DoD's 2015 budget envisions smaller military with less generous benefits

Tuesday - 2/25/2014, 4:35am EST

Jared Serbu reports.

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The annual budget proposal the Defense Department will formally unveil next week will call for an overall reduction in the size of the military, along with some cutbacks to the benefits service members currently receive.

Both of these are decisions the Pentagon says are necessary as it attempts to preserve the military's readiness.

In a preview of the line-by-line budget rollout the White House and all agencies will conduct next week, Defense officials said Monday they plan to trim back some large cost drivers in each military service.

For the Navy and Air Force, that will mostly mean trims to their planned purchases of weapons platforms.

For the Army and Marine Corps, it will mean tens of thousands fewer uniformed personnel. The Army, in particular, would be smaller than at any point since the U.S. entered World War II.

Pentagon officials say the budget still relies on the defense strategic guidance President Obama issued two years ago, but with some modifications that will entail more risk because of the military's reduced size.

While the proposal will not include plans to cut military compensation outright, some benefits, such as health care and housing allowances, would be scaled back.

Defense Secretary Chuck Hagel said those changes represent a best-case scenario. They assume DoD will get tens of billions of dollars more money in 2015 than last year's bipartisan budget agreement currently allows. They also imagine that lawmakers will bypass sequestration in 2016 and beyond.

If they don't, Hagel warned, the picture will be far bleaker.

In the short term, the military would face readiness and acquisition shortfalls that significantly compound the problems the Pentagon faced beginning in early 2013, when many units were forced to cancel training activities, and routine facility upkeep fell off the priority list.

"In the longer term, after trimming the military enough to restore readiness and modernization, the resulting force would be too small to fully execute the President's defense strategy," Hagel said. "This plan balances a need to protect our national security with the need to be realistic about future budget levels. DoD has also completed a detailed plan should sequestration-level cuts return in fiscal year 2016 and beyond, as is the current law."

Five-year increase

Overall, the Pentagon's budget proposal would ask Congress for $115 billion more over five years than what is currently allowed by the 2011 Budget Control Act — the law which created sequestration.

In 2015, it would boost DoD's spending authority via a one-year special fund the Obama administration will propose as part of the governmentwide spending request next week.

The Opportunity, Growth and Security Fund would add $58 billion to discretionary spending in 2015 via "spending and tax reforms" that the White House has not yet spelled out. DoD would receive $26 billion of that total.

"The money is specifically for bringing unit readiness and equipment closer to standard after the disruptions and large shortfalls of the last two years," Hagel said. "The reason we are requesting this increase over sequestration levels is because the President and I would never recommend a budget that compromises our national security. Continued sequestration cuts would compromise our national security both for the short and long term."

Defense officials said the department's analysis shows that if sequestration stays in place in 2016, the Army, for example, would have to shrink to 420,000 soldiers, a size that the Pentagon believes is too small to adequately perform that service's missions.

But even under DoD's proposal, the Army would alter its previous plans to downsize its current force of 532,000 to 490,000 troops, instead, cutting back to somewhere between 440,000 and 450,000. The requested cuts also include a 5 percent reduction in the size of the Army Reserve and National Guard.

"This reduction is smaller than the 13 percent reduction in active duty soldiers," Hagel said. "I'm mindful that many in the guard and reserve community and in Congress have argued that the reserve component should be protected from cuts, because they provide more troops at lower cost. If our priority was having the largest possible force in the event of a large-scale prolonged war, that would be reasonable. However, we must prioritize readiness, capability and agility. And while it is true that reserve units are less expensive when they are not mobilized, our analysis shows that a reserve unit is roughly the same cost as an active duty unit when mobilized and deployed."