The New Defense Budget Plan

The Pentagon's budget imagines spending levels that are not based on reality. This isn't just a problem for now, but a problem for the next five years.

It's budget season in Washington. Every year at this time I am hopeful that the Pentagon might finally escape Wonderland and wake up. And every year at this time, I am disappointed -- but not surprised -- when it does not.

Although the Pentagon won't make the budget public until March 4, Defense Secretary Chuck Hagel provided a sneak peek, which shows some progress in the effort to get real about defense resources. That is to say, the Defense Department budget for fiscal 2015 is consistent with the budget deal struck last year by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.). And the Pentagon has abandoned the notion that future defense budgets should reflect last year's unreal Pentagon forecast. That's the good news.

The bad news is that Hagel's current forecast is still not real. It could work, but the budget castles he designed for between 2016 and 2019 are built on quicksand, which is a real problem for defense planners over the next five years.

Good news first. Plans involving Army cuts seem to be based in reality. Gen. Raymond Odierno, the Army's chief of staff, used to argue that the Army could not perform its missions with less than 490,000 in the active-duty force. Shrinking the budgetary appetite means shrinking the Army to a smaller force, and Hagel plans to do that -- maybe to 440,000.

Headlines falsely stated that the proposal would "shrink the Army to pre-World War II levels." This is simply not true; the Army, in fact, would be larger. And we don't live in Hitler's world -- there is no major enemy ground force surging into other countries that the United States needs to confront. Moreover, this ain't the conscript Army of yesteryear -- it is a well-armed, superior force any way you look at it, larger than that of almost any nation the United States might fight (except that of China, which it wouldn't fight on the ground) and the only one that can be deployed around the globe.

The Army needs to shrink, to reflect the end of the wars and the reality that the Pentagon's own strategy rules out large, long-term stability operations, like Iraq and Afghanistan. And, unlike the 1930s, there are now more than 500,000 U.S. Army guardsmen and reservists to call up in a time of need, if it ever arises. It is a better Guard and Reserve than ever, courtesy of the deployments in Iraq and Afghanistan -- quality force, for sure.

There is some reality in the hardware decisions, as well. Hagel proposes to retire the Air Force A-10 attack aircraft and the U-2 surveillance aircraft, saving some operating monies, plans to buy only 32 new littoral combat ships (instead of the original goal of 52), and wants to provide a mercy killing for the Army's latest failure in designing a new ground combat vehicle (on to the next one, I guess).

There is even some reality on the pay and benefits side, where spending has doubled per troop over the past 12 years, pay raises have exceeded the standard measure for wage increases in the economy, and health benefits have been extended to more recipients among the Guard and Reserve and the retiree community.

That last item costs taxpayers $1.4 billion a year. Takes some guts to try to end it: When I was at the Office of Management and Budget in the 1990s, we tried to end the subsidy, but it was the one proposal that was certain to ensure the presence of every four-star officer at a Defense Resources Board meeting; thus, it was rejected time and time again. Guess who likes the benefit? Retired officers.

OK, so now for the unreal part -- the Wonderland adventure. The new Hagel budget still imagines that the Budget Control Act and its spending levels are higher than what they actually are, when, in fact, the Budget Control Act caps are lower than Hagel's numbers -- $115 billion lower over the next five years. He has not gone far enough.

Even in 2015, when the Hagel budget accepts reality, he has added an asterisk. There's a little $26 billion boost he would like to get, as part of a White House proposed investment fund, that would be above the Ryan-Murray cap. This is the first step back into Wonderland -- this magical investment fund will not happen. Republican Rep. Mac Thornberry, who is likely to be the next chair of the House Armed Services Committee, has made it clear that the House majority will abide by the Bipartisan Budget Act. Rep. Ryan, chair of the House Budget Committee, will agree. If it can't pass the House, it will not happen.

The return to Wonderland gets even worse in the out-years. The secretary's four-year budget proposes $115 billion in spending above the 2011 Budget Control Act's caps between 2016 and 2019. The White House may have encouraged him to do this, but he took the bait and ran with it. But allowing the military services to imagine there will be more money down the road than the act provides is a dangerous temptation, one the secretary should have resisted.

