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Pentagon to Take Draconian Personnel Moves if Sequester Continues

defense-spending

If sequestration continues another year, the Defense Department will freeze promotions, cut workers, and suspend training.

Tom Philpott, Military.com (“Freeze Possible On All Promotions, Recruiting“):

Failure by Congress to end budget sequestration could force the services in fiscal 2014 to freeze military promotions, suspend recruiting and halt all change-of-station moves, Defense Secretary Chuck Hagel warned in letter Wednesday to leaders of the Senate Armed Services Committee.

Automatic budget cuts already are “severely damaging military readiness,” Hagel wrote to Sen. Carl Levin (D-Mich.), committee chairman, and Sen. Jim Inhofe (Okla.), ranking Republican. Without relief, defense spending will take another $52 billion hit in the fiscal year that begins Oct. 1.

If Congress lets that happen, by continuing to refuse to compromise on a debt reduction deal, the Department of Defense will keep a civilian hiring freeze in place, continue to neglect facilities maintenance, deepen cuts to weapon programs and impose “an extremely severe package of military personnel actions including halting all accessions, ending all permanent change-of-station moves, stopping discretionary bonuses and freezing all promotions,” Hagel wrote to introduce a budget “contingency plan.”

Levin and Inhofe had asked Hagel to describe how keeping sequestration in place would impact defense budgets and national security. They are worried that “many members of Congress and the American public still seem to have the view that sequestration is an effective way to cut government spending, and can be made workable simply by providing the Department with additional flexibility or making minor adjustments.”

Hagel explained that any debt-reduction deal to remove sequestration still would require Congress to make hard choices as defense budgets fall, to be able to preserve readiness, modernize weapon systems and sustain combat power. The hard choices, Hagel wrote, must include temporary caps on military pay raises and higher TRICARE fees on military retirees.

Congress also must allow retirement of lower-priority weapons including older ships and aircraft, remove restrictions on the rate of drawdown for U.S. ground forces and support other cost-saving moves including a new round of base closings, Hagel wrote.

[...]

Hagel had ordered a Strategic Choices and Management Review to develop options to try to accommodate sequestration without serious damage to military capabilities. The resulting options won’t do that, he said.

A cut of $52 billion in defense spending would be large and steep, but the portion that could be taken out of military personnel accounts would be relatively modest, the report explained. That’s because cost-savings from force cuts would be offset by separation pay, exit travel costs, unused leave payments and, for some members, unemployment insurance.

So if personnel accounts were directed to absorb just a 10 percent share of the 2014 sequestration hit — $5.2 billion — that would require the “extremely severe package” of personnel actions described earlier. “The inability to reduce military personnel costs quickly would put additional downward pressure on other portions of the FY 2014 budget,” Hagel’s plan explained.

If Congress keeps sequestration in place, Hagel calls for a more rapid force drawdown than current law allows, with some involuntary separations likely, perhaps even affecting personnel recently returned from Afghanistan.

“Implementing sequester-level cuts would be made even more difficult if Congress fails to support the military pay raise of one percent proposed in the President’s FY 2014 budget. If that raise grows to 1.8 percent, as some in Congress have proposed, it would add about $500 million in FY 2014 funding requirements, which would force even larger cuts in other spending categories,” Hagel’s plan explained.

While some of this is standard bureaucratic scare tactics—highlighting programs most visible to the public and to Members—most of it’s legitimate. There are tremendous savings to be had in defense, whether from shuttering unneeded bases, streamlining acquisitions, or even cutting the force to pre-9/11 levels now that the war in Iraq is over and the one in Afghanistan is winding to a close.

The problem, as noted toward the end of the excerpt, is that many of those savings are actually cost money in the short term. Sequestration penalizes prudent fiscal choices because it demands immediate savings.

It’s very expensive to close down a base and move assets across the country. Personnel and their equipment and personal goods need to be moved. New facilities need to be constructed at the gaining facility. Environmental damage needs to be mitigated. The savings and efficiencies, then, come in the out years.

Similarly, there are almost certainly some weapons systems and other big ticket items in the acquisition chain that no longer fit the future strategic realities. But the contracts a laden with substantial penalties and buyout provisions for early termination. In some cases, those costs are worth paying. But, again, future savings actually cost money in the short term.

