Center for American Progress

For the Pentagon, Diminished Sequester Still Looms Under Congressional Budget Deal

For the Pentagon, Diminished Sequester Still Looms Under Congressional Budget Deal

The Murray-Ryan budget deal does not eliminate the challenges DOD faces from sequestration but does provide an opportunity to responsibly reduce defense spending.

An F-35B fighter jet flies into Luke Air Force Base in Goodyear, Arizona. (AP/Ross D. Franklin)
An F-35B fighter jet flies into Luke Air Force Base in Goodyear, Arizona. (AP/Ross D. Franklin)

The budget deal announced by Senate Budget Committee Chairwoman Patty Murray (D-WA) and House Budget Committee Chairman Paul Ryan (R-WI) is an important step forward but leaves important long-term questions unresolved for the Department of Defense, or DOD.

If enacted by the House and Senate, the deal could pave the way for an omnibus appropriations bill to fund the federal government, including DOD, before January 15 when the current continuing resolution expires. This preliminary agreement offers an opportunity for Congress to return to a semblance of regular order. After several years of last-minute continuing resolutions and partial appropriations, this is an important chance to realign government funding with government priorities.

The deal promises about $63 billion in so-called sequester relief—$45 billion in fiscal year 2014 and $18 billion in fiscal year 2015—split evenly between defense and nondefense discretionary spending. While the appearance of any sequester relief may raise hopes and hearts at the Pentagon, there are several important caveats:

  • The Pentagon still faces the prospect of substantial automatic sequester cuts in this fiscal year. The budget deal’s $22 billion of defense sequester avoidance raises the Pentagon’s FY 2014 Budget Control Act, or BCA, cap from $498 billion to $521 billion, but the reintroduced FY 2014 National Defense Authorization Act, or NDAA, authorizes $552 billion in the defense base budget—$32 billion more than the revised cap.
  • There is a significant disconnect between the authorizers and the appropriators of funds. The final FY 2013 discretionary defense appropriation, which was carried over into the current continuing resolution, was $518 billion, or about $2.5 billion less than the revised BCA cap. This continuing resolution expires on January 15, so further appropriations will be needed to avert a second government shutdown.
  • Because the uncertainty over the Pentagon’s FY 2014 funding levels and sequester amounts has stretched well into this fiscal year, DOD will have to absorb any FY 2014 sequester within the remaining months of FY 2014, intensifying the financial burden.
  • The budgetary maneuvers that mitigated the pain of the $37 billion FY 2013 sequester—particularly the spending down of prior-year unobligated balances—are largely exhausted, meaning the full effects of sequestration will now come to bear on the military.

The problem with sequestration is not the total dollar amounts of the reductions to the defense budget. Instead, it is the sudden and arbitrary nature of the sequestration cuts that is most damaging to our national security. Following the initial steep cuts, the defense base budget BCA cap would reach $575 billion by FY 2020, surpassing the record base budgets of FY 2009 and FY 2010. The adjustment proposed by the Murray-Ryan deal would ameliorate some of the worst effects of those rapid reductions.

Congress, however, has yet to mount a systematic effort to responsibly lower defense spending—as shown by the unrealistic spending levels contained in successive NDAAs—which has contributed to the sequester’s across-the-board cuts. The DOD has struggled to implement the arbitrary cuts imposed by sequestration, partly due to its own refusal to plan for its effects. The revised FY 2014 BCA cap would still lower the defense base budget to somewhere between FY 2007 and FY 2008 levels. The Pentagon should use the breathing room offered by this partial relief to implement cost-cutting procedures, continue to draw down ground forces, reform defense personnel costs, and complete assessments of the need for a variety of procurement programs, including the modernization of the strategic nuclear deterrent.

But DOD must not view the deal as evidence that it is out of the woods or a return to the open spigot of defense dollars that characterized the past decade. Responsibly reducing defense spending is essential to ensuring that we have the flexible and effective military that future national security challenges require. The proposed budget deal could offer Congress and the Pentagon a chance to get smart about crafting a leaner, more flexible, and more affordable force.

Looking ahead to the FY 2015 budget, the president, the Pentagon, and Congress must start making the tough but responsible choices, bringing the base defense budget below the revised FY 2015 cap of $521 billion. Last year, CAP outlined more than $100 billion in responsible and politically feasible defense cuts, which could serve as a blueprint for that process. The clock is ticking.

Lawrence J. Korb is a Senior Fellow at the Center for American Progress. Katherine Blakeley is a Research Assistant with the National Security and International Policy team at the Center. Max Hoffman is a Research Associate on the National Security and International Policy team. 

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Lawrence J. Korb

Senior Fellow

Katherine Blakeley

Policy Analyst

Max Hoffman

Former Senior Director