Pentagon Budget Cramdown

Shades of Tim Geithner. President Obama and Defense Secretary Gates are forcing a cramdown of our Pentagon budget that sells our military’s ability to defend America dangerously short.

Obama and Gates have set up a big political battle over proposed cuts in purchases of key weapon systems ranging from the F-22 fighter to the Navy’s proposed Zumwalt-class stealthy destroyer and ballistic missile defense systems. As the media will characterize it, it will be a battle waged between the forces of good — the Obama team — and the greedy defense contractors and their political shills in Congress. Gates’ proposed cuts are wrong-headed. About which more in a moment.

But a more important battle over the long-term Pentagon budget is concealed beneath the sound bite fight.

It’s the same thing that Congressional liberals want to impose on banks. Under their theory, if a homeowner goes bankrupt, a bankruptcy judge could force the mortgage holder to reduce the amount of the mortgage and settle for a repayment of less than its face value. That’s the essence of a mortgage cramdown. Both the Bush and Obama Treasury teams have considered other equity cramdowns — for example, to force GM and Chrysler bond holders to settle for less than face value — as part of plans to bail out the automakers.

Under cover of the weapon system cuts, Obama and Gates are doing the same thing to the Pentagon by ending the Bush era practice of paying for the war by “supplemental” budgeting. In the Bush years, the base Pentagon budget — to cover basing, personnel and weapon system spending — was separate from the cost of conducting the war.

Obama and Gates want to impose a cramdown on the Pentagon budget so that the future cost of fighting in Afghanistan or anywhere else will be paid out of the regular — and reduced — defense budget.

Obama’s defense budget request for 2010 is about $534 billion, an apparent increase over the Bush 2009 budget of $515 billion. And Obama has proposed a supplemental of about $83 billion to pay for the war this year, bringing the price up to about $617 billion. But this is less than the real 2009 number which, counting the war supplemental was about $647 billion.

And Obama and Gates are also saying that this will be the last supplemental appropriation for the war.

According to budget estimates released by Cong. John Spratt (D-SC), chairman of the House Budget Committee, the real Bush Pentagon budget for 2009 — counting the supplemental war budget — was that $647 billion. Spratt’s numbers show that the Obama budget will total about $606 billion in outlays in 2010, down more than $40 billion in the year when Obama has scheduled our withdrawal from Iraq. But more forces will be moving to and operating in Afghanistan then. Gen. Ray Odierno — commander in Iraq — has already said that withdrawal on Obama’s timeline may be impossible.

Spratt’s estimates show that the total outlays go down to $587 billion in 2011 and go back up by $8 billion in 2014 to $595 billion.

The meaning of these numbers is that if the war continues in Afghanistan or Iraq or anywhere else — or if any other conflicts break out — the Pentagon will have to offset the cost of the fight by cutting other spending.

Obama and Gates are imposing a cramdown on our military leaders: they will have to sacrifice defense equity — new aircraft, ships, satellites, and every other weapon they rely on — to pay for whatever war effort continues beyond 2010. How can those cuts be made?

Presumably the same way Secretary Gates made the cuts announced last week. Gates is an avowed critic of what he calls “next war-itis:” planning to fight future wars rather than focusing entirely on the current conflict. In bygone days — from about the year 1 to around 1974 — generals were justly ridiculed for wanting only to fight the war that had just ended.

The solution to that was “next war-itis.” A combination of experienced warfighters and scientists collaborated to think over the time horizon to develop weapon systems and the people to use them to defend America against the foreseeable threat as well as the current ones. Bob Gates wants to end all that.

Gates said that there is a “strong analytical base” for his proposed cuts because they somehow emanate from the National Defense Strategy. But how? The National Defense Strategy is supposed to be the starting point for the Quadrennial Defense Review which is — by law — the means by which the Defense Department is supposed to define the force structure, force modernization and budget for the next four years. Though the 2009 QDR hasn’t begun, Gates’ announcements presume the result.

In the Good Old Days — which I will take the liberty of defining as the years 1981-1988 — we had a process called “Defense Guidance.” (The QDR is its bureaucratically-bloated successor.)

The DG analysis started with a definition of the threats that existed and could be foreseen. Next came an analysis of the force structure we had and a comparison of it to the threats. Whatever the differences were — in weapons, personnel and everything else that enables our armed forces to fight — the product of the DG ensconced them in the Defense Department’s plans and budgets.

Secretary Gates’ aversion to “next war-itis” is demonstrated by his decision to stop production of the F-22 fighter at 187 aircraft. The original Air Force plan was to buy 750 to replace the 1970s-era F-15. That number was reduced repeatedly in the Clinton and Bush years and now again by Gates.

The F-22 decision is accompanied by Gates’ decision to take 250 old fighter and attack aircraft out of the Air Force inventory and increase the number of UAV’s used to great advantage in Afghanistan, Iraq and Western Pakistan. But the UAV’s only fly in friendly skies: they cannot fly wherever an enemy can challenge American air supremacy with any success.

Gates wants to increase the speed of production of the F-35. But the F-35 is not an air supremacy weapon. Its capabilities are vastly less than those of the F-22.

In the Defense Guidance process, the warfighters played a key role in every step. Their voices were heard, their hard-won counsel taken seriously. In the Obama-Gates Pentagon budget cramdown, who speaks for the warfighters?

Cartoon by Brett Noel