The sequestration monster myth

by Jeremy Herb, Politico
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Defense Secretary Ash Carter warns that sequestration will make the nation “less secure.” Sen. John McCain says it will set the military “on a far more dangerous course.” And Joint Chiefs Chairman Gen. Martin Dempsey says it will prompt “a dramatic change in how we protect our nation.”

There’s just one problem: The sequestration monster lurking around the corner isn’t really coming.

Yes, the Pentagon is at risk of seeing its fiscal 2016 budget reduced by tens of billions of dollars as a result of the spending limits under the 2011 Budget Control Act. But the prospect of sequestration — across-the-board cuts reaching almost every nook and cranny of the Pentagon — is nearly as remote as the possibility of the Loch Ness monster showing up on the Senate floor. 

Sequestration has become shorthand for the budget cap that would limit Pentagon spending to $499 billion next year if Congress does not change the law. While it sounds like a small rhetorical shift, some budget analysts say the use of the “S-word” is intentional — so the potential cuts sound worse than they really are.

“What has happened over the three-year period is sequester has become a boogeyman,” said Gordon Adams, a former budget official in the Clinton administration who’s now a professor at American University. “The bottom line here is it’s scary; sequester is scary. … So, if you use the sequester word, you’ve got a boogeyman you can scare everyone with.”

Todd Harrison, a defense budget analyst at the Center for Strategic and Budgetary Assessments, blames the Pentagon for muddying the waters by constantly warning of sequestration’s devastation.

“I’m just exhausted by the misuse of the term sequester, and I point the finger firmly at DOD,” Harrison said. “They made a deliberate decision to start calling it sequester-level instead of BCA budget level, because sequester sounds worse.”

Others argue that concerns over the sequestration warnings are overblown, because the potential for the cuts is very real, regardless of whether they are because of a formal sequester or not.

“The words are wrong, but the intent is shared,” said Mackenzie Eaglen, a defense analyst at the conservative-leaning American Enterprise Institute. “There’s consensus on what it means, and therefore it doesn’t matter. … It means a budget of $499 billion, and in everyone’s mind, it means reverting to the caps.”

At the Pentagon, a defense official said military leaders have clearly expressed their need for funding above the $499 billion BCA defense cap.

“From the beginning, DOD officials have been saying that in order to support the current defense strategy, we need sustained funding levels in excess of the BCA caps,” the official said. “Funding below the president’s budget level, whether that was through sequester or through appropriating to the BCA caps, would increase the risk to our ability to execute the defense strategy.”

Sequestration, which stems from a 1985 law, became a staple of the defense lexicon in 2011 when Congress passed the BCA. That law set in motion the potential for $50 billion in across-the-board cuts for defense in 2013, along with equal cuts to domestic spending, when the specially empaneled congressional supercommittee failed to find $1 trillion in deficit reduction savings.

In 2013, there was a formal across-the-board sequestration cut to most Pentagon departments, although the 2013 fiscal-cliff deal mitigated some of those $50 billion in cuts.

But for the remaining nine years of the BCA, there is no across-the-board sequester cut in the law like 2013. The only way sequestration would occur is if Congress appropriated spending at levels above the budget cap without changing the cap — a prospect that budget analysts and most lawmakers say is simply not going to happen.

Rather, Congress and the White House are likely to make a deal to raise the budget cap, or the government will operate under a continuing resolution that would keep spending below the BCA level. Congress could also appropriate at the level of the spending cap, as the House and Senate budgets do along with a boost to the war budget, although President Barack Obama has threatened to veto such a bill.

The difference between making $35 billion in targeted cuts to the Pentagon’s $534 budget request to comply with the caps versus applying those cuts across the board may not seem like a major difference, when the end result is still $499 billion. But choosing how to cut would protect key programs, preserve multiyear contracts and give the Pentagon and Congress the flexibility to lessen the impact of the reduction, analysts say.

Still, that hasn’t stopped Pentagon leaders and defense hawks — not to mention the president and liberals wanting an equal boost to domestic spending — from talking up the harmful effects of sequestration.

The BCA caps were raised the past two years by a 2013 budget deal, but they are looming again in 2015, which has caused sequestration talk to quickly amp up. McCain, the Arizona Republican who picked up the Senate Armed Services gavel this year, has repeatedly said getting rid of sequestration is his No. 1 priority.

“Compounding the enormous security challenges facing our nation is the looming threat of sequestration, which is having a devastating impact in the readiness and capabilities of our men and women in uniform,” McCain said at a hearing last month.

Carter, too, has used his appearances on Capitol Hill to rail against sequestration. “Sequestration threatens our military’s readiness, the size of our war-fighting forces, the capabilities of our air-naval fleets and, ultimately, the lives of our men and women in uniform,” he said at a March hearing.

Adams argues that relying on sequestration to describe the budget situation has falsified the argument over the Pentagon budget because there are ways to trim DOD’s $534 billion budget by $35 billion without devastating the military.

“We don’t suddenly end up on Oct. 1 with a bunch of ham-handed cuts. We end up with a ceiling on the budget,” Adams said. “The real argument is about, ‘I haven’t got enough money; I want more in my budget.’ That’s exactly what the Pentagon asked for in 2016 — they asked for $34 billion above the caps.”

Former budget officials at the Pentagon and the White House Office of Management and Budget, however, dispute the notion there’s any intentional attempt to use sequestration to scare lawmakers or the public.

“It’s technically more correct,” former DOD comptroller Robert Hale said of referring to budget caps, rather than sequestration. “It’s good for budget types like me; we get to explain. It’s a term of strong negative connotations, widely expressing the point of view of the speaker, I should say, in terms of it being a bad idea.”

Mark Cancian, who left OMB this month and is now a senior adviser at the Center for Strategic and International Studies, said there’s no standard language to describe the cuts within the administration. He noted that Pentagon officials have been wary of overselling the effects of the budget caps, as critics accused DOD and the defense industry of “crying wolf” when sequestration hit in 2013.

For Eaglen, using the term sequestration is a way to get lawmakers and other people with short attention spans to pay attention to the argument from defense hawks that Pentagon spending needs to be higher.

“If you have to talk like that, then you’re going to lose your case,” she said. “People who want to talk about higher defense funding levels can’t win if their case starts to be a green-eyeshade conversation.”