Personnel, then, become the default target for cuts. People not hired save money now, both in terms of their salary and benefit and the not insignificant recruitment and onboarding costs. People not promoted also save money, as do people not trained or supported. Very quickly, however, that breaks morale and readiness.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. steve says:

    This reminds of the GOP Congress cutting funding to the office that investigates whether or not people on disability still meet the requirements to stay on it. IIRC, every one dollar spent by that office results in 10 dollars less in disability payments going out. However, the Tea Party dominated Congress has ot save money now. I would predict that the current Congress is too dysfunctional to resolve this problem with the military. I expect them to just restore all of the Defense spending.

    Steve

    Like or Dislike: Thumb up 4 Thumb down 0

  2. PJ says:

    @James Joyner:

    Personnel, then, become the default target for cuts. People not hired save money now, both in terms of their salary and benefit and the not insignificant recruitment and onboarding costs. People not promoted also save money, as do people not trained or supported. Very quickly, however, that breaks morale and readiness.

    In the future, there will be no need for personnel.

    Like or Dislike: Thumb up 0 Thumb down 0

  3. Ben Wolf says:

    Weapons systems are the single greatest cost, and generally the most wasteful. Yet we’ll disable the parts of our military we actually need rather than cancel contracts and programs. Better to impair our defense than reduce corporate profits, right?

    Like or Dislike: Thumb up 5 Thumb down 1

  4. James Joyner says:

    @Ben Wolf: No, personnel is by far the biggest expenditure. Not only is the Military Personnel budget of $154.2 billion higher than the Procurement budget of $140.1 billion, but a significant chunk of the $283.3 billion Operations and Maintenance budget goes to training, recruiting, housing, feeding, and equipping personnel.

    Like or Dislike: Thumb up 5 Thumb down 0

  5. Ben Wolf says:

    @James Joyner: I understand that; from my perspective weapons is the highest individualized cost, not the biggest chunk of the budget. Things like pay, training, housing etc. are things I would argue should be disaggregated but that depends on how you look at it. Cancellation of the F-35 alone would go a long way toward preserving funds for military readiness.

    Like or Dislike: Thumb up 1 Thumb down 1

  6. Dave Schuler says:

    @James Joyner:

    Add to that the cost of pensions and veterans benefits that don’t show up in the Pentagon’s budget but elsewhere.

    I recognize I’m in a minority on this but I think a smaller standing army would be a good thing not only from a fiscal standpoint but from a foreign policy standpoint. We should have a military that’s large and capable enough to defend the country but not so large that we’re tempted into invading other countries on weak national security grounds.

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  7. superdestroyer says:

    @Ben Wolf:

    It does not save as much one would think. If you kill a new weapons program then you have to start spending much more to maintain the old systems that were due for replacement. So if cut one program you have to add more to other programs.

    Like or Dislike: Thumb up 1 Thumb down 0

  8. MichaelB says:

    Ben, that’s simply not true. Large numbers get thrown around for large procurement projects, but those numbers are over decades. For example, the F-35 program was about $11.4 billion in the 2011 budget request. It’s the largest procurement program, but still only a small part of the defense budget – and it pales in comparison to manpower costs.

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  9. There are tremendous savings to be had in defense, whether from shuttering unneeded bases

    There’s also the issue that politicians are blocking any attempts to close unneeded bases to keep the pork flowing. The House Republicans want to have their cake and eat it to; demanding military cuts, but then repeatedly blocking any cuts that would impact their districts.

    Like or Dislike: Thumb up 2 Thumb down 0

  10. Pinky says:

    What I’d like to see us do is impossible: start charging countries for the protection we provide. I know, to outsiders it’d make us look like an empire demanding tribute, and to Americans it would make us look like mercenaries killing for money. But the fact is, Europe and much of the Pacific has no incentive to reassume the responsibility for their own safety. As things are now, we spend money on protecting them, for which we all receive the benefit of international peace and trade – but they receive it for free. If we pulled back the way libertarians and liberals call for, we’d be leavig a vacuum that the good guys wouldn’t necessarily fill. But if we started charging our allies for the work we do, we could start to address those externalities

    Like or Dislike: Thumb up 1 Thumb down 0

  11. Pinky says:

    @Stormy Dragon: Actually, those BRAC’s have done a pretty good job. They should happen more often, sure, but they’ve been effective.

    Like or Dislike: Thumb up 1 Thumb down 0

  12. Mikey says:

    @Stormy Dragon:

    The House Republicans want to have their cake and eat it to; demanding military cuts, but then repeatedly blocking any cuts that would impact their districts.

    That’s not just the Republicans, that’s just about every member of the House.

    It’s a rare member of Congress indeed who would sign on to the closure of what’s usually the biggest job generator in his/her district.

    Like or Dislike: Thumb up 5 Thumb down 0

  13. michael reynolds says:

    @Mikey:

    You must be mistaken because we all know from our Republican friends that government does not create jobs. Therefore there cannot be jobs at stake. So no problem.

    Like or Dislike: Thumb up 10 Thumb down 2

  14. Ben Wolf says:

    @MichaelB: But those budget numbers don’t reflect the costs of maintenance, training and thousands of additional personnel. I believe engines are actually budgeted seperately from that figure as well. Even if we accept the $11 billion figure, that amount would eliminate the need for cuts to personnel.

    @superdestroyer: The costs for maintaing equipment currently in service are less than that for a new weapons platform. The infrastructure, equipment manufacturing and trained personnel are available now, whereas broad deployment of the F-35 requires significant investment just to get going.

    Like or Dislike: Thumb up 0 Thumb down 0

  15. rudderpedals says:

    @Pinky: At that point we can hang out a mercenaries-for-rent sign. On the other hand we’re doing it for free now and it feels abusive. Why shouldn’t the rest of the world pay its fair share?

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  16. @James:

    Sequestration penalizes prudent fiscal choices because it demands immediate savings.

    Indeed. It is ideology/simplistic thinking as opposed to actual attempts at governance.

    Like or Dislike: Thumb up 2 Thumb down 0

  17. PJ says:

    @Pinky:
    You want to dismantle NATO then? And instead ask the countries to pay for protection? What might happen is that some countries bordering Russia will just seek a new alliance with it instead, and other countries may very well just build a couple of atom bombs (they are superb for deterrence and it would probably be a lot cheaper).

    And how would you propose to get them to pay? Threaten them with trade sanctions?

    Actually, most likely would be an European military alliance, which would mean that the US would lose influence, trade, etc.

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  18. C. Clavin says:

    This can’t be right…because I remember OTB posts about the sequestration amounting to a big nothing.

    Like or Dislike: Thumb up 6 Thumb down 0

  19. C. Clavin says:

    Maybe Republicanists could forget about restricting the rights of women and gays and immigrants and the 38th vote to repeal obamacare and actually focus on doing something productive.

    Like or Dislike: Thumb up 2 Thumb down 1

  20. anjin-san says:

    actual attempts at governance

    I remember my dad talking about being concerned that congress was going to end up simply not being up to the task of taking care of the countries business. This was back in the 80s. How he saw the tea party coming from that vantage point, I have no idea.

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  21. James Joyner says:

    @Steven L. Taylor: Quite so.

    @C. Clavin: I think there are two intertwined issues: the amount of the cuts and the means of the cuts. In most cases, the cuts are actually tiny. But making the cuts across-the-board is simplistic and counterproductive.

    Defense is a different matter altogether, in that it’s absorbing a disproportionate share of the cuts. That was the administration’s half of the bluff: Figuring the Republicans loved Defense more than it hated spending or loved tax cuts. They were wrong.

    Like or Dislike: Thumb up 1 Thumb down 0

  22. anjin-san says:

    @ James Joyner

    Figuring the Republicans loved Defense more than it hated spending

    Republicans adored spending when Bush was in office, just as they seemed to love expanding the size and power of the federal government.

    Can you shed some light on this? I am not being snarky, just trying to understand the sudden 180 degree shift.

