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                         February 8, 2002

Budget ups defense spending by $48 billion

By Irene Brown
Editor

President Bush Monday revealed the details of his $2.13 trillion spending plan for next year, which includes the largest increase in defense spending since the Reagan years. Bush told service members at Eglin Air Force Base in Florida that the budget calls for a 14 percent increase in military spending and doubles the funding for national security.

Saying the nation faced the "new realities" of war and the need for stronger homeland security, Bush told the airmen, "The budget I submit recognizes the vital role the military will play and recognizes we have only one alternative, and that is victory."

After four years of budget surpluses, the new spending plan anticipates deficits for the remainder of Bush’s term, starting with a $106 billion deficit this year, $80 billion in 2003 and $14 billion in 2004.

The director of the White House’s Office of Management and Budget, Mitch Daniels, said the budget primarily seeks to "win a two-front war," to enable the country to combat terrorism abroad and to better protect Americans at home.

Specifically, the proposal calls for $38 billion for homeland security, doubling the $19.5 billion that had been budgeted this year. The money is divided among support for bioterrorism defense, firefighters and law enforcement agents, beefed-up airport and border security and improved intelligence collection.

The Defense Department budget proposes investments in unmanned aerial vehicles, precision weapons and high-tech gear for ground troops. The budget also includes $7.8 billion for missile defense technology.

For non-military and military alike, the proposal also includes a provision for $675 billion in additional tax cuts over the next 10 years, $354 billion of which is the result of permanently extending the large-scale tax reduction the White House pushed through Congress last year. Otherwise the tax cut is due to expire in 2010.

Recalling how last September’s attacks hurt the economy, Defense Secretary Donald H. Rumsfeld told reporters the proposed increase in defense spending represented a modest insurance policy.

"If one thinks about the economic loss that took place on September 11th in this country and elsewhere in the world in billions and billions of dollars, it is very clear that the defense budget is cheap when one compares it to putting our security at risk, our lives at risk, our country at risk, our freedoms at risk," he said.

Rumsfeld, like Bush, spoke of the need to prepare for future, uncertain battlefields. The defense secretary spoke of "wars of tomorrow" that he said would likely involve threats different from those the United States faced during the Cold War and the immediate post-Cold War period.

At Eglin, Bush told the audience that the proposed increase in defense spending was no more than they deserved.

"We need to be able to send our troops on the battlefields and places that many of us never thought there’d be a battlefield," Bush told them. "Our men and women -- you deserve the best weapons, the best equipment and the best training."

Federal employees did receive some mention in the budget unveiling, but perhaps not the one they were looking for. While the president announced that military personnel would also receive a 4.1 percent pay raise if Congress approves the request, he’s only asking for 2.6 percent for civilians, a proposal some Washington officials are already opposing.

Reps. Steny Hoyer, Connie Morella and Al Wynn of Maryland; Jim Moran of Virginia; Eleanor Holmes Norton of D.C. and Tom Davis and Frank Wolf of Virginia, expressed their feelings in a letter they sent to the president Jan. 30. The letter stated: "Our military and civilian employees make significant contributions to the welfare of this country everyday and should be compensated in an equitable manner."

The proposal marks the second year the Bush administration has attempted to give larger raises to military personnel than to civilian personnel, breaking a long-standing tradition of pay raise parity for the military and the civil service. Office of Management and Budget officials defended the proposal for an end to pay parity.

"We believe that a distinction can and should be made between [civilians and] people who are in harm’s way at time of war," OMB Director Mitch Daniels said during a budget briefing Monday.

The civilian pay raise would be split between an across-the-board increase and locality-based increases. Based on recent history, the across-the-board increase could be 1.6 percent, with the remaining 1 percent divvied up on the basis of work locality.

Daniels noted that using the change in the Employment Cost Index as a basis for adjusting federal pay, as has been done in recent years, would have resulted in a 3.6 percent civilian raise next year.

"But that’s only a starting point," Daniels said. "We thought giving back one percent -- or lets’s say taking one percent less from this rule-of-thumb index -- would be something federal employees would think was fair."

In addition to providing funds for the war on terror, the budget request starts the military transformation process, Defense Secretary Donald Rumsfeld told reporters Monday during a Pentagon news conference.

Rumsfeld said the $379.3 billion reflects the six transformation goals set down in the Quadrennial Defense Review. These are: protect the U.S. homeland and critical bases of operation; deny enemies sanctuary; project and sustain power in access-denied areas; leverage information technology; improve and protect information operations; and enhance space operations.

He said the 2003 budget also tries to balance the different types of risk the United States faces.

"We’ve all heard for years of war risks and requirements to keep those war risks at a moderate level," Rumsfeld said to reporters. "In this (budget) process we have done our best to try to balance war risks against the risks of not properly taking care of (our) people and not properly funding infrastructure."

The budget also considered the risks of not modernizing and not properly transforming the force.

Rumsfeld said he believes many people think that "transformation is a weapon system or transformation is firing some person who is not transformational."

Transformation can be new weapons, he explained, but it can also be connectivity and interoperability and "in taking things -- every single one of which exists presently -- and managing them, using them, arraying them in a way that has a result that is transformational."

The administration’s new budget was not all about spending increases. The budget request also states that DoD would continue to pursue a 15 percent cut in its headquarters staff and that civilian personnel levels would drop slightly in 2003, from 671,800 workers to 664,600. Budget documents show that civilian employment levels would continue to drop through 2007, to a level of 652,300 workers.

The defense department is seeking to open 9,452 additional jobs to commercial competition in fiscal 2003, including 3,756 Army position.

"DoD is committed to an aggressive A-76 program and is vigorously pursuing the budget savings that can be achieved," states the 2003 budget proposal. Similar outsourcing projections are forecast through fiscal 2005.

The competitions would follow rules outlined in Office of Management and Budget Circular A-76, which require a competition between federal employees and a contractor before any work is outsourced, with the jobs going to the lowest bidder. Defense estimates the average study takes 18 months to complete and costs $2,000 per position reviewed.

On the positive side, the federal government will boost its non-defense workforce by 8 percent over the next two years, adding more than 85,000 workers to the rolls of civilian agencies.

The Transportation Department will hire more than half of the new civilian workers, mostly at the new Transportation Security Administration. The Justice Department will add 17,000 workers to its payroll, an increase of 14 percent. Treasury will increase its ranks by 7,000 workers, a 5 percent hike.