Hagel's sequestration review points to few good choices
WASHINGTON — An Army with fewer soldiers than it’s had since before World War II. A Navy with eight aircraft carriers. Military retirees losing their civilian government pensions.
Those were some of the most drastic cuts Secretary of Defense Chuck Hagel said Wednesday that the Pentagon is being forced to weigh as it struggles with ongoing budget cuts under sequestration. The automatic cuts could slash $500 billion over a decade, including $52 billion from next year’s budget.
The range of options — none of which have been settled on, and many which would require Congressional approval — are contained in a study Hagel ordered in March, the Strategic Choices and Management Review, designed to help the Pentagon navigate the automatic budget cuts.
But even the most draconian cuts outlined in the study still would result in a massive DOD budget shortfall for the next few years, Hagel admitted. It’s up to Congress to help DOD avoid having to make the most damaging budget choices, he said.
“The deep and abrupt spending cuts under sequestration that began on March 1st this year are the law of the land,” he said at a Pentagon press conference. “Sequestration will continue in the absence of an agreement that replaces the Budget Control Act.”
Regardless of Congressional action, however, the findings in the SCMR likely lead to a smaller Army by 2019 than recently foreseen. With 420,000 to 450,000 active-duty troops, the Army could fulfill the mission required by the recent national defense strategy that redirects the military’s focus to Asia, Hagel said. Current plans approved by Congress call for the Army to cut end strength to 490,000 by 2017.
Likewise, the Air Force could cut up to five tactical air squadrons and reduce its C-130 force with minimal risk, the review said.
But the cuts could go much deeper if Congress allows sequestration to continue, he said.
Following one possible approach outlined in the SCMR — designed to protect programs like the Joint Strike Fighter and missions such as the long range strike and cyberwar capability — active Army end strength could drop as low as 380,000 troops. Meanwhile, the Marine Corps could drop to 150,000 active-duty troops. Older Air Force bombers would be retired, and the Navy would cut two or three carrier strike groups, Hagel said.
“This strategic choice would result in a force that would be technologically dominant, but would be much smaller and able to go fewer places and do fewer things, especially if crises occurred at the same time in different regions of the world,” he said
On the other hand, Hagel said, troop numbers and the regional power projection could be protected in exchange for severe cuts in modernization, reductions in cyber capabilities and a smaller Special Operations Command.
“Cuts on this scale would, in effect, be a decadelong modernization holiday,” he said. “The military could find its equipment and weapons systems — many of which are already near the end of their service lives — less effective against more technologically advanced adversaries.”
Although Congress has consistently balked at Pentagon proposals to limit pay increases for troops and impose new or higher costs on retirees for health care, such changes will be necessary under sequestration, Hagel said.
Hagel said DOD could save $50 billion in a decade if Congress would agree to a package of benefit and pay measures that would, among other things:
Cause retirees to increase their use of civilian health insurance instead of Tricare.
Reduce housing allowances and the overseas cost-of-living allowance.
Continue limiting military and civilian pay raises.
Even more sweeping changes could save $100 billion, and might be necessary if sequestration continues, he said. Those include eliminating civilian pensions for retired military personnel serving in civilian government service, ending subsidies for defense commissaries, and restricting the availability of unemployment benefits, he said.
Beyond troop and benefit cuts, Hagel said the Pentagon could save $40 billion over the next decade by increasing efficiency and cutting overhead.
Hagel in recent weeks ordered a 20 percent budget reduction — which he said should result in 20 percent military and civilian staff cuts — in major DOD offices and headquarters. Those on the chopping block include the Office of the Secretary of Defense, the Joint Staff, the military service headquarters, combatant command headquarters and defense agencies and field activities.
Under continuing sequestration, more aggressive cuts, including the combination of regional combatant commands and defense agency mission cuts, could save $60 billion in total, he said.
The defense chief said that if Congress cannot agree to a way to end sequestration entirely, it should restructure the cuts so they are “backloaded” with the biggest cuts far in the future — giving the Pentagon time for budget-cutting strategies to take cumulative effect.
When it comes to handling the near-term cuts, Hagel indicated the Pentagon is essentially without a plan, despite the SCMR.
“The reality is that cuts to overhead, compensation, and forces generate savings slowly,” he said. “With dramatic reductions in each area, we do reach sequester-level savings — but only towards the end of a 10-year timeframe. Every scenario the review examined showed shortfalls in the early years of $30-35 billion.”