The Budget Control Act (BCA) of 2011 and its default enforcement mechanism, sequestration, installed an arbitrary budgetary framework that is not sufficient to meet national security or domestic needs, or to reduce the national debt. Sequestration, which was triggered by the Joint Select Committee on Deficit Reduction’s failure to reach a compromise on debt reduction, triggered across-the-board cuts to most discretionary budget accounts beginning in fiscal year 2013. Although compromises in 2013 and 2015 relieved some budgetary pressure, they did little more than kick the can down the road.
A long-term “grand bargain” budget deal is necessary to responsibly reduce the national debt while providing for current domestic and national security priorities, but major challenges lie ahead. The debt ceiling, extended by the Bipartisan Budget Act of 2015, returns in March 2017, just two months into a new administration, with the return of sequestration looming just seven months later in October.
In addition to the spending cuts, the BCA has ushered in arbitrary, budget-driven thinking on national security spending. The 2014 Quadrennial Defense Review warned that “resumption of sequestration-level cuts would lead to more immediate and severe risks to the [defense] strategy. Ultimately, with sequestration-level cuts, by 2021 the Joint Force would be too small and too outdated to fully implement our defense strategy.” These assertions were made prior to the rise of the Islamic State group in both Iraq and Syria, Russian aggression in Eastern Europe, Chinese militarization of the South China Sea, costly cybersecurity breaches of the U.S. government and continued reckless behavior from North Korea and Iran. Unfortunately, because sequestration cut defense and nondefense budget authority equally, the current administration and Congress have determined that any increase in defense spending must be accompanied by an increase in nondefense spending, regardless of our national security needs.
The emphasis on defense spending in the aggregate ignores the structural problems sequestration causes. This mindset has led to disproportionate cuts in procurement and in research, development, test and evaluation accounts, although the Department of Defense’s main cost drivers are military personnel, and operations and maintenance accounts. For example, according to a Bipartisan Policy Center report, DoD paid $110 billion more in 2013 than in 2000 for a 10 percent smaller force. These structural problems must be resolved ahead of an acquisition “bow wave” in the 2020s, coinciding with the time to buy many of the innovations under development as part of the Pentagon's nascent “third offset” strategy. Recent training mishaps, testimony from the Service Chiefs and a Government Accountability Office report have also raised concerns about our military’s readiness. A grand budget bargain that brings stable, predictable defense budgets and reforms that make the department more efficient are necessary to alleviate long-term fiscal concerns and provide sufficient resources for our national defense.