The Looming Fiscal 2014 Budget Talks Keep Agencies in Limbo - (Archived)

While talk of sequestration has not been making as many headlines as it was at the beginning of 2013, that does not mean a heated FY 2014 budget battle is not looming. As a matter of fact, Deputy Defense Secretary Ashton Carter stated that the Pentagon was, “prepared for a wide range of budget contingencies,” depending on how the fiscal situation shakes out in Washington.

Since budget negotiations remain uncertain, the Pentagon is preparing one based on the Obama administration’s fiscal 2014 budget request and a second scenario if the White House and Congress cannot come to an agreement. This comes on the heels of a May 29 Defense Department (DoD) memo discussing the possibility of a 10 percent defense budget cut in fiscal 2014.

Defense Secretary Chuck Hagel ordered The Pentagon’s Strategic Choices and Management Review (SCMR) at the time of the May 29 memo. The SCMR, which was awaiting Hagel’s review as of Wednesday, was designed to be the basis for fiscal 2015 and its goal was to also help with decisions related to fiscal 2014, according to Carter.

[pullquote]Sequestration has clearly impacted the DoD budget planning process. On June 13, Carter stated, “Despite our best efforts to minimize this damage, it is at a minimum, embarrassing, to be doing this in the eyes of friends and foes alike.”[/pullquote] Sequestration has clearly impacted the DoD budget planning process. On June 13, Carter stated, “Despite our best efforts to minimize this damage, it is at a minimum, embarrassing, to be doing this in the eyes of friends and foes alike.” Until the White House and Congress come to an agreement, agencies are going to have to plan for multiple scenarios.

On June 20, Democrats put a new agenda on the table, with spending bills that ignore a second year of spending cuts.  The Democratic plan is in line with the budget that was passed by the Senate in March, which calls for new taxes and spending cuts to replace the automatic cuts that are a part of sequestration.

Washington-based think tanks have also jumped into the conversation, such as one recent idea to have the DoD cut tens of thousands of civilian jobs. This caused delays in the DoD rollout of its Strategic Choices and Management Review for several weeks, according to the American Forces Press Service.   Carter also stated that he has aligned himself with the Center for a New American Security and other think tank views on large reductions to the DoD’s civilian workforce to boost areas such as the Asia Pacific and cybersecurity.

This battle will be watched closely since the Obama administration’s fiscal 2014 budget is $52 billion above the cap for defense spending imposed by the sequestration provision of the 2011 Budget Control Act, a topic that surely will not go unnoticed by Congress.

The Senate Armed Services Committee is anticipating the DoD’s complete budget plan, with Senators Carl Levin, D-Michigan, and Jim Inhofe, R-Oklahoma, writing Hagel to demand a “package of reductions” by early July to plan for possible sequestration cuts in fiscal 2014.

Between the Obama administration’s proposed fiscal 2014 budget and Congress’ rhetoric on budget cuts, the battle simmers as agencies await answers. Keep checking back to the FedPulse blog for updates.

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