April 28, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
By THERESA HITCHENSon April 27, 2020 at 5:02 PM
WASHINGTON: With the federal deficit expected to balloon to over $4 trillion in fiscal 2020 due to spending to pump the economy in the face of the COVID-19 coronavirus pandemic, downward pressure on the US defense budget is inevitable, several experts believe.
“I think the budget comes down sooner rather than later,” Mackenzie Eaglen, resident fellow at the American Enterprise Institute, said bluntly in a webinar today.
The best-case scenario is for flat defense budgets for the foreseeable future, but if history is a guide, the smart money is on defense budget cuts, explained Todd Harrison, DoD budget guru at the Center for Strategic and International Security (CSIS).
“What has historically happened is, when Congress's fiscal conservatives come out and get serious about reducing the debt, reducing spending defense is almost always part of what they come up with for a solution,” he said. “So, we could be looking at a deficit-driven defense drawdown coming. ... At least history would suggest that that is a real possibility.”
Indeed, even as Congress is pulling out all the stops trying to assist DoD and the defense industrial base to weather the COVID-19 coronavirus pandemic, DoD already is being eyed as the future deficit bill-payer, Eaglen told the webinar. “DoD is at the top of the list,” she said.
Eaglen added that, at a more macro-level, the budget crunch could force DoD to re-look the goals of the 2018 National Defense Strategy (NDS) with an eye to downsizing.
“There's going to be an impact across the board,” she said. “There probably will be a total relook — at even the NDS fundamentals, and what mission is going to have to go — in response to this.”
Harrison noted that already DoD has been looking at flat budgets through 2021, which has caused it to have to take some risks as it tries to juggle divesting in high-maintenance legacy systems with investing in future programs while maintaining readiness to handle a possible peer conflict with Russia and/or China.
“Just to divest legacy systems and invest in new ones and try to maintain, or slightly grow, force structure, DoD was already saying that it would need three to five percent real growth each year in the defense budget, going forward, just to fully execute that,” he said.
This means that DoD leadership is going to face even more difficult decisions in the future, Harrison explained. “Now we're looking at an environment where the budget might be flat at the best case or trending down over time. Something's gonna have to give. And so, if DoD really wants to protect these key modernization programs, not only is it going to have to divest legacy systems, it's going to have to divest them faster, and it's going to have to make some reductions in force structure that's going to incur risk.”
More immediately, Harrison said, as Congress moves over the next few months to pass a fourth, or even a fifth, economic stimulus package DoD already is signaling that it hopes to see a number of its “unfunded requirements” stuffed into those bills.
“DoD is saying: ‘hey, if you want to fund more things for DoD to help stimulate the economy, and help the defense industry, well, here's a list you already have that you can pick from.”
DoD's unfunded priorities list — the annual wish list of programs it would like to fund if only there was more money in the top-line — for 2021 includes a total of $35.9 billion for programs across the military services and the combatant commands.
The Pentagon might also petition Congress for greater authority to use operations and maintenance funds appropriated but not spent due to work slowdowns to short up programs facing cost overruns because DoD paid contractors for work supposed to be done, but not actually done, while employees are home-bound due to the pandemic, Harrison said.
“DoD has implemented the CARES Act implementation, saying that they would pay for paid leave for employees of defense industry firms that are unable to report to work. And so that cost is covered,” Andrew Hunter, who works on defense industrial base issues at CSIS, explained. “Those folks aren't necessarily going to be laid off; they will be kept on the payroll and paid. And again, that will create some costs down the road to then pay those folks to do the actual work that they're originally scheduled to do.”
Most of the nearly $10.5 billion in the CARES Act, signed by President Donald Trump on March 27 to help DoD protect itself from the impacts of the pandemic goes into O&M accounts, according to CSIS. That said, some $1 billion goes to procurement funding, with an eye on health-related equipment. Further, it includes some $1.5 billion in the Defense Working Capital Fund, which allows DoD to make investments in things like depot maintenance, transportation and supply management in the near term and recoup the costs through future year pricing deals.
