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More Fantasy Budgeting From the Pentagon

At the Pentagon, it’s one step forward and four steps back.

This week, the Department of Defense unveiled its latest budget submission, which, for the first time since sequestration began, adheres to the spending cap set in law for Fiscal Year 2015. More striking even, is that the Pentagon’s proposed topline spending amount for FY 2015, $495.6 billion (which excludes war costs), nearly matches the amount that the military received last year—representing a continued “freeze” in defense spending. However, it’s highly likely that the Pentagon will continue to use its off-budget war funding account and other gimmicks to evade fiscal accountability.

Although Congress and the White House agreed to significant spending constraints in the Budget Control Act of 2011, for the past two budget cycles, the Pentagon has been largely able to protect funding for big-ticket weapons systems like the F-35 Joint Strike Fighter and Littoral Combat Ship (LCS). Yet, this week’s budget submission proposes slowing down the former program and truncating the latter.

The Pentagon had originally intended to purchase 55 LCS, but is now proposing cutting that figure by twenty vessels—bringing the total expected number of LCS acquired to 32. Secretary of Defense Chuck Hagel recently expressed his “considerable reservations” about the LCS program in a memorandum to the Secretary of the Navy, writing that, “Given the emerging threat environment of the future, I have considerable reservations as to whether [the LCS] is what our Navy will require over the next few decades.”

The Project On Government Oversight has long been concerned with the LCS and applauds the Pentagon for proposing to cut the program. Unfortunately, the Navy is still requesting three LCS in FY 2015—a poor decision given the program’s now-proposed termination as well as the fact that these vessels are not expected to be survivable in hostile environments. Congress should defund the program this year and stop pouring money into this boondoggle of a ship.

While most of the budget was released this week, one last piece of the pie that remains to be seen is the Pentagon’s war funding request. Due to uncertainty over the future of the American and NATO presence in Afghanistan, the White House has submitted “placeholders” for how much war funding it expects to request.

The war funding account, also known as the Overseas Contingency Operations account, is in addition to the Pentagon’s base budget request. This off-budget account has become a slush fund that the Pentagon and Congress use to avoid spending constraints. From FY 2013 to FY 2014, the number of American personnel deployed to Afghanistan fell by roughly forty percent, yet the amount of war funding provided over that same time period actually increased. This is largely due to the fact that both the Pentagon and Congress have shifted funding from the Pentagon’s base (non-war) budget into its war funding account to get around the spending caps set in law.

This week’s budget request indicates that the Pentagon will continue to request war funding following the likely conclusion of major combat operations in Afghanistan. Specifically, the Pentagon included placeholders of $30 billion a year from FY 2016-2019 despite the fact that America and NATO’s military presence there is expected to decline sharply.

The Pentagon also has another budget gimmick up its sleeve: it has proposed a $26 billion Opportunity, Growth, and Security Initiative—referred to colloquially as a wish list or items that the Pentagon wants but cannot afford within its statutorily-constrained budget.

This $26 billion wish list includes funding for eight P-8A Poseidon aircraft for the Navy—a newly-introduced surveillance and anti-submarine aircraft that costs close to $300 million a plane. With such a high price tag you might expect it to have received rave reviews so far. But, the Pentagon’s top weapons tester, Michael Gilmore, recently wrote a scathing assessment of the Poseidon, noting that it “is not effective for the intelligence, surveillance and reconnaissance mission and is not effective for wide area anti-submarine search.” Gilmore recommended that the Navy conduct additional testing of the aircraft before entering full-rate production. Apparently, the Navy disagrees.

Also included in this year’s wish list are two F-35s for the Air Force—an aircraft program that is over budget, behind schedule, and has repeatedly failed to meet key performance goals. The Air Force was originally expected to request thirty F-35s in FY 2015, but cut the purchase by four aircraft, two of which made their way onto the wish list.

While the Air Force’s F-35 request was marginally reduced, the Navy significantly cut its planned purchases of the F-35. Over the five years covered in the budget request, the Navy is proposing procuring thirty-three fewer F-35s than originally planned. More significant, though, is the fact that the Navy is only proposing acquiring two F-35s in FY 2015.

Earlier this year, an unnamed congressional source told Politico that the Navy had requested a three-year pause in acquisition of the F-35. While the Navy’s request was reportedly denied by the office of the Secretary of Defense, it seems the service may be getting its way nonetheless: According to Pentagon budget planners, if Congress doesn’t relax the Budget Control Act’s statutory spending caps, then the Navy will indeed get a two-year break from the F-35.

In the tried and true tradition of ignoring reality, the Pentagon is also proposing busting the spending caps from FY 2016-2019 by $115 billion more than is allowed. Furthermore, in previous years, each individual service submitted a wish list to the Pentagon, which in turn submitted them to Congress. But this practice was quashed by former Secretary of Defense Bob Gates during President Barack Obama’s first term.

This year, however, House Armed Services Committee Chair Howard “Buck” McKeon (R-CA) has requested, and will receive, the individual service wish lists once again. This is on top of the Pentagon’s $26 billion defense-wide wish list.

Instead of more fantasy-budgeting, the White House and Pentagon should propose living within their means and adhering to the budget caps for the entirety of the five-year budget window. Congress must avoid the temptation to use the war funding account as a slush fund and push back against budgetary gimmicks and wish lists.