Obama's FY 2014 Request to Congress Makes Cuts to DOD Personnel, Programs

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By David Hansen  

President Obama's $526.6 billion fiscal year 2014 base budget request for the Defense Department cuts $3.3 billion from the FY 2012 enacted level in an effort to curb explosive growth in DOD's personnel costs and in some defense programs.

If sequestration extends to 2014, the Pentagon will have to cut an additional $52 billion, Defense Secretary Chuck Hagel said in an April 10 press conference.

The budget request, which does not include money for overseas contingency operations, provides $99.3 billion in FY 2014 for DOD procurement (down from $104.5 billion enacted in FY 2012), including:

• three variants of the F-35 ($8.4 billion);

• new ship construction ($10.9 billion);

• missile defenses ($9.2 billion);

• cyberspace operations ($10.1 billion).


It also requests $209.4 billion for operations and maintenance (up from $197.2 billion enacted in FY 2012); $67.5 billion for research, development, test, and evaluation (down from $71.4 billion enacted in FY 2012); $137.1 billion for military personnel (down from $141.8 billion enacted in FY 2012); and $11 billion for military construction (down from $11.3 billion enacted in FY 2012).

A detailed budget for overseas contingency operations will be sent separately to Congress “in the coming weeks,” the Pentagon said.

Under the budget request, DOD would continue pursuing its Better Buying Power initiative that will focus on continuous improvements in the acquisitions process (98 FCR 567, 11/20/12).

“Even while restructuring the force to become smaller and leaner and once again targeting overhead savings, this budget makes important investments in the president's new strategic guidance--including rebalancing to the Asia-Pacific region and increasing funding for critical capabilities such as cyber, special operations, and global mobility,” Hagel said in a press statement. “Most critically, the proposed budget sustains the quality of the all-volunteer force and the care we provide our service members and their families.”

But Rep. Buck McKeon (R-Calif.), chairman of the House Armed Services Committee (HASC), quickly denounced the request as far too little to defend U.S. strategic interests.

“Two months ago, the Chairman of the Joint Chiefs of Staff testified before my committee that our military could not absorb any additional cuts and continue to carry out the missions the country has assigned to them,” McKeon said in an April 10 statement issued within two hours of the budget release. “Now, with no assessment of strategic impact, the president has proposed yet another arbitrary cut of $120 billion from the military.”

“Historically, Congress and the White House have both proven to be poor judges of where and how we will have to fight to preserve our liberty,” McKeon continued. “By levying more cuts on the military, the president has decided that a future generation of Americans won't have what they need on that day.”

Reimbursement Cap

The budget request asks Congress to pass the reimbursement cap for defense contractor employees in the Senate's version of the FY 2013 National Defense Authorization Act; the cap was set at the vice president's salary of $230,000. The request urges Congress to extend the cap to all contractor employees and only allow agencies to pay above it on an exceptional basis.

Congress rejected the Senate proposal in the final version of the FY 2013 NDAA and instead asked for a Government Accountability Office study on the issue.

Contracting groups such as the Professional Services Council opposed the cap as a restraint on recruiting skilled personnel (98 FCR 459, 10/23/12).

The group continues to oppose the cap proposal, which is premature in advance of the GAO study, PSC Executive Vice President and Counsel Alan Chvotkin said. He would not comment on whether the Senate proposal would succeed this year.

Little Chance of Passing?

Contractors should not expect the gridlocked Congress to pass the request as written, Chvotkin said.

“The prospect of every agency having an authorization bill by the start of FY 2014 is about zero,” he said.

A more likely outcome will be a partial or full continuing resolution for some agencies by the start of the fiscal year, he said. DOD has a better chance of getting a full authorization bill, according to Chvotkin, but the president's DOD numbers are “soft.”

“My guess is that the final appropriation bill will come closer to the BCA caps than the president's budget proposes,” he said.

DOD posted detailed documents on its FY 2014 budget request at: http://www.defense.gov/news/2014budget.pdf.

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