2 Defense_Budget_Priorities 2012

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Unformatted text preview:      Wedevelopedadefensestrategythattransitionsourdefenseenterprise froman range of U.S. national rebalance and reform, and supports the national security imperative of deficit reduction through a lower level of defense spending  StrategicGuidance,January2012    INTRODUCTION  FromNewStrategicGuidancetoBudgetChoices   was drivenbythe approaching endofa decade of war, a changing technological and geopolitical landscape, and the national security  ­2017were derived from this guidance and conform to the 2011 Budget Control Ac t reduce Defense Department future expenditures by approximately $487 billion over the next decade or $259 billionover the nextfive years. Reflecting these reductions, theDepartment willrequestfundingof$525billionforFY2013,risingto$567billionbyFY2017.   Achievingthesesavingsishard,butmanageable.Itis hard becausewe havetoacceptmany changes and reductions in areas that previously were sacrosanct.  Collectively, the changes align our investments to strategic priorities and budgetary goals, but individually, each one requiresadifficultadjustment.Itismanageablebecausetheresultingjointforce,whilesmaller andleaner, willremain agile,flexible,ready,innovative,andtechnologicallyadvanced. Itwill beaforcethatis: Adaptableandcapableofdeterringaggressionandprovidingastabilizingpresence, especiallyinthehighestpriorityareasandmissionsintheAsia ­Pacificregionandthe MiddleEast,whilestillensuringourabilitytomaintainourdefensecommitmentst o Europeandotheralliesandpartners Ready,rapidlydeployable,andexpeditionarysuchthatitcanprojectpoweron arrival Capableofdefendingthehomelandandprovidingsupporttocivilauthorities Possessingcutting ­edgecapabilitiesthatexploitourtechnological,joint,and networkedadvantage Abletoreconstitutequicklyorgrowcapabilitiesasneeded Aboveall,mannedandledbythehighestqualityprofessionals DefenseBudgetPrioritiesandChoices   1    HistoricalContext  After every major conflict, the U.S. military has experienced significant budget draw downs. ThenewbudgetlevelfortheDefenseDepartmentwill rise fromFY2013toFY2017;however, totalU.S.defensespending, includingbothbasefundingandwarcosts, willdropbyabout22% fromitspeakin2010,afteraccounting forinflation.Bycomparison,the 7 yearsfollowingthe VietnamandColdWarpeakbudgetssawasimilarmagnitudeofdeclineontheorderof20to 25%.  However, there are several significant differences between the circumstances we face today andthepost ­ColdWardrawdown.Onthepositiveside,incontrasttotheendoftheColdWar when the reductions came entirely out of the base defense budget, under the new plan the basebudgetwillroughlymatchorslightlyexceedinflationafterFY2013.Thecuts overall defense spending levels are coming primarily from reduced war ­related requirements and are reflected in lower OCO budget levels.  On the other hand, while the Cold War decline, today the U.S. military is still fighting in Afghanistan, countering violent extremism in other areas, and confrontingavarietyofemergingsecuritychallenges.Moreover,thepost  ­ColdWardrawdown was preceded by a decade ­long defense build ­up that emphasized procurement and modernization, resulting in a smaller but mostly new, relatively unused, and technically superior inventory of U.S. militaryequipment.Bycontrast, notwithstandingthe large budget increases in the base defense budget over the past decade  including funding for weapons developmentandacquisition  westillhavesignificantgapsinmodernizationthatwillneedto befilledincomingyears.  In preparing this budget, we endeavored to avoid the Wewillresistthetemptationto mistakes of previous draw downs that attempted to sacrificereadinessinordertoretain maintain more force structure than the budget could forcestructure,andwillinfactrebuild afford.  Readiness suffered as a result, leading to a readinessinareasthat,bynecessity, werede ­emphasizedoverthepast hollow force, which took years of investment to decade reverse.  