Room to Maneuver

As I have been writing for a year, the Pentagon has the greatest flexibility of any agency in the executive branch to deal with sequestration. Secretary of Defense Chuck Hagel proved it on Tuesday, August 7, announcing that civil service furloughs at the Pentagon, which started at 22 days, then fell to 11, were falling even further, to six days in this fiscal year.

This comes on top of putting Air Force air wings back in the air after grounding them because the sequester took the operating funds, and deploying the carrier Harry S. Truman into the Persian Gulf after all, having said the Navy would have to keep it in port -- again, because there was simply no money.

This kind of recovery from a $37 billion sequester suggests there has been some hyperbole over the past eight months. I wonder if former Secretary Panetta is watching.

I have never had any doubt that DOD could handle sequestration, not even for a second. The Pentagon is blessed when it comes to managing a decline in funding. It has a huge budget, over $600 billion a year. The accounts that are most affected by the sequester -- operations and maintenance -- have the greatest flexibility to move money around (they call it "fungibility").

They have the capacity to reprogram funds internally, below certain thresholds and within certain accounts, without notifying Congress, and authority on top of that to reprogram (having notified Congress). They got a full appropriations bill this year, with more funds ($11 billion more than they had for operations under a continuing resolution) and more flexibility in March -- other agencies were not so lucky. And they had the war in Afghanistan, from which we are withdrawing, leaving previously appropriated operations money on the table.

There is no question that everyone would prefer a drawdown at DOD that had even more flexibility than the Pentagon's lucky bag of magic can provide. Fitting force structure planning, weapons investment plans, and readiness together, driven by strategic requirements, is preferable to "automatic" cuts. (Clearly, though, these automatic cuts are not nearly so blunt or deadly as has been made out.) But the additional flexibility that the Pentagon would like won't come without a broader budget deal between the White House and the Congress -- don't hold your breath. In his briefing on the Strategic Choices and Management Review last week, Hagel complained that the cuts went so deep that "flexibility" wasn't even the issue.

Way back when, Secretary Panetta and the uniformed military were crying the loudest about the pain the sequester would induce, way before the air traffic controllers or the Head Start instructors. But seriously, you could not have it better than the Pentagon has. Full credit to Hagel for acting on the flexibility he has. He'll get even more credit if the hyperbole ends and the Pentagon steps up to the reality of a drawdown and plans accordingly. They've got room to maneuver.

U.S. Navy photo by Mass Communication Specialist 3rd Class Chase C. Lacombe/Released

National Security

The Shoots of Hope Spring Eternal

But when it comes to the federal budget, are they weeds?

Courtesy of the sequester, the defense budget is due to decline around $52 billion next year, cutting about $500 billion from the current baseline over the next 10 years, unless Congress and the White House arrive at a different understanding about spending and revenue policies. Domestic discretionary spending is in for a similar hit without a budget bargain.

With Congress safely out of town until September 8, it is worth taking a look at the prospects for a deal. They haven't been very good for the last three years, but, every once in a while, somebody pushes a phantom green shoot through the solid pavement of discord in Washington, and, briefly, people start to wonder.

The latest version of hope comes from Sen. Bob Corker (R-TN), who, with a new "gang" from the Senate, said he had been spending a lot of time with the White House Chief of Staff Denis McDonough, Deputy White House Chief of Staff for Policy Rob Nabors, and Office of Management and Budget Director Sylvia Matthews Burwell, according to John Bennett at Defense News.

What the two gangs are talking about is not clear -- mostly what they agree and disagree on. Nothing new there -- the "agrees" and "disagrees" have been pretty well known for several years. Maybe something about mandatory spending cuts substituting for discretionary spending cuts, Corker suggests. Of course, it's not clear what that means, since mandatory spending cuts have been hanging around as an option for a while, even as part of the president's budget request sent up to Congress in April.

But Corker is pushing optimism: "People are having serious discussions now about how to go forward," reported Bennett. Wait a second. Does that mean no previous discussions were serious? Hardly the case; there have been discussions forever and both sides have been dreadfully "serious." And Lindsey Graham (R-SC), who has been participating in the latest round, is "increasingly hopeful."

This is a little like Charlie Brown and Lucy with the football gig. None of the pieces on the table is new. Senior Democrats like Chuck Schumer and senior Republicans like Corker, Graham, and John McCain (R-AZ) have been having these "conversations" so many times that even Punxsutawney Phil is getting bored with the repetition.

And it's the same old, same old, set of issues. Will Republicans put revenues (taxes) on the table? Will the Democrats put mandatories on the table? Will domestic discretionary spending pay the price for a higher level of defense spending than sequester would provide? Or will there have to be balanced cuts between defense and domestic discretionary spending?

Moreover, will Senate Republicans even be able to bring very many of their tribe to the table when it comes to a vote? And does any of that matter when John Boehner (R-OH) cannot control his right wing in the House, which is adamantly opposed to putting taxes on the table and appears quite comfortable allowing defense and domestic discretionary spending cuts to kick in through the sequester.

It turns out that the sequester is simply politically convenient. It is like a base closure round for the entire federal budget -- nobody has to take responsibility for the cuts because an automatic process does the job. And then everyone can complain about it and blame someone else. Pretty sweet if you want the cuts to happen, cannot specify what they should be, and don't want your fingerprints on them.

Not everybody thinks a deal is actually in the offing. Stan Collender, a DC-based budget guru, thinks Washington is headed in the opposite direction: toward "budget bedlam" this fall. The political hurdles to an agreement are daunting, even to the most avid participant in extreme obstacle course games. There are no appropriations bills, as yet, for the coming fiscal year; we are back in the land of the continuing resolution. And the debt ceiling comes up in November. And there's a new sequester opportunity sometime in January 2014. And then there's the president's Fiscal Year 2015 budget submission -- before the FY 2014 budget has even come alive.

Pay no attention to the looming midterm elections next year, with Tea Party primary candidates already lining up to take on any Republican who dares to play "let's make a deal." It all sounds eerily familiar.

Count me with Collender. That shoot sticking out of the pavement is just a weed waiting for a House Tea Party weed whacker to come along and cut it down to size. And weeds, being weeds, will just grow back again. And decent gardeners know what I mean.

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