March 1 sequestration would cost DoD $45 billion, comptroller says


Thanks to Congress's New Year's Day fiscal cliff maneuvering, the Defense Department's budget would take an estimated $45 billion sequestration hit March 1 instead of the $62 billion previously estimated, according to DoD Comptroller Robert Hale.

Speaking at a Brookings Institution forum on defense spending, Hale said the $45 billion at risk in the March 1 fiscal cliff is about 9 percent of the Pentagon budget, versus 12 percent for the Jan. 1 cliff. On the other hand, if sequestration does go into effect March 1, he said, DoD has two fewer months to implement the cuts.
The reason for the drop was complex, but has to do largely with caps being changed in the Budget Control Act, and negotiations in the Taxpayer Relief Act, Hale said in response to a question.
"I've never seen a period featuring any greater budgetary uncertainty than we're looking at over the next few months and through March," he said during prepared remarks. "It gives a whole new meaning to the term 'March Madness,' and I can't wait for it to be over."
The Pentagon desperately needs more stability both in the size of its budget and in the budgeting process, Hale said.
"We've lived under two long-term continuing resolutions, a six-month continuing resolution; we are under one right now," he said. "They really hogtie the department and its ability to manage."
If DoD can make its own choices on how to implement spending cuts, they likely would be "investment-heavy" for the first couple of years, he said, followed by cuts in operating costs and then changes in manpower.
Then the department still has to get Congress to agree on its plans, which he said has not been easy. Congress rejected the idea of retiring some Navy ships this fiscal year to save money, or approving all of the Pentagon's proposals to change healthcare benefits for retirees, he said.
Consolidating more military base operations could produce some savings, Hale said in response to a question, although it would not provide an immediate payoff.
"If the Congress wants us to hold down defense spending and they want … us to reduce the number of spending personnel, they need to give us authority to move ahead with infrastructure consolidation," he said.
For more:
-watch a video of Hale's talk
-listen to the audio
-read the transcript
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