Our approach to readiness recognizes that  ­DoDStrategicGuidance,January2012 after a decade of focus on counter ­insurgency operations, the U.S. armed forces must re ­honeother capabilitiesneededforawiderspectrumofmissionsandadversaries.  Protectingreadinessalsorequiresresettingdamagedandwornequipmentafteryearsofwar. Thoughthisbudgetseekstomeetall ofthesecompelling(andcompeting)demands,thisisan areathatwillrequirecontinuedmonitoring. DefenseBudgetPrioritiesandChoices   2     Complete,BalancedPackage Asaresultof athoroughprocessthatwasguidedbythestrategyandthatleftnopartofthe budgetunexamined,wehavedevelopeda well ­rounded,balancedpackage. Thereis no room formodification ifweare topreservetheforceandcapabilities that areneededtoprotectthe countryandfulfillthe missionsoftheDepartmentofDefense.  A change inonearea inevitably requiresoffsettingchangeselsewhere,unbalancingtheoverallpackage . Thispackageincludes reductionsacrossthefollowingthreeareasthatformtheoutlineofthispaper. Moredisciplineduseofdefensedollars Strategicallydrivenshiftsinforcestructureandmodernization TheAllVolunteerForce  MOREDISCIPLINEDUSEOFDEFENSEDOLLARS TheDepartmentmustcontinueto 2013 ­2017,wefirst turnedto where DoD could reduce excess overhead, operations expenses, and personnel meetingthedemandsofthestrategy. costsacrossthedefenseenterprise,andachievebetter  ­DoDStrategicGuidance,January2012 buying power in our acquisition of systems and services.   As careful stewards of the DoD s leaders should take theseactions irrespectiveofbudgetpressures. Clearly,themoresavingsrealizedinthisarea, thelessspendingreductionsrequiredformodernizationprograms,forcestructure,andmilitary compensation.  Thiswasacontinuationoftheeffortbegunin2010 ,which identifiedmorethan$150billion in savings overfiveyears allocated among the three militarydepartments,thedefenseagencies, combatantcommands,andthe This leftless roomforadditional reductions tomeetthenewtargetof$259billionoverFY13 ­17.Nonetheless,wedidfindabout$60billion innewprojectedsavingsoverFY13 ­17.Examplesinclude: Moreskillfulcontractingpracticestoincreasecompetition,reducecosts,and increasebuyingpower Betteruseofinformationtechnology Betteruseofbusinessandenterprisesystems Streamlinedstaff Limitationsonofficialtravel Betterinventorymanagement DefenseBudgetPrioritiesandChoices   3    Reductionsincontractservices Deferralofsomemilitaryconstructiontoalignourfacilitiesmorecloselywiththe sizeandpostureofourfutureforce Reductionsinplannedcivilianpayraises  Beyondtheroughly$60billioninefficienciesandoverhead savings,weeliminated anumberof poorlyperformingprogramsdescribedlaterinthepaper.  The proposed force structure reductions described below also suggest the need for a correspondingreductioninthe  infrastructure.  Wecannotaffordtosustain infrastructurethatisexcesstoourneedsinthisbudgetenvironment.  Therefore,thePresident willrequestthatCongressauthorizeuseoftheBaseRealignmentandClosure(BRAC)process  withagoalofidentifyingefficientsavings thatcanbereinvestedinhigherprioritiesassoonas possible.  APPLICATIONOFSTRATEGICGUIDANCETOFORCESTRUCTURE&INVESTMENT It isnot possible to accommodatea budget reduction ofthemagnitudecalledforbytheBudgetControlAct without scaling down force structure and delaying, decreasing, or in some cases eliminating investments. The strategic guidance was written to guide these reductions ina mannerthat minimizes the risk to our ability to protect U.S. interests in an evolved national securityenvironment.  ablueprintfortheJointForcein2020, providingasetofpreceptsthatwillhelp guidedecisionsregardingthesizeand shapeoftheforceoversubsequent programandbudgetcycles,and highlightingsomeofthestrategicrisks thatmaybeassociatedwiththe proposedstrategy.  ­DoDStrategicGuidance,January2012 expertsassessedthepotentialstrategic,militaryandprogrammaticrisksassociatedwitheach  I. RebalanceforcestructureandinvestmentstowardtheAsia ­PacificandMiddleEast regionswhilesustainingkeyalliancesandpartnershipsinotherregions II. Planandsizeforcestobeabletodefeatamajoradversaryinonetheaterwhile denyingaggressionelsewhereorimposingunacceptablecosts III. Protectkeyinvestmentsinthetechnologicallyadvancedcapabilitiesmostneededfor thefuture,includingcounteringanti ­accessthreats IV. Nolongersizeactiveforcestoconductlargeandprotractedstabilityoperationswhile retainingtheexpertiseofadecadeofwar DefenseBudgetPrioritiesandChoices   4    V. Totheextentpossible,structuremajoradjustmentsinawaythatbestallowsfor theirreversalorforregenerationofcapabilitiesinthefutureifcircumstances change  I.REBALANCETOWARDTHEASIA ­PACIFICANDMIDDLEEASTREGIONS  Asia ­Pacific/MiddleEastEmphasis WhiletheU.S.militarywillcontinue ThefocusontheAsia ­Pacificregionplacesarenewed tocontributetosecurityglobally,we emphasisonairandnavalforceswhilesustaining willofnecessityrebalancetoward groundforcepresence.TheMiddleEasthasbeen theAsia ­ dominatedbygroundforceoperationsoverthelast Stateswillcontinuetoplacea decade;however,aswegraduallytransitionsecurityin premiumonU.S.andalliedmilitary Afghanistanandreestablishpeacetimegroundforce presencein andsupportof  partnernationsinandaround[the presence,thisregionwillalsobecomeincreasingly MiddleEast]. maritime.Thereforewe:  ­DoDStrategicGuidance,January2012 Maintainedthecurrentbomberfleet Maintainedtheaircraftcarrierfleetat11shipsand10airwings Maintainedthebig ­deckamphibiousfleet SustainedArmyandMarineCorpsforcestructureinthePacific,whilemaintaining persistentpresenceintheMiddleEast BudgetedtoforwardstationLittoralCombatShipsinSingaporeandpatrolcraftin Bahrain Fundeddevelopmentofanewafloatforwardstagingbasethatcanbededicatedto supportmissionsinareaswhereground ­basedaccessisnotavailable,suchas counter ­mineoperations  For these forces to remain capable, we had to invest in capabilities required to maintain our access advantages.   Consequently, we increased or protected investment in capabilities that projectpower incontestedareasandstrikequicklyfrom overthehorizon,including: Fundingforthenewbomber DesignchangestoincreasecruisemissilecapacityoffutureVirginia ­classsubmarines Designofaconventionalpromptstrikeoptionfromsubmarines Upgradedradarsfortacticalaircraftandships Improvedair ­to ­airmissiles Newelectronicwarfareandcommunicationscapabilities DefenseBudgetPrioritiesandChoices   5     Toensuresufficientresourcestoprotectthese strategicpriorities,wewill reducethenumber of ships byslowingthepaceofbuildingnew ships andbyacceleratingtheretirementof some existingships.Theseinclude: Retiring7cruisersearly 6didnothaveballisticmissiledefense(BMD)capability, andtheseventhwithBMDcapabilityisinneedofcostlyhullrepairs Slippingalargedeckamphibiousship(LHA)by1year Slipping1newVirginiaclasssubmarineoutsidetheFYDP ReducingLittoralCombatShipsby2shipsintheFYDP ReducingJointHighSpeedVesselsby8intheFYDP Retiring2smalleramphibiousships(LSD)earlyandmovingtheirreplacement outsidetheFYDP  Withrespecttotacticalairforces,weconcludedthatDoDcould,atminimalrisk,disestablishsix AirForcetactical ­airfightersquadrons(outof60)andonetrainingsquadron. Aswereduceair forcestructure,we areprotecting aircraftwithmulti ­rolecapabilitiesversusnichecapabilities. Theresultantforcewillbecapableofhandlingourmostdemandingcontingencyplans including homelanddefense.  Europe&GlobalPartnerships Wewillcontinuetoinvestin ourresponsibilitiesto the MostEuropeancountriesarenow NATO alliance.  We will adjust the posture of land producersofsecurityratherthan forces in Europe in concert with overall Army Europemustalsoevolve. transformation including eliminating two heavy  ­DoDStrategicGuidance,January2012 brigades forward ­stationed there.  DoD will nevertheless maintain NATO Article 5 commitments and ensure interoperability with allied forces by allocating a U.S. ­based brigade to the NATO ResponseForceandbyrotatingU.S. ­basedunitstoEuropefortrainingandexercises. Wewill alsoforwardstationballisticmissiledefenseshipsinRota,Spain.  Acrosstheglobewewillseektobethesecuritypartnerofchoice,pursuingnewpartnerships with a growing number of nations including those in Africa and Latin America.  