While Gen. James Clapper, the director of national intelligence, may be right that the impact of sequestration is "insidious, gradual, and almost invisible," it is the "invisible" part that is telling. Sequestration is exposing the fat, and starting the process of trimming it.
Suggesting the reality of the sequester will go away, as the budget request does, however, sends a contradictory message to Pentagon planners. It allows the services to continue to live with the illusion that defense budgets will be flat over the next decade. And they will not. What the services need to hear is that their resources are going down.
The budget fails that realism test. And it expands the illusion even further by promising cuts that will not happen. Like major increases in the fees younger retirees pay for Tricare health insurance. Like a new BRAC round or two. Like limiting pay increases for troops to 1 percent, almost a percentage point below projected wage growth.
None of these proposals will survive in Congress. And if a larger budget deal (even a short-term one) lowers the defense budget below the administration's request and the appropriators refuse to scoop up these proposed savings, the trade-offs they make will not make the services happy.
There is also a lack of realism in the projections for the size of the military force and the amount of hardware the services can afford. Army and Marine Corps "end strength" is still projected to decline to the previously planned 490,000 troops and 182,000 troops, respectively. But, in truth, they will come down further. The Army knows this, but it is still searching for new missions and requirements to justify the larger force (including giving ground forces a big role in the so-called pivot to Asia).
The budget's procurement plans are also unrealistic. The Pentagon is still planning to buy two Virginia-class subs every year. Still planning to spend nearly $9 billion over five years for a new bomber, even though the current ones continue to fly well. Still planning for that Army Ground Combat Vehicle it doesn't really need, given all those MRAPs and Strykers the Army bought over the last decade. And still hoping and praying that the F-35 is under control, so it can buy 29 next year and ramp up production.
As I have written a number of times, procurement funds are the first things to go in a defense drawdown. They are already down 20 percent in constant dollars between FY 2010 and FY 2012, double the 10 percent decline in the defense budget overall. The new budget documents show that projected procurement spending through FY 2018 is already 4.5 percent lower than the projection for the same time period offered a year ago, or over $20 billion less. But the lack of realism continues, fanned by the expectation that sequestration will be fixed and the new budget caps will go away.
Secretary Hagel's job is still in front of him: cutting through the illusions. The "Scammer" needs to start with an assumption about lower budgets than those currently forecast. It needs to pin the services down as to what they will do when lower budgets become the reality. It may do to play politics with the budget request to Congress, but anything other than tough signals to the services will do a long-term disservice to defense planning.
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