    Like or Dislike: Thumb up 4 Thumb down 0

  23. James Joyner says:

    @anjin-san: While doubtless motivated partly by Obama, the Tea Party movement was also a massive reaction against Republican profligacy during the Bush years and an attempt to “take the party back” to an era that hasn’t existed in other than rhetoric in quite some time.

    Like or Dislike: Thumb up 0 Thumb down 0

  24. superdestroyer says:

    @Steven L. Taylor:

    But knowing that there are going to be cuts in the future, shouldn’t leaders/managers anticipate less money and make both short term cuts and long term cuts.

    Saying that you will save money in the future is just kicking the can down the road and leads to bad leadership.

    Like or Dislike: Thumb up 2 Thumb down 0

  25. anjin-san says:

    @ James

    an era that hasn’t existed in other than rhetoric in quite some time.

    Well, they have had some success. America in the 21st century is looking more and more like America in the 19th century.

    Like or Dislike: Thumb up 3 Thumb down 0

  26. RaflW says:

    It’s interesting how a story about how damaging sequestration to the military budget plays vs. cuts to health and human services, or sciences, or transportation plays out.
    I don’t doubt that an orderly shutdown of a base costs money and thereby means that the shortcut/slash approach is worse.
    But I’m pretty sure that slashing science budgets, NIH spending, and many other non-defense programs have similar blunt-hammer problems.
    The sequester didn’t have the short-term impacts the White House overhyped, a concern I had at the time that they were overplaying their hand and damaging the ability to really point out the harm as the sequester sunk in.
    I see no way that most sequester cuts get reversed given the recent House antics on the Farm Bill and other maneuvers, and accepting the sequester for any baseline bill for the next budget locks them in.
    I have to grudgingly congratulate the GOP for accomplishing something in the minority that they only dreamed of. But the damage to our national preparedness, our future in health, science, transportation and much else will suffer.
    As a nation, we’ve just handed Asian and other economies a fantastic own-goal. Well yay-booya Republicans!

    Like or Dislike: Thumb up 2 Thumb down 0

  27. anjin-san says:

    our future in health, science, transportation and much else will suffer.

    China is more than ready to step into the breach. I am sure they are more than grateful to tea party types for the leg up.

    Like or Dislike: Thumb up 5 Thumb down 0

  28. James Joyner says:

    @RaflW: @anjin-san:

    But I’m pretty sure that slashing science budgets, NIH spending, and many other non-defense programs have similar blunt-hammer problems.

    No doubt. See my March post, “Sequester Could Devastate Scientific Research.”

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  29. Console says:

    Wait until you see what the less competent agencies like the FAA will end up doing. Everyone is still operating under the assumption that come October everything will be back to normal.

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  30. Andre Kenji says:

    @James Joyner:

    While doubtless motivated partly by Obama, the Tea Party movement was also a massive reaction against Republican profligacy during the Bush years

    No. It wasn´t. Until the summer of 2009, when discussions about HCR were already at full steam, tea parties were basically known for the absence of people in their rallies. Fox News, and bloggers like Michelle Malkin and Glenn Reynolds were extensively trying to promote these rallies, and there was very few people participating.

    The thing only gained steam when people began to talk about Medicare cuts to pay for HCR, and because Medicare recipients feared that any extension on the coverage would mean that THEY would lose coverage. Watch the town halls, they don´t talk about spending, they talk about healthcare. There is a **** in a Arlen Specter Town hall saying that everything was fine(The guy was clearly over 65) and saying that it was simply a matter of sending illegals home.

    The Tea Party exists in reaction to perceived cuts to the biggest Federal Program, not in response to “profligate spending”.

    Like or Dislike: Thumb up 6 Thumb down 0

  31. Ebenezer_Arvigenius says:

    But the fact is, Europe and much of the Pacific has no incentive to reassume the responsibility for their own safety.

    Oh for chrissake. I know Americans love to think of themselves as the good giant but could we lay this BS to rest. With the possible exception of Russia and the US there is no military power that could seriously threaten Europe as a whole.

    And with the exception of Syria (thanks to the French) and Mali (handled by the French themselves) the only military engagements that have taxed European military capabilities and caused significant costs have been the messes in Afghanistan and Iraq. Let’s just say that at this point I wouldn’t bet if American help hasn’t been a net loss over the last decade.

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