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Pentagon Budgetary Hat Trickery

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The sky-is-falling game is now fully underway when it comes to the more than $500 billion in Pentagon budget cuts slated to begin March 1 if Congress and the White House can not agree on a $1.2 trillion deficit reduction by then. So far, no rumbles of any kind of a deal.

Sequestration means the Pentagon would have to hack $46 billion out of the seven months left in its $557 billion 2013 budget (these numbers vary depending on who is using which yardstick when; $46 billion is the size of the cut projected last week by Ashton Carter, the deputy defense secretary, and the $557 billion sum is the number used by the Center for Strategic and Budgetary Assessments).

Anyway, time for the wheels to start squeaking:

Bloomberg reports that Pentagon contracts “plunged” 67% in January, compared to December:

The Pentagon wants to reduce commitments to better prepare for the possibility of automatic cuts, which would require making steep reductions to the annual budget over just six months, according to Larry Allen, president of Allen Federal Business Partners, a consulting firm in McLean, Virginia. “Slowing spending on anything other than what is absolutely essential saves on contract cancellation costs,” he said in an e-mail.

Meanwhile, over at the Washington Times, correspondent Rowan Scarborough reports that the Obama Administration has selected high-profile cuts – including indefinitely delaying the deployment of the aircraft carrier Harry S. Truman to the Persian Gulf Feb. 6, two days before she was set to sail — to make them appear worse than they really are:

Analysts and Capitol Hill staffers say there are less-dramatic budget items that could be sacrificed in the first year of a decade of across-the-board spending cuts called sequestration. But they think the Joint Chiefs of Staff and the White House want to pick the items that would put the most pressure on lawmakers.

All this, of course, might lead some to think that the Pentagon is facing huge budget cuts that could cripple the nation’s security.

That leads to the third item in this hat-trick of budget news: this video summary of what’s actually happening to the nation’s military budget, It’s from the Friends Committee on National Legislation.

What do you expect from the Quakers? Damn pacifists. Probably affects their math skills.

18 comments
GalacticCannibal
GalacticCannibal

Exactly why do we need another steel boat (Aircraft Carrier)costing $10 billion. In the age of NUKE tipped missiles these steel boats are floating dinosaurs. Potential enemy military satellites can pin point their exact position and sink them with one nuke-tipped missile. We already have 10 of these dinosaurs sailing on the oceans.

Don_Bacon
Don_Bacon

The USS Truman was originally scheduled to depart Naval Station Norfolk, Virginia, on 8 February but then it was delayed, postponed and/or canceled according to the source. Now this, with "delaying":

NORFOLK, Va. (WAVY) - The Navy released a list of cost-saving moves Tuesday as the country inches closer to stiff budget cuts.
That plan includes canceling the USS Bataan (LHD 5) ARG deployment and delaying the Harry S. Truman (CVN 75) CSG deployment. The Navy would also reduce spending on ships, aircraft weapons and R&D by $7.75B.
http://www.wavy.com/dpp/military/navy-releases-updated-budget-cuts-plan

There is no current information on the Truman webpage, and there have been no entries on facebook since Feb 14. The gonavy  locator indicates the Truman departed on Feb 14 -- "14Feb-15Feb2013, WestLant" and that's usually accurate. I suspect it's correct and the Truman's departure was secret, but I don't know.
http://www.gonavy.jp/CVLocation.html

Meanwhile the warmongers with their "all options on the table" toward Iran have driven Brent Crude up to $116/bbl. That's a good way to increase operating expenses in tough times.

cent-fan
cent-fan

Now the technicians in the defense industries can take over the melon picking duties from those damned illegal border crossers that take away American jobs.We could even lower the minimum wage now that selfless workers from our patriotic industries will be taking the helm and flooding the fields… then again they might collect unemployment like the 47% parasites that contribute nothing to society.Calling doctor Limbaugh… I have questions.

mtngoatjoe
mtngoatjoe

The problem with sequestration isn't the $85 billion in cuts for this year, it's how those cuts are implemented. We have to reduce our spending. It would be better to do that during good economic times, but we've dug ourselves into a position where the debt is hurting our economy. Nobody wants to spend more to boost the economy, and we can't sustain the level of spending we're at, so there's only one option the American people will support: less spending. Everyone needs to understand that while spending less will improve (but not fix) the bottom line for the federal budget, MANY people will lose their jobs. I'm not suggesting that we continue our current high level of spending, but cutting back will be painful, especially with unemployment already over 7%.

