What Defense should expect in FY 2012 budget

Friday - 2/11/2011, 9:40am EST

Todd Harrison, Senior Fellow for Budget Studies, Center of Strategic and Budgetary Assessments

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By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

When it comes to budget funding, Defense is staring down the barrel of a very large problem: without help from Congress, soon, it won't be able to make payroll.

President Obama will release the administration's FY 2012 request Monday, but the budget battle for the current fiscal year is still being waged in the halls of Congress.

Todd Harrison is a Senior Fellow for Budget Studies at the Center of Strategic and Budgetary Assessments which has just released it's analysis titled "The FY 2012 Defense Budget: What to Expect in an Age of Austerity".

Harrison told Federal News Radio that since Defense Secretary Robert Gates has already proposed multibillion-dollar cuts in military spending, there shouldn't be too many surprises.

"We know where they're going to be taking some money from programs, but interestingly we also know where they're going to be investing in new programs," said Harrison.

Two of the "big ones," as he called them, are the new long range penetrating bomber, already budgeted for $1.7 billion dollars over the five year plan in last year's budget. Harrison said to expect "probably adding another one or two billion dollars to that plan to speed it up and make it into a real program."

Harrison said to watch for big investments also coming to an announced plans for accelerating the Navy's Next Generation Jammer and development of carrier based UAVs. "What we don't have yet," said Harrison, "are the exact details on the dollars."

More immediate concerns

While the devil of the FY 2012 budget is in the details, for FY 2011, the problem is more immediate, said Harrison.

"We're 134 days into the fiscal year right now, and this is the longest DOD has been without an appropriations bill being passed since 1976." That year, explained Harrison, the fiscal year started July 1st. Congress was routinely so late that they changed the start date to October 1st. "That worked for a while," he said.

While Congress has a number of options, including passing another continuing resolution, the problem for DOD is having very little flexibility. Harrison said it's not just not getting larger amounts, they also have trouble moving money between accounts.

"Compounding this problem is that while Congress didn't pass a new appropriations bill for FY '11, they did pass a military pay raise of 1.4% for people in the uniformed military. So DOD is actually having to pay higher payroll expenses but they don't have any extra money to do it, so they're having to take from other accounts to put into payroll. At some point, they will exceed the transfer authority that they have for moving money between accounts," explained Harrison.

At that point, he said, Defense will at least need to go back to Congress to get additional authority. If it gets to that point, said Harrison, expect a crowd.

"You're going to see more and more folks from the Pentagon, from the services, from the comptroller offices - they're going to be going up to the Hill asking for some relief to be transferring money around. It's going to reach a critical point in the not too distant future where they're going to need some relief from Congress to do that."

(You can Follow the latest budget news, learn more about proposals for even deeper cuts to agencies, and take a poll about the FY 2012 budget, all here on FederalNewsRadio.com.)

This story is part of Federal News Radio's daily DoD Report. For more defense news, click here.