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Budget Deal Leaves Intact Vast Majority of Sequester Cuts



--- Quote ---The recent budget deal proposed in Congress provides modest relief for a Department of Defense (DOD) that still faces hundreds of billions in unfunded costs and a shrinking, less prepared military.

The agreement reached by Rep. Paul Ryan (R., Wisc.) and Sen. Patty Murray (D., Wash.), which will likely pass the Senate this week and head to the president’s desk, provides $31.5 billion in relief to DOD over two years from budgetary reductions known as sequestration.

However, the proposed lifeline from Congress represents less than 7 percent of the total impact of sequestration on the defense budget in the next decade—about $500 billion in cuts. That is on top of another $500 billion in reductions imposed by the 2011 Budget Control Act’s spending caps.

Mackenzie Eaglen, resident fellow at the American Enterprise Institute (AEI) and a defense budget expert, noted in a recent op-ed that the Pentagon consistently underestimates its spending needs. The Congressional Budget Office (CBO) projected last month that even if sequestration were fully repealed, the Pentagon’s costs in its base budget would still be $283 billion higher between 2014 and 2021 than the money allocated to it.

“While this agreement is a positive step towards unwinding the sequester, the Defense Department’s budget woes are simply lessened, not eliminated,” Eaglen wrote.

DOD undershoots its funding needs partly because of escalating benefit costs. The CBO, whose cost projections are typically higher than the Pentagon because it does not expect costs to be curbed, estimates that compensation and health care costs will rise from $190 billion, or about 36 percent of the total DOD budget, next year to $235 billion, or 38 percent, by 2028.

Any proposed changes to those programs elicit staunch opposition from lawmakers and veterans groups. A congressional committee aide said in an interview that lawmakers feel like they have already made adequate changes to TRICARE, DOD’s health care program, to make it sustainable.

The latest version of the National Defense Authorization Act (NDAA) does not raise fees for TRICARE beneficiaries.

“There is a reason to reform a particular benefit program that might have merit one time if you see a problem to fix,” the aide said. “But don’t reform it and try to squeeze more money out of it the next year. That tends to be corrosive on the all-volunteer force.”

Retired Army Col. Bob Norton, a lobbyist for the Military Officers Association of America (MOAA), said in an interview that DOD has also underspent its TRICARE funds by billions in the past and asked Congress to move the money elsewhere.

“To say there’s not enough for other stuff when [DOD has] underexecuted the TRICARE program and converted money into other things—they’re playing with the facts,” he said.

The MOAA and other veterans groups also oppose a provision in the Ryan-Murray deal that would lower the annual cost-of-living adjustment (COLA) for military retirees younger than 62 by one percent, which they say would deprive veterans of tens of thousands in retirement income.
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