SHUTDOWN COUNTDOWN: The Big Four Republican and Democratic leaders in Congress head to the White House to meet with President Trump at 3 p.m. today in the hope of reaching a budget deal to avert a partial government shutdown after Friday. The outcome is also crucial for the defense budget. Lawmakers are eyeing a two-week stopgap measure to keep the government running until Dec. 22, but have yet to reach an agreement on raising a $549 billion Budget Control Act cap on defense spending as well as a cap on non-defense spending.

There is no mood in Congress for another expensive and disruptive shutdown, but when asked yesterday about the prospect, Trump said, “It could happen.” Speaking at the top of yesterday’s Cabinet meeting, the president claimed Democrats “are really looking at something that is very dangerous for our country. They are looking at shutting down.”

“President Trump is the only person talking about a government shutdown,” countered House Minority Leader Nancy Pelosi in a statement. “Democrats are hopeful the president will be open to an agreement to address the urgent needs of the American people and keep government open.” A planned White House confab fell apart last week when Trump tweeted beforehand that he did not see a deal with Pelosi and Senate Minority Leader Chuck Schumer, prompting the pair to skip the meeting. Despite the president’s accusation yesterday that Democrats “want to have illegal immigrants pouring into our country, bringing with them crime, tremendous amounts of crime,” Schumer and Pelosi say they will show up today.

“The president is pleased that Sen. Schumer and Rep. Pelosi have decided to put their responsibility to the American people above partisanship and attend tomorrow’s meeting, paving the way to fund our government and support our brave service men and women who put their lives on the line every day,” White House deputy press secretary Lindsay Walters said yesterday. “The administration hopes to find fiscally responsible ways to avoid a government shutdown, address the looming sequester and devastating cuts facing our military, as well as fund important domestic priorities that will encourage economic prosperity and keep Americans safe.”

WHAT IT MEANS TO DoD: Without a larger deal to raise the cap, the $700 billion National Defense Authorization Act that was passed last month — and which includes money for more aircraft, ships and troops — could be slashed. Both the Pentagon and the defense industry were applying pressure on Congress as the clock ticks toward the expiration of the current budget measure Friday night. Col. Rob Manning, a Pentagon spokesman, was still urging Congress to avoid another stopgap measure and pass appropriations legislation to fund the NDAA this week. “Continuing resolutions immediately disrupt training, impede readiness recovery, delay maintenance, impose uncertainty on the workforce and induce inefficient and constrained contracting practices,” Manning said. But the chances of Congress passing defense appropriations by Friday is nearly zero. Meanwhile, Deputy Defense Secretary Pat Shanahan and Gen. Paul Selva, the vice chairman of the Joint Chiefs of Staff, were on Capitol Hill yesterday talking defense budget in a closed-door briefing open to all senators. “It was an update or a discussion about some of the choices we’re going to have to make and the priorities in the spending bill,” said Sen. Thom Tillis, a member of the Armed Services Committee.

REMOVE THE CAPS: The Aerospace Industries Association has also released a letter sent to Schumer, Pelosi, Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan and signed by 44 leaders of defense companies that calls on the lawmakers to repeal the $549 billion cap on defense spending. “We remain concerned that final FY18 appropriations, without repeal or substantial alteration of the discretionary spending caps introduced by the Budget Control Act of 2011, could undermine our collective commitment to strengthening military readiness,” they wrote. The Dec. 1 letter included the signatures of some of the country’s largest contractors, including Lockheed Martin CEO Marillyn Hewson, Boeing CEO Dennis Muilenburg and Raytheon CEO Thomas Kennedy. “If Congress acts soon and decisively on finalizing FY18 spending including a statutory repeal or revision to the BCA, it will positively assure that the Defense Department avoids a sequester for the first time since April 2013.” Sequestration refers to the across the board automatic cuts, sometimes called a meat ax, that occur across the federal budget if Congress violates the spending cap.

Good Thursday morning and welcome to Jamie McIntyre’s Daily on Defense, compiled by Washington Examiner National Security Senior Writer Jamie McIntyre (@jamiejmcintyre), National Security Writer Travis J. Tritten (@travis_tritten) and Senior Editor David Brown (@dave_brown24). Email us here for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list. And be sure to follow us on Twitter @dailyondefense.



HAPPENING TODAY, THE LONG PROMISED AUDIT: The Pentagon will announce today that it will begin a comprehensive audit of the Department of Defense, something demanded by Congress for years. A briefing is set for today with Pentagon Comptroller David Norquist and Chief Spokesperson Dana White to outline how the Pentagon will account for $2.4 trillion, believed to be the largest audit ever undertaken. A requirement for the audit was included in the 2017 National Defense Authorization Act.

