Agenda • Trends – Defense – Army
• FY 15 Budget Request • Modernization • FY 15 Challenges
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Defense Spending Trends DoD Budget (FY 14 Constant $)
Total DoD Military Manpower
Total DoD Civilian Manpower
DoD Total $ (FY14 Constant $)
DoD FY01-14 Base (FY14 Constant $)
$800 B
8M
Korean War Armistice (1953)
Height of Vietnam War (1968)
$700 B
Vietnam War Ends (1973)
Height of Cold War (1985)
9/11 (2001)
Today 7M
Gulf War Ends (1991)
$600 B
OCO?
6M
$500 B
5M
$400 B
4M
$300 B
3M
$200 B
$100 B
$B
Manpower
$B (FY 14 Constant $)
Base?
2M
End Strength Ramp?
1M
M
• Discretionary spending is ~30% total federal budget…of which, Defense is ~50% • Increasing emphasis to reduce spending/deficit…Congress and the Administration • Historically, funding levels have decreased as military demand decreases 3
FY 2012 – FY 2015 Budget Summary Adapting to fiscal and strategic environment requires balance among readiness, end strength, and modernization $135.3
$132.0
$127.2
$127.4
$129.7
$125.1*
$120.5
FY13: Budget reductions cut $7.6B from enacted levels Overcame OCO shortfall late in year through reprogramming actions Cancelled CTC rotations and prioritized training resources Civilian furlough and hiring freeze Deferred maintenance and facility sustainment Every investment program impacted
*
FY14:
FY 2012
FY 2013
Research, Development, & Acquisition Operation & Maintenance Military Personnel
Budget reductions cut $7.7B from the PB request Beginning to build back lost readiness – CTC * FY 2014 OMA Enacted includes $3.1B realigned from Base to OCO Rotations Risk incurred in modernization and construction
FY 2014
PB 2015
Military Construction, Family Housing, & BRAC Other (CAMD, AWCF, JIEDDO, & ANC)
Our Guiding Principle Must Be Keeping Balance Among Readiness, End Strength, and Modernization 4
FY 2015 Budget Themes Enabling Globally Responsive, Regionally Engaged Strategic Land Forces
Building Adaptive Leaders Increased strategic and critical thinking in military and civilian leaders Total Army Professional Education Talent Management synchronizes need, skills, and ambition
Provisioning a Ready and Modern Army Soldier centered modernization Readiness optimized within affordability Readiness, end strength, and modernization balanced under affordability levels
Strengthen Commitment to the Army Profession Trust is our bedrock: between Soldiers, Leaders & the American People Total Force – Active, Guard, Reserve, Civilians & Families share the same professional ethic
Increasingly capable Army Prevent, Shape, and Win strategies Deployable, ready, regionally focused Army forces Expeditionary & enduring Land power in Joint Forces Brigade Combat Teams reorganization
Maintain the Premier All Volunteer Army Ready and Resilient Campaign Highest quality of life on Installations for Soldiers, Families and Veterans A professional Civilian work force Quality Soldier retention during downsizing
Soldiers Committed to Our Army Profession – and Ready to Fight 5
Army Budget Trends FY 2003 – FY 2019 ($B) $252 $235
Our Guiding Principle Must Be Keeping Balance Among Readiness, $221 End Strength, and Modernization
$237
OCO placeholder estimate; actual submission to be determined based on future decisions and events
$205 $121
$177
$243
$92
$99
$99
$167
$177 $168
$68
$109
$50
$143 $72
$147
$64
$123
$127
$129
$130
$131
?
?
?
?
?
$121
$127
$129
$130
$131
$46
$40 $26
$131 $97
$103
$103
$105
$143
$144
$138
$137
$112
$127
$122
FY 15-19 POM Request Enacted
Execution FY 03
FY 04
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY 14
FY 15
FY 16
FY 17
FY 18
FY 19
Numbers may not add due to rounding
Given realities of constrained budgets, the Army must adapt, innovate, and make difficult decisions impacting the Total Force
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FY 2015 Base Budget Request Does not include OCO
Base Request ($B) Military Personnel Operation and Maintenance/ERA * Procurement/RDTE Military Const/Family Housing/BRAC Other (CAMD/AWCF/JIEDDO/ANC)** Total
$120.5 B
FY13 FY14 FY15 Actuals Enacted Request
56.1 56.2 43.1 43.8 23.1 21.4 3.4 2.1 1.6 1.6 127.3 125.1
56.1 42.0 20.1 1.3 1.0 120.5
*FY14 enacted includes $3.1B Congressional realignment from Base to OCO funding ** FY15 Other: Chemical Agents and Munitions Destruction ($868M), Army Working Capital Fund ($14M), Joint Improvised Explosive Device Defeat Organization ($115M), and Arlington National Cemetