The Pentagon is counting on Congress averting a painful government shutdown when the calendar turns to the new fiscal year on Oct. 1, but the Defense Department’s No. 2 civilian is not ruling out the possibility of a "disastrous" year-long continuing resolution to fund the military.
Deputy Defense Secretary Bob Work said Tuesday that his department is resigned to the fact that it will at least begin fiscal 2016 under a short-term continuing resolution that will likely extend until December, when officials hope Congress and the White House will reach a bipartisan budget deal to raise the spending caps for the Defense Department and other agencies.
"I think there is at least a shot that we will get a Murray/Ryan 2.0 that solves both the defense and non-defense discretionary [spending] in a way the president would be able to support," he said in a sit-down at the Pentagon with CQ reporters and editors.
But Work, who effectively serves as the Pentagon’s chief operating officer, is also girding for the very real possibility that the two parties are unable to agree on revised budget numbers and settle instead for a CR that extends throughout the fiscal year.
That would put the Defense Department, whose annual appropriations have long been considered a must-pass piece of legislation, in unfamiliar — and uncomfortable — territory.
For the last several years, the Pentagon has started October under a continuing resolution. But officials have always eventually gotten their budget, even if it has taken months.
Work, a veteran of many of the Obama administration’s past budget battles, says a year-long CR would be disastrous and exacerbate an already difficult budget situation.
"I’m constantly getting my chops busted because we're not efficient," Work said, adding: "If you look at back over the seven years, the fits and starts, the changing topline, entering into years on a continuing resolution, there is no organization on this earth that would be able to remain in business, operating under these conditions. Now the reason why we do is we make compromises, and the compromises we make are not good for national security."
Continuing resolutions, which typically extend the previous year’s funding levels into the next fiscal year, can wreak havoc on an agency’s funding because the money does not match the department’s current spending needs.
For the Pentagon, which consumes nearly half of all federal discretionary spending, stopgap spending measures also block new-start weapons and construction projects, affect multi-year procurement programs and cast doubt on funding levels for the next fiscal year.
"You make an awful lot of things that are compromises on the edges that, in the broadest impact, really hurt our national security," Work said.
The Air Force, for instance, is expected to award a lucrative contract for a next-generation bomber in the coming weeks. But Work acknowledged that the Pentagon could postpone the much-anticipated award until officials are more certain of the department’s budget picture for 2016.
"We might elect to say, ‘Let’s delay this until we resolve our budget,'" he said, adding that he will meet soon with Pentagon acquisition chief Frank Kendall to discuss whether or not to pull the trigger on any big decisions.
If the Pentagon operates under a continuing resolution for the entire fiscal year, Work said he is hopeful — but not confident — that lawmakers will pack the CR with “anomalies” to give the department at least some ability to carry out its plans for 2016.
The Pentagon has already drafted a list of requested anomalies, which includes keeping on schedule an "urgently needed" 15-ton bomb being designed with the capability to destroy Iran's nuclear facilities. Defense officials also are seeking CR language to allow them to continue, as planned, everything from shipbuilding to space procurement programs and to begin new projects and expand others "without delay."
"I just don’t think Congress would force us to go into a year-long CR without giving us some flexibility," Work said. "But in these conditions, I have now stopped predicting too much because I’ve been proven wrong in every case."
In submitting its budget request for fiscal 2016, the Pentagon opted to blow past mandated spending caps by some $35 billion, arguing that is the minimum amount the military needs to execute its daily missions and prepare for the future.
Congressional Republicans responded by shifting base-budget funding into the war accounts, which are not subject to caps. But administration officials have blasted that approach as an end-run around the caps that gives the Defense Department preferential treatment. Domestic spending does not have a similar overflow valve.
For number-crunchers like Work, the reliance on the so-called Overseas Contingency Operations funds poses another, longer-term problem. War funding fluctuates wildly from year to year, and there is no guarantee that funding will be available the following fiscal year.
Paying for a new program through what Work called the OCO "gimmick," for instance, would be irresponsible and risky, he said.
Compounding the Pentagon’s budget woes is congressional resistance to many cost-saving proposals, including retiring aging weaponry like the A-10 close-air support aircraft, launching another round of base closures and making changes to military benefits.
The “congressional noes,” as Work calls them, could add up to as much as $43 billion over the next five years, only adding to the overall budget uncertainty, particularly as both the annual defense appropriations and authorization bills remain in limbo with just two weeks until the start of the new fiscal year.
In the meantime, Work said, planning for the future is chaotic.
"We believe if we just had some time with a steady topline that we feel is sufficient that we would be able to get after some of these problems," he said.
John M. Donnelly contributed to this report.