Obama Defense budget based on Bush estimate

The Obama administration has given the Pentagon a $527 billion limit, excluding war costs, for its fiscal 2010 Defense budget, an Office of Management and Budget official said Monday. If enacted, that would be about $14 billion more than the $513 billion allocated for fiscal 2009 (PL 110-329), including military construction funds, and it would match what the Bush administration estimated last year for the Pentagon in fiscal 2010. But it sets up a potential conflict between the new administration and the Defense Department's entrenched bureaucracy, which has remained largely intact through the presidential transition. Some Pentagon officials and congressional conservatives are already trying to portray the OMB number as a cut by comparing it with a $584 billion draft budget request compiled last fall by the Joint Chiefs of Staff for fiscal 2010. The $527 billion figure is "what the Bush people thought was the right number last February, and that's the number we're going with," said the OMB official, who declined to be identified. "The Joint Chiefs did that to lay down a marker for the incoming administration that was unrealistic. It's more of a wish list than anything else." Defense budget experts have said the draft by the Joint Chiefs, which was never publicly released, was designed to pressure the Obama administration to drastically increase Defense spending or be forced to defend a reluctance to do so. Defense officials in past outgoing administrations have left inflated budget estimates for incoming officials in the hope of raising the spending baseline. The Joint Chiefs' draft budget was never scrubbed by President George W. Bush 's OMB, which had told federal agencies to submit draft budgets based on current services. One key issue is the administration's decision to reduce supplemental appropriations by folding into the base Pentagon budget the non-war-related spending that has cropped up in supplemental bills. The Pentagon refused to comment publicly on why it would need the higher amount. Defense Secretary Robert M. Gates has said the fiscal 2010 Defense budget must contend with the realities of the bad economy and stop the trend of steep increases in military budgets since the Sept. 11 terrorist attacks. Gates also has said the department will deliver Congress a formal request for a second tranche of fiscal 2009 war funding "in the coming weeks." He sent Congress an estimate for that tab of $69.7 billion. "I believe that the FY 2010 budget must make hard choices," Gates told the Senate Armed Services Committee on Jan. 27. But behind the scenes, Pentagon officials have already begun trying to cast the new administration's fiscal 2010 Defense number as a cut. A Jan. 30 Fox News report quoted a senior Defense official as saying the Obama administration demanded a $55 billion cut in Defense spending. President Obama met with the Joint Chiefs that day. "To call that a cut would be wrong, because what the chiefs had done was a huge increase," said Gordon Adams, who led the national security division of OMB during the Clinton administration. Making the Decision Obama's team was faced with the choice of meeting the Pentagon's higher number–forcing huge cuts in other parts of the federal budget–or basing the Defense spending number on its own decision-making, and it chose the latter option. And since OMB ultimately decides the administration's request to Congress, it's likely the White House will win this battle. "The department is prepared to quickly and responsibly produce an official portion of the president's budget request based on programmatic and strategic guidance from the new administration," said Pentagon spokesman Darryn James. But a spokesman for the Republican leadership of the House Armed Services Committee blasted out an e-mail Jan. 31 entitled, "Defense Official: Obama Calling for Defense Budget Cuts," which linked to the Fox News report. Adm. Mike Mullen–the chairman of the Joint Chiefs, who, like Gates, is a Bush appointee–has long advocated large increases in base Defense spending. He champions pegging the Defense budget to 4 percent of the gross domestic product. Along with conservatives in Congress, Mullen believes that number is feasible and could ensure steadily increasing investments, at least when the economy is growing. In contrast, most economists and Defense budget experts believe Defense spending should be based on the need and the threat, not on an arbitrary economic figure. "It is really important for that 2010 budget to be restrained, not only for reasons of overall budget stability for the government, but specifically because the Defense Department has been so unrestrained for the last eight years," Adams said. "The abuse of supplementals has broken the discipline in the process."