Keeping the military as combat ready as possible, during this period of budget chaos, will require an accelerated force drawdown starting in 2014, the Defense Department's chief financial officer explained Tuesday.
That will mean more tumult for personnel because a steeper drawdown likely will require some involuntary separations of military careerists and reductions-in-force orders, RIFs, for civilian employees, warned Robert F. Hale, under secretary of defense and comptroller, during an interview in his Pentagon office.
"We will try to minimize them," Hale said of any force-out actions the services will take. "So much depends on factors we don't entirely control."
For example, an improving economy that enhances private sector job opportunities could entice more military and defense civilian employees to leave voluntarily, reducing the need for forced separations or RIFs.
"But there could definitely be some [force-outs] on the military side and reductions in force on the civilian side. Not big across-the-board ones," Hale added. "They'll be focused."
Still, he added, "it's always hard on the individuals who have served well, in almost all cases, and suddenly find themselves being told [to] look for something else. That's tough."
Hale couldn't quantify the size of an accelerated drawdown in 2014. It will depend in part on whether Congress, by January, provides some relief from a second year of automatic funding cuts required under the sequestration formula of the 2011 Budget Control Act.
Military leaders two months ago delivered to Defense Secretary Chuck Hagel and the Congress a Strategic Choices Management Review, showing options for the services if forced to accept a decade of sequestration. Deeper force cuts would be critical to restoring readiness.
From a wartime peak of 570,000 active duty soldiers, Army strength is sliding toward 490,000 under the five-year drawdown plan announced in January 2012. The new review shows the Army could still carry out its priority missions with 420,000 to 450,000 soldiers, and that full sequestration could require deeper cuts, to as low as 380,000.
Marine Corps active strength is falling from a peak of 202,000, toward 182,000 by 2016. But to preserve unit readiness through sequestration, Gen. James Amos, Marine Corps commandant, announced last month a new active duty strength target of 174,000.
Hale said the Navy and Air Force likely will see more force cuts too.
It is fair to describe defense budgets as chaotic, he agreed. Congressional budget fights the last four years have forced DoD to conduct five shutdown-planning drills and operate under two six-month "continuing resolutions," or CRs, when spending was frozen at previous-year levels.
Last March sequestration kicked in, forcing $37 billion in automatic program cuts through September. In the past six months some defense civilian employees were furloughed twice.
The new fiscal year began with a government shutdown followed by a four-month CR. This one lowered defense spending by $32 billion more and is due to expire Jan. 15. If a House-Senate budget conference can't reach a debt-reduction deal to ease sequestration, defense spending could fall in 2014 a total of $52 billion.
"So chaos is a fair word to describe what's happened to us," Hale said.
When Congress allowed defense funds to lapse Oct. 1, "it was very frustrating for the entire department," caused "a colossal waste of time," and deepened the readiness crisis caused by sequestration, Hale said.
"We damaged training, especially in the Reserves. We had to cancel 100,000 drills a week. We wasted government money, which is frustrating. I mean at least $600 million [wasted] for those four days when we had to furlough our civilians."
Hurt most were civilian employees, he said. The shutdown came atop pay freezes, sequestration and an earlier furlough without pay.
"They are frustrated and angry and morale is low. And I don't blame them," said Hale.
Military personnel worked during the shutdown and got paid on time due to a special appropriation called the Pay Our Military Act. But sequestration continued to decimate their training.
"These young people come in to do a mission, and train to do that mission, and suddenly 12 combat-coded squadrons in the Air Force had to stop flying. The Army had to stop sending combat teams through combat training centers except for those actually going to Afghanistan," Hale said.
He agrees with Army Gen. Martin Dempsey, chairman of the Joint Chiefs, that force retention problems will follow in the wake of training cuts. And those cuts likely will get worse in 2014.
Military readiness has fallen rapidly because of the abruptness of budget cuts, Hale said. Shrinking the force doesn't save much money immediately, so operations and maintenance accounts have been hit hard.
In time a smaller force should free up money to restore training cycles and begin to raise readiness again. In the interim, Hale said, "We will protect the units relatively close to deploying but seriously degrade the readiness of the ones that aren't."
He compared the risk to buying high-deductible insurance.
"You hope you don't ever have to use the policy. If you do, you'll regret it," Hale said. "If we ever had a major contingency, we'd see some units just not ready to go, or we'd have to send them in a degraded readiness situation and that's never the way the United States likes to work."
Despite the budget turmoil and many long days for Hale and staff since his nomination in January 2009, he's the Defense Department longest-serving comptroller since the 1950s.
"I have to say that technically it's an interesting time for financial management," Hale said.
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