Turning “Nos” into “Maybes”: The 2015 National Defense Authorization Act
December 18, 2014
The Department of Defense (DOD) came to Congress each of the last three years with a series of proposals to execute cuts that would help DOD rationalize its program and contain growing costs. The response out of Congress has frequently been one of denial, with many of these reform proposals seemingly rejected out of hand. The narrative out of the DOD has been that Congress is undermining the department’s ability to manage to the budget cuts that Congress has forced on them. Deputy Secretary Bob Work has stumped on this narrative in 2014, stating at the Global Security Forum here at CSIS in November that, “we do know we're facing up to $70 billion in nos, $70 billion in nos across the Future Years Defense Program, stemming from potential congressional rejections of our proposed way forward.” These “Nos” come from changes to force structure, including fleet retirements, mothballing of platforms and restructuring, and compensation changes, including changes to housing allowance calculations, pay raises, and healthcare co-pays, among others.
While many of the proposals from DOD in the FY 2015 were not supported in this year’s authorization bill, they were not as roundly rejected as may have been initially expected. This should be taken as a positive sign for DOD and the administration. Moving congressional positions and enacting reform is a long process. Any significant change has to go through what could be termed the four stages of congressional acceptance: Denial, Studying, Half-measures, and Acceptance. For the first time, some of these DOD initiatives are moving past the denial phase.
Significant TRICARE co-pay changes and consolidation did not get through in this year’s NDAA, but pharmacy co-pay increases did get into the bill, and the Military Compensation and Retirement Modernization Commission established in the 2013 NDAA will release its study in February, providing plenty of time for their recommendations to be considered by Congress for the 2016 bill. Pay raises were limited to below inflation and housing allowance cost growth was slowed (if only for one year). The retirement of the A-10 fleet was rejected, but Congress did allow a third of the planned retiring planes to move into “backup inventory status.” Similarly, the bill rejects the cruiser phased modernization program for 11 cruisers and 3 dock landing ships, but does allow 2 cruisers to go into modernization. The Army’s plan to restructure the aviation assets between the active component and the National Guard was denied, but Congress initiated a commission to study the issue and allows the Army to plan for changes starting in FY 2016.
These half-measures and small conciliations are understandably frustrating for DOD. The most severe challenges for DOD under steep budget cuts are in the near term. The options for what can be cut right away are limited, and any changes take time to implement, so each year of rejection has ripple effects through the defense program. And there are still big-ticket items, like Base Realignment and Closure (BRAC), which remain in the denial phase. Even if sequester does not return, many of these initiatives will be important to ensure that DOD is getting the greatest amount of capability for its dollar. But, this will only happen one step at a time, so DOD should be heartened that Congress has begun to walk along the path of change.
Ryan Crotty is a fellow with the International Security Program and deputy director for defense budget analysis at the Center for Strategic and International Studies in Washington D.C.
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