worst-case scenarios, to reflect the
new top line.
“The vector isn’t down,” said
Gordon Adams, a professor of U.S.
foreign policy at American Uni-
versity who oversaw national secu-
rity spending at the White House
Office of Management and Budget
during the Clinton administration.
“I won’t say you’re sitting pretty,
but it’s not the worst of all possible
After two years of operating
under sequester and the threat of
more across-the-board cuts, the
agreement gave the department
some time, flexibility and certainty
to manage its books, Army GEN
Martin E. Dempsey, chairman of
the Joint Chiefs of Staff, told re-
porters in December.
Still, top lines for 2014 and 2015
remain a total of about $70 billion
below figures the department once
hoped for. With austerity still a priority on Capitol Hill and within the
Pentagon, Hagel has an opening to
push the management reforms he’s
been pressing for since he took over
as defense chief.
“We will continue to press ahead
with our efforts to cut DoD’s overhead and infrastructure costs, improving our acquisitions enterprise
and continue to make tough choices
on force structure,” Hagel told
reporters Dec. 19 in what is perhaps a
preview of his 2015 budget request.
Those changes, if enacted, could
have widespread effects across the
force, potentially changing the size,
structure and function of the federal
government’s largest back office.
Perhaps Hagel’s most ambitious
goal is to make significant, cost-saving changes to the military’s compensation and benefits system, long
a third rail on Capitol Hill. With the
fervent backing of influential military and veterans groups, lawmakers
have rejected most proposals to
increase TRICARE co-pays or otherwise rein in the Pentagon’s burgeoning personnel costs.
The Defense Department, Hagel
warned, simply cannot afford to
pay its growing personnel bills,
which threaten to squeeze out
funding for other priorities.
“We all know that we need to
slow the cost growth in military
compensation,” Hagel said. “Other-
wise, we’ll have to make dispropor-
tionate cuts to military readiness and
While his predecessors have
tried and failed to enact much
change in this area, Hagel could
make some headway thanks to a
confluence of events.
An independent commission
currently is reviewing the military’s compensation and benefits
system. On the Hill, the House and
Senate Armed Services Committees plan to review the issue and
hold hearings this year. And
Senate Armed Services Chairman
Carl Levin, D-Mich., has expressed a desire to review the system in
its entirety, rather than taking a
piecemeal approach that targets
Perhaps most compelling about
this budget cycle, however, is that
the very existence of the budget
agreement will force the Pentagon
to deal head-on with the budget
realities, said Todd Harrison, an
analyst at the Center for Strategic
and Budgetary Assessments.
For the last two years, the Defense Department has submitted
budget requests that were tens of
billions of dollars above the levels
set in law, in the hopes that Congress and the White House would
come to an agreement to undo the
sequester trigger and spare it the
pain of sharply diminished defense
As such, the Pentagon never
presented a comprehensive and
detailed plan to get spending
under the caps. With the bipartisan budget framework Congress
agreed to in December now in
place, albeit just for 2014 and
2015, department officials are
expected to submit a budget that
meets the prescribed top line, a
move that will for the first time
belie their priorities.
“They’re going to have to make
some hard choices and show their
hand to Congress — this is a low priority, and this is what we can do
without,” Harrison said. “They
haven’t done that yet.”
At a ‘Tipping Point’
For acting Maritime Administrator
Paul “Chip” Jaenichen, one thing
was very clear during a recent symposium hosted by the Maritime
Administration (MARAD) in
Washington — participants spoke
with a sense of urgency.
“There is no question we are at a
tipping point and, for some, the
conditions are dire,” he said.
The Jan. 14-16 symposium was
focused on the future of the maritime industry and the importance
of beginning a national discourse
for the creation of a national maritime strategy.
Some of the main themes
throughout the symposium included creating jobs, making the industry more attractive to a younger
workforce and the importance of
getting liquefied natural gas (LNG)
vessels in the U.S.-flag fleet.
The symposium was more of a
series of working discussions, where
“we identified issues, gathered ideas
and developed momentum,” Jaeni-
chen said during his closing remarks
Jan. 16. Some of the suggestions
included short-, medium- and long-
term actions, with Jaenichen asking,
“How can we deliver?”
Lowering shipping costs, creating
a new national vessel registry and
trying to brand the U.S. fleet inter-
nationally were widely discussed.
As other countries such as Japan
and South Korea grow their flag
fleets and become more LNG centric, the U.S. fleet is getting small-
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