Defense budget brawl looms after pandemic

BY REBECCA KHEEL - 05/03/20 01:30 PM EDT

Defense budget cuts are looming as the coronavirus pandemic places pressure on the federal budget across various agencies.

The Pentagon had already been expecting relatively flat budgets for the next few years due to economic constraints caused by the widening deficits in the country.

But with the pandemic, the deficit is projected to explode after Congress passed trillions of dollars in coronavirus relief packages, with more aid bills expected. Defense budget analysts are predicting that will mean cuts to defense spending down the line.

Meanwhile, Democrats say the crisis should result in a rethinking of national security that gives less money to the Pentagon and more to areas like public health.

The chairman of the House Armed Services Committee said this past week it's hard to predict where the defense budget will head after the crisis abates, but suggested the entire federal budget will need to be re-examined.

“The economics of this get much more complicated than they were before this, and it's logical to assume that we are going to have to reevaluate our entire budget, both revenue and expenditures,” Chairman Adam Smith (D-Wash.) said on a teleconference in response to a question from The Hill. “Beyond that, it would be pure speculation as to what's gonna happen.”

Smith, a long time opponent of the nuclear budget, specifically highlighted nuclear modernization as an area for potential cuts, but said defense portfolios are “all on the table to figure out how to spend the money more wisely.”

In the meantime, defense hawks, progressives and deficit hawks alike are honing their arguments as they brace for defense cuts.

The defense budget battles are already starting to play out as Congress debates further coronavirus relief bills.

The Pentagon has said it expects to request “billions” of dollars in the next bill to help contractors hit by the virus. That funding would follow the $10.5 billion the Pentagon got in the third coronavirus stimulus package for the Defense Production Act, defense health programs, and military deployments related to the crisis and other areas.

Smith, though, said this past week he would not support more Pentagon funding in further coronavirus bills, saying the department can find unused funding in its existing $738 billion-plus budget.

Smith's comments came about a week after dozens of progressive organizations led by Win Without War argued in a letter to Congress that “any arguments that the Pentagon cannot use existing resources to respond to the crisis should be met with considerable skepticism.”

But the Pentagon maintained after Smith's comments it cannot dip into its existing budget for coronavirus relief.

Ellen Lord, the Pentagon's top weapons buyer, said the department may be able to use some operations and maintenance funds for coronavirus needs, but added money still has to be available for “pretty significant needs” in readiness and modernization.

“I am not sure that we have the fiscal flexibility to encompass all of the new demands we have and the inefficiencies that we are seeing and perhaps may see in the future,” Lord said at a briefing. “But I respect what Chairman Smith is saying, and we will obviously do our best.”

Looking further ahead, Pentagon officials have indicated they are preparing to tighten their belts at the other end of the crisis.

In a webinar with the Brookings Institution this past week, Army Secretary Ryan McCarthy recalled “compressed budgets” in the wake of recovery bills for the 2008 financial crisis, culminating in the 2011 Budget Control Act that Pentagon officials now blame for readiness shortfalls. The law set budget caps that resulted in sequestration, continuing resolutions or government shutdowns in several years.

“These are challenges we're thinking about now as we look at the [Future Years Defense Program] and whether or not this will pressurize Army budgets in the [fiscal year] 23, 24 timeframe, which are very critical to us and our modernization efforts and increasing our talent management within the force," he said. “We are watching that very closely, and we know that is a challenge that is out in front of us.”

Late last month, the Congressional Budget Office projected that Congress' rescue and stimulus efforts will cause the federal deficit to quadruple to $3.7 trillion, the largest by far in U.S. history.

Defense budget experts say the ballooning deficit likely spells defense cuts in the future, citing trends after previous rising deficits and economic downturns such after the 2008 financial crisis.

“What has historically happened is, when Congress and fiscal conservatives come out and get serious about reducing the debt and reducing spending, defense is almost always part of what they come up with for a solution,” Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies, said in a webinar. “So, we could be looking at a deficit-driven defense drawdown coming in the next two or three years. At least history would suggest that that is a real possibility.”

In the same webinar, American Enterprise Institute resident fellow Mackenzie Eaglen predicted the “budget comes down sooner rather than later.”

“There probably will be a total relook even at the [National Defense Strategy] fundamentals and what mission is going to have to go in response to this,” she added.

But defense hawks are arguing the Pentagon should not be used to pay other bills,, saying the country still faces threats from Russia and China.

Fred Bartels, a senior policy analyst for defense budgeting at the conservative Heritage Foundation, said the defense budget needs to match the National Defense Strategy, which has not changed despite the pandemic. The strategy calls for the military to be ready for so-called great power competition with China and Russia.

“What you're going to have is likely empty promises, and that's the worst possible outcome for the military,” Bartels said of a budget cut without a strategy change. “If your national strategy tells the world that you're going to do that but you don't follow through, it's going to be harder and harder to operate.”

But the pandemic has intensified calls from progressive lawmakers to rethink what constitutes national security.

Rep. Ro Khanna (D-Calif.) told The Hill the crisis shows the definition of national security needs be expanded.

“Lawmakers must view issues like climate change, biosecurity, cybersecurity and this pandemic as serious and real national security threats facing our nation,” Khanna said in a statement to The Hill. “For too long, we were myopically focused and spending trillions on traditional national security issues like terrorism and ‘great power' politics. These new threats impact our health, safety, and economy, requiring new funds to address them.”

https://thehill.com/policy/defense/495762-defense-budget-brawl-looms-after-pandemic