Defense Strategy, Resources, & the “Strategic Choices & Management Review”

By Robert Murrett

060919-F-1830P-032One of the most significant hazards in any nations’ defense posture is the tendency for resources to drive strategy. For the US, this pitfall has been particularly apparent since the passage of the Budget Control Act (BCA) in August of 2011.

Following passage, a new defense strategy was promulgated in January of last year, followed by a proposed future years’ defense budget linked to the revised strategy, as well as the BCA. Despite these deliberate efforts by the Obama Administration and Department of Defense (DOD), the implementation of additional BCA-driven cuts (known as “the sequester”) has disrupted the planning process, and thrown some elements of our strategic posture into question.

[pullquoteright]While it is clear that the SCMR will serve as the basis for next year’s Quadrennial Defense Review (QDR) and the FY ’15 program build, recent statements by US Secretary of Defense Chuck Hagel have downplayed the SCMR’s significance.”[/pullquoteright]Some of the details from the past several months are noteworthy. After Congress implemented the second round of BCA cuts by passing the “Consolidated and Further Appropriations Act” in March 2013, the Pentagon responded by making significant changes in the Fiscal Year 2013 (FY ’13) program and also tasked a “Strategic Choices and Management Review” (SCMR) to examine the emergent budget realities. While it was said that the 2011 Defense Strategy would be the point of departure for the SCMR, the intent to both “preserve and adapt” the strategy made it clear that modifications were an option.

As the SCMR process unfolded, many were encouraged to see concurrent moves within DOD regarding execution of the FY ’13 budget and modifications to planning for the proposed FY ’14 program. On May 29, US Deputy Secretary of Defense Ashton Carter signed out a memo directing the Services and Special Operations Command to “develop options for the FY ’13 budget … with a cut of 10%.”

This effort was to address two options: one with and a second without significant reprograming authority (i.e., the ability to move money among accounts). This direction reflected the reality of the March Appropriations Act settling in. It also acknowledged the extremely low likelihood that Congress would do anything to appropriate additional funds to DOD by the end of this fiscal year—leading to a more realistic level of defense spending for FY ’14.

Because of the potential impact of the SCMR, many in DOD and beyond were eagerly anticipating its rollout, which was scheduled for the end of May. However, as the weeks went by, there was a sense that the effort would focus strongly on budget matters and not ask hard questions regarding the existing defense strategy.

While it is clear that the SCMR will serve as the basis for next year’s Quadrennial Defense Review (QDR) and the FY ’15 program build, recent statements by US Secretary of Defense Chuck Hagel have downplayed the SCMR’s significance. Last week, he said “there will be no rollout of any grand plan on this,” suggesting that public and congressional analysis of the effort would take some time. Furthermore, by asking former defense secretary William Perry and General John Abizaid (Ret.) to review the SCMR results, Hagel will have to balance their input with congressional demands for details regarding the review as congress members continue budget deliberations in the months ahead.

As all this has unfolded, there has been a noteworthy change in tone over the past several weeks. On the whole, senior DOD officials, as well as the Chairman of the Joint Chiefs of Staff and Service Chiefs, have moderated earlier projections that allowing the defense budget to fall below $500 billion (as part of the BCA mandates) would have a drastic impact on our overall defense posture. It has become clear over the past several months that members of Congress have grown increasingly skeptical regarding claims from the Pentagon on the defense cuts, particularly amid signs that the impact of the sequester may not be quite as pronounced as depicted.

Specifically, some of the operational units that were stood down (e.g., Air Force squadrons) have resumed operations, and the official DOD posture on furloughs for the roughly 650,000 personnel impacted is still “as many as” 11 days. If the department is able to reduce the total number of furlough days in the weeks ahead, it will be another sign that reprogramming and successful budget execution have mitigated some of the dire predictions from spring 2013.

The weeks ahead will provide some level of clarity on the Defense budget, and hopefully, more discussion on overall strategy. Secretary Hagel confirmed earlier this month that DOD was developing a “Plan B” approach that will take into account the BCA-driven $52 billion cuts in FY ’14. His direction to “plan for the full range of sequester cuts” marks a departure from the strategy adopted by his predecessor—former defense secretary Leon Panetta felt that planning for cuts would cause them to be realized (they were anyway).

Additionally, final resolution of FY ’13 accounts will be accomplished in the weeks ahead, with “normal” end-of-fiscal-year dynamics amplified by the factors described above. Following this, there will be a top line determined for the base FY ’14 defense program. As this top line figure will likely be in the range of $480 billion (plus overseas contingency funds), the demands for a genuine review of US defense strategy, to drive our ongoing budget decisions, will only grow.