December 03, 2011

How the pending defense cuts could play out

Congress’ failure to make a deficit deal could cut the number of soldiers by up to 25 percent, leaving the smallest Army since just before World War II.

That, in turn, means you stand a good chance of deploying more often. You will do so with older gear, weapons and vehicles, and your pay and benefits — which are protected right now — are likely to see changes in the near future. For military leaders, the choice comes down to cutting soldiers, cutting programs or reducing pay and benefits.

The “doomsday” scenario predicted by Defense Secretary Leon Panetta is here.

The 12-member so-called supercommittee had until Nov. 21 to overcome partisan politics and create a deficit reduction plan. An automatic cut of $600 billion to defense spending over 10 years went into effect when the deadline passed. These cuts are on top of $450 billion in cuts already ordered by the Obama administration.

Some analysts and lawmakers remain confident that Congress will work out a solution before the painful cuts kick off. Lawmakers from both sides have said they will introduce legislation to block automatic defense cuts.

Others lack such confidence. Legislation will have to go through bipartisan committees, pass the Senate and House, then be signed by the president — and this during a hotly contested election year, when President Obama has vowed to block legislation that would exempt the Pentagon. Still other analysts feel such massive cuts are exactly what the national budget needs to get back in the black.

Several scenarios

The Pentagon has not said how it will cover $1.2 trillion in cuts. Defense officials, including Panetta, have pledged to protect pay and benefits, but that promise will not likely hold for future soldiers. It is likely the Navy and Air Force will fare far better than ground forces when the budget ax falls.

The Center for a New American Security in October released “Hard Choices: Responsible Defense in an Age of Austerity.” It stands as the most detailed scenario to date.

The pending cuts are “a worst-case scenario,” retired Army Lt. Gen. David Barno, who led the report, told Army Times. “We judged the risk to U.S. interests in maintaining a global engagement strategy as very high. They’re not just high, they’re very high.” Barno is among the group that feels legislation to reverse the cuts is “difficult at best.”

The Pentagon must halt most new programs in order to meet the new budget, according to the report. This comes as no surprise. According to Defense Department statistics, 75 percent of major acquisition programs last year exceeded their baseline program acquisition unit cost, up from 66 percent in the previous report.

The CNAS report also calls for a reduction in short-range strike fighters, amphibious capabilities and manned aircraft. It cuts heavy armored formations, with the remainder being shifted to the reserves. Military officials have said such a move is not feasible as the reserves lack the training time required to maintain proficiency. CNAS and other analysts say budget cuts and changing strategies leave no choice.

With those cuts as a baseline, the CNAS report then presents four scenario-based outcomes based on fiscal and strategic requirements. They are:

• Scenario 1: Reposition and Reset. Had the supercommittee succeeded and added no further defense cuts to Obama’s requirement, Army end strength would still require a reduction to 482,000 — roughly 87,000 fewer soldiers than are serving today and the lowest number since 1989. Marine Corps end strength would be cut to 175,000. Six CG-47 cruisers and 15 C-5A transport planes would be retired. The Ground Combat Vehicle, Joint Light Tactical Vehicle and missile defense programs would be canceled. The Joint Improvised Explosive Device Defeat Organization, or JIEDDO, would be shut down in fiscal 2017.

The risk inherent to this scenario is described as “modest and acceptable.”

• Scenario 2: Constrained Global Presence. Had the supercommittee succeeded and required a total of $502 billion in defense cuts when combined with the president’s plan, the services would add one aircraft carrier to the cuts of Scenario 1. It also would be necessary to reduce the V-22 Osprey, the Navy’s MQ-4C Broad Area Maritime Surveillance Unmanned Aircraft System and the F-35 Joint Strike Fighters.

The risk inherent to this scenario is described as “significant but acceptable.”

