Pentagon budget planners left waiting on the White House

As Indiana Jones knows, the Pentagon has top men working on things like its budget year round. Top men. But as the White House and congressional leaders enter into negotiations to avoid the fiscal cliff and sequestration, budget teams inside the Pentagon eager to avoid enormous and automatic cuts are busily working on…nothing.

“The Department has not received detailed planning guidance on sequestration from [the White House Office of Management and Budget], and we are not planning for it.  We are still hopeful that Congress will pass a balanced deficit-reduction plan for the president to sign, and sequestration is averted,” said Lt. Col. Elizabeth Robbins, spokesperson for the Defense Department’s budget affairs. Sound familiar?

After all this time, after a year’s worth of doomsday warnings about the “catastrophic” effects of a budget stalemate on the military, even in this eleventh hour the Pentagon’s top budget teams are left waiting and wondering. Without the green light from OMB, they are not allowed to begin.

There's no buzzing inside the building to come up with scenarios and schemes to meet any deals between Democrats and Republicans. The Pentagon, like the rest of us, is in limbo.

“It's a difficult time to be a comptroller,” Robbins explained to the E-Ring. Not only does the Pentagon not know what to expect of the future, which makes planning the fiscal year 2014 budget near impossible, the current year's budget also hasn’t been approved.  

“Since we don't have an appropriated FY13 budget, we are running the department on a continuing resolution [CR] while producing an FY14 budget without an approved FY13 baseline. In addition, the FY14 budget we're working on does not take into account the additional $52.3 billion of cuts required by sequestration,” said Robbins. Got that?

“So if sequestration occurs, the department will have to rework the entire FY14 budget to reflect the additional cuts, and we'll have to implement sequestration without knowing the FY13 funding levels of specific programs, projects, and activities that Congress will ultimately approve. So either a deal on sequestration will be made and we can carry on with building a FY14 budget while under a CR, or on January 3 we'll need to move quickly to adjust course.”

The budget talks are now in the hands of President Obama, who over the weekend spoke with Speaker of the House John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV), White House spokesman Jay Carney said on Monday.

If Democrats and Republicans make a deal on FY13 and future spending and revenue deadlocks, and if DOD can finish its work preparing the FY14 budget request, that request still must be vetted through OMB before President Obama submits it to Congress, usually by early February. If they don't make a deal, OMB is expected sometime quickly to finally give DOD a green light to start planning to implement more than $50 billion in automatic cuts next year, as well as retool the 2014 request to meet a lower budget ceiling. The FY14 budget still has to be submitted.

The Pentagon comptroller, Under Secretary of Defense Robert F. Hale, said in an interview with Politico released on Monday that there will be no sudden personnel or programmatic cuts on January 3, the morning after sequester penalties kick in. A defense official confirmed to E-Ring that it will take Hale’s team a few weeks to determine and enact the actual furloughs and spending cuts required. That job falls to Hale and Michael McCord, principal deputy under secretary of defense, as well as John Roth, the deputy under secretary of defense for programs and budget, and Blaine Aaron, the deputy under secretary of defense for budget and appropriations.  

Outside the building, stakeholders are not sitting silently, though. Defense industry representatives applauded even the hint of compromise to break the stalemate, appearing to endorse both revenue increases and spending cuts as necessary to make a deal.

On Monday, Marion C. Blakey, president and CEO of the Aerospace Industries Association, said, “We urge negotiators to focus on a balanced approach that considers all reasonable solutions and ultimately produces a plan that also includes adequate revenue and entitlement reform. Our country’s long-term national security and financial health depend on it.”

Olivier Douliery/Pool via Bloomberg