The subject of an audit comes up in almost every confirmation hearing on Capitol Hill, and the failure of the Pentagon to provide an accounting has been a source of perennial frustration. “We need to be able to audit the Department of Defense,” said Sen. Angus King, at the June confirmation hearing for Shanahan. “I can't keep going home to Maine saying we're spending half a trillion dollars a year, but it can't be audited,” King said. Shanahan promised the audit would begin in September, or October the latest.

It’s now December, but the important thing is that it “demonstrates DoD and the secretary's commitment to accountability and maximizing every taxpayer dollar entrusted to us,” White told the Washington Examiner. “I am devoted to gaining full value from every taxpayer dollar that's spent on defense, thereby earning the trust of Congress and the American people.”

SASC TARGETS BUYING REFORMS: Another perennial promise from the Pentagon is to do a better job buying things the military needs, from spare parts to big ticket weapons programs. With so many Pentagon programs overdue and over budget, top DoD officials are heading to the Senate Armed Services Committee this morning for a grilling on acquisition reform. The 10 a.m. hearing will feature testimony from Ellen Lord, the new undersecretary of defense for acquisition, technology and logistics; newly confirmed Army Secretary Mark Esper; Navy Secretary Richard V. Spencer; and Air Force Secretary Heather Wilson.

ISIS DEFEATED! ‘THANKS, PUTIN’: Russian President Vladimir Putin said yesterday that ISIS has been dealt a “complete defeat” in Syria, thanks to Moscow's military intervention in 2015. Putin declared victory and said operations against ISIS in eastern Syria had been successfully completed. The Russian embassy in Britain tweeted a “mission accomplished” stamp declaring Syria is 100 percent ISIS-free.  

NOT SO FAST, COMRADE: The Pentagon had a starkly different view of things, including some harsh words for Moscow’s Syria intervention. “Russia has conducted only a fraction of counter ISIS operations,” Manning said. “Most of the territory liberated in Iraq and Syria has been liberated by the efforts of the global coalition and its partners.” The Pentagon estimates that ISIS has lost 97 percent of the territory it once held, and that the fight is not over.

“The Syrian regime and Russian Federation’s actions have thus far demonstrated that countering ISIS and other violent extremist groups like Nusra Front and al-Qaeda is not their foremost priority,” Manning said. “Their collective actions call into question their commitment to deal a lasting defeat to and other extremist groups.”

TRUMP TAKES CREDIT: Meanwhile over the White House, Trump was congratulating his defense secretary for successfully implementing his strategy to defeat ISIS. Turning to Jim Mattis, Trump said, “I want to thank Gen. Mattis for doing such a great job with respect to ISIS. He's knocked the hell out of them. Of course, I've made it possible with what I've let you do, I think, Wouldn't you say?” To which Mattis replied, “Yes, sir. Absolutely.”  

NOW IT CAN BE TOLD: Now that the bulk of the fighting against ISIS is over and some U.S. troops are coming home, the Pentagon has decided the time is right to tell the American people how many forces the U.S. actually has in Syria. For over a year, the Pentagon has hidden the true extent of U.S. involvement in providing combat support on the ground to U.S.-backed Syrian fighters. The official number of 503 troops was a well-known fiction. Yesterday, the Pentagon revealed the real number is closer to 2,000, and that’s not counting the 400 Marines who just left. The Pentagon also said there are 5,200 troops in Iraq, a slight increase over the old number of 5,000.

“To be very clear, this is not an announcement of a troop increase in either Iraq or Syria,” Manning said. “We are simply revising how we internally conduct force management and publicly report the U.S. force commitment in Iraq and Syria.”

PUTIN FOR PRESIDENT: Putin has officially announced his intention to run for reelection to another six-year term. Although 30 other candidates have also declared they are running in the March election, it doesn’t take a sophisticated data analysis to confidently predict that Putin will win easily, although the Kremlin would like it to look like a real election. Putin enjoys the endorsement of United Russia, Russia’s main pro-government political party.

A MILD REBUKE: America’s closest ally issued a carefully worded objection to Trump’s decision to recognize Jerusalem as the official capital of Israel. “We disagree with the US decision to move its embassy to Jerusalem and recognize Jerusalem as the Israeli capital before a final status agreement. We believe it is unhelpful in terms of prospects for peace in the region,” said British Prime Minister Theresa May. But at the same time she applauded Trump’s commitment to a two-state solution negotiated between the parties. “We encourage the US Administration to now bring forward detailed proposals for an Israel-Palestinian settlement,” May said while also noting the British Embassy in Israel is based in Tel Aviv and there are “no plans to move it.”

NOT TAKING SIDES: In his remarks yesterday, Trump stressed that he was simply recognizing the reality and acknowledging the obvious, that Jerusalem is Israel's capital. “This decision is not intended, in any way, to reflect a departure from our strong commitment to facilitate a lasting peace agreement. We want an agreement that is a great deal for the Israelis, and a great deal for the Palestinians,” Trump said. “We are not taking a position of any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem, or the resolution of contested borders. Those questions are up to the parties involved. The United States remains deeply committed to helping facilitate a peace agreement that is acceptable to both sides. I intend to do everything in my power to help forge such an agreement.”

