Flawed Sequestration Report Reinforces Need to Reverse Damaging Defense Cuts

Steven Bucci / Owen Graham / September 20, 2012

The Obama Administration’s recent report on how it would slash nearly $500 billion more from national defense over the next decade leaves lawmakers, the military, the defense industry, and the American public largely in the dark about the consequences of these massive spending cuts. Nevertheless, the report—which was submitted to Congress one week late—does provide some critical evidence about how the Administration would implement the looming “sequestration” cuts that are scheduled to automatically start on January 2, 2013.

After months of resistance to congressional requests, the Obama Administration was finally forced by a recently passed law to detail the sequestration cuts that are required by last year’s debt ceiling agreement. Despite numerous flaws, the report reinforces the need for Congress and the commander in chief to quickly reverse these devastating reductions.

Among the significant details are the following:

• By exempting military personnel, the burden of sequestration would fall disproportionately on military operations, training, maintenance, and weapons modernization accounts. Keeping force levels steady while cutting funds for readiness, research, and procurement is a recipe for creating the “hollow force” that the chiefs of the four military services have repeatedly said they are determined to avoid.
• The report also indicates that the Obama Administration intends to include funds appropriated by Congress—but not yet expended by the Pentagon—in its calculation of funds subject to sequester. In doing so, the Administration’s method further squeezes defense modernization—the accounts that have already taken a disproportionate hit under President Obama’s first three years in office. What this means, for example, is that although the Navy’s shipbuilding budget for fiscal year (FY) 2013 is $14.9 billion, the total “sequestration baseline” for FY 2013 is $22.7 billion, a figure that includes the unobligated balances from previous years. Because the FY 2013 baseline is larger, the percentage cut from future Navy procurement will be greater, thus putting the Navy’s planned fleet modernization in even greater jeopardy.
• Sequestration, as laid out in the report, will also damage the military’s ability to properly train units and succeed in combat, including in Afghanistan. Reductions to the Pentagon’s operations and maintenance accounts—which correlate directly to military readiness—total $18.3 billion across the military services and the reserve components. This impacts the daily activities of those in uniform across the force—everything from flying and steaming hours to fuel to the civilian workforce to health care.

The Pentagon’s civilian and military leadership have gone on record as saying that the prospect of roughly $500 billion in additional defense cuts—on top of the already-approved $487 billion reduction over the next decade—would be “devastating” to the U.S. military and “very high risk” to national security. As General Martin Dempsey, chairman of the Joint Chiefs of Staff, has pointedly noted, “In my personal military judgment, formed over 38 years, we are living in the most dangerous time in my lifetime right now, and I think sequestration would be completely oblivious to that, and counterproductive.”

Moreover, sequestration will harm the readiness and responsiveness of America’s defense industrial base to an ever-competitive international security environment. W. James McNerney Jr., chairman, president and chief executive officer of the Boeing Company, warned in July 2012 that “implementing sequestration next January would significantly harm our military forces’ readiness and the health of the U.S. defense industrial base.” In a letter to lawmakers, Robert J. Stevens, chairman and chief executive officer of Lockheed Martin Corporation, cautioned that sequestration “will disrupt our advanced manufacturing operations, erode our engineering expertise and capability and accelerate the loss of critical skills and knowledge.” Many other leaders of the defense industrial base have gone on record to echo such sentiments.

While many in both parties thought the threat of sequestration would force policymakers into compromise, it has not worked. And although both parties and both branches of government are culpable for sequestration, the President proposed it originally and ultimately owns its outcome. To prevent sequestration, there is no substitute for presidential leadership.

The Obama Administration’s report rightly observes that the sequestration provision of the Budget Control Act of 2011 remains “bad policy.” Indeed, it is. But as even the Administration’s inadequate response to the Sequestration Transparency Act of 2012 makes clear, unless sequestration’s massive cuts to defense spending are avoided, the U.S. military—and, with it, America’s ability to lead globally—will be put on an accelerated path of steep decline.

About Defending Defense

The Defending Defense Project is a joint effort of the American Enterprise Institute, the Foreign Policy Initiative, and The Heritage Foundation to promote a sound understanding of the U.S. defense budget and the resource requirements to sustain America’s preeminent military position. To learn more about the effort, contact Robert Zarate ([email protected]), Charles Morrison ([email protected]), or Steven Bucci ([email protected]).