• Scenario 3: Selective Leverage. Had the supercommittee succeeded and required a combined $665 billion in defense cuts, Army end strength would be cut by 110,000 soldiers to 460,000 and the Corps to 162,500. Heavy armored forces would be moved into the reserves. In addition to the cuts of Scenario 2, the Navy would see reductions in Virginia-class attack subs and amphibious ships, and the cancellation of MQ-4C. More F-35s would be purchased than in Scenario 2, but canceled F-35s would not be replaced with as many F-16s and F/A-18s, resulting in fewer fighters.

The risk inherent to this scenario is described as “high.”

• Scenario 4: Focused Economy of Force. Because the supercommittee failed, federal law now requires substantial cuts totaling $1.2 trillion across the board. The CNAS analysis said it will be necessary to cut end strength to 430,000 soldiers and 150,000 Marines. The lack of manpower would make large commitments difficult. As such, the Army would focus on rapid response/forcible entry (airborne and helicopter assault) and on the lower end of the conflict spectrum, such as advising and assisting foreign forces and conducting irregular warfare.

In addition to the cuts of Scenario 3, the Marine Corps’ F-35B will be canceled and its heavy capabilities would be eliminated. Procurement of the Littoral Combat Ship would end in fiscal 2013.

The risk inherent to this scenario is described as “very high.”

Alternatively, the Pentagon could buy back some troops by reducing the cost per soldier, CNAs found. For example, increasing Tricare prescription costs, raising Tricare fees and deductibles and introducing a minimum deductible for Tricare for Life would save about $97 billion — enough money to fund nearly 100,000 soldiers.

‘Reasonable’ size

The Army already plans to cut 22,000 soldiers by the end of 2013. Another 13,500 soldiers will be cut in 2015, and again in 2016 to bring the Army down to roughly 520,000. That is nearly 40,000 more soldiers than the Army had 10 years ago, and most analysts agree that 480,000 is the minimum cut the Army can expect — whether or not Congress gets its act together.

Army Chief of Staff Gen. Ray Odierno in October told Army Times that an Army of 520,000 is “reasonable” based on the assumption that forces are out of Afghanistan in 2014. Such an Army would come “fairly close” to the long-standing goal of fighting two simultaneous wars, but “below 520, we can’t.”

While “comfortable” with 520,000 soldiers, Odierno said he didn’t think the Army would end up with that number.

A reorganization of brigade combat teams is also underway. The final product will depend on the force size, mission and risk defense leaders are willing to take. Details are expected in the annual Total Army Analysis, due to service leaders in December. Most experts expect the Army will cut 15 of 73 BCTs and strengthen the remaining teams.

Cutting one in four soldiers is hard to swallow, but there is little else to cut from ground forces. The CNAS analysis eliminates the GCV, and the low hours on upgraded Bradleys and M1A1 tanks makes that hard to argue.

What the Army has plenty of is people, and people cost money. For example, more than $6 billion will be saved by reducing the Army by 27,000 and the Marine Corps by 20,000 in 2014. And the Pentagon is likely to cut ground forces as future strategies place a heavier reliance on naval and air forces — a scenario soldiers and Marines have seen repeated time and again.

“Naval and air forces will grow increasingly important in the future strategic environment,” the CNAS report said. “As a result, the Pentagon should prioritize these forces and not distribute the expected defense cuts evenly across the services.”

Those forces have already been cut to the bone. The number of ships has been cut by nearly half and the Air Force has parked 2,500 planes in the boneyard since Operation Desert Storm in 1991. The Navy also has cut 50,000 sailors in the past nine years. The Army cut six divisions following the first Gulf War. But a return of the Pacific theater to the forefront of future strategies has placed renewed emphasis on the air-sea team.

Gen. James Thurman in October described the Pacific region, which is home of some of the world’s largest militaries and economies, as “key to U.S. security and prosperity.” Thurman is commander of United Nations Command, ROK/US Combined Forces Command and U.S. Forces Korea. Across that border stands North Korea. It possesses the world’s fourth largest military, 70 percent of which is on the demilitarized zone — something Thurman called “a no-kidding threat.”

