The Pentagon is not likely to get the $535 billion President Barack Obama has requested for fiscal 2016, but that does not mean every Defense Department project will get hit with spending cuts like in 2013.

Robert Hale, who retired last June after more than five years as the Pentagon’s comptroller, believes lawmakers could strike a short-term budget deal that would trim below Obama’s request but still come in higher than the $500 billion defense spending cap.

“It may look unlikely now, but I think it’s still possible,” Hale told Defense One Wednesday. Known for his ability to explain complicated financial matters in laymen speak while maintaining a sense of humor, Hale is now a fellow at consulting firm Booz Allen Hamilton.

If there is a so-called mini-deal akin to the one reached by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., in December 2013, one lasting two years would be most beneficial and give DOD the most stability, Hale said.

“I hope we see a mini-deal and I hope we see a two-year mini-deal,” which would grant the Pentagon some fiscal certainty through the 2016 presidential election, he said.

But, Hale said a more likely scenario is Congress failing to strike a deal, but appropriating funds at the $500 billion budget cap put in place by the Budget Control Act of 2011. That means instead of across-the-board cuts, lawmakers would decide themselves where the cuts would be made.  Several members of Congress have already asked the military services to advise them where lawmakers could cut, if the services had their budgets reduced.

“So Defense loses the money in that case … but at least the cuts are done in a considered manner rather than the across-the-board, salami slice kind of things that occur with a formal sequestration,” Hale said.

Rep. Rodney Frelinghuysen, R-N.J., chairman of the House Appropriations Defense subcommittee, has said his panel would put submit a Pentagon spending bill that complies with the $500 billion budget cap.

Todd Harrison, an analyst with the Center for Strategic and Budgetary Assessments, said, “It looks like Republicans, other than the Armed Services Committees, the rest of the Republican caucus actually seems kind of OK with the budget caps. I don’t see as much resistance to appropriating at a lower level.”

Hale said full-blown sequestration – where Congress appropriates billions of dollars above the 2011 cap, leading to evenly spread cuts across accounts, such as the ones experienced in 2013 – is the least likely scenario.

“I just don’t think there’s any stomach to that on the Hill … so I don’t think that’s likely,” he said.

Over the past two days, Pentagon officials have stepped up their warning about sequestration.

“I want to be clear about this, under sequestration, which is set to return in 212 days, our nation would be less secure,” Defense Secretary Ashton Carter told the Senate Armed Services committee Tuesday.

Carter is the fourth defense secretary to lobby for higher defense spending caps. Frank Kendall, the Pentagon’s acquisition chief, said the Defense Department will make a strong case for funding the department at the levels proposed by President Barack Obama last month.

“It’s what we need to defend the nation,” Kendall said Tuesday after a speech at a conference in Springfield, Va. “It’s a pretty important fight.”

I am afraid this is all a fantasy, that what we’re going to end up with is nowhere near what we requested.
Frank Kendall, undersecretary of defense for acquisition, technology and logistics

Kendall was part of the team that prepped Carter for his congressional testimony this week.

The Pentagon has requested a $535 billion budget for 2016, which is about $35 billion above spending caps. Kendall said the larger budget accounts for global threats and improvements needed to the military’s nuclear forces. But Kendall is not sure the Defense Department will get that extra money.

“I am afraid this is all a fantasy, that what we’re going to end up with is nowhere near what we requested,” he said in his speech at the conference.

Kendall said the impact of sequestration is more long term than immediate, gradually taking its toll on forces’ readiness.

“It is difficult for us, I think, to stand up in front of the Congress about what we can’t do in specificity and send signals to our enemies and potential adversaries that we really don’t want to send,” he said. 

Defense spending cuts in recent years have delayed new military projects.

“Sequestration is sitting out there and no matter what I do in acquisition … no matter what industry is able to produce, if we don’t have the resources we need, we’re not going to be able to defend the country,” Kendall said. “And that’s the path we’re on right now.”

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