CONFLICTING ADVICE: According to a report by Bloomberg, Trump got a mixed message from his national security team. Vice President Mike Pence, White House Chief of Staff John Kelly and UN Ambassador Nikki Haley all came down in favor of recognizing Jerusalem as Israel’s capital, and Secretary of State Rex Tillerson and Mattis recommended against the move. Tillerson was reportedly concerned about the implications for the peace process, while Mattis cited a potential backlash and security threats.

MORE CONFLICTING ADVICE: Haley told Fox News yesterday that it’s an “open question” as to whether U.S. athletes should participate in next year’s Winter Olympics in South Korea. "I think those are conversations we are going to have to have, but what have we always said? We don't ever fear anything, we live our lives.”

It’s a different response than national security adviser H.R. McMaster gave this week when Fox News asked him whether Americans should feel safe going to South Korea for the games. He said “yes.”

REMEMBERING THE DAY OF INFAMY: Today is Pearl Harbor Remembrance Day, in which we recall the surprise attack by Japan on what was then the U.S. territory of Hawaii, which led to America’s entry into World War II. The Navy just this month authorized the posthumous award of combat medals to two sailors who displayed heroic actions during the attack on the U.S. Naval Base at Pearl Harbor on the morning of Dec. 7, 1941.

The Silver Star was awarded to Chaplain Lt. j.g. Aloysius H. Schmitt for gallantry in action against the enemy while serving on the battleship USS Oklahoma. As Oklahoma was capsizing, Schmitt sacrificed his own life to assist many of his shipmates in escaping to safety. The Washington Post recounts the story here.

The Bronze Star Medal with V device for valor was awarded to Chief Boatswain’s Mate Joseph L. George for heroic achievement while serving aboard the repair ship USS Vestal. George, a second class petty officer at the time, saved the lives of several sailors from the battleship USS Arizona. He survived the war and retired from the Navy in 1955, but passed away in 1996.

FINAL THOUGHT: Retired Rear Adm. Thomas Lynch, former commander of the USS Dwight D. Eisenhower Battle Group and Naval Academy superintendent, and current executive chairman of NewDay USA, offered these thoughts on the day:

“If you ever visit the Battleship Arizona Memorial in Pearl Harbor, you will see how the ship still leaks oil — 76 years after the Japanese attack on American naval forces. The Arizona Memorial is a somber reminder of the 2,400 Americans lost during an air raid that saw 18 U.S. Navy ships, including five battleships, either sunk at their docks or run aground attempting to dodge enemy bombs and torpedoes. We owe a great debt of gratitude to our Pearl Harbor and WWII Veterans, one we can never repay, but we remember and honor them today for their steadfast courage and selfless sacrifice.”

THE RUNDOWN

AP: Collapse of the Caliphate

Reuters: U.S. Officials Warn Of ISIS' New Caliphate: Cyberspace

Wall Street Journal: U.S. Tries to Seize Antiquities Looted by Islamic State

USA Today: Palestinian leader: Trump's Jerusalem decision a 'withdrawal' of peace process

USNI News: Aegis Combat System ‘Virtual Twin’ Pilot Program Could Lead to Fielding Faster Upgrades

Stars and Stripes: North Korea warns war is ‘established fact’ day after US bombing drills

New York Times: Russia Balks at Cross-Border Humanitarian Aid in Syria

Military.com: Navy Completing Only Half of Missions -- And May Have to Turn Down More

Wall Street Journal: Navy Looks To Reassess Its Mission After Ship Accidents

Defense News: Poland has sticker shock over ’unacceptable’ price tag for Patriot buy

Defense News: Israel Declares F-35s Ready For Operations

Foreign Policy: Yemen’s Snake Charmer Is Dead

Defense One: Northrop Tests Spy Drones That Deploy in a Fake Bomb

Calendar

THURSDAY | DEC. 7

8 a.m. 1575 I St. NW. NCPPP’s Federal P3Bootcamp with Lucian Niemeyer, assistant secretary of defense for energy, installations and environment. p3bootcamp.org

8:30 a.m. 1616 Rhode Island Ave. NW. Finding consensus for a new authorization for the use of military force with Reps. Mike Coffman, Ruben Gallego, Don Bacon and Jimmy Panetta. csis.org

9:30 a.m. Rayburn 2172. Counterterrorism efforts in Africa with John Sullivan, deputy secretary of defense, and Mark Mitchell, acting assistant secretary of defense for special operations and low-intensity conflict. foreignaffairs.house.gov

