Secretary Hagel has finally answered the mail, addressing the impact that a $52 billion sequester cut would have on the defense budget the president requested for Fiscal Year 2014. His July 10 letter -- which responds to a request from Senators Carl Levin and James Inhofe, the chair and ranking member of the Armed Services Committee -- is full of bad news and seriously misses an opportunity to start some real planning for a defense drawdown that is underway, with or without sequestration.
Hagel's letter is refreshing in one respect. It does not hyperventilate, unlike the rhetoric used by Secretary Panetta, for whom even one year of sequestration (currently playing in a budget theater near you) was a "doomsday" event that would reduce the United States to a "second rate power." That has not happened, so Hagel is more careful. He says that, if further cuts are implemented, "the size, readiness and technological superiority of our military will be reduced, placing at much greater risk the country's ability to meet our national security commitments." And he is cautious about its impact on strategy.
He does not say that the Defense Department would have to abandon Panetta's Defense Strategic Guidance, which laid out the so-called pivot to Asia 18 months ago, but he does argue that the sequester would, "even with flexibility, substantially limit our ability to implement [budget] cuts in a way that fully protects the tenants [sic] of the DSG."
But, in a way, Hagel's approach is even more dramatic than Panetta's. Panetta asked for flexibility to manage the cuts; Hagel doesn't bother. He doesn't warn of using a "meat axe" to do the job of a scalpel; he just says that sequester-level cuts would be damaging, flexibility or not. Specifically, he says even if Congress went so far as to set aside any current limits on internal Pentagon funding transfers, "DoD would not be able to mitigate the significant and detrimental impacts associated with sequester levels."
When he gets to the specifics of those impacts, however, the letter is curiously empty of analysis and misses the big opportunities he has to truly change how the Pentagon does business, and, in doing so, focus its funding on the forces and equipment he says he needs.
There are three big problems here -- problems he has focused on before -- but he does not offer options to actually manage them.
First of all, there are the "military people" questions. He warns that even if DOD had the flexibility to save money on people (military pay and benefits are exempt from the sequester), reducing the size of the force beyond current plans would not produce big savings in 2014, largely because people would have to be paid to leave. Moreover, he says, Congress would have to lift restrictions it put on lowering the size of the Army and the Marine Corps -- so, over to you, Congress. Force reductions will happen in a drawdown, and they will go deeper than currently projected, so it is high time to think about how to do that and start now, however minimal the first year savings. Hagel's letter does not do that.
Instead, the secretary writes that a 10 percent cut in military personnel spending would force DOD to stop adding new people, stop moving people around, stop bonuses, and freeze promotions. That all sounds pretty draconian, but Hagel does have choices -- they're just tough ones. How about no pay increases for the force, or a change in the compensation formula so that performance is rewarded, rather than time in rank? Hagel doesn't discuss it. What he does say is that, if Congress insists on raising military pay 1.8 percent, instead of the 1 percent increase the administration asked for, it will make FY 2014's budget problem harder, should the sequester hit. This is true.