $2.4 billion included over five years for base closing, suggesting the Pentagon is more serious about trying to cut infrastructure, which it argues is necessary to reap major long-term savings.

Congress, however, is just as serious about rejecting base closings, as numerous lawmakers have vowed to deny the request already.

Hagel defended the need for base closures, as the Pentagon already has excess infrastructure and is going to continue cutting back the number of troops.

“This process is an imperfect process,” Hagel said. “There are up-front costs for BRAC, and this budget adds $2.4 billion over the next five years to pay them, but in the long-term there are significant savings.”

The Pentagon is also resubmitting its request to increase healthcare fees in Tricare and Tricare For Life, which were similarly rejected by Congress last year.

The Defense Department also looked to lower military pay this year, reducing the annual pay increase for troops to 1 percent, down from 1.8 percent in 2013.

The Pentagon would save $1.4 billion in 2014 and $12.8 billion over five years with its proposals to curb military compensation spending.

Under sequester, military personnel costs were exempted and were not subject to the 9.4 percent reduction that is hitting the rest of the budget.

The budget achieves $13.7 billion in savings over five years through weapons terminations and restructuring. There are no major weapons programs getting the ax, but the Pentagon is terminating the Precision Tracking Space System to save $270 million in 2014, and the Air Force's Expeditionary Combat Support System, which saves $76 million this year.

The department included $8.4 billion in funding for the F-35 fighter jet, $10.9 billion for ship construction, $9.2 billion for missile defense and $4.7 billion for cyber operations.

The Army continued its downward trend in the services’ budgeting breakdown, as the Army received $129.7 billion in 2014, a $3.4 billion reduction from last year’s request.

The Navy budget remained constant, while the Air Force received a $4.4 billion bump compared to last year.

Those budget figures are consistent with the Pentagon’s strategy, unveiled last year, to pivot to the Asia-Pacific region.

The cuts to the Army are also tied to the end of the wars in Iraq and Afghanistan, as last year’s budget included a reduction of 100,000 troops from the Army and Marines. This year’s budget continues those reductions but does not accelerate them.

The 2014 budget proposal released Wednesday did not include funding for the war in Afghanistan, as the Pentagon said it would submit it’s Overseas Contingency Operations budget in late April or early May.

That budget, which is not subject the sequester caps, is not finalized because the troop levels in Afghanistan remain in flux. The budget assumes that the current plan to have 34,000 troops in Afghanistan in February 2014 remains constant through September 2014.

Updated at 1:59 p.m.