Deputy Defense Secretary Ashton Carter directed senior Pentagon officials to plan for a possible 10 percent budget cut in fiscal 2014.
In a memo sent to Defense Department managers on May 29 -- and obtained by Government Executive -- Carter instructed officials to develop options as part of the ongoing Strategic Choices and Management Review. He ordered Defense managers to prepare several fiscal scenarios in fiscal 2014: one with a 10 percent across-the-board budget cut, and another with a 10 percent cut that allowed managers flexibility to move funds to different accounts.
He also directed managers to develop “internal fiscal guidance” for budget programming in fiscal years 2015 through 2019 at President Obama’s budget level, then told them to factor in alternative scenarios that included a 5 percent and 10 percent cut.
Carter added that Defense officials may ask for an additional “alternative at a level 5 percent below the president’s budget” at a later date. Office of Management and Budget Director Sylvia Burwell recently told all agency heads in a memo to prepare for an additional 5 percent cut in preparation for the fiscal 2015 budget request.
“We will also continue to defend aggressively the specifics of the president's fiscal 2014 defense budget proposal at the right level for the department,” Carter wrote. “However, we do need to develop options in the event that fiscal realities differ from the funding level in the president's budget.”
The results of the review are due on July 1, Carter said. Sens. Carl Levin, D-Mich., and Jim Inhofe R-Okla., asked Defense Secretary Chuck Hagel to deliver a “package of reductions” by July that would help the department cope with possible budget cuts in fiscal 2014. Defense Secretary Chuck Hagel responded to the letter in mid-May and told the senators the strategic review would “provide options and insights” that would help guide changes in the fiscal 2014 budget.
The memo comes as outside groups begin planning for possible Defense budget cuts in the coming fiscal years. A shadow budget review, recently conducted by a group of Washington think tank analysts, said that massive cuts to Defense’s civilian workforce would help the Pentagon manage continuous sequestration cuts over the next decade. Defense Comptroller Robert Hale previously indicated that sequestration lasting into fiscal 2014 could cause job losses.