OzarkGranny
OzarkGranny

Assuming the numbers in the video are accurate, there really is no reason to avoid the sequestration, well accept that a lot of people will lose their jobs.  

Don_Bacon
Don_Bacon

@GalacticCannibalYup. After Billy Mitchell sank a battleship from the air in 1921, the die was cast and that warship class eventually went the way of the dodo. Aircraft carriers could bring aircraft to within range of battleships and sink them. Since carrier aircraft could attack battleships, and sink them out to 200 nm they eliminated a battleship’s ten-fold firepower advantage, which only reached 20 nm.

Nothing ever stays the same. Now there are guided and ballistic missiles that can be brought to within range of aircraft carriers and sink them. China's DF-21D  ballistic missile with independently-targeted warheads has a range of 1500 nm, and many navies feature  missiles distributed widely in a flotilla of small combatants.


The U. S. surface navy has not been challenged in a sea battle since 1945. The transition to the missile era went unnoticed because we were concerned—properly so—with Soviet submarines and land based aircraft, and with projection of U. S. power overseas with our own air and missile attacks and ground forces. These missions are still important, but now the U. S. Navy can also exploit missiles distributed widely in a Flotilla of small combatants as many other navies have done.

An important layer in Iran's defense of the Persian Gulf and the Strait of Hormuz is its coastal defense cruise missile (CDCM) capability. Iran can attack targeted ships with anti-ship cruise missiles from its own shores, islands, and oil platforms using relatively small mobile launchers (speedboats).

Which is one reason the US has never attacked Iran.

bobell
bobell

The Navy doesn't get one big pile of money from Congress. It's split among dozens of appropriationa, each of which, under the sequester, is supposed to be cut by the same percentage.  The operating costs of ships and the salaries of the civilian employees come out of the same overall appropriation, called "Operation and Maintenance, Navy" and generally referred to as O&M.  The proposed furloughs of civilian employees are an effort to keep more money available to operate the ships, but there are limits to how much that will save.  So USS Harry S. Truman (its actual name) stays in port.

Worse, just about every ship under construction is finded by a separate appropriation, so the Navy is severely limited in its ability to move the money around, like by cutting all funding for one ship so another can be finished.  The sequester will leave every ship under construction underfunded.  Managing that situation will be almost impossible.  Similarly, each weapon system is under a separate appropriation, so there are severe limits on cutting one program deeply to allow all others to survive. This is going to be ugly.

Don_Bacon
Don_Bacon

@cent-fan Alabama scared all their Hispanics off with a new law and now the big growers can't hire replacements. People show up for work cutting lettuce etc., stoop labor, and they last about half a day before they quit. Standing in a chilly warehouse cutting up headless chickens as they come down a conveyor belt? No thanks, they said. 

So call Doctor Limbaugh -- he's got the meds, last time I heard.

bobell
bobell

@mtngoatjoe The debt isn't hurting our economy nearly as much as the insistence onreducing it at exactly the wrong time. When you say "Nobody wants to spend more to boost the economy," you're insuilting a whole bunch of people who know that we need stimulus a hell of a lot more than we need deficit reduction -- and we're getting deficit reduction anyway, even without the sequester.

