Trump, Democrats Eye Defense-Spending Cuts

Rep. Adam Smith, likely the next House Armed Services chair, has said he expects future budgets to come in below $716 billion.

AP Photo/Shakh Aivazov
Harrison Cramer
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Harrison Cramer
Nov. 8, 2018, 8 p.m.

The Democrats’ seizure of the House gives lawmakers fresh powers to stymie President Trump’s legislative agenda, but there’s one goal on which they might agree: cutting the Pentagon’s budget.

Rep. Adam Smith, the likely next chair of the House Armed Services Committee, has openly stated that the $716 billion defense budget was “too high” for 2019 and that he would work to lower it in the future. Smith may adopt a more hawkish position in order to compromise with the Senate, but Trump has also indicated his intention to cut defense spending.

In mid-October, Trump told Cabinet members to “trim the fat” on federal spending, and told reporters the Pentagon would prepare a $700 billion budget for 2020. Office of Management and Budget Director Mick Mulvaney later confirmed that the Pentagon should prepare for the cut.

The announcement caught budget planners, who had preparing to spend $733 billion in 2020, off-guard. The request came just weeks before planners were supposed to finalize the budget for White House approval.

“So imagine we’ve been going through this very disciplined process for the whole year to build a budget that’s $733 billion, and then last week we were directed, 'Build us a $700 billion budget,'” Deputy Defense Secretary Patrick Shanahan told defense reporters in October.

Pentagon comptroller David Norquist is now drafting two different budgets for Trump to consider: one at $733 billion, and another at $700 billion. Those totals include the Pentagon’s base and contingency budgets, plus money for national security and nuclear-research programs.

Smith and other House lawmakers won’t enter the picture until after Trump submits his request for approval, and experts were skeptical that the House flip would affect the budgeting process.

Still, the president’s request sets the stage for budget negotiations in Congress. Normally, the OMB forecasts spending levels to the Pentagon in early spring, and the agency develops an appropriate budget. If all goes well, OMB and the Pentagon “settle” on the budget in mid-December, leaving enough time for the president to submit the request. Congress uses that request as the framework for the legislation, which it attempts to pass before the start of the fiscal year.

Mark Cancian, who spent over seven years as chief of the OMB’s Force Structure and Investment Division, expects the Pentagon to lobby Trump for the higher budget. Unlike other agencies, which turn over their budget proposals for review in mid-September, the Pentagon sticks around, and may influence the president’s final decision.

“The [Defense secretary] can walk into the president and say, 'The budget is not adequate,'” said Cancian, who added that he expects Defense Secretary James Mattis will resign if Trump backs the lower budget. He also suggested that Mattis will likely argue he cannot execute his National Defense Strategy, which emphasizes great-power competition with Russia and China, by cutting defense spending.

“$30 billion is a lot to pull out,” Cancian said. “If it’s just $4 [billion] or $5 [billion], the comptroller can huddle with the service budgeteers and they can come out with an answer in a couple of days. But $30 billion—I mean, you really have to start making some strategic decisions.”

Michael O’Hanlon, director of research for the Brookings Institution Foreign Policy program, said he believes that Mattis likely won’t resign over the budget but that the cuts will require budgeters to get creative. Budgetary reforms that could actually produce real savings might require short-term investment, O’Hanlon said.

“You can try to cut back on research and development, eating your seed corn, [but] you really can’t do anything useful in the way of closing bases or reforming military health care, or downsizing the force in the … very first year you’re proposing the budget,” he said. “A lot of those things actually take money to implement, so the savings are in years three to five—which is part of why we have a five-year defense plan, not a one-year budget horizon.”

Both O’Hanlon and Cancian said Norquist may start by cutting weapons procurement, modernization programs, and deals with private contractors. Speaking at the Alexander Hamilton Institute last week, National Security Adviser John Bolton said that “procurement reform” would allow the Pentagon to save money. Procurement spending jumped significantly in 2019.

“You can look to your contractor support base, everything from weapons maintenance, to intelligence, to defense analytics, to management,” said O’Hanlon, who clarified that he was not endorsing such cuts. “You could actually reduce the size of those contracts with the private-sector firms.”

The Aerospace Industries Association, which lobbies on behalf of defense manufacturers, came out against the cuts on Thursday.

Cancian suggested the Army’s search for a new ground combat vehicle, and the Navy’s search for a new cruiser design, could get held up.

Lawrence Korb, who served as assistant Defense secretary to President Reagan, suggested that budgeters could make the cuts “in a half hour,” largely by focusing on weapons procurement, modernization, and training. The Pentagon could buy “one less Columbia-class submarine, aircraft carrier, or cut back on the number of V-22s, or Abrams Tanks,” said Korb, who is now a senior fellow at the Center for American Progress.

“Let’s take the F-35,” Korb said. “How many were we planning to buy next year? ...We say, instead of that, we’re going to cut 5 percent of those, or 10 percent. And how many flight hours do we want to have for the Air National Guard? Instead of 20 hours a month, we’ll make it 15.”

Korb also pointed out that the Pentagon could save billions by implementing administrative reforms. Last year, Korb testified to the House Oversight and Government Reform Committee on the first-ever independent audit of the Pentagon, which identified $125 billion in administrative waste over five years. The report was buried, and the official who oversaw its creation—Robert Stein, former chairman of the Defense Business Board—left the board in 2015.

Pentagon spokeswoman Dana White announced last December that the agency was conducting another audit, which is scheduled to be released on Nov. 15.

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