Whenever possible, we will develop innovative, low ­cost, and small ­footprint approaches to achieveour securityobjectives,relyingonexercises,rotationalpresence,andadvisorycapabilities.W ewill preserveourkeypartnershipdevelopmentefforts,including: llianceGroundSurveillance NationalGuardStatePartnershipProgram DefenseBudgetPrioritiesandChoices   6    FiveRegionalCentersforStrategicStudythatproviderelationship  ­building opportunitiestointernationalstudents COCOMExerciseandEngagementprogramthatfundsparticipationinexerciseswith partnernations GlobalSecurityContingencyFundinconjunctionwiththeStateDepartment SecurityForceAssistanceProgram  Additionally, thegradualdrawdownofthepost9/11warswillreleasemoreS pecialOperations Forces(SOF) capacitytopartnerinotherregions. Furthermore,thoughtheArmywilldecrease its current European footprint by two heavy brigades, it will establish and maintain a new rotational presence in Europe and capitalize on existing training opportunities with our allies andpartners. TheArmy will also align Brigade Combat Teams with each regional Combatant Command  establishing language and cultural expertise to better shape the security environment.  II.CONFRONTINGAGGRESSION  Reducedforcestructurewillresultinlesscapacityto Asanationwithimportantinterests conduct operations in multiple regions. Accordingly, inmultipleregions,ourforcesmust becapableofdeterringand the strategic guidance calls for a fresh approach to defeatingaggressionbyan  ­sizing construct that opportunisticadversaryinoneregion had shaped defense planning since the end of the evenwhenourforcesarecommitted Cold War.  If we are engaged in a major combat toalarge ­scaleoperationelsewhere. operation in one theater, we will have the force  ­DoDStrategicGuidance,January2012 necessary to confront an additional aggressor by denying its objectives orimposingunacceptablecosts.  This evolutionnotonlyrecognizesthe changing nature of the conflicts in which the U.S. must prevail, but it also leverages new conceptsofoperationenabledbyadvancesinspace,cyberspace,specialoperations,precision  ­ strike,andothercapabilities.  This strategic precept puts a premium on self ­ and rapidly ­deployable forces that can project power and perform multiple mission types.  This reinforces the need to maintain existing numbers of aircraft carriers, large ­deck amphibious ships, and bombers.  Furthermore, as the MarineCorpswithdrawsfromthegroundinAfghanistan,itwillreturntoanafloat posture,with thecapabilityto rapidlyrespondtocrisesastheyemerge.  Thesechoicesare consistentwith our strategic emphasis on the Asia ­Pacific region and the Middle East, but are applicable anywhereontheglobewhereU.S.nationalsecurityorvitalinterestsarethreatened.  DefenseBudgetPrioritiesandChoices   7    MobilityAircraftImplications Thestrategicguidanceplacesapremiumonforcespresentorabletorapidlyrepositiontodeter aggression and respond as needed.  It recognizes that we do not need to retain the airlift capacitytosupporttwolarge, simultaneous andrapidlydevelopinggroundcampaigns.When faced withcompetingdemands,wecan prioritizeandphasemovements. Airmobilitystudies havealsoshownsignificantexcesscapacityintheU.S.airliftfleets. Asaresultwearereducing theairliftfleetby: Retiring27agingC ­5As,resultinginafleetofmodernized52C ­5Msand222C ­17s Retiring65oftheoldestC ­130s,resultinginafleetof318C ­130s Divesting38C ­27s  These reductions enable the Department to streamline and standardize our airlift fleet by reducing the number of different types and eliminating the need to operate, sustain, and maintain aircraft excess to the requirements of the new strategy. Even when supporting a majorwar,wewillhavetheliftavailabletomoveadditionalcapabilitytoanother region.        Example:Thenewstrategicguidanceemphasizesflexibilityandadaptability.The C ­27J was developedandprocuredtoprovideanichecapabilitytodirectlysupportArmyurgentneeds indifficultenvironmentssuchasAfghanistanwherewethoughttheC  ­130mightnotbeable tooperateeffectively.However,inpractice,wedidnotexperiencetheanticipatedairfield constraintsforC ­130operationsinAfghanistanandexpecttheseconstraintstobemarginal in future scenarios. Since we have ample inventory of C ­130s and the current costto own andoperatethemis lower,wenolongerneed norcanweafford anichecapabilitylike theC ­27Jaircraft.TheAirForceandtheArmywill establish jointdoctrinerelatingtodirect support. StrategicDeterrence Under the new strategic guidance, we will maintain a safe, secure, and effective nuclear deterrent.  