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Defense Budget Process for Fiscal 2015 Likely to Be More Stable

At least some of the uncertainty that plagued the fiscal 2014 defense budget process likely will be removed from the fiscal 2015 debate.

Last year, for fiscal 2014, the White House released a budget tens of billions of dollars above spending caps set in law, while both chambers offered similarly fictional spending levels for defense appropriations and authorization.

For fiscal 2015, however, Congress has provided a $10 billion boost to the cap for defense spending, and the Pentagon has committed to proposing a budget that stays within that.

Overall defense spending for fiscal 2015 has been set at $521.4 billion, about $10 billion more than the 2011 debt limit law (PL 112-25) would have allowed.

More important, after the instability caused, in part, by the Defense Department not proposing a budget consistent with fiscal 2014 spending caps, the Pentagon is determined to set a more stable course in fiscal 2015. It is unclear when the administration will send its budget request to Congress, but it could be in February or early March, congressional aides said.

“We’ll use those funds to restore spending on readiness,” Defense Secretary Chuck Hagel said in December. “We will also work to minimize disruption to our most critical modernization efforts.”

Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, said the budget deal allows the Pentagon to address most of its near-term readiness challenges and restore some readiness that it had lost over the past year and a half.

“Many of you have heard me say for some time that there were three things we really need in order to manage the financial affairs of the department and the military,” Dempsey said in December. “And they are certainty, time and flexibility. The bilateral — I should say bipartisan budget agreement gives us a little of each of those, so it is a welcome event here at the end of 2013.”

Nonetheless, fiscal 2015 could mark the beginning of a transformation for the military.

Senior congressional aides expect the military to propose significant personnel reductions, institutional streamlining and administrative changes that better reflect its more limited resources.

“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 the tough choices on force structure,” Hagel said. “We also recognize that we can no longer put off military compensation reform. DOD’s leadership, Chairman Dempsey, the service chiefs, the service secretaries, and myself, we all know that we need to slow cost growth in military compensation. Otherwise, we’ll have to make disproportionate cuts to military readiness and modernization.”

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