The Budget Act is real; Hagel's projections are not. But bad budgeting is the result of this misstep. Unlike the domestic agencies, the military actually plans out its future budgets in excruciating detail, putting in programs it thinks will actually happen. My guess is that the services were given a higher budgetary target than the Budget Control Act caps and then were asked what would disappear if the Pentagon were forced to live at the caps. Needless to say, planned that way, the things that fall off the table sound like military disasters: The Army would have to shrink to 420,000, which is too small. The Pentagon would have to eliminate all the KC-10 tanker aircraft, dry dock a lot of ships, suspend the Navy version of the F-35 fighter for two years. "The resulting force," Hagel said, "would be too small to fully execute the president's defense strategy."

That's not the only unreality in his budget plan. He proposes cutting the housing allowance subsidy that troops receive from 100 percent to 95 percent of the total cost; he wants to raise co-pays and deductibles for the military's health insurance scheme; and he wants to eliminate the taxpayer subsidy provided to military commissaries. They are not bad ideas, but they are unreal, politically. Congress will not allow it to happen, any more than they were willing to swallow the lower COLA for military retirees under 62 years old that Ryan and Murray built into their December 2013 budget agreement. Congress reversed that one in a second earlier this month; Hagel's proposals will fare no better.

His plans even contradict the very rules he laid out in his budget preview -- compensation changes need "a holistic and comprehensive approach," not a piecemeal one, he said. But his approach is entirely piecemeal, and it will fail, as it has before, leaving future budget planners with the task of finding the savings somewhere else.

Same deal with the savings he would get from closing more bases starting in 2017. The United States has only had one base closure round in the past 15 years, and it didn't save a lot of money because a lot of it involves consolidating forces into other existing bases, which cost money for construction and expanded operations.

I give the Pentagon team credit for not getting all the way down the rabbit hole, but the price of not awaking at the end of the story is that the dream is still not "real." Congress is unlikely to fix this problem; year-by-year they will just vote less money than the services expect and the planners will have to rewrite the plans.

What the secretary should have done is to instruct his budget planners to do their work assuming the 2011 Budget Control Act caps were real, write the best plans and choose the best programs at that level, and go to the president with an honest accounting of the forces' capabilities and missions at an acceptable level of risk. He didn't do that; reality will have to wait.

SAUL LOEB/AFP/Getty Images


Head Games

Mexico’s president promised a new approach to the drug wars. So why is he still going after big fish?

It was only a little over a year ago that Mexico's president Enrique Peña Nieto drew a sharp distinction between the policies of his predecessor, Felipe Calderón, and his own plan for taking on the scourge of the drug trafficking organizations (DTO) roiling the country. Calderón's military-style crackdowns -- which emphasized taking out the kingpins and drug lords leading the cartels -- had proved a failure, the new administration argued. Instead, Peña Nieto promised a new strategy, one that, as he put it, would take on the structural roots of drug trafficking and "focus institutional efforts on attending to the [social] causes of the criminal phenomenon."

And yet, on Feb. 22, it was Peña Nieto's government that celebrated the capture of the biggest prize of them all: Joaquin "El Chapo" Guzman Loera, head of the Sinaloa cartel. "The apprehension of one of the most wanted drug lords at the international level shows the effectiveness of the Mexican state," Peña Nieto trumpeted, following the arrest. The capture came less than a year after the Peña Nieto government had nabbed another big fish: Miguel Treviño Morales, or "Z-40," leader of Los Zetas, was captured in July 2013.

Though he came into office with the best of intentions and understands well the futility of an endless series of high-profile arrests and the resilience of the cartels, Peña Nieto can't, it seems, resist the allure of the big get.

Peña Nieto had campaigned on a pledge to combat Mexico's drug trafficking organizations not through the kind of military-style campaigns favored by Calderón and his fellow Partido Acción Nacional leader Vicente Fox, which many blamed for a spike in violence, but through a more comprehensive strategy: judicial reform, expansion of the federal police, and the establishment of a new paramilitary security organization, the Gendarmería Nacional, for the most violent regions of the country.

So why has he reverted back to what he views as an ineffective strategy? Because comprehensive reform, of the sort that could rebuild the credibility and the effectiveness of Mexico's judicial system, is hard. These major efforts, only part of Peña Nieto's ambitious plans for reform in Mexico, have largely stalled or, in the case of the Gendarmería, have been watered down. And because for all of his administration's understanding of the complexities and nuance of combating drug trafficking, there are still few things that beat a big arrest for symbolic value, and for sending a message (and for taking a wanted and dangerous man off the streets -- no one, of course, is arguing that El Chapo should be free). The fight against DTOs is, at least partially, about who can give the appearance of winning and being in control. The DTOs themselves understand this too. That's why, for example, they leave mutilated bodies by the side of the highway, near a busy overpass.