However, the bill grants DoD a good deal of flexibility to move money around — with the exception of banning any funding for Trump's southern border wall construction.
https://breakingdefense.com/2020/04/dod-budget-cuts-likely-as-4-trillion-deficit-looms/
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December 4, 2019 | International, Aerospace, Naval, Land, C4ISR, Security
By: Jeffrey A. Stacey After the successful 2011 Libya operation, it appeared the U.S. and European allies were on the cusp of a new era of working together on international crises, only to stall out thanks to economic austerity and populist elections. Now that the refugee crisis in Europe is subsiding and allied troops and equipment have deployed to Poland and the Baltics, the window of opportunity has once again opened for deepening relations between the European Union and NATO. By setting up an EU-NATO informal track, regularizing operational transitions and embarking on expanded coordination in out-of-area operations — all of which are more crucial, given a potential Brexit and the 2020 U.S. election — these two crucial, overlapping alliances can step into a new era. There are two logical diplomatic tracks to be pursued: a formal track centered on implementation of EU and NATO ministerials/summits, as well as an informal track centered on working through difficult issues and preparing them for decision-makers. Senior officials from both organizations have commented recently that the informal track would be particularly useful for the kind of deep-dive, “peer around the corner” strategizing that busy officials are rarely afforded an opportunity to engage in. The EU is a global leader in what it calls “crisis management,” and what NATO refers to as “stabilization and reconstruction.” Joint planning ahead of such operations, aligning civil/military planning in advance, will allow for improved outcomes in theater. In general, NATO would gain a new capability to act in the immediate aftermath of its military operations when a crisis occurs, and the EU would gain the opportunity to spearhead joint Western crisis management as a matter of course. Taking a cue from the so-called changing of berets in the 2004 NATO mission in Bosnia — when European soldiers involved in the terminating NATO mission simply changed their uniforms out for EU uniforms and remained in place to take part in the EU follow-on mission — there is a strong likelihood that a similar arrangement can be made for deployed civilians. The EU and NATO have ample reasons to agree to regularize operational leadership transitions in moving from the military phase of a conflict to the post-conflict stabilization phase. Here's how it could work: The EU would be designated to spearhead the stabilization phase, having jointly planned this phase of the operation with NATO civilian planners at Supreme Headquarters Allied Powers Europe. NATO would commit to always selecting a European as the head of the NATO temporary civilian operation, and would call up a modest number of civilian experts from the nations, who would deploy to theater and engage in a delimited number of core stabilization tasks with the plan for a larger EU-led civilian deployment to absorb the NATO operation. NATO civilian operators would focus on a discrete set of core stabilization tasks awaiting the follow-on EU mission to become more comprehensive. Once a decision to deploy a civilian mission occurs in Brussels, the NATO stabilization mission would devolve to the EU. Most of the civilian experts will already be from EU countries, with the mission head also European. The rest of the NATO civilians can be seconded to the civilian operation mission via framework agreements such as the extant one between the U.S. and the EU that already has seconded Americans to EU missions in Africa. This operational compromise would prevent either alliance from playing second fiddle, ushering in a new era of co-planning and cooperating for both. Why can't both sides “just do it,” i.e., simply enact a leadership transition in theater whenever the need arises? Pragmatism can work in the moment, but it doesn't set precedents, as proven by the fact this is not already happening; past “impromptu” experiences of working together on the ground have not led to any pattern or even expectation of repeat or improved cooperating since. This proposal is firmly in the EU's interests, as it will put it fully in the driver's seat of crisis management and bring the EU the recognition it deserves for its existing capabilities and substantial operational experience. This proposal is also firmly in NATO's interests, for the alliance that almost split over its ongoing Afghanistan operation has no interest in further prolonged field deployments. There is also an additional strategic opportunity for both, as closer EU-NATO cooperation would be an important means for keeping the U.K. connected with its EU partners in the security and defense field following Brexit. But with crises around the world proliferating, in more pressing terms these two critical overlapping alliances among Western allies need to jointly become more operationally ready. Despite the political challenges in numerous Western countries, an agreement to overcome the EU-NATO operational impasse is on the cards. Prior to the negative impact of U.S. President Donald Trump's arrival, NATO-EU relations had been at their pinnacle. With an EU-NATO informal track and a means for overcoming the operational hurdle in hand, substantial progress can still be made prior to the next U.S. administration. https://www.defensenews.com/opinion/commentary/2019/12/03/how-to-take-eu-nato-relations-from-words-to-action/