Budget Likely Will Protect Cyber, Trim Benefits

Defense Secretary Chuck Hagel has signaled that he will seek to protect cyber warfare funding and Special Operations in the Pentagon's 2015 budget.  At the same time his aides are pushing cutbacks in pay and benefits.

Hagel is expected to preview the budget proposal at a Pentagon briefing Monday, with additional details coming from Christine Fox, the acting Deputy Defense Secretary, later in the week.

Hagel's outline could be complicated by President Obama's plan for major boosts in education and job training funding in the federal government's overall budget proposals for 2015.

White House officials said Thursday that Obama will press for a $56 billion increase in domestic spending to be partially offset by cuts in defense. The White House and Pentagon budget plans are expected to be announced officially on March 4.

In an address Tuesday night in Bethesda, Md., Hagel did not give numbers but said his 2015 fiscal proposals would boost cyber security, intelligence gathering, and reconnaissance.

"We are adjusting our asset base and our new technology," Hagel said. "Of course, it's going to shift the proprieties and the balance of forces, and where you invest your money to be able to ensure readiness for your forces, capability and capacity," Hagel said of the budget proposals.

Hagel has previously spoken at length on the need to slow the growth in pay and benefits spending to meet the demands of what could be more than $1 trillion in cuts to defense through 2021 from the combined effects of cutbacks already underway and the legislative sequester process.

"We don't have a crystal ball, but all the indications we've seen is that they're going to go after the commissary benefits," said retired Air Force Col. Mike Hayden, director of Government Relations at the Military Officers Association of America.

In response to reports by Military.com and others, the Pentagon has previously said that no decisions have yet been made on spending cuts that would effectively force the closings of most stateside base commissaries.

Hayden said MOAA also expected the 2015 budget proposal to include a plan to hold pay increases for the troops at one percent, rather than 1.8 percent, and "we think they'll go after TRICARE again."

In a report last month, the Congressional Budget Office said that barring working-age military retirees from TRICARE Prime would save $90 billion over 10 years.

Hayden said major cuts to weapons programs and renewed proposals to close stateside military bases were unlikely in a Congressional election year. Congressional leaders have already staked out their opposition to any plans to cut the aircraft carrier fleet from 11 to 10, and to retire the A-10 Warthog.

The Ohio delegation has already held off the long-standing proposal by Gen. Ray Odierno, the Army's chief of staff, for a temporary halt to the production line of the M1A1 Abrams tank, made by General Dynamics in Ohio.

Any effort by the Pentagon to scale back on purchases of the F-35 Joint Strike Fighter and the Littoral Combat Ship would also be opposed by Congress.
Even the hint of cutbacks in the National Guard has already produced a strong reaction in the House. Suggestions that the Army National Guard would be reduced from 350,000 to 315,000, while its Apache attack helicopters were shifted to the active duty Army, prompted Rep. Joe Wilson, R-S.C., to introduce a bill to stop the move that has picked up more than 60 co-sponsors.

Major cuts were also expected in the funding for Overseas Contingency Operations, the bill for funding the wars in Iraq and Afghanistan that has been kept separate from the main Pentagon budget. The current OCO budget now stands at about $80 billion, and several defense analysts have predicted that it could go below $60 billion as U.S. combat forces leave Afghanistan this year.

The budget deal reached in December by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., gave the Pentagon some initial relief from the sequester process but also left the Defense Department with the task of cutting about $43 billion from an initial bottom line budget of about $541 billion.

Hayden pointed to the testimony last month before the Senate Armed Services Committee by Fox and Adm. James Winnefeld, vice chairman of the Joint Chiefs of Staff, as a guideline on where the Defense Department was heading in making the cuts.

Adm. James Winnefeld told the senators to expect "fine-tune adjustments" on compensation that would cap military pay raises at one percent and institute enrollment fees for TRICARE for Life. Current health care costs for the Defense Department amount to about $52 billion annually.

"The changes to compensation fall into two buckets," Fox said.  "There are changes to pay and copays and things of the existing benefit programs and pay, and then there's retirement. We must find ways to slow the rate of growth."

-- Richard Sisk can be reached at Richard.Sisk@monster.com.