I do agree with you that letting the sequester take effect is a lot like performing brain surgery with a meataxe. But the Repubs took the economy hostage in order to get something like the sequester -- and now they've got it.  We'll all suffer for it, the one percent aside.

forgottenlord
forgottenlord

@mtngoatjoe 

Personally, my bigger problem is the sharp drop.  The problem is that, as noted in the article, it's cheaper to not buy something or not renew a contract than it is to cancel a contract.  There was a helicopter purchase Canada was doing back in the early 90s that they cancelled - they spent more than if they'd just gotten the stupid things.  So if cancelling contracts is so expensive, what should they do?  Extend it to being a multi-year draw down at a far steeper level that still ends up as a trillion dollars in savings (or more) but would allow them to slowly prune contracts that aren't desired while holding onto or renegotiating necessary contracts and having the flexibility to make good decisions.

This also helps with the economic issue - yes, you're still cutting spending and your delaying the end of the recession, but it is easier for the economy to take out, say, $10 billion a month for 24 months than it is to drop $100 billion in one month - even though the former removes more than twice as much by the time it's over

Don_Bacon
Don_Bacon

@OzarkGranny The US government has a policy of outsourcing jobs overseas, and that can't be cured by throwing money at it.  The growth is in Asia and Africa, and so is the labor. "Free trade" eliminates tariffs on what they produce, and USAID (taxpayer) money is used to train the workers. Corporations pay for political campaigns, and they expect a return, which sometimes includes sweetheart contracts (F35) but also includes help overseas. That's what embassies are for.

forgottenlord
forgottenlord

@OzarkGranny I would like them to be spread out a bit - more because it makes it so you can make cuts responsibly as contracts expire and it will allow the economy to more easily absorb the cuts.

MrObvious
MrObvious

@OzarkGranny 

I'm all for reasonable cuts and even cutting our defense budget - but every we lay off cuts into our ability to move onto a robust and sustained recovery. 

bobell
bobell

@OzarkGranny Right you are. And it's not as if jobs matter to anyone. I mean, who can forget the GOP campaigning  in 2010 on a platform of "Jobs? Jobs?  Who cares about jobs?"

Don_Bacon
Don_Bacon

@bobellI understand about appropriations, but neither the DOD nor the services made any attempt to prioritize among appropriations, and seek to shift funds, or prioritize and shift within appropriations. There was no Pentagon committee appointed to look at the impact of sequestration on appropriations. There apparently was no effort at all to plan for this -- they have told us so.

Money can be reprogrammed, or at least it could until the Pentagon pissed off Senator McCain (McCain!!).

Army Times, Mar 13, 2012
Sen. John McCain has worsened the Pentagon’s cash flow problems by announcing he will no longer approve reprogramming requests that shift money between accounts.

Other than for emergencies, McCain he will not support Pentagon requests to move money until he receives a detailed report on money transfers over the last two years.

Last year, Congress approved between $12 billion and $15 billion in transfers, McCain said. This year, just two months after the fiscal 2012 Defense Authorization Act was signed into law, the Defense Department has sent seven transfer requests to Congress totaling more than $850 million, he said.

Reprogramming is used throughout defense programs, covering unexpected costs for personnel, maintenance or weapons programs. The practice is controversial because the military is essentially asking for permission to alter spending allocations made by Congress.
http://www.armytimes.com/news/2012/03/military-john-mccain-blocks-reprogramming-requests-031312w/

The Pentagon is completely out of control, with a political hack as chief, and I have my doubts about the next one. To paraphrase LBJ, I'd feel better about them if one of them had managed a grocery store just for a little while.

Don_Bacon
Don_Bacon

@bobellBut there has been a stimulus, driving the annual deficit to over a trillion for four years, that's three billion every day of stimulus.  The last couple of months have been much better, and receipts actually exceeded expenditures last month.
http://www.fms.treas.gov/mts/mts.pdf

Don_Bacon
Don_Bacon

@forgottenlord @mtngoatjoe They had a year to plan for it and didn't. It was business as usual, spending money like they had it -- as chronicled by Battleland on this site.

forgottenlord
forgottenlord

@Don_Bacon

And therein lies why I want it to be a progressive decrease month-by-month.  From the Pentagon's perspective, they were given a huge change purse and next year is future-Homer's problem.  However, if you have their budget actually shrink every month, then every month they'd be looking to fix their budgetary mess and allowing more bad contracts and not-needed work go away.


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