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Pentagon in survival mode as officials face budget uncertainty

The Pentagon is in survival mode over its budget problems, planning only “days” at a time amid massive uncertainty with the 2013 and 2014 spending plans, acquisitions chief Frank Kendall said Tuesday.

The Defense Department is dealing with a potential $46 billion cut under sequestration for the last seven months of the 2013 fiscal year, and still does not know whether it will get additional flexibility from Congress with passage of a 2013 appropriations bill.

The budget for fiscal year 2014 is being readied, but the topline spending figures for next year are even more murky.

All that has Pentagon officials “planning in days” rather than weeks or months, Kendall said at the McAleese-Credit Suisse Defense Conference at the Newseum Tuesday.

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“Once we figure out what long-term budgets look like, then we an do some long-term planning,” he said. “Right now we’re just trying to get through this.”

Kendall and Pentagon Comptroller Robert Hale said they had some optimism that Congress would approve an appropriations bill for Defense in a continuing resolution to fund the government for the rest of the year.

But both stressed that would not alleviate the larger budget issues under sequester, even if it did give them some needed flexibility.

“$46 billion is $46 billion, and it’s going to have a big impact on the Department and a big impact on industry,” Kendall said. “There’s only so much we can do.”

Hale described sequester as a “pretty dumb set of problems” facing the Pentagon, something that Defense officials have long warned to be the case.

Regardless of whether sequester is reversed, Hale urged Congress to give the Pentagon a clear budget figure so the military can craft a strategy around it.

“We desperately need more stability both in the topline and the process,” Hale said. “Until we get a bill from Congress, especially this Congress frankly, we’ve got to assume the worst case.”

Hale said that the strategy created last year under former Defense Secretary Leon Panetta is likely going to need to be re-crafted, because it assumed that the cuts from sequestration never occurred.

“It’s not likely we’re going to get the current [spending] level,” Hale said. “If there are cuts, what we ask for is time to re-do this strategy.”

The Pentagon is preparing to release its 2014 budget, as President Obama's budget is expected to be submitted to Congress more than two months late in April.

Kendall said that changes were likely going to be needed to DOD's spending plan once the other budget issues shake out.

“There will be a lot of adjustments to that given the course Congress is on,” Kendall said.