Major Policy Developments:
The national security policy challenges facing the President remain the same as before the election: ISIL, Syria, Iraq, Afghanistan, Iran’s and North Korea’s nuclear programs, Arab-Israeli peace, Ukraine, Russia, and even the Ebola virus. With the mid-term election results, the President must face them with the help, or hindrance, depending on one’s perspective, of a Republican-controlled Senate and House.
The next major policy issue facing the President and the 114th Congress is what to do about the defense budget and sequester. Imposed by the Budget Control Act (BCA) of 2011, and triggered by Congress’ failure to agree on a broad plan of spending cuts and revenue increases to reduce the deficit to meet the BCA’s yearly spending caps, sequester imposes across-the-board percentage cuts in every budget line item. These so-called “salami slice” cuts were so disruptive to the Department of Defense (DoD) during FY 2013 that the Bipartisan Budget Agreement (BBA) of 2013 eliminated sequester for Fiscal Years 2014 and 2015. However, it still imposed spending caps, albeit revised ones, for DoD as well as the domestic side of the budget.
The 2013 sequester amount, along with the spending caps for 2014 and 2015, reduced defense spending by $600 billion from the 10-year plan that was in the President’s 2012 Budget. However, the BBA did not alter the sequester mechanism for 2016 and beyond. In what could be described as a classic game of chicken, the President’s budget for Fiscal Year 2016 and beyond assumed that Congress would fix sequester. Thus, the topline numbers for FY 2016 and beyond exceed the budget caps in the BCA. That means the FY 2016 budget would have to be reduced by an additional $36 billion, and the 10-year plan by $168 billion. This additional reduction to programs already planned and programmed would result in additional manpower cuts, eliminating an aircraft carrier, eliminating a squadron of F-35s and the fleet of KC-10 tankers, retiring 8 additional ships, and eliminating 8 new construction ships and reducing readiness funding by $16 billion, to name some examples.
Congressional defense leaders on both sides of the aisle have joined President Obama in condemning the effects of sequester on defense programs and readiness and calling for its repeal. However, in the over three years since sequester was invented, no consensus has emerged on how to repeal it. The President has insisted that sequester must be repealed for both the defense and domestic sides of the federal budget and replaced with targeted cuts and tax and revenue increases.
The President proposed to provide additional funding for investment in defense and domestic programs such as education and infrastructure that contribute to national and economic security. Republican proposals have generally only targeted the defense side or offered delays in Obamacare as the funding source to pay for sequester relief. Deficit hawks are satisfied that sequester is working to reduce the deficit and should remain in place. The outcome of this policy debate will drive all other defense policy decisions in the final two years of the Obama Administration. It will determine everything from the numbers of Americans in uniform, the size of their pay raises and the cost of healthcare benefits, the readiness of ships, aircraft, and combat vehicles, to the number of ships and aircraft purchases. It will drive the level of investment in research and development and decide if and when new weapon systems will be developed to meet the next generation of threats. It will also affect the debate on all national security issues such as putting United States troops back on the ground in Iraq to fight ISIL (current air and supply operations are running at $8.3 Million a day) and how much the U.S. can afford to support the Afghan Government after the 2014 drawdown.