October 1, 2014

Washington Budget Report: April 29, 2014

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Poorly Designed Defense Caps Could Pose Problems

The Pentagon is warning that budget caps scheduled to take effect after next year could mean cuts to readiness, modernization and force structure that would increase national security risks.

The future spending caps are based on sequestration-level funding. After next year, military leaders say in a new report, the caps would require cutting $115 billion from their 5-year budget plans by 2019, with $66 billion coming from procurement and research and development.

Those cuts could be even larger if Congress again rejects Pentagon efforts to save money through reasonable changes in compensation.

Possible cuts outlined in the report would mean a larger maintenance backlog, fewer new vehicles, ships and aircraft, and less funding than what military leaders consider adequate for readiness and training.

All federal departments must manage limited resources in the coming years, and difficult cuts will have to be made. But this Pentagon report is a reminder that unrealistically low caps and indiscriminate cuts are not the best approach.

Uncertainty over whether Congress will actually allow the low caps to take effect also makes it difficult for managers to plan ahead and use tax dollars wisely.

That's why Congress should replace the sequestration-level caps now scheduled for 2016 and beyond with comprehensive fiscal reform, including better targeted spending cuts where they are appropriate.

In Budget Exercise, Players See Need for Compromise

With dozens of Colorado residents assembled last week for “Principles and Priorities,” a federal budget exercise developed by The Concord Coalition, U.S. Rep. Jared Polis promised to take the results back to Washington.

"I will learn from your work," the Colorado Democrat said at the event, held in Loveland. "We will take the solutions that you come up with and post them on our website; I will talk about them on the House floor."

His colleagues in both parties might find that helpful. In conducting the exercise around the country in recent years, Concord has found that average citizens are generally more supportive of compromise, difficult decisions and public sacrifice than their elected representatives assume.

Principles and Priorities asks participants to work in small groups to develop 10-year deficit-reduction plans to put the budget on a more sustainable course.

They usually succeed – in part because most participants quickly realize that inflexibility and partisan slogans are a recipe for failure.

The Loveland program was presented by Polis, Concord and Fix the Debt. Concord works with members of Congress in both parties who want to give their constituents opportunities to participate in such exercises.

Bipartisan Policy Center Launches Initiative on Savings

The Bipartisan Policy Center (BPC) launched its Personal Savings Initiative at a press conference Wednesday featuring former Senate Budget Committee Chairman Kent Conrad (D-N.D.) and Jim Lockhart, former deputy commissioner of the Social Security Administration.

Lockhart and Conrad will chair an 18-member commission to develop policy recommendations. The bipartisan panel, which includes both of the public trustees for Social Security, hopes to address topics such as retirement savings, Social Security, defined-contribution accounts, annuities, housing and higher-education debt.

Statistics have long shown that many Americans are financially unprepared for challenges such as college, serious health problems and retirement. As an aging population puts increasing strain on the federal retirement and health care programs, it is particularly important for many Americans to save substantially more for their later years.

The BPC initiative will feature roundtable discussions on these concerns and will release a final report in early 2015.