Long-term obligations threaten DOD modernization, experts say

Major modernization and technology programs are facing unparalleled levels of funding scrutiny, budget and policy experts say. The Pentagon will indicate how it intends to balance various financial pressures with the release of its fiscal 2008 budget request on Feb 5.

The Defense Department must contend with several long-term financial obligations, according to experts speaking at a prebudget briefing the Center for Strategic and Budgetary Assessments (CSBA) sponsored.

A permanent increase in the size of the standing Army, the military’s ongoing transformation, resetting the force because of wear and tear, and projected governmentwide fiscal constraints will all have an impact in the next few years, the panelists said.

Two major long-term initiatives, the Joint Strike Fighter program and the Future Combat System (FCS), are ripe for cuts, said Robert Work, director of strategic studies at CSBA. “If you’re going to make any fundamental portfolio shifts, you’ve got to get into those programs to make them,” he said.

The shift to network centric warfare is adding tension to the tight budget environment, Work said. Information technologies, open architectures and commercial procurements all drive down the price of information infrastructure, he said, but the costs of maintaining the ever-expanding network are increasing.

Also, despite their statements to the contrary, the Army, the Navy and the Air Force will increasingly battle one another for funds. “What you’re going to see is a lot more inter-service rivalry,” Work said.

The top line of the defense budget will likely remain static in the next five years, which will force DOD to make large cuts somewhere, said Steven Kosiak, CSBA’s director of budget studies. “There’s basically two ways you can do that. One is to cut modernization programs and the other is to cut force structure.”

But the Army can’t cut force structure, Kosiak said. The Army has committed to modularity, also called Army enhanced readiness, an effort to reorient its force structure from large battalions to smaller, more agile brigade combat teams.

Rather than enacting major reductions, DOD is likely to shave large technology programs gradually over time to pay the bills for other needs, Kosiak said. FCS will probably be scaled back bit by bit, although making the cuts initially would be more efficient, he added.

Meanwhile, the Army is trying to redefine FCS as a global war on terror program rather than a long-term modernization program. FCS will not become operational until at least 2014.

The Navy and Air Force are trimming their workforce to fund modernization efforts. The Air Force plans to cut 40,000 personnel by 2009. Communications and IT units in the Air Force will lose 8,000 people, 21 percent of their total staff, according to Maj. Gen. William Lord, director for information, services and integration, in the Air Force Office of Warfighting Integration and Chief Information Officer.

Meanwhile, the Army and Marine Corps plan to add 65,000 and 27,000 permanent troops to their ranks, respectively. This will add a total of more than $100 billion through fiscal 2012 and a recurring cost of about $15 billion for each year after, analysts estimate.

Overall, DOD’s long-term spending projections cannot be taken at face value, Kosiak said. DOD regularly issues five-year plans that push large procurement commitments towards the out years, but, “those will almost certainly not materialize,” he said.

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