Monday, February 24, 2014

Hagel Said to Propose Lowest Army Level Since Before 9/11 - Businessweek


The Pentagon today will unveil the broad outlines of a five-year budget that accelerates an Army request to shrink the force to near its level before Sept. 11, 2001, according to defense officials.


The plan by Defense Secretary Chuck Hagel would reduce the Army by 6 percent to about 490,000 personnel by 2015 from about 522,000 today -- accelerating by two years the Army’s plan to reach that total by 2017. Hagel’s plan also calls for trims to 450,000 by 2019 -- 30,000 below the active duty force in September 2001, before the terrorist attacks on the U.S.


Hagel is also considering a deeper cut to reach 420,000 by 2019, said a defense official. It’s unclear whether the secretary will discuss that option today, said the defense official familiar with its details who requested anonymity to discuss the plan before an announcement.


Army Chief of Staff General Ray Odierno as recently as this month said he’d be comfortable with a force of 450,000. A level of 420,000 would be too low, he said.


Hagel’s preview of a roughly $496 billion basic defense budget echoes proposals by predecessors Robert Gates and Leon Panetta, who showcased parts of their respective budgets before formal release. The deepest cuts were announced by Gates in April 2009 with the termination or truncation of numerous programs, including the manned vehicle portion of Boeing Co.’s then $159 billion Future Combat System for the Army.


Combat Vehicle


Hagel’s preview won’t include termination of any major weapons programs for next year although he’ll announce the Army won’t continue funding beyond the current technology demonstration phase for the Ground Combat Vehicle, said an official. General Dynamics Corp. (GD:US) and BAE Systems Plc (BA/) are developing competing versions of the system.


The weapons buying request for 2015 will be about $91 billion, or $15.2 billion less than the $106.2 billion the Pentagon estimated last year and $64 billion for research and development, or $8.8 billion less than forecast, according to internal budget figures provided by a defense official.


Hagel’s most controversial proposals instead may be several to reduce the rate of compensation increases and housing allowances, according to officials.


Hagel faces a tighter budget environment than either Panetta or Gates because his plan was required under the Bipartisan Budget Act to cut as much as $43 billion from the year-ago level envisioned for fiscal 2015.


Automatic Cuts


That’s in addition to a $25 billion reduction for this fiscal year mandated by the budget plan lawmakers crafted, and $37 billion eliminated in fiscal 2013 under the automatic cuts known as sequestration.


The budget agreement delayed sequestration cuts until 2016, allowing congressional appropriators and the military to select this year and next how to apportion the reductions.


Among the most closely watched figures when President Barack Obama releases the budget March 4 will be the non-wartime annual spending for fiscal years 2016-2019.


The administration in January gave the Pentagon guidance through 2019 that calls for spending after 2015 that would exceed congressional budget caps, according to U.S. officials.


A defense official today said the new five-year plan will push spending to about $115 billion beyond the limits.


The planned Army force cuts were reported last night by Defense News.


To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net


To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net









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