Defense Panel Calls for Base Closures, Shifting DoD Budget to Boost Active Duty Force, R&D and Procurement

A congressionally mandated report from the National Defense Panel, 10 members appointed by the House and Senate Armed Services Committee, paints a gloomy picture of the impact of current force cuts and advocates for base closures, reducing the growth in military health care spending, and cutting DoD civilian and contractor positions. The panel believes the cost savings from these politically unpopular measures should then be funneled into reversing investment shortfalls in military readiness and present and future capabilities.

Sequestration, the Budget Control Act, and DoD’s strategic plan, as outlined in the 2014 Quadrennial Defense Review, are all criticized. Budget cuts, the panel says, prompts allies and adversaries to question U.S. commitment, while the current strategic plan exceeds the department’s projected resources.

Not only is Congress hesitant to close bases for fear of job losses in their states and districts, but they have also prevented the military from retiring older weapons systems. One example of the latter was the uproar caused by the Air Force’s plan to mothball their A-10 Close Air Support fleet in favor of the new Joint Strike Fighter.

The DoD was called out for shrinking too fast in a dangerous world. Instead, leaders should reverse manpower cuts and target reinvestment in a number of areas such as cyber, intelligence, space architecture, naval forces, airlift, and logistics sustainment.

With Congress in recess until September and mid-term elections in November, there is little chance any action will be taken over this report this year. The question then becomes how the new Congress will handle this “congressionally mandated report” and its unpopular recommendations.

Crowell & Moring will continue to monitor hearings, proposed legislation, and DoD testimony to keep clients up to date on where budgets are likely to shrink and where they are likely to expand. Even with the panel’s unfavorable tone about today’s state of affairs, companies should be ready to react quickly when future opportunities emerge.