The wishful thinking and outright fiction in the new defense budget

Last night I saw upon the stair
A little man who wasn't there
He wasn't there again today
Oh, how I wish he'd go away

-- Hughes Means, 1899

The wishful thinking continues. The defense budget appeared today. It is another budgetary fiction, alongside past fictitious renderings from the five-sided building. And it will not survive the political process it is about to enter, as we head toward new fiscal cliffs and ideological disagreements over the federal budget.

The federal budget need not have waited the extra 65 days; it is something the administration could have sent up earlier because it ignored the event causing heartburn across the capital: the sequester, or the "little man who wasn't there."

For DOD, this means the request of $526.6 billion is $51 billion over the funds it now has available for this fiscal year.

Of course, the Pentagon and the administration are hoping the sequester dissolves in an outbreak of bipartisan good feeling that leads to a budget agreement sometime this summer. That good feeling has yet to show signs of life, with two budget resolutions in Congress that are miles apart and little incentive for either party to take them to a conference doomed to contention.

So we will have sequestration, probably through the fiscal year, setting a new baseline for DOD. That is not, in itself, a bad thing, but Secretary Hagel's budget ignores it. Instead, his budget assumes that the Army and Marines will stay on the path to the 490,000 and 182,000 troops already projected and the large "back office" can stay in place -- the 560,000 active duty forces who do not deploy, but are the "overhead drag" on defense efficiency.

There are other fictions in the defense request. Pay for these troops will grow one percent, which is lower than likely inflation. Perhaps, just perhaps, the fees retirees pay for healthcare will rise to something like one-tenth of what a non-military family of four pays for health insurance. A new round of base closures and consolidations has been requested. All things will not happen.

Why the fiction? Perhaps it is to punt the ball to Congress, where unreality seems to reign supreme. Let the Republicans increase defense at the cost of domestic spending, and run on that record in the 2014 elections. Make sure nobody can say the Democrats in the White House are soft on defense when those elections come.

But the curtain will have to be pulled from the fiction sometime this year; funding the government will not wait until next year. Once again, the appropriators may have to step in and the find the way to a spending deal nobody else wants to contemplate.

Defense budgets have been, and remain, a hostage to this larger budgetary discord. Rest assured that the man who isn't on the stair will keep reappearing until realism sets in and the few remaining grown-ups in Washington reassure us all that they can set a fiscal path that is clear and sustainable.  Meanwhile, the fantasy in defense-land will continue. Real reform -- a smaller back office, pay and benefits policies that are affordable and sensible, hardware costs that are under control -- will have to wait.

SAUL LOEB/AFP/Getty Images

National Security

Hagel Channels Eisenhower

Can the new SecDef actually rein in the military-industrial complex?

It was a New Yorker cartoon, I think, that showed two generals walking in front of the Pentagon, with one saying to the other, "Well, we've run out of money; guess we have to start thinking." Secretary of Defense Chuck Hagel started that thinking process in his speech at National Defense University on Wednesday. He is the first to really do so since we started flooding the Pentagon with money when we invaded Afghanistan and then Iraq.

Oh, the speech is full of some miserable speechwriter progeny. The boilerplate per square minute was almost indigestible: "a principled realism that is true to our values" (a Dagwood sandwich of prose, everything in the strategic fridge layered on top of itself), and "we are a wise, thoughtful, and steady nation, worthy of our power, generous of spirit, and humble in our purpose" (how could we, dare we, be anything else?).

But in and around this mindless rhetoric, Hagel got the problem right: It's about the money. And the money is going south probably for a number of years. Strategy and planning have to follow the money, not the other way around.

He was wrong to say that the Pentagon will be dealing with "significantly less resources than the Department has had in the past," as Mark Thompson pointed out on TIME's Battleland blog. Defense budgets, even down 10 percent over the past two years, are still higher than they have ever been since the end of World War II, in constant dollars.

And instead of drawing the line at the "cuts" Secretary Panetta made (that $487 billion in reductions to projected budget growth over 10 years), Hagel was clear that the Pentagon now needs to plan for further reductions, perhaps as low as the full sequester. (Realistically, I would suggest even lower than that.)

But instead of saying these lower budgets will turn the United States into a second-rate power, or undermine national strategy, or decimate the nation's military capability, his message was clear: It is time to adapt, change, reform, and move on. If the Pentagon wants funding for the point of the spear, he said, it will need to zero in on the real budget issues: military hardware that has cost too much for decades; a system of pay and benefits that has spun out of control; and, especially, a "back office" that is over-stuffed and hasn't faced budgetary discipline in decades.

As the secretary said, everything we buy costs too much, takes too long, and falls short on performance. The Government Accountability Office has reported that recent reforms to the way the Pentagon buys equipment have lowered cost growth in hardware programs. Maybe, maybe not. (A large part of the cost change has come simply because programs have been finished or cancelled.) It is certain that costs will not stay down unless the secretary follows weapons programs closely. Maybe Hagel will; most secretaries do not.

He raised good questions about personnel costs, too, like healthcare fees and pay raises. Like how many civilians and military the department really needs. And how many officers, and what about all those folks who are doing commercial, not military work? If any secretary wants to take this on, he does so gingerly, and at the edges, the way Secretary Gates did, but a full assault is needed to make any real progress.

Above all, Hagel addressed what he once called "bloat" at the Pentagon -- too many headquarters, too big a Joint Staff, a plethora of offices. The back office needs to be the cutting edge of budget discipline; it is too often ignored in debates about whether weapons or uniforms will pay the price.

Like all good speeches, and all puddings, the proof will lie in the eating. So far, the signs aren't good. The terms of reference for the Strategic Choices and Management Review (known as "scammer" in the Pentagon -- an unfortunate acronym) Hagel ordered did not make it clear that program options were needed at much lower budget levels. And the secretary may have made a strategic error in saying that the entire building, including the service chiefs, "are going to come out of this together." The big, hard choices are the ones the chiefs do not like to make: cutting billets, offices, infrastructure. The operating budgets have historically been cut the least in a defense drawdown. They are the pet rocks, the bulwark of service turf. And to cut them down to size, the secretary is going to have to discipline the services, not bear hug them. It will not be easy. He will need to lay down the law and take the money.

In fact, the whole task is going to be unbelievably difficult. Because if Hagel means business, he is taking on the Iron Triangle, all three parts at once. He is going after the services' cherished possessions. He is going after the programs and basing infrastructure Congress loves to protect. And he is telling industry and the communities that house bases and offices that some of them will not survive.

Few secretaries have done this and gotten away with it. Eisenhower, whom Hagel quoted twice, could do it because, well, he had five stars and the highest-ranking officers had only four. Nixon could do it because the war was ending and his defense secretary, Melvin Laird, was one of the best pickpockets the Pentagon has ever seen. And Dick Cheney and Colin Powell could do it because they were Cheney and Powell.

Every drawdown is tough. This one should, in theory, be less tough because the budget is historically high. But the problems are historically tough, too. So we should wait a while, spoon in hand, for the pudding tasting, to see if the rhetoric this week is followed by the discipline it will take to bring the Iron Triangle to heel.

Alex Wong/Getty Images