About $22 billion would have to come from the military services’ operations and maintenance (O&M) account, which pays for readiness-related activities such as training.
Because cuts would have to be applied in the last seven months of the fiscal year, it would require an average reduction of 17.5 percent to each O&M program. Such cuts, the Joint Chiefs of Staff wrote to Congress, could put the United States “on the brink of creating a hollow force.”
The sequester deadline, March 1, is eight days away, but Congress appears unable to make the compromises needed for a realistic solution to the nation’s fiscal problems. Yet, President Obama and House and Senate Republicans seem to agree that the Pentagon, if not the rest of the government, ought to get some immediate relief.
If there’s no remedy approved before March 1, there certainly could be one worked out before March 27, when the fiscal 2013 continuing appropriations resolution (fiscal 2013 CR) runs out. Before that date, Congress can pass a full-year fiscal 2013 defense appropriations bill, which appears unlikely, or a new fiscal 2013 CR that would keep the government running through Sept. 30, the end of the fiscal year.
So far, however, Democrats and Republicans are far apart on how to make up any major funding relief provided to the Defense Department, whether by cutting more non-defense spending or providing additional revenue.
What’s possible, however, is at least giving the Pentagon authority to shift funds, which Defense Secretary Leon E. Panetta has sought for more than a year.
To understand Belasco’s analysis, you must realize that the fiscal 2013 CR for the most part linked this year’s current spending levels to those of the fiscal 2012 appropriations law.
According to Belasco, the fiscal 2012 appropriations law specified that in the personnel and operations and maintenance accounts, “there would be considerable more flexibility to allocate O&M sequester reductions applied at the account level” than the program-specific reductions for procurement and research and development.
Applying that approach to the fiscal 2013 CR, Belasco says, gives the Defense Department — and the individual services — “discretion to allocate funding within O&M accounts.” That is important because some O&M funding accounts in fiscal 2012 were lower than funds originally sought for fiscal 2013.
She writes that the Army has the greatest mismatch, a gap this year of $6 billion, because of the reset costs of forces returning from Afghanistan. However, Belasco says, that may be softened because the Army may have overestimated the funds needed to cover inflation and a requirement for a civilian pay increase that has not taken place. The Army may gain another $2.6 billion with the transfer of funds from the overseas war account to the base budget that also took place in fiscal 2012.