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Tuesday, July 29, 2014         

NEW YORK TIMES


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Obama puts deficit ball back in Pentagon’s court

By THOM SHANKER and CHRISTOPHER DREW

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WASHINGTON >> When Defense Secretary Robert M. Gates disclosed his new military budget plan in January, he ordered $78 billion in cuts over five years, on top of several hundred billion dollars in savings already found by canceling weapons programs and identifying business efficiencies.

Gates said those were wrenching decisions for the Pentagon, and he said that he opposed further reducing the growth of spending.

But President Barack Obama has called for substantially tightening the Pentagon’s budget again, ordering the national security establishment as a whole to slice $400 billion in projected spending through fiscal 2023. The decision was relayed by the White House to Gates just a day before Obama’s speech on Wednesday.

Within hours of the president’s address, military planners warned that meeting the reduced spending targets might require cutting the size of the force even beyond current projections as troops come home from Iraq and Afghanistan — and this would mean, they said, accepting new risks.

But some civilian budget analysts argued that, while the president’s directive sounded sweeping, the Pentagon could save that much money just by limiting its future spending increases to the rate of inflation projected by the White House.

“This is easily absorbable, and it’s not really a cut,” said Gordon Adams, a professor at American University who oversaw military budgets in the Clinton White House.

He said that while the Pentagon would no longer see real growth in spending if Congress approved Obama’s plan, it would be able to retain the purchasing power it has.

Until now, Obama has avoided putting his name behind sweeping proposals to cut defense spending for fear that the Republicans would brand him as a typical soft-on-defense Democrat, and he was pleased that his defense secretary, a Republican, went after poor-performing procurement programs and management inefficiencies, plowing much of the savings right back into the military.

And while the president spoke emphatically about his $400 billion target, he left himself some room to maneuver, directing the Pentagon to first conduct a comprehensive review, and only then would he make decisions on spending.

Senior Pentagon officials said Gates was less concerned about the Pentagon’s being called upon once again to help reduce the deficit; he was concerned, they said, about the magnitude of the cuts being sought, and he pressed for a process that would clearly define the available choices and the consequences and risks that would follow from each option.

“The secretary has been clear that further significant defense cuts cannot be accomplished without reducing force structure and military capability,” said Geoff Morrell, the Pentagon press secretary.

Administration officials pointed out that the $400 billion would not be drawn from the special budget paying for the wars — and that it would not come just from the Pentagon, either. The cuts will be found across the vast national security apparatus, including the State Department, homeland security, Veterans Affairs, office of the director of national intelligence and the nuclear weapons programs under the Energy Department.

Administration officials stressed that Gates and the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, would be intimately involved in shaping the president’s final decision. But a review of such consequence is almost certain to extend beyond Gates’ expected departure this summer and Mullen’s retirement in October.

Personnel costs are the largest part of the Pentagon budget, and Congress has been loath to cut benefits or even raise the costs of military health insurance. So any significant reductions in the Pentagon’s future budget growth certainly would impose tough choices on what the military would be able to do.

But Adams and Todd Harrison, an analyst with the Center for Strategic and Budgetary Assessments, said Obama’s plan would not force sharp cuts in the military’s purchasing power, as occurred when the Cold War ended.

Adams worked last year with a bipartisan group — led by former Sen. Pete V. Domenici, R-N.M., and Alice M. Rivlin, a former budget director in the Clinton administration — that recommended reducing the Pentagon’s projected spending by $900 billion over 10 years. Obama’s deficit-reduction commission called for saving $1 trillion over that period.

Adams said the $400 billion was less than half of that and about 7 percent of what the administration had projected spending on the military over the next 12 years.

Military spending has grown at an inflation-adjusted average of 7 percent a year in the decade since the terrorist attacks of Sept. 11, 2001 — the rate is nearly 12 percent a year before adjusting for inflation — including the costs of the wars in Iraq and Afghanistan.

In passing a compromise 2011 spending bill on Thursday, Congress cut the Pentagon’s base budget to $530 billion from the $540 billon that Gates had said was critical. Adams said that multiplying that $530 billion by the inflation rates used by White House officials could produce savings of $401.7 billion compared with a previous administration proposal.

But unless the Pentagon reduces some of the duties it had planned to expand, it could still face difficulties. “They’ve already done a lot of the easier things in cutting programs,” Harrison said.






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