North Korea also has made significant progress on the construction of a new nuclear reactor. The “six-party talks” have worked to find a peaceful resolution to security concerns arising from this nuclear weapons program, but leadership of four of the six will change or be challenged in 2012, adding to regional instability.

North Korea has 11,000 underground facilities and the world’s largest artillery force, which boasts 13,000 systems, Thurman said. Its 60,000-strong special operations force is the world’s largest. While U.S. ground forces are there to deter and defend, current strategy puts a greater emphasis on advanced technologies and air superiority.

Just around the corner is the People’s Liberation Army of China. With 3 million members, it is the world’s largest military force. More than two-thirds are ground forces, but it is the PLA Navy that is catching the attention of many defense strategists.

An August 2009 Office of Naval Intelligence report calls the submarine force a “primary thrust” of Chinese naval modernization.

Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments, in his February 2010 report, “Why AirSea Battle?” said China will double the number of Navy subs at its current pace. Those subs can fire anti-ship cruise missiles (many while submerged) and long-range, wake-homing torpedoes. This matters because the nation that controls shipping lanes controls commerce and economies.

China also is building a nuclear-powered ballistic missile submarine, according to a report by congressional analyst Ron O’Rourke. The Chinese SSBN is expected to be armed with 12 ballistic missiles with a range of nearly 4,000 nautical miles. That means they could hit Alaska from protected waters close to China; the western half of the 48 states from mid-ocean locations west of Hawaii; and all 50 states from mid-ocean locations east of Hawaii.

Pay and benefits?

There is one more way the Pentagon can save a significant number of weapons and personnel even amid this “doomsday” scenario, but it is a tough pill to swallow.

The CNAS cuts did not include any changes to pay and benefits, but they are likely to take a hit. Pay raises are on the top of that list.

Federal law requires service members to receive a raise at least equal to the national average, known as the employment cost index. But don’t expect anything more than that in coming years.

Service members have enjoyed unprecedented boosts to benefits and pay raises above the national average every year since 2004. As a result, service members are better compensated than 80 percent of civilians of comparable age and education when tax-free cash allowances for housing and food are included, according to DoD personnel statistics.

A service member’s total compensation is doubled when noncash or deferred benefits such as retirement pay, health care and veteran’s benefits are added. These benefits boost the total compensation for a civilian worker by only one-third.

That is why the Pentagon and Senate in 2010 balked at an effort by the House Armed Services Committee to bump the military raise to 1.9 percent, half a percentage point higher than the 1.4 percent ECI. The Pentagon and Senate have voiced opposition because the proposal would cost $367 million in fiscal 2011 and $2.4 billion over five years.

Health care also is under scrutiny. Those costs ran $50.7 billion in 2011 — nearly one-tenth of the total defense budget. Health care costs in the past decade have grown by 85 percent in real terms, according to the CNAS report. Because the force is older than in previous years, and more likely to have spouses and children, that cost is expected to double again by 2028. Benefits could carry a cumulative $1 trillion price tag in 30 years. Unlike Social Security, there is no “lock box” for this unfunded line item.

Making changes to Tricare is on many agendas in Washington. Raising premiums for Tricare Prime has been postponed time and again, but is increasingly likely in coming years. These have not increased since the program was launched in 1995, though the cost to the military has tripled, from $4,000 to $12,000 per family in the same period.

Tricare for Life has become another hot-button issue. Military leaders and lawmakers with whom Army Times spoke were adamant that the program must continue for current service members and retirees — but they aren’t convinced this is a benefit future service members will see.

Many who are staggered by the $10.9 billion Tricare for Life price tag for 2011 also question whether the program can be restructured to cut costs. They point to a 2007 Rand Corp. study that said three in four military retirees can get health insurance through a civilian employer or other group plan, but only half do so. The rest rely on Tricare, which means the Defense Department foots the bill.