The importance of symbolism in the case of the Guzman arrest is difficult to overstate. El Chapo, or "Shorty," had evaded capture since his 2001 escape from Puente Grande, a high-security Mexican prison. For the next 13 years, his legend grew, both as a businessman -- Forbes named him one of the world's most influential -- and as a living representation of the government's fruitless efforts against drug trafficking. His freedom was humiliating.

His arrest could help change this narrative, at least temporarily. The sight of a nondescript, middle-aged man with a paunch being led away in handcuffs was, after all these years, almost anticlimactic and certainly punctured much of the El Chapo mystique, while at the same time bolstering perceptions of an effective and powerful central Mexican government. (For comparison, think back to the reverence for U.S. Navy SEAL Team 6 following the death of Osama bin Laden.)

And projecting an image of competence and progress against drug trafficking may be particularly important at the moment, as the Peña Nieto administration struggles to come up with a strategy for how to handle the autodefensas -- the armed civilian organizations that are taking on the DTOs without government sanction or control. The autodefensas' unorthodox tactics -- they've been known to, for example, hold police officers at gunpoint -- are due at least in part to a growing frustration with government ineffectiveness and corruption. Analyst Vanda Felbab-Brown characterized these groups as "deeply destabilizing" in a 2013 report for the Brookings Institution. Analogous organizations in Colombia, another nation riven by the illegal drug trade, have, for example, devolved into paramilitary organizations focused on targeting political rivals. Although the Mexican militias have not yet reached what Felbab-Brown calls the "disastrous intensity" of their Colombian counterparts, they do provide a compelling alternative to a state that has already lost the trust of many. Arresting El Chapo, though perhaps ultimately not helpful, at least conveys to the autodefensas that the central Mexican government is not yet at the mercy of the DTOs and is still able to mount large-scale operations against those it deems a danger.

The arrest of a famous kingpin -- especially one so thoroughly associated with a broader group, like El Chapo is with Sinaloa -- tells a simple, straightforward story that fits neatly into a news headline. By contrast, the intricate, incremental work that goes into picking apart supply chains and disrupting financial networks is difficult to explain in brief. And while few would suggest El Chapo shouldn't be taken off the streets, building a consensus around the best way to, say, reform the judiciary, as well as generating the political will to proceed, requires far more heavy lifting.

Guzman's arrest is being touted as a success on both sides of the border. U.S. Attorney General Eric Holder characterized it as "a victory for the citizens of both Mexico and the United States." But of course, this victory is at best temporary, if not illusory. Actually stemming the flow of illegal drugs and stanching the associated violence is a much more difficult goal and one that remains out of reach. Even if Sinaloa is crippled by El Chapo's arrest -- and that may well not be the case -- it will make little difference in controlling the flow of drugs, contraband, weapons, and money. Newer, more violent organizations such as the Knights Templar and Los Zetas, which appears to be weathering well Z-40's capture, will move to take over routes and businesses previously controlled by Sinaloa. It is likely that the DTO itself may splinter -- if that happens, the ensuing violence may further damage a nation already scarred from years of DTO-related killings. As long as profits can be made, and hidden, through illicit trade, there will be competition for those profits, with or without El Chapo.

There are reasons to find hope in El Chapo's arrest, however. The arrest did not involve cutting-edge border control technology or high-tech aerial surveillance, but old-fashioned police work and cross-border cooperation. "We got the right people to flip and we were up on good wire," one law enforcement source told the Associated Press. The extent and type of U.S. involvement might never be fully known, but the cooperation between the two nations provides a glimmer of optimism about the future of such efforts. Cross-border cooperation is crucial for getting to the roots of drug trafficking; the DTOs' biggest customer is the United States.

And there are reasons to find hope that real progress is taking place in the fight against trafficking -- even if it keeps a lower profile. While media was paying attention to the capture of an aging drug lord, and focused on the network of sewage tunnels that El Chapo used to temporarily evade capture, they missed a much bigger story: The discovery of a 481-foot-long smuggling tunnel leading from Arizona to Nogales, Sonora, which traffickers used to smuggle tons of illegal drugs and other contraband into the United States. (The tunnel has since been shut down.)

Congratulations on your big fish, Mr. President, but you would do well to remember your own advice: It's moves like these -- dismantling the logistical and financial networks of drug trafficking organizations -- that will, in the end, do more damage than any high-profile arrest.

Grigoriy Sisoev/Host Photo Agency via Getty Images