Report forecasts need for more Defense Department budget cuts

(Analyst's note: Wonder how all this will wash with the obvious requirement to replace hardware after years of war?)

By Megan Scully

Facing the prospect of several lean years after a decade of rapidly expanding budgets, the Defense Department will need to make difficult spending decisions, potentially including more cuts to weapons systems in FY11 and beyond, according to a report.

Today's report from the nonpartisan Center for Strategic and Budgetary Assessments concluded that an expected flat-line in defense spending - combined with anticipated growth in personnel costs - will restrict growth in research and development and in procurement accounts.

The Army, for instance, is enlarging its troop strength by 22,000 soldiers over the next three years, with an annual price tag around $1 billion. Meanwhile, healthcare costs across all the services, which total $47 billion next fiscal year, are expected to nearly double in the next 10 years, according to the report.

"Options for dealing with the tightening budget situation are limited," the report says. "In the coming years, pressure will likely continue to grow for DOD to scale back its plans, including both major modernization efforts and force structure plans."

The Defense Department's budget request for FY10 totals $668 billion, which includes $130 billion for wars in Iraq and Afghanistan. While the $538 billion base budget marks a 3.4 percent real increase in spending over the amount appropriated this year for the department, future budgets are expected to grow only slightly more than the rate of inflation.

Projections of more cuts to military hardware come as Congress continues to grapple with changes Defense Secretary Gates proposed to dozens of procurement programs for FY10, including the termination of some high-profile programs such as the manned ground vehicle portion of the Army's Future Combat Systems.

Pentagon officials are reviewing their budgetary options during the congressionally mandated Quadrennial Defense Review of military capabilities and requirements. Already, officials estimate that they need $50 billion to $60 billion worth of technological "enhancements" over the next five years - meaning cuts will have to come in other areas.

Todd Harrison, author of the CSBA report, says he expects programs that have limited missions or purposes - such as the Marine Corps' Expeditionary Fighting Vehicle -- to become targets for cuts. More versatile programs needed for conventional and unconventional warfare are more likely to be safe from the budgetary ax, he said.

"Whatever path is selected, effectively addressing the growing cost of DOD's plans and the growing size of the federal deficit will require making some hard decisions," the report says. "And the sooner those decisions are made the less painful they will be to carry out."