Analysis: Striking a New Deal for Defense

February 13, 2013

The Pentagon prides itself on solid contingency planning, with one glaring exception: the prospect of reduced funding. Only in the past couple of months has the Defense Department begun to prepare for the significant budget cuts likely this year.

Yes, there will be hiring freezes, furloughs, suspension of nonessential travel, reduced depot maintenance activity, smaller base operating budgets and fewer training exercises. But such measures can be sustained for only a short while. They are emergency measures designed to weather a passing storm. But it should be clear by now that the nation's fiscal and economic tempests will not soon dissipate.

Whether or not the sequester goes into effect -- or lasts only a couple of months -- the Pentagon's budget is surely coming down another notch or two. It would be wise to prepare for a 2014 budget that is $10 billion to $30 billion lower than those of the past few years. After that, defense spending will probably continue to trend downward for a while. That's simply the reality of the current economic and strategic circumstance. It's time for defense leaders to plan accordingly.

Some hope that tax hikes will rescue the Defense Department from further fiscal restraint. But even if the government's share of national income rises, there is a long list of urgent priorities competing for funds -- not to mention a mountain of debt to redress. And the broader context for these challenges is a change in the strategic environment that gives greater prominence to the shape of the global economy and the United States’ position in it. This portends a new deal for defense, like it or not.

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