Budget Request Balances Today’s Needs Against Tomorrow’s Threats

By Jim Garamone

DoD News, Defense Media Activity

WASHINGTON, Feb. 2, 2015 – The president’s fiscal year 2016 budget request of $534 billion protects America today, while positioning the U.S. military to face the threats of tomorrow, Under Secretary of Defense (Comptroller) and Chief Financial Officer Mike McCord said.

McCord spoke about the budget request in advance in a Jan. 29 interview at the Pentagon.

He emphasized that although planners were aware of financial constraints, the budget is a strategy-driven construct.

A Balanced Plan

The comptroller called the budget a balanced plan. “We have needs for today that partly flow from the budget situation -- the sequester that happened to us a year and a half ago,” McCord said. “But we also have those future needs with rising powers, with Russia being more aggressive.”

The budget funds ongoing strategic priorities including the rebalance to the Asia-Pacific, maintaining the U.S. commitment to Europe and the Middle East and sustaining a global approach to countering violent extremists. The budget also prioritizes and protects key technology investments and looks to continue the effort to build innovative partnerships.

For service members, the budget pegs the 2016 pay raise at 1.3 percent -- .3 percent higher than forecast last year. The budget seeks to control personnel pay and benefits. It seeks to slow the growth of the basic allowance for housing. The budget looks to reduce the subsidy paid to the Defense Commissary Agency, although not as much as originally forecast, McCord said.

The budget looks to consolidate TRICARE health care plans with alternated deductibles/co-pays that will encourage beneficiaries to seek health care in the most appropriate setting and improve the continuity of care. DoD also looks for Congress to approve modest annual fees for TRICARE-for-Life coverage for retirees 65 and older. And, the budget looks for additional changes to the pharmacy co-pay structure for retirees and active duty family members.

Force size will remain constant in 2016 and DoD would like to slow the Army and Marine Corps drawdown in the out-years. “The size of the active force, the size of the reserve components, the number of ships or fighter squadrons -- we’re still trying to hold true to the end points we have been shooting for … under the Quadrennial Defense Review,” McCord said.

Request for Base Closures

The department is asking for congressional support for base closures. “We have excess capacity,” McCord said in the interview. “There is a compelling logic for it, and we’re going to have to deal with it at some point.”

It has been 10 years since that last round of base closures and the world has changed, he said. “It’s entirely appropriate that you take another look at your basing structure,” McCord said.

DoD also included retiring the A-10 Thunderbolt 2, restructuring Army aviation and plans for the Navy’s cruiser phased modernization to the fiscal 2016 request.

“I feel as the chief financial officer that … we have a business case that would make sense to anybody running an organization that needs to be dynamic and competitive in a world environment,” McCord said. “We need these [reliefs].”

The president’s defense budget request exceeds the cap imposed by the Budget Control Act of 2011 by about $36 billion. For the last two fiscal years, Congress and the executive branch agreed to a number above the sequestration cap. “This year we have no such agreement,” McCord said. “The Budget Control Act still has sequester lined up … and we’re submitting a budget above that level. That’s a major concern to [DoD leaders]. This is not something we are going to be able to answer for our service members. It will take a good bit of the year to sort out.”

DoD must make the case to Congress that the president’s budget is the level that is needed. “I know there are some members that will say the law requires otherwise,” he said. “The president has continually taken the position … that we should come up with an alternative, and many members on the defense committees feel the same way.”

It is the view of defense leaders that the military cannot fulfill the national security strategy if sequestration triggers.

Digging out from the readiness hole sequestration in 2013 put the department in is also part of the president’s budget. Under this budget, the Army and Marine Corps are due to regain full-spectrum readiness by fiscal 2020. The Navy will catch up on maintenance and training deficiencies caused by sequester by 2020. The Air Force -- because of its current mission load and global transportation commitments -- will not hit this mark until 2023.

Right Mix of People

“Readiness is not just a function of money -- important as that is,” McCord said. “You need the right mix of people in your unit, people with the experience. There’s things that can’t be undone in a short period of time, just with money.”

Add to that the experience of the wars. Soldiers and Marines worked counterinsurgency almost exclusively. Transitioning to full-spectrum operations will take time for leaders to develop and to train their soldiers and Marines, McCord said. “Sequester was the big, unnecessary, self-inflicted wound,” he said. But it aggravated existing problems.

Modernization is protected under the budget with DoD buying 57 Joint Strike Fighters, for $10.6 billion; 16 Navy P-8 aircraft, for $3.4 billion; and five E-2D aircraft for $1.3 billion. The budget puts $3 billion into the Air Force’s KC-46 air-to-air tanker and $1.2 billion into development of the long-range strike capability. There is $821 million put toward MQ-9 Reaper remotely piloted aircraft.

Aircraft Carrier Overhaul

The budget funds two Virginia-class submarines, two DDG-51 destroyers and three littoral combat ships. It also provides $678 million toward the overhaul of the aircraft carrier USS George Washington.

The Army gets $4.5 billion for helicopter modernization.

By major funding group, operations and maintenance receives $209.8 billion, military personnel gets $136.7 billion, and procurement is set at $107.7 billion. Research, development, test and evaluation is set at $69.8 billion and military construction and family housing is at $8.4 billion.

By service the Army receives $126.5 billion, the Navy $161 billion, the Air Force $152.9 billion and defense-wide the number is $94 billion.

The overseas contingency operations fund is set at $50.9 billion and this is separate from the $534 billion base budget. This is the lowest request since fiscal 2002. The money funds the continued responsible transition in Afghanistan. It also provides $5.3 billion for operations against the Islamic State of Iraq and the Levant terror group. This includes training and equipping Iraqi forces and the vetting and training of moderate Syrian opposition forces.