This budget protects all three legs of the Triad  bombers that provide both conventional and nuclear deterrence, intercontinental ballistic missiles (ICBM), and ballistic missile submarines.  To this end, we are committed to the procurement of a new bomber. However, we will delay the new Ohio submarine replacement by two years without underminingourpartnershipwiththeUK.Whilethisdelaywillcreatechallengesinmaintaining currentat ­seapresencerequirementsinthe2030s,webelievethisrisk canbemanaged. An ongoing White House review of nucleardeterrence will address the potentialfor maintaining ourdeterrentwithadifferentnuclearforce.  DefenseBudgetPrioritiesandChoices   8    III.PROTECTNEWCAPABILITIES&INVESTMENTS  Although our force will be smaller, it will employ both willhavecutting lessons from recent conflicts and new technologies edgecapabilities,exploitingour technological,joint,andnetworked developed to confront the most lethal and disruptive  threatsofthefuture.Meetingtherequirementsofthe  ­CoverMemo,DoDStrategicGuidance, newstrategicguidanceentailed increasing fundingfora January2012 few key capabilities while protecting others at existing levels or making comparatively modest reductions. Inevitably, investing in these high ­priority areasrequiresdeeperoffsettingreductionsinareasoflesserpriority.  Counter ­terrorism.  Because we will continue to be engaged in counter terrorism operations aroundthe globe, weprotectedkeycomponentsof the force thatareadeptinexecutingthis mission: SpecialOperationsForces criticaltoU.S.andpartnercounterterrorismoperations andavarietyofothercontemporarycontingencies UnmannedAirSystems fundenoughtrainedpersonnel,infrastructure,and platformstosustain65USAFMQ ­1/9combatairpatrols(CAPs)withasurgecapacity of85;thePredatoraircraftwasretainedlongerthanpreviouslyplanned,allowingus toslowthebuyoftheReaperaircraftandgainsomesavings;wealsoprotected f airsystem,GrayEagle Sea ­basedunmannedintelligence,surveillanceandreconnaissance(ISR)systems suchasFireScout importantISRassetswheregroundbasingisnotavailable AdvancedISR newunmannedsystemswithincreasedcapabilities  Cyber operations. The strategic guidance highlights the increasing importance of cyber operations. As a result, cyber is one of the few areas in which we actually increased our investments,includinginbothdefensiveandoffensivecapabilities.  Powerprojection. Ourabilitytoprojectpowerisakey componentofourstrategicguidance. We protected important capabilities like the new bomber, upgrades to the small diameter bomb, aircraft carriers, surface combatant modernization, and cyber capabilities . We also protected capabilities that allow us to project power in denied environments. In addition to thosediscussed earlier,suchasfundingforthenewbomberandincreasingth ecruisemissile capacity of future submarines, we protected anti ­submarine warfare and counter ­mine capabilities. DefenseBudgetPrioritiesandChoices   9    Missile defense. Missile defense programs provide the capability to defend our homeland, supportourallies,andprotect U.S.militaryforces whenoperatinginregionsacrosstheglobe. Despite its importance, we were not able to protect all of the funding in this area.   We protected investments in homeland defense and the Phased Adaptive Approach for missile defenseinEuropeaimedatprotectingourallies.Wereducedspendingandacceptedsomerisk in deployable regional missile defense and will increase reliance on allies and partners in the future.  Spacesystems. Spacesystemsarecriticaltooursurveillance,communications,positioningand networkingcapabilities.Therefore,weprotectedfundingforupgradestotheGlobalPositioning System (GPS), the Space Based Infrared System (SBIRS) and the Advanced Extremely High Frequency(AEHF)satelliteprograms.  Counterweapons ofmassdestruction. Weprotectedinvestmentinthisareaandexpandedits scopeintheareaofbiologicalweapons.  