If US lawmakers don't come to an agreement about the federal budget in the next day or so, the military could be forced to operate under last year's spending plan. And that could stymie its 2016 modernization efforts — meaning less stuff like new fighter jets and joint lightweight tactical vehicles (JLTVs).
In place of a budget, Congress is expected to authorize a stopgap funding measure known as a continuing resolution, or CR, before Fiscal Year (FY) 2016 commences at midnight on Wednesday.
Funding levels are locked in place with a CR, which means the Department of Defense (DoD) can't start any new programs, nor can it discontinue any programs that were funded during this past fiscal year. The military would instead be required to maintain its 2015 budget and spending priorities through at least December of this year.
But the Pentagon is reportedly bracing for the unprecedented possibility that this scenario could last for the entirety of FY 2016.
"The yearlong CR is a really painful and unwise way to manage the Department of Defense," said Justin T. Johnson, a senior policy analyst for defense budgeting at the Heritage Foundation. Although he expects Congress to ultimately avoid a yearlong CR, he said there is "definitely a realistic chance" of one being authorized.
The FY 2016 base budget provides the DoD with $534.3 billion, up $38.2 billion from the previous fiscal year. The FY 2016 Overseas Contingency Operations (OCO) budget — a fund technically meant to cover incremental costs of conflicts overseas — is $50.9 billion, a decrease of $13.3 billion from last year. Thus, the Pentagon is expected to have about $25 billion more to spend in 2016. If those funds aren't available, modernization efforts across the services will end up on the cutting-room floor.
According to the Pentagon, that would mean the start of work on the CVN-80, a new aircraft carrier for the Navy, would be put on hold. The same would be true for the F-35 Joint Strike Fighter program, along with plans to phase out the traditional Humvee in favor of the JLTV. The military was expected to buy 450 of JLTVs in 2016, but under a longterm CR, it would reportedly have funds for only 184.
"It gets more painful as time goes on," a Pentagon spokesperson said. "It would have an extremely negative effect on what we are trying to do in terms of modernization."
The Pentagon does have a fair amount of experience operating under short-term CRs. And if the CR continued into the next calendar year, the Pentagon could ask Congress for a whole lot of "anomalies," Johnson explained. Congressionally approved anomalies would allow the Pentagon to redirect money toward some of its 2016 initiatives and help prevent it from defaulting on its defense contracts, thereby avoiding costly penalties. The price to terminate a multi-year contract with Boeing to renew twenty-seven CH-47F Chinook heavy-lift helicopters and buy 12 new aircraft, for example, is $99 million, according to official documents obtained by the Hill. Terminating the contract would also negate an expected $355 million in savings.
Even with anomalies, though, the Pentagon would still have to find $25 billion worth of cuts for FY 2016, which would be no easy feat.
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Sequestration — automatic, legislatively mandated budget caps — is scheduled to resume in 2016. The defense budget proposal for FY 2016 is about $36 billion above the point at which sequestration sets it, according to the Pentagon's budget request.
"Sequestration was never intended to take effect — rather, it was supposed to threaten such drastic cuts to both defense and non-defense funding that policymakers would be motivated to come to the table and reduce the deficit through smart, balanced reforms," the Office of Management and Budget wrote in a letter to the Senate Appropriations Subcommittee on Defense in June. "The Republican framework would bring base discretionary funding for both non-defense and defense to the lowest real levels in a decade.
"That is why the President has been clear that he is not willing to lock in sequestration going forward, nor will he accept fixes to defense without also fixing non-defense."
Senate Minority Leader Harry Reid and House Minority Leader Nancy Pelosi met with the president for about 90 minutes two weeks ago to prepare for budget negotiations. The trio of Democrats reportedly agreed to find a solution that would allow for an equal increase in defense and non-defense spending. They also demanded that the budget not include what they called "ideological issues," such as an attempt to defund Planned Parenthood.
The Senate is expected to send the House a continuing resolution that would fund the government through December 11. Outgoing Speaker of the House John Boehner said on CBS's Face the Nation on Sunday that the government would not shut down.
"We are preparing for a short-term CR," the Pentagon spokesperson said. "I do not think, at this point, you could say we're planning for a long-term CR. I think we are very, very hopeful that that does not occur."
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