WASHINGTON, June 11, 2013 - Sequestration and the need for another base closure and realignment commission headlined Defense Secretary Chuck Hagel's testimony before the Senate Appropriations Committee's defense subcommittee today.
Hagel and Army Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, defended the president's request for $526.6 billion for the Defense Department's fiscal year 2014 budget and an additional $79.4 billion for overseas contingency operations.
"This budget enables the department to support troops still at war in Afghanistan, protect readiness, modernize the military's aging weapons inventory in keeping with the president's strategic guidance and sustain the high quality of the all-volunteer force," Hagel said. "This budget also continues the department's approach of the last couple of years of targeting growing costs in areas of support, overhead, acquisition and pay and benefits."
But the specter of sequestration hangs over this budget. DOD is absorbing $37 billion in fiscal 2013 spending cuts, which has necessitated furloughs of 700,000 civilian employees for up to 11 days.
DOD also has cut facilities maintenance, instituted hiring freezes, cut overhead and reduced important, but lower-priority, programs, the secretary told the senators, noting that the department has submitted a request to Congress to allow Pentagon officials to shift $9.6 billion in funding.
"We ask this subcommittee's assistance in providing rapid review and approval of this critical reprogramming request," Hagel said.
The spending cuts have forced the services to reduce training and maintenance of nondeployed operating forces, Hagel said.
"The Army has stopped rotations at its key combat training centers for all but deploying units, more than a dozen combat coded Air Force squadrons either already have or will soon stop flying and the Navy has curtailed deployments," the secretary said.
The fiscal 2014 budget request is based on $487 billion in spending reductions over 10 years mandated by the Budget Control Act of 2011 -- it does not include the effects of sequestration, Hagel told the panel, and if sequestration continues, it will mean a further $500 billion on top of the already agreed-to cuts.
"The president's [fiscal] 2014 budget replaces sequestration and gives the department the time and flexibility to plan and implement spending reductions wisely and responsibly," he said.
Under this request, Hagel added, DOD has identified $34 billion in new savings, including weapons program restructuring and terminations that achieve $8.2 billion in savings, slowdowns in military construction, and reductions in other programs.
The budget request's military compensation package "preserves DOD's world-class pay and benefits while putting our military on a more sustainable path for the future," Hagel said. "It includes changes to the TRICARE program to bring the beneficiary's cost share closer to the levels envisioned when the program was implemented."
Hagel called on the committee to support DOD's need to eliminate excess infrastructure. The budget request calls for one base realignment and closure round in 2015.
"BRAC is an imperfect process, and there are up-front costs, but in the long term, there are significant savings," the secretary said. He noted that previous BRAC rounds now save $12 billion a year.
"Although there are clearly opportunities to achieve significant savings by improving efficiency, consolidations and reducing overhead, the scale of the current spending reductions will also require cuts and changes to military operations," he said.
The budget request isn't all about cuts, Hagel noted. The defense strategic guidance issued in 2012 identified areas that must be increased. These include implementing the military rebalance to the Asia-Pacific region, maintaining America's nuclear stockpile, increasing cyber capabilities and sustaining the growth of special operations forces.
"Finally, this budget seeks to preserve a combat-ready force and sustain the high-quality all-volunteer force," he said.
The budget is the best effort to inject some certainty into the fiscal environment, Hagel told the Senate panel, noting that changes in top-line spending would require changes to the budget plan.
"Consequently, I directed a strategic choices and management review in order to assess the potential impact of further reductions and plan for those continued reductions," the secretary said.
Hagel assured the senators that the Defense Department will continue to find new ways to operate more affordably, efficiently and effectively.
"However, as I've stated, continued cuts on the scale and timeline of sequestration will require significant reductions in core military capabilities and the scope of our activities around the world," he said.
Hard choices remain, the secretary said, and continued partnership with Congress is essential.
"In the past, many modest reforms to personnel and benefits, along with efforts to reduce infrastructure and restructure acquisition programs, were met with fierce political resistance and not implemented," Hagel said. "We are now in a different fiscal environment. New realities are forcing us to more fully confront these tough and painful choices, and to make the reforms necessary to put this department on a path to sustain our military strength for the 21st century and meet new and complicated threats."