As Talks to Avoid Shutdown Near Climax, Pentagon Continues Bemoaning Stopgap Budgets

Though all agencies dread budget stalemates that risk a government shutdown, the loudest complaints about Congress’s habit of postponing tough decisions often come from the Pentagon.

In running the largest agency budget, the Defense Department must service massive long-term weapons contracts while protecting warfighters who face real-time life-and-death situations. This month’s fiscal 2018 budget drama predictably has Pentagon planners on edge. They must scramble—four months into the fiscal year—to manage priorities ranging from payroll to training to meeting procurement milestones.

As top lawmakers gather for weekend talks with President Trump at Camp David, they face a Jan. 19 deadline to fund the entire government before December’s continuing resolution expires. There is some talk of yet another temporary bill, postponing the reckoning to the President’s Day weekend, as Rep. Tom Cole, R-Okla., told Politico.

 “Continuing resolutions are damaging and erode our readiness and capabilities,” Defense spokesman Christopher Sherwood told Government Executive. "The longer the CR, the more damaging it is."

Last month, before Congress passed the current continuing resolution, Defense Undersecretary and Comptroller Dave Norquist told reporters, “What the C.R. says is, ‘Stop, wait. Don't award that contract yet,’ which delays when you begin to increase the quantity and the production. [There are] two very destructive effects of that. One is, we're delayed in meeting the requirements of the combatant commanders. The other one is, there are companies out there willing to hire people to begin to meet our requirements and, therefore, you're not getting the benefit on the economic side, of that employment. So two weeks does that for two weeks. A month does that for a month. The answer is really, none of this is fixed until you get a proper appropriation bill.”

In Congress, the two parties largely agree on some sort of hike in the defense budget, but they remain at loggerheads on whether to bring nondefense spending up to a similar level, as required by the 2011 Budget Control Act that delivered the threat of sequestration.

Negotiators also remain far apart over an array of separate issues such as funding the Children’s Health Insurance Program, deciding the fate of the immigrant families in the Deferred Action for Childhood Arrivals program, and Trump’s demand for a southwestern border wall. Democrats, who have leverage because passage in the Senate requires 60 votes, want to protect domestic priorities.

Current caps restrict spending to $549 billion for defense and $516 billion for non-defense agencies in fiscal 2018. Republicans are seeking to raise the defense number, but Democrats are reluctant to go along without a comparable increase to domestic programs. If an agreement is not reached, the budget caps would be breached and sequestration would be triggered.

 “If you want to know whether the numbers being floated are serious, one of the ways to tell is to look at the numbers on the non-defense side,” said defense budget analyst Todd Harrison, a senior fellow at the Center for Strategic and International Studies. ”You can’t have one without the other.”

Whether the final balance in a Republican deal with Democrats is 50-50 or 70-30, is unclear, Harrison said. “But how does delaying for another six weeks change the fundamentals of the situation? You might as well make a deal and move on.”

Defense managers “have a lot of things they can do to mitigate the impact of a continuing resolution,” he said, citing such options as slowing spending on different programs or making across-the-board cutbacks. “But four months into a fiscal year without a budget, these start to lose their effectiveness.”

Robert Hale, the former Defense Comptroller now a senior adviser at Booz Allen Hamilton, told Government Executive he always says “the Pentagon knows how to hold its fiscal breath for a couple of months.” But he added: “As we get into the New Year, the effects get more serious and add to workload.”

For example, “if you have a contract coming up for extension and you can’t obligate funds past Jan. 19, you have to do a bridge contract.” If the company is facing uncertainty, it may demand a higher price, Hale added. “The whole contracting process gets delayed because you can’t do new starts. People are nervous, understandably, about entering in not knowing what the budget will be.”

If the stalemate and continuing resolution go on for another few months, Hale said, it will become tougher to do things like ramping up training using one-year operational funds. The danger level of stumbling into a government shutdown “is significant,” though Hale doesn’t consider that likely. The stalemate that prompted the 2013 government closure, he noted, was the fight over the non-defense issue of repealing Obamacare.

Throughout the past year, Defense officials and their Capitol Hill patrons have sought to head off the reliance on continuing resolutions. In August, Sens. John McCain, R-Ariz., and Jack Reed, D-R.I., the chairman and ranking member of the Armed Services Committee, wrote to Defense Secretary Jim Mattis asking him to delineate the impact of a continuing resolutions for three or six months on the defense service branches and agencies.

In a six-page letter in September, Mattis gave details of the impact, as reported by Defense News. He warned of “readiness impacts, stating that 90 days after the start of a CR, lost training is ‘unrecoverable’ due to the need to move on to previously scheduled events. As a result, the Marines will lose out on vital training for coordinated joint fires, while the Air Force will be unable to train a group of pilots needed to refresh a pilot shortage. The Navy will delay induction of 11 ships, which would push some readiness availabilities into fiscal 2019.” Military construction delays would affect 37 Navy projects, 16 Air Force projects and 38 Army projects.

During this week’s ongoing budget talks, Senate Majority Leader Mitch McConnell said: “Since fiscal year 2013, discretionary defense spending has been cut by … $85 billion more than nondefense spending. That number has real consequences for the men and women who serve our country in harm’s way.”

Democrats noted domestic programs have seen cuts too. In their Dec. 12 letter opposing a new continuing resolution, Senate Democrats said, “According to estimates, domestic programs will see at least $12 billion in cuts in [fiscal] 2018 due to sequestration and other spending obligations.” Therefore, a funding bill that provides full-year sequestration relief for military programs but not for other important domestic programs “would result in devastating cuts to homeland security agencies like the FBI, cancer research programs at the National Institutes of Health, and opioid treatment funding" at the Health and Human Services Department. 

But Republicans were not convinced. Rep. Mac Thornberry, R-Texas, chairman of the House Armed Services Committee, said, “Opponents of this bill argue that we should put our urgent national security needs on hold until we reach a similar consensus on a whole host of other domestic programs. That is the approach we have taken for the past six years and the results are indisputable: the number of our troops killed in training accidents is increasing, our military capabilities are eroding, our enemies have become emboldened, and America is less secure. To continue to use defense funding as a political football in the face of these undisputed consequences is irresponsible.”

The Pentagon can only continue to watch as the talks grind on.