Scienceandtechnology. TheDepartmentbelievesthatacceleratingtrendsinbothtechnology development and a dynamic threat environment dictate that we must maintain our edge by protecting our investments in development of future capabilities.  As such, science and technologyprogramsarelargelyprotectedwithinthisbudget.  ReasonableReductions/ResponsibleRisks Inordertosustainthehighestpriority investments,wemadesubstantialreductionsto programsthat: Wehavesoughttodifferentiatebetween thoseinvestmentsthatshouldbemade todayandthosethatcanbedeferred.  ­DoDStrategicGuidance,January2012  Areexperiencingschedule,cost,orperformanceissues: JointStrikeFighter committedtotheJSFprogramofrecordthatincludesallthree variants,butslowedprocurementtocompletemoretestingandmake developmentalchangestominimizeconcurrencyissuesbeforebuyinginsignificant quantities ArmyGroundCombatVehicle delayedbyprotest¸thusfreeingupavailable fundingforotherpriorities JointLandAttackCruiseMissileDefenseElevatedNettedSensorSystem(JLENS)  ­ curtailedduetoconcernsaboutprogramcostandoperationalmobility    DefenseBudgetPrioritiesandChoices   10    Areofferingoraugmentingcapabilitythatalreadyexists,butatsignificantlyhighercost: JointAir ­to ­GroundMunition(JAGM) significantlyreduced,butlimitedfunding sustainedtoenablelowercostalternativessuchasHellfire GlobalHawkBlock30 terminated(seeexamplebelow)  Areenteringservicebeforetheyareneeded: DefenseWeatherSatelliteSystem(DWSS) terminatedbecauseprematuretoneed Armyaviation delayedhelicoptermodernizationbythreetofiveyears  Oraredeemedexcesstorequirements: Commercialsatelliteimagery reducedpurchasesforcapacityexcessto requirements capability HMMWVs terminatedupgradesandfocusedmodernizationresourcesontheJoint LightTacticalVehicle   Example: When we initially invested in the Global Hawk Block 30 program, it held the  promise of providing essentially the same capability as the U ­2 manned aircraft for significantlylessmoneytobothbuyandoperate.Astheprogramhasmatured,thesecost  savingshavenotmaterializedand,atbest,weprojectthefuturecostofGlobalHawkBlock 30operationstobecomparablewiththeU ­2.Inthisfive ­yearbudget,the costoftheGlobal  HawkprogramwouldsignificantlyexceedthecostoftheU ­2sowecancelledGlobalHawk  Block30andextendedtheU ­2program.Althoughthisisasignificantdisappointment,our experience with Global Hawk Block 30 will help other Global Hawk programs like the Air   BroadAreaMaritimeSurveillance(BAMS).  IV.FORCESNOTSIZEDFORLONG ­TERMSTABILITYOPERATIONS InresponsetothedemandsoftheAfghanistan and Ourplanningenvisagesforcesthat Iraq campaigns,  active Army end ­strength populationsandfacilitateatransitionto increasedby95,000andMarineCorpsend ­strength stablegovernanceonasmallscalefora by30,000. TheU.S.militarycommitmentinIraqis complete and a securitytransition inAfghanistanis longerbesizedtoconductlarge ­scale, underway.  In this budget, we plan to reduce the prolongedstabilityoperations size of the active Army from a post ­9/11 peak of  ­DoDStrategicGuidance,January2012 about 570,000 in 2010 to 490,000 and the active Marine Corps from a peak of about 202,000 to 182,000.  The Army plans to remove at least DefenseBudgetPrioritiesandChoices   11    eight Brigade Combat Teams from its existing structure; however, the future organizing constructoftheArmyisunderreview. Evenwiththesereductions,theArmyandMarineCorps willbelargerthantheywerein2001.  While the U.S. does not anticipate engaging in prolonged, large ­scale stability operations  requiringalargerotationforce inthenear ­tomid ­term,wecannotruleoutthepossibility.If suchacampaignweretooccur,wewouldrespondbymobilizingtheReserveComponentand, overtime,regeneratingActiveComponentendstrength.Additionally,even astroopstrength draws down, the Army, Marine Corps, and U.S. Special Operations Command will preserve expertiseinsecurityforceassistanceandcounterinsurgencytraining.  Theselessons applytoprocurementaswell;forexample,thekindoftrooptransportvehicles needed to succeed andsurvive in an irregular warfareenvironment areincluded in the Army andMarineCorpsmodernizationplans.  