Hagel: Budget Request Balances Many Needs
By Claudette Roulo
American Forces Press Service
WASHINGTON, April 10, 2013 President Barack Obama’s fiscal year 2014 budget request for the Defense Department balances competing operational and strategic needs while ensuring the maximization of taxpayer dollars and addressing internal imbalances, Defense Secretary Chuck Hagel said today.
In a joint news conference at the Pentagon with the chairman of the Joint Chiefs of Staff, the secretary said the budget request takes several important steps on the way to fiscal sustainability.
“First, the budget continues to maximize our use of resources,” Hagel said. By changing the way the department operates and reducing support costs, the proposal saves an additional $34 billion over the next five years, he said.
“This savings is on top of the approximately $211 billion in ongoing overhead reductions and business efficiencies identified in the last two budget requests, which are still being implemented,” the secretary added.
Other proposed initiatives include restructuring the civilian workforce, overhauling military medical treatment facilities and taking advantage of private-sector health care to control costs, Hagel said.
“These efforts are having some success, with projected health care spending in this budget declining by some 4 percent compared to our budget two years ago,” he noted.
The department is requesting that a new round of base realignments and closures be authorized for 2015, Hagel said. While the BRAC process is imperfect and includes upfront costs, he said, in the long term it results in significant savings.
Other savings come through terminating or reducing poorly performing programs, the secretary said.
“Over the last four years, the department has canceled or curtailed more than 30 major acquisition programs,” he said, “rebalancing our portfolio towards platforms better suited to 21st century security challenges, and making new investments in areas like cyber and advanced intelligence, surveillance and reconnaissance capabilities.”
About a third of the department’s budget request -- $170.2 billion -- goes to military compensation, Hagel said. The proposed budget would slow the growth of military pay, implementing a 1 percent increase in 2014, down from 1.7 percent in 2013.
The department also is requesting that the beneficiaries’ cost share of the TRICARE military health program increase, particularly for working-age military retirees, Hagel said. The proposed increase would bring premiums “closer to the levels envisioned when the program was first implemented,” he added.
Current fiscal realities demand that tough decisions be made, the secretary said.
“The longer we put this off, the harder it's going to be,” he added, “particularly given the uncertainty that still exists about future levels of defense spending.”
The comprehensive deficit reduction plan contained in the president’s budget proposal would permit Congress to eliminate sequestration, Hagel said.
“That plan averts what would otherwise be another significant reduction in the defense budget, some $52 billion in fiscal year 2014 alone and $500 billion over a decade,” he noted. “Instead, it calls for $150 billion in additional defense savings over 10 years.”
These cuts are back-loaded, with most occurring after fiscal 2018, the secretary said, allowing the department time to manage them without “disproportionate harm to modernization and readiness.”
Budget constraints aren’t going away, Hagel said, and the current fiscal environment calls for clear-headed analysis anchored in the president’s defense strategic guidance. To that end, the secretary said, last month he directed DOD civilian and military leaders to review the department’s strategic assumptions.
The strategic choices and management review is intended to ensure that, in this time of austerity, the department is prepared to defend the nation and its strategic interests, he said.
“No matter the outcome of this budget debate, going forward, every decision must be carefully weighed against our national interests and it must be worthy of the service, sacrifice and loyalty of our men and women in uniform and their families,” Hagel said.
The results of that review are expected at the end of the month, he noted.