Tough Budget Choices Protect Security Interests, Fox Says

By Claudette Roulo

American Forces Press Service

WASHINGTON, Feb. 26, 2014 – The Defense Department’s proposed fiscal year 2015 budget protects the department’s two most important constituencies: troops and taxpayers, Acting Deputy Defense Secretary Christine H. Fox said today in a speech at the American Enterprise Institute.

In doing so, the department’s leaders recognized that they must make tough decisions in order to navigate this period of fiscal austerity, Fox said.

“Making spending choices that will be portrayed as having more losers than winners due to the fact that budgets are tight and could get even tighter is no way to win a popularity contest,” she said. “In many respects, there was something in this package to set off just about everybody's alarm bells and umbrage meters.”

The defense priorities laid out by President Barack Obama in 2010 weighed heavily on the department’s budget choices, the acting deputy secretary said.

Those priorities are not a short list, Fox said, noting they include “shifting operational focus and forces to the Asia-Pacific, sustaining commitments to key allies in the Middle East, being prepared to defeat a major adversary in one part of the world while denying victory to an opportunistic adversary elsewhere, reducing the force planning requirement to conduct large, prolonged counterinsurgency and stability operations, aggressively pursuing terrorist networks and countering weapons proliferation that threaten the homeland, enhancing capabilities in cyber, space and missile defense, maintaining a smaller but credible nuclear deterrent and continuing a military presence and pursuing security cooperation in multiple regions -- Europe, Africa and South America -- though at reduced size and frequency.”

The list makes it clear that, despite the budget uncertainty at home, the military must still be prepared to counter a wide variety of threats while embracing new opportunities around the world, Fox said. The world is no less dangerous, turbulent or in need of American leadership, the acting deputy secretary added. And without a repeat of the peace dividend that followed the Cold War, Fox said, “resources for national defense may not reach the levels envisioned to fully support the president's strategy.”

Even before the sequester provision was triggered, the Budget Control Act of 2011 reduced projected defense spending by $487 billion over 10 years, she said.

“The next two defense budgets submitted by the president stayed generally on this fiscal course, though last year’s request added another $150 billion in reductions back-loaded towards the end of the BCA period. … Then, of course, the department, along with the rest of the executive branch, got hit with sequester just under one year ago,” Fox said.

Some relief arrived in the form of the Bipartisan Budget Act, she said. But, the act still cuts defense spending by more than $75 billion in fiscal years 2014 and 2015 relative to the president’s budget plan. And sequestration is scheduled to return in FY 2016 and cut defense by more than $50 billion annually through 2021, Fox added.

“With our leadership's stern warnings about sequestration appearing to fall mostly on deaf ears in the Congress last year, one of secretary Hagel's top priorities is to prepare the department for an era when defense budgets could be significantly lower than expected, wanted or needed,” the acting deputy secretary said.

The budget proposal announced Feb. 24 would provide $115 billion more funding over the next five years than would sequestration, she said.

“We think it is a realistic proposal that reflects strategic imperatives as well as the resources the department might reasonably expect to receive. … In all, the budget plan and associated proposals provide a sustainable path towards shaping a force able to protect the nation and fulfill the president's defense strategy, albeit with some additional risk,” Fox continued.

One place the department chose to assume risk was in shrinking the overall size of the force to protect funding for military technology and acquisitions, the acting deputy secretary said, acknowledging that a smaller force can go to fewer places and do fewer things.

“However, attempting to retain a larger force in the face of potential sequester-level cuts would create, in effect, a decade-long modernization holiday on top of the program cancellations and delays already made,” she said.

Defense Secretary Chuck Hagel drew upon lessons learned from previous drawdowns to ensure military forces would be properly trained and superior in arms and equipment, Fox said.

“In [previous drawdowns], the U.S. military kept more force structure than could be adequately trained, maintained and equipped, given defense budgets at the time,” she noted.

During last year's Strategic Choices and Management Review, the department also looked for places to trim the Pentagon’s bureaucracy and found that some savings were possible, the acting deputy secretary said.

“However, achieving savings in the military's proverbial tail takes several years and produces significantly less in bankable savings than is commonly believed,” Fox said. DOD's headquarters structures account for just over 2 percent of its personnel and 1 percent of its budget, she noted, making it impossible to achieve the savings demanded by sequestration solely by cutting personnel.

The services also are making significant cuts, she said. For example, the Navy has reduced its support contracts, cut its fleet size and pursued better pricing initiatives.

The department’s proposed budget assumes a certain amount of risk, the acting deputy secretary said.

“Crafting a strategy totally devoid of risk and totally disencumbered from resources is a logical fallacy and historical fiction,” Fox said. “For starters, a relevant strategy is not a set of goals and preferences put together on the assumption or hope that the money will just follow. In reality, strategy requires a symbiotic relationship between resources, outcomes and courses of action. … Each strategic element informs one another on the path to final decisions.”

The result, she said, is a strategy that is neither budget-driven nor budget-blind.

“Remember that even the largest defense budgets will have limits, as will our knowledge and ability to predict the future, so they always contain some measure of risk,” Fox said.

That said, the return of sequestration would bring unacceptable levels of risk to the nation, the acting deputy secretary said.

“As a result of the last few months of analysis, we were able to identify with some precision what the post-sequestration military would look like over the next decade,” she said.

The consequences included an even smaller Navy fleet, an Army with just 400,000 active-duty soldiers, delayed or curtailed purchases of F-35 Lightning II joint strike fighter aircraft and other platforms critical to air superiority, and combat units short of spare parts and unable to conduct complex, realistic training, Fox said.

In addition, “our forces could not deploy quickly and in strength to respond to disasters overseas or other contingencies that require America's leadership,” she said. “Some allies and partners would be more likely to hedge their bets and cut side deals with their larger and more aggressive neighbors. And finally, America would remain the world's leading military power, but would no longer be the guarantor of global security that can be counted on to protect our values, interests and allies.

“Pretending that a return to sequester is not harmful is the most harmful thing that we can do,” Fox said.