A graduate of the Massachusetts Institute of Technology, with both B.S. and M.S. degrees in aeronautics and astronautics, Todd Harrison began his career in the aerospace industry, developing advanced space systems and technologies while also serving as a captain in the U.S. Air Force Reserves.

Before joining CSBA, an independent nonprofit policy research institute in 2009, Harrison worked at the defense consulting firm Booz Allen Hamilton, where he assessed challenges to modernization and evaluated the performance of acquisition programs.

Sequestration just cuts every account – with an exception for military personnel – by the same amount. But that way, members of Congress can say: “Hey, I’m for deficit reduction, and I’m for higher defense spending, but I was not for any of these specific reductions. It was just a stupid formula, and the law, that did it, not me.”

Harrison’s numerous publications as leader of CSBA’s Budget Studies program have focused on overall budget trends, defense modernization, the defense industrial base, military personnel costs, and war costs. In April 2013, just before the Pentagon released its 2014 budget proposal, Harrison published a brief titled “Looking Beyond the Fog Bank: Fiscal Challenges Facing Defense,” in which he argues for the Pentagon and Congress to resolve the political stalemate over budget caps so that the Department of Defense (DoD) can address the underlying structural problems – primarily spiraling growth in personnel and operations & maintenance (O&M) accounts – that are pushing the military budget to unsustainable levels.

 

Craig Collins: Both the Pentagon’s 2014 budget proposal ($526.6 billion “base budget”; $79.4 billion for overseas contingency operations [OCO]) and the appropriations bill that was approved by the House of Representatives on July 24 ($512.5 billion base budget; $82 billion for OCO) exceed the amount the DoD is currently allowed to spend under the law. The Senate, which hadn’t brought an appropriations bill to the floor as of midsummer, has proposed similar numbers in its authorization bill. What’s going on?

TODD HARRISON: The Budget Control Act essentially caps DoD’s 2014 budget at $475 billion. The original cap in the law was higher – but that cap was overridden the moment the congressional Super Committee failed to agree on overall spending cuts [in November 2011] and triggered the automatic cuts known as sequestration. The cap in effect now has that automatic reduction already taken out of it. So the cap is $475 billion, unless Congress changes the cap – which they can do at any time.

So you might ask yourself: Why on Earth would Congress appropriate more money than the caps allow, knowing the caps are going to cut their appropriation? They can do that because voting on a higher level of defense spending gives everyone political cover, and then the caps will kick in and do the dirty work of cutting things. Now, they do that in a dumb, blind, nonstrategic way: Sequestration just cuts every account – with an exception for military personnel – by the same amount. But that way, members of Congress can say: “Hey, I’m for deficit reduction, and I’m for higher defense spending, but I was not for any of these specific reductions. It was just a stupid formula, and the law, that did it, not me.”
As long as the Budget Control Act stays in place, and you’ve got the budget caps and automatic reductions, we know what the topline for DoD will be next year: $475 billion. Congress can appropriate and authorize whatever they want, but until they change the law, they will be sequestered down to $475 billion no matter what they do.

 

So in a way, Congress has stumbled across a way to do, in reverse, what the Pentagon has been doing for the past several years – proposing a fantasy budget with no chance of becoming reality.

In both cases, they’re kicking responsibility off to the other side: When DoD proposes cuts in things like TRICARE, knowing Congress is not going to go along with it, they’re basically kicking the ball over to Congress and saying: “Well, if you won’t let us save money by doing this, then find some other way.” And Congress is doing the same thing by appropriating a higher level of defense spending and then letting sequestration do the cutting for them.

I compare this to taking the family budget and having to cut every item by 10 percent. That would create some big problems. You can’t just cut your rent or your mortgage payment by 10 percent – you’ll get evicted. There are some “must-pay” bills and some that – well, you won’t like it, but you could cut them by more than 10 percent, perhaps even to zero, and then redirect those amounts to the expenses you just can’t cut any further.

After the sequester took effect this year, DoD submitted a request to Congress to essentially do this – a reprogramming request – where they said: “Hey, we can’t do the cuts across the board like you wanted, because it really makes no sense. At least let us move some money around and do some prioritization.” And Congress allowed it for the most part, because they don’t have a good alternative.

Still, that’s not a very strategic way to go about budgeting, because even when you’re doing that reprogramming, you’re just trying to put Band-Aids on things. You’re just reacting to and trying to fix problems, rather than proactively trying to avoid problems.

 

Both the Pentagon budget proposal and the House appropriation include a war budget similar to – just slightly less than – the $88 million approved for 2013. But we’re drawing down. It raises the suspicion that an old budgeting trick from the early 2000s – hiding base budget expenses in the war budget – is being revived.

There’s an enormous loophole in the Budget Control Act, because it does not count war-related funding against the budget cap. So if Congress were to appropriate $475 billion for DoD’s budget, there’s no sequester. We’re fine. And then if they were to appropriate an extra $52 billion in the war-related budget, that wouldn’t trigger a sequester either. How much of that can they get away with? We don’t really know yet.

I haven’t seen a detailed report of the House appropriation, but I’ve analyzed the level of war spending in Afghanistan, going back all the way to 2005, since we’ve had good numbers on troop levels there. We have averaged spending $1.2 million per troop, per year, in Afghanistan, and it’s been pretty consistent even throughout the surge where we were deploying large numbers of troops and equipment.

We’re going to have about half the number of troops in Afghanistan in 2014, so why would the war-related appropriation be even close to the same amount of money? Even when we’ve been rapidly deploying new troops in the surge, buying all kinds of new equipment, building new bases, transporting all the troops and equipment over there, we’ve still averaged about $1.2 million per troop. And now they say, in the middle of the drawdown, it’s going to almost double, to $2.3 million per troop in 2014. That just puts up a red flag for me – it suggests that they must be putting costs in there that are not really war-related.