10 a.m. Dirksen G-50. Department of Defense acquisition reform efforts with Ellen Lord, undersecretary of defense for acquisition, technology and logistics; Army Secretary Mark Esper; Navy Secretary Richard Spencer; and Air Force Secretary Heather Wilson. armed-services.senate.gov

10 a.m. House Visitor Center 210. Subcommittee hearing on the Department of Homeland Security’s organization and ability to meet the threats posed by weapons of mass destruction. homeland.house.gov

10:30 a.m. Shared threats and a common purpose: U.S.-Romania missile defense cooperation with Romanian Ambassador George Cristian Maior. hudson.org

12 p.m. 214 Massachusetts Ave. NE. Realism and democracy in American foreign policy after the Arab Spring. heritage.org

3 p.m. 529 14th St. NW. Lessons from the Syria crisis: Old rivalries, new dynamics. press.org

FRIDAY | DEC. 8

8 a.m. 300 First St. SE. The Mitchell Space Breakfast Series with Gen. Jay Raymond, commander of Air Force Space Command. mitchellaerospacepower.org

10 a.m. 1775 Massachusetts Ave. NW. The Intermediate-Range Nuclear Forces Treaty: Does it have a future? brookings.edu

11:30 a.m. 929 Long Bridge Dr. Missile defense luncheon. ndia.org

12 p.m. 214 Massachusetts Ave NE. The terrorist argument: Modern advocacy and propaganda. heritage.org

12 p.m. 1201 Pennsylvania Ave. NW. Emerging challenges in cybersecurity: A conversation with former NATO Assistant Secretary General Sorin Ducaru. hudson.org

MONDAY | DEC. 11

9 a.m. 1616 Rhode Island Ave. NW. U.S.-Korea defense acquisition and security cooperation. csis.org

5:30 p.m. Book discussion of “Anatomy of Failure: Why America Loses Every War it Starts?” with author Harlan Ullman. atlanticcouncil.org

TUESDAY | DEC. 12

8 a.m. 1300 Pennsylvania Ave. NW. CTTSO advanced planning briefing for industry. ndia.org

9 a.m. 1300 Pennsylvania Ave. NW. U.S.-UK Relations in a changing world with Lt. Gen. H.R. McMaster, White House national security advisor. policyexchange.org.uk

12 p.m. 1030 15th St. NW. 2017 Atlantic Council-Korea Foundation Forum with Wilbur Ross, secretary of commerce. atlanticcouncil.org

12:30 p.m. 1777 F St. NW. Yemen: A country in crisis. cfr.org

1 p.m. 1000 Massachusetts Ave. NW. Live Power Problems podcast recording: “All I Want for Christmas is an F-35: Trump, the Generals and the Defense Budget.” cato.org

2 p.m. 1775 Massachusetts Ave. NW. Revisiting lessons of the Vietnam War. brookings.edu

5 p.m. 1616 Rhode Island Ave. NW. Book launch of “Anatomy of Failure: Why America Loses Every War It Starts.” csis.org

WEDNESDAY | DEC. 13

8 a.m. 1800 Jefferson Davis Hwy. Special topic breakfast with Adm. Paul Zukunft, commandant of the Coast Guard. navyleague.org

9:30 a.m. Dirksen 419. Using force: Strategic, political and legal considerations with Stephen Hadley, Christine Wormuth and John Bellinger. foreign.senate.gov

10 a.m. Russell 222. Update on research, diagnosis and treatment for traumatic brain injury and concussion in service members. armed-services.senate.gov

1 p.m. 1616 Rhode Island Ave. NW. Ballistic missile defense: Evolving threats and new priorities with Rear Adm. Jon Hill, deputy director of the Missile Defense Agency. csis.org

1:45 p.m. 1201 Pennsylvania Ave. NW. The future of combating terrorism and countering the use of WMD: A Conversation with Acting Secretary of Homeland Security Elaine Duke. hudson.org

3:30 p.m. Rayburn 2118. Addressing physiological episodes in fighter, attack and training aircraft Lt. Gen. Mark Nowland, Vice Adm. Paul Grosklags, and Rear Adm. Sara Joyner.

6 p.m. 1250 S Hayes St. Aerospace Industries Association Lyman award dinner. aia-aerospace.org

THURSDAY | DEC. 14

7 a.m. 901 17th St. NW. S&ET executive breakfast. ndia.org

9:30 a.m. 1501 Lee Highway. Mitchell Hour on the operational National Guard, a unique and capable component of the joint force with Gen. Joseph Lengyel, chief of the National Guard Bureau. mitchellaerospacepower.org

11:30 a.m. 1250 S. Hayes St. Aerospace Industries Association media luncheon. aia-aerospace.org

12:30 p.m. 525 New Jersey Ave. NW. CNAS event: Toward a common North Korea strategy with Rep. Ami Bera. cnas.org