Budget Agreement Eases Pentagon’s Sequester Pain

Aerial photograph of the Pentagon in Arlington, Va., on Sept. 26, 2003.  DoD photo by Tech. Sgt. Andy Dunaway, U.S. Air Force. 
National Journal
Stacy Kaper and Sara Sorcher
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Stacy Kaper Sara Sorcher
Dec. 10, 2013, 2:25 p.m.

The two-year budget agree­ment is a pos­it­ive de­vel­op­ment for de­fense watch­ers — mit­ig­at­ing about half the se­quester cuts ex­pec­ted to gouge the de­fense budget in fisc­al year 2014.

The agree­ment, an­nounced Tues­day night by Sen­ate Budget Com­mit­tee Chair­wo­man Patty Mur­ray, D-Wash., and House Budget Com­mit­tee Chair­man Paul Ry­an, R-Wis., would provide $63 bil­lion in se­quester re­lief over two years, split evenly between de­fense and nondefense pro­grams. By some simple math, that leaves some $31.5 bil­lion in se­quester re­lief for de­fense over the two-year peri­od.

The Pentagon was fa­cing a roughly $52 bil­lion cut from its $527 bil­lion re­quest in fisc­al year 2014. Now, the budget agree­ment says de­fense dis­cre­tion­ary spend­ing would be set at $520.5 bil­lion that year. That fig­ure pre­sum­ably in­cludes the De­part­ment of En­ergy’s nuc­le­ar-weapons pro­grams, mean­ing the de­part­ment will likely be work­ing with closer to a half-tril­lion-dol­lars in fund­ing in fisc­al 2014 — and, to do so, it has front-loaded most of the new­found se­quester re­lief.

“This is a pos­it­ive out­come for the mil­it­ary and in par­tic­u­lar, for the de­fense in­dustry,” Lex­ing­ton In­sti­tute Chief Op­er­at­ing Of­ficer Loren Thompson told Na­tion­al Journ­al, “be­cause it means the pres­id­ent’s re­quest for the Pentagon would only be cut by about 5 per­cent, where the caps would have put it $52 bil­lion lower. What the se­quester re­lief does is, in ef­fect, re­duce the cut to the Pentagon’s base budget in half.”

While the agree­ment doesn’t stave off se­quest­ra­tion’s im­pact on de­fense com­pletely, Sen­ate Armed Ser­vices Com­mit­tee mem­ber Sen. John Mc­Cain, R-Ar­iz., said “it softens it.” He con­firmed that the se­quester re­lief is “much more” in the first year of the two-year deal.

The im­plic­a­tion of this un­even dis­tri­bu­tion in se­quester re­lief means that fisc­al year 2015 will see less ex­tra money to play around with from this deal.

Thompson, however, cau­tions, “We shouldn’t as­sume any of these agree­ments mean much bey­ond the year in which they are passed — the 2014 num­ber is the one that really mat­ters. Who knows what will hap­pen bey­ond the elec­tion?”

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