DoD: Budget cuts won’t hurt troops — for now - Army News | News from Afghanistan & Iraq - Army Times

DoD: Budget cuts won’t hurt troops — for now

The Pentagon’s 2013 budget proposal released Monday calls for a 6 percent drop in overall spending, a contraction that reflects the end of the war in Iraq, the drawdown in Afghanistan and a delay in purchasing several new weapons systems.

Military officials emphasized that cuts to personnel accounts were “disproportionately small” and aim to leave most active-duty troops untouched by the cuts in planned spending that Congress ordered last year.

Pay raises for troops will continue — including a 1.7 percent bump in 2013, and a similar increase the following year. But starting in 2015, those raises may drop below the average rate of private-sector wage growth. Current plans call for a raise of 0.5 percent in 2015, 1 percent in 2016 and 1.5 percent in 2017, officials said.

The last time the annual military pay raise lagged private-sector wage growth was 1999.

New hardware is taking the biggest hit in the new budget proposal, including proposed delays in the purchase of new F-35 Joint Strike Fighters and new Navy ships and ending the Air Force’s unmanned Global Hawk program.

A major part of the five-year spending plan hinges on the intention to wind down the Afghanistan mission and avoid future ground wars. Reductions in force levels for the Army and Marine Corps will begin in 2013 and continue for the next five years.

“We are no longer sizing these forces to accommodate large prolonged stability operations,” said Robert Hale, the Pentagon’s comptroller and chief financial officer, in a briefing Monday afternoon.

The budget projects about 68,000 troops in Afghanistan in 2013, down from the current level of about 90,000. But “that does not mean there won’t be later changes to Afghan troop levels,” Hale said. “It does mean we don’t want to bind the hands of the president.”

The Pentagon’s base budget will fall for the first time in more than a decade, slipping less than 1 percent to $525.4 billion from last year’s $530.6 billion. When adjusted for inflation, 2013 would mark the third consecutive year the budget has fallen, officials said.

The bulk of the reduction would hit the budget’s supplemental war funding, formally known as Overseas Contingency Operations, or OCO, which is slated to fall by more than 25 percent, down to $88.5 billion from 2012 level of $115.1 billion.

That reduction in spending reflects the withdrawal of 50,000 troops from Iraq and 10,000 troops from Afghanistan last year, as well as the planned reduction of 22,000 more troops from Afghanistan later this year.

Hale compared the current plans to other post-war periods including the years following the Vietnam War in the 1970s and the aftermath of the Cold War in the 1990s. “They are not that different than past postwar drawdowns,” Hale said.

The budget proposal will be sent to Capitol Hill and is likely to change in some ways before it becomes law. In the past several years, lawmakers have reduced the overall budget before approving it.

The budget proposal released Monday was based on an order from Congress forcing the Pentagon to reduce planned spending over the next 10 years by about $487 billion.

The proposal does not take into consideration the law that may result in an additional $500 billion in cuts that would begin next year if lawmakers fail to reach a broader agreement to reduce federal spending and the national deficit. Hale said those cuts, known as budget sequestration, would amount to a “meat ax” approach.

Planned cuts to the active-duty force will affect all four services next year:

• The Army’s authorized end strength will drop to 552,100, down 9,900, or almost 2 percent, from the 2012 level of 562,000.

• The Marine Corps will drop to 197,300 troops, down 4,800, or more than 2 percent, from the 2012 level of 202,100.

• The Navy will fall to 322,700, down 3,000 sailors, or less than 1 percent, from the 2012 level of 325,700.

• The Air Force will fall to 328,900 airmen, down 3,900, or more than 1 percent, from the 2012 level of 332,800.

Overall, however, the active-duty force of 1.4 million will remain larger than it was in 2001, when the military had a total of 1.39 million active-duty troops.

Another primary target for cost cutting is the military health system. The budget calls for an abrupt drop in the military health care budget to $48.7 billion, which would be a drop of 8 percent from the $52.8 billion appropriated in 2012.

For years, military officials have complained about soaring health care costs, which nearly tripled since 2001, when the total cost was $19 billion.

To achieve the savings, the Pentagon hopes to make several changes that will impact retirees:

• Increase Tricare enrollment fees for working-age retirees.

• Impose Tricare enrollment fees for the first time on retirees age 65 and older.

• Increase pharmacy co-payments for retirees.

• Change laws to allow for health care fees to increase at the rate of medical inflation.

Proposed changes to the military retirement system were left out of this budget. However, the Pentagon is calling for the creation of a “Retirement Modernization Commission” that would make recommendations for how to change the longstanding system of 20-year cliff-vesting pensions.

Any changes should not affect today’s troops and would apply only to service members who join in the future, defense officials said.