V.PROTECTINGTHEPOTENTIALFORFUTUREADJUSTMENTS We will retain, to the extent possible, the ability to adjust or reverse force structure and modernization changes being made today to preserve flexibility for managetheforceinwaysthatprotect itsabilitytoregeneratecapabilities tomorrow. The Army and Marine Corps are both thatmightbeneededtomeetfuture, working to retain a slightly more senior force by unforeseendemands,maintaining retainingmid ­gradeNCOsandcommissionedofficers intellectualcapitalandrankstructure even as their overall end strength decreases.  The thatcouldbecalledupontoexpandkey Army is preserving the organizational structure and elementsoftheforce trainingforce uponwhich it maybuild if required. In  ­DoDStrategicGuidance,January2012 this way, they will have the structure and cadre of experiencedleadersnecessarytobuilduponifwehavetore ­growtheforcequickly.  ReserveComponent A smaller active force requires a capable and ready Reserve Component. Among other applications, a strong Reserve Component is a vital element of the concept of reversibility embeddedinthestrategicguidance.Consequently,wearemakingonlymarginalre ductionsin the Army reserve and Army National Guard and no reductions to the Marine Corps Reserve. Furthermore,wewillleveragetheoperationalexperienceand instituteaprogressivereadiness model in the National Guard and Reserves in order to sustain increased readiness prior to mobilization.  In particular, we will maintain key combat support capabilities such as sustainment aswellas combatservicesupportcapabilitiessuchascivilaffairsmaintainedata DefenseBudgetPrioritiesandChoices   12    highreadinesslevelintheReserve Component.Similarly,theAirForceisbalancingthesizeof itsreserveandactivecomponents,includingaircraftandmanpowerreductions,andadjusting thealignmentofmissionsandinstallationstosustaintheoperationalReserveComponentfor thelong term.TheAirForcewillaugmentthereadinessoftheirreservesby increasingActive ­ ReserveComponentassociations.  IndustrialBaseSkills Somedomesticmanufacturershavekeyskillsinthedesignandmanufactureofmilitarysystems thatcannotbeduplicatedelsewhere intheeconomy orregeneratedquickly. Insupportofthe segmentsoftheindustrialbase.However,theindustrialbase willrequirecarefulmonitoringin thefuture.Forexample,addingtheafloat forward stagingbase addressesurgentoperational shortfalls and will help sustain the shipbuilding industry in the near  ­term and mitigate the impactofreducingshipprocurementintheFYDP.     THEALLVOLUNTEERFORCE The All Volunteer Force is the foundation of our Themenandwomenwhocomprisethe AllVolunteerForcehaveshown military andvitaltothe securityofournation. Butthe versatility,adaptabilityand cost of military personnel has grown at an unsustainable rate over the last decade.  Including reducesthesizeoftheforce,wewilldo wartime funding or OCO appropriations, military soinawaythatrespects[their] personnel costs have doubled since 2001, or about sacrifices. 40% above inflation, while the number of full ­time  ­DoDStrategicGuidance,January2012 military personnel, including activated reserves, increased by only 8% during the same time period.  Within the base budget alone (i.e., excludingwartimefundingorOCO)duringthissametimeperiodpersonnelcostsincreasedby nearly90%,orabout30%aboveinflation,whilethenumberofmilitarypersonnelhasincreased byonlyabout3%.  In order to avoid unacceptable additional cuts in force structure or investments that could threatenourabilitytoexecutethestrategicguidanceunderthenewbudgetconstraints, DoD addressedthegrowthofpersonnel ­relatedcostswhilekeepinginmindthat: ThecoreoftheU.S.militaryisourAllVolunteerForce Militarylifeentailsuniquechallengesandstresses War ­relateddeploymentsofthepastdecadehaveputextraordinarydemandson manytroopsandtheirfamilies DefenseBudgetPrioritiesandChoices   13    WoundedWarriors,Families,andTransitioningVeterans Thisbudget plan sustainsorenhanceskeysupportprogramswhilereformingandre  ­organizing otherstobemoreeffectiveandresponsivetotheneedsoftroopsandtheirfamilies:  WoundedWarriors extrafundingaddedinthebaseandOCObudgetstoenhance theIntegratedDisabilityEvaluationSystem TransitionAssistance reformoftheTransitionAssistanceProgramandtransition processforallservicemembersthroughacollaborativeDoD ­VAinitiativethat improvescareeropportunitiesandreadinessfocusingoneducation,technical training,jobplacement,andentrepreneurshippreparation FamilySupport effectiveprogramssustained,expanded,orimproved,including non ­clinicalcounselors,marriagesupport,newpatientsupport,and stress ­reducing recreationforreturningtroops PsychologicalHealth programssustainedandparticularlyeffectiveprograms,such asthoseaddressingtraumaticbraininjuryandpost ­traumaticstressdisorder,were significantlyexpanded ReserveComponentSupport  providesservicesandreferralstoreservists,guardsmen,theirfamilies,andtheir employersthrougheachstageofthemobilizationcycle  DODSchools facilitiesbeingrestoredandmodernized MilitaryCommissarySystem currentnumberanddistributionofstoresmaintained  Compensation&Benefits Reductions in the rate of growth in spending on military compensation and other personnel  ­ relatedcostsandbenefits inthebudget are significantlyless thantheirshareoftotal defense spending.Militarycompensationandbenefitscurrentlyaccountforroughly1/3ofthedefense budget;however,thechanges wearemaking incompensationandbenefits accountfor about 1/9ofthetotalbudgetreductionswearemaking.  Asthestrainofdeployments onaforcethathasservedandsacrificedforoveradecadeofwar arereduced andthedemandsonrecruitmentandretentionease wehaveanopportunityto address personnel responsibilitytoprotectthenation. Theseproposals are fully uniformedleadership.  Military Pay.  Instead of reducing military pay, we created sufficient room to allow full pay raises in 2013 and 2014 to keep pace with increases in private sector pay.  We will achieve somecostsavingsbyprovidingmorelimitedpayraisesbeginningin2015.Thiswillgivetroops DefenseBudgetPrioritiesandChoices   14    andtheirfamiliesfairnoticeandleadtimebeforetheseproposedchangestakeeffect. Wewill, therefore, achieve some savings in the later years to invest in force structure and modernization. Despitethischange,militarypersonnelwillseetheirpaycheckincrease every yearacrosstheFYDP.  Health Care.  Military health care has seen rapid growth relative to the rest of the defense budget. Most ofthechanges madeinthisbudget willnotaffectactivedutypersonnelortheir families.  We are also exempting medically retired and survivors ofthose who diedon active dutyfromallhealth carechanges. Thosemostaffected willbeworking ­age retireesunderthe ageof65stilllikelytobeemployedintheciviliansector.Theseproposedchangesinclude: Furtherincreasingandaddingnewenrollmentfeesforretireesunderage65inthe TRICAREprogram,usingatieredapproachbasedonretiredpaythatrequiressenior  ­ graderetireestopaymoreandjunior ­graderetireesless;theresultingfeesremain belowcomparablecivilianequivalents EstablishinganewenrollmentfeefortheTRICARE ­for ­Lifeprogramforretirees65 andolder,againusingatieredapproach;theresultingfeeswillbewellbelow comparablecivilianequivalents Implementingadditionalincreasesinpharmacyco ­paysinamannerthatincreases incentivesforuseofgenericsandmailorder  Retirement.  We will ask the Congress to establish a commission with BRAC ­like authority to conduct a comprehensive review of military retirement in the context of total military compensation.Thegoalofthecommissionwouldbetorecommendchangesinordertomeet thepersonnelneedsoftheDoDinacosteffectivemanner.DoDstronglysupportsprotecting the retirement benefits of those who currently serve by grandfathering their benefits.  Any reformsshouldonlyaffectfuturerecruits.   CONCLUSION  ClearlytheDepartmentwasrequiredtomakedifficultchoicesinordertoprovideabalanced forcewithintheconstraintsoftheBudgetControlAct.Thesebudgetreductionsarenotwithout risk, but they were made in a judicious and considered way and guided by sound strategic guidance.TheFY13budgetsetsthedirectionforanongoingprocessofadaptation,resultingin aJointForceof2020.TheJointForceof2020,whileleanerandsmaller,willremainagileand ready, comprised ofprofessionalSoldiers,Sailors,AirmenandMarinesemployingcuttingedge technology.Itwill remainthestrongestmilitaryforceintheworld,fullycapableofprotecting  DefenseBudgetPrioritiesandChoices   15 ...
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