Pentagon to Take Draconian Personnel Moves if Sequester Continues
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.