Pentagon prepares for an expensive decade

Indeed, a large poster of the fictional Empire’s deadliest — and likely most expensive — weapon hovers over Morin’s desk, a testament to the quirkier side of one of the Pentagon’s top “numbers” men.

It’s Morin’s job to assess the cost estimates of the Pentagon’s major weapons purchases and advise the department on whether it can bring those systems online in the budgets requested.

That job is a lot less predictable these days. Under the last three years of sequestration, the Defense Department has not known what its budget will be until well beyond the start of the fiscal year. The department is now trying to plan for a host of modernization efforts. That includes its entire nuclear enterprise — the new Ohio ballistic missile submarine, its land-based nuclear missiles, and new long-range bomber — and the most expensive program in the Pentagon’s history, the Joint Strike Fighter, among other major programs.

To get the programs on track for what will be an expensive decade ahead, the Pentagon requested $34 billion over the sequester caps in fiscal 2016. But odds that Congress will give it the entire amount or even part of that funding are dimming. That increases the risk that the Defense Department’s projected needs in the mid-2020s and beyond will turn into a wave of critical defense spending needs.

Even if the Pentagon gets the extra money in 2016, the mid-2020s will be an expensive time for the Defense Department. The top nine programs alone will need about $40 billion a year in procurement starting around the 2025 timeframe — and that does not count the hundreds of “smaller” programs that each will need several million, or several hundred million, dollars to move along.

If Congress does not agree to a compromise that raises sequester limits, those annual spending needs around 2025 would jump.

“If we end up significantly lower than [the president’s 2016 request], that means the bow wave will get bigger in a multiplicative way,” Morin said. “First it will get bigger because the content that we would buy during the ’20-teens,’ we will not be able to buy. It will be crowded out and we’ll buy it in the 2020s or 2030s. So that’s a classic bow wave — we just push those costs. Those modernization needs will still be there, but they will be delayed. Second, that kind of approach will drive increased costs for many of the programs — the unit cost will go up because [the services] will be driven to stretch out programs. So that’s a multiplicative effect.”

Morin was appointed to the office and confirmed last summer, and previously was assistant secretary of the Air Force for financial management. There, he was a key player in setting the Air Force’s budget priorities to keep its crown jewel, the F-35 Joint Strike Fighter, moving forward even as unstable funding and now three years of sequester cuts have made long-term planning for the fighter hard to predict.

After the initial deep sequester cuts in 2013, “department leadership did an aggressive prioritization. So the most visible programs — the highest impact programs — we were fairly successful in protecting. You didn’t see the F-35 program torn to shreds in 2014 and 2015. In those areas we’ve minimized the damage,” he said.

But the cost was that “a whole host of second-tier modernization programs were raided essentially in order to free up the resources to keep the big strategic programs on track,” Morin said. For example, Army truck acquisition and Navy aviation programs took hits. “Modifications to current generation aircraft have been a big bill payer,” Morin said.

He said the department is strategizing internally on its long-term outlook under the sequester. But for now, the department is outwardly focused on convincing Congress that further costs not only bring strategic risk, but added financial ones, as well.

“What we are focused on right now is explaining, very clearly, to everybody who cares, what the consequences are.”