Kendall: Pentagon Learning to Live With Budget Uncertainty

Since the Defense Department’s budget proposal was unveiled March 4, Pentagon officials have harbored hope that, by now, they would have received a “signal” from Congress that it was willing to compromise and meet the administration halfway. But hope is fading fast, said Frank Kendall, undersecretary of defense for acquisition, technology and logistics.

A year ago, the gap between the funding the Pentagon wanted and the amount authorized by Congress was more than $50 billion. In budget year 2016, the Obama administration wants to shrink that gap to $25 billion. But even that is beginning to look like a bridge too far. “I don't see any political prospect of that any time soon,” Kendall said April 15 at the National Defense Industrial Association’s logistics forum in Washington, D.C.

“Whatever happens in the election coming up, I think we'll still be in the same position … probably for an indefinite period of time,” said Kendall.

The ups-and-downs of the past three budget years wreaked havoc on defense programs, said Kendall. “This is probably the worst budget environment I've seen.” Facing a political climate that is increasingly unfavorable, the Pentagon is bracing for an extended period of topsy-turvy budgets. “Uncertainty is something we are just going to have to manage our way through,” Kendall said. “We are trying to figure out how to manage.”

“At one point there was a $50 billion difference between the number we made detailed plans for, and the budget we might actually get. Our recent budget submission is less severe,” said Kendall. Last year’s Bipartisan Budget Agreement gave the Defense Department some stability for fiscal years 2014 and 2015 and softened the blow of the 2011 Budget Control Act. The bipartisan agreement, though, did not spare the Pentagon from deep automatic cuts from 2016 through 2021.

The fiscal year 2015 defense budget top line is $495.6 billion. The five-year plan for 2016 through 2019 included in the 2015 budget request exceeds the budget caps for those years by about $115 billion. For that additional funding to be appropriated in 2016 and beyond, Congress would have to ditch the BCA spending caps.

When those spending limits were enforced a year ago, the Defense Department was caught unprepared. It was hoping that sequestration would go away “if we just hang on one more year, until we get a signal from the Congress,” Kendall said. “But the problem is that sequestration is a 10-year law. It doesn't go away unless Congress does something to take it away.”

Although the specifics of the administration’s 2016 budget proposal will not be known until early 2015, Kendall said President Obama is unlikely to submit defense budgets to Congress that comply with BCA spending levels. “This is not definitive, and I don’t want to get ahead of the president, but I will tell you that it is extremely unlikely that we will ask for less money than the president thinks he needs to defend the country,” Kendall said. “We are not going to send budgets over, I believe, at sequestration levels. We are going to send budgets for the amount of money this administration thinks it really needs for defense. That is what we did this year and I suspect it's what we'll do in the future.”

A sequester-level 2016 budget, he said, would be “pretty unpleasant.” BCA-compliant budgets were examined under Defense Secretary Chuck Hagel’s “strategic choices management review” last year, and the conclusion was that the Pentagon could not absorb a $50 billion cut every year without gutting the military and turning it into a “hollow force,” said Kendall. “I lived through a hollow force in the 1970s as an Army captain in Europe,” he said. “We don't want to go back to that.”

Washington remains as divided over defense budgets as it was when disagreements over taxes and spending led to the Budget Control Act and the sequester as a mechanism to control spending. A recent budget proposal by House Budget Committee Chairman Rep. Paul Ryan, R-Wisc., seeks to restore $274 billion to defense over the next 10 years. But the plan stands no chance politically, and has been widely criticized for boosting the military budget at the expense of domestic social programs and other non-defense discretionary accounts such as homeland security and diplomacy.

Topics: Defense Department, DOD Budget, DOD Leadership