Todd Harrison, senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, said sequestration’s immediate cuts will vary depending on how the Defense Department generally spends the money.
Harrison’s remarks are contained in an Aug. 24 briefing summarized by the Air Force Association. Sequestration, imposed by the Budget Control Act of 2011, will trim almost $500 billion from defense spending over the next ten years unless Congress acts before Jan. 2. The cuts would be in addition to the Obama administration’s programmed reductions of $487 billion over the same timeframe.
Operations and maintenance funding – the life blood for depot overhauls at Robins and other locations – would be especially hard hit and impacted almost immediately.
“About two-thirds of funding from DoD’s operations and maintenance accounts are spent in the same year they are appropriated,” Harrison is quoted by AFA. “That means contractors that perform maintenance or other support functions are likely to feel the pain of sequestration much sooner than those that develop weapon systems.”
He said weapon system developers will be initially sheltered at least to some extent because only 22 percent of procurement funds and 49 percent of research, development, test and evaluation funds are spent the same year they are appropriated.
“This provides some insulation for defense companies because it allows more time for adjustment,” Harrison noted.
The sequestration process will have some exclusions and exceptions. President Obama has excluded military personnel accounts, although that exclusion will mean more cuts to O&M and equipment accounts to meet the overall reduction goal.
Also, base closures would not be likely, Harrison stressed. “The Budget Control Act’s sequestration clause prohibits the closure of any military installation that employs at least 300 people until a detailed cost and environmental analysis is completed and congressional defense overseers approve the closure,” he is quoted by AFA.
That exception means that meeting reduction goals will be even more challenging since the Defense Department likely will be prevented from ceasing operations at inefficient locations.
The military will see no “pink slips,” the senior fellow added, and no reduction in pay although accounts such as military healthcare could suffer since they are primarily funded with O&M dollars. That impact would be felt by both active duty and retired military and their families.
“Beyond that, no programs would be immediately terminated,” Harrison stressed, according to the AFA, “and sequestration would not affect contracts for which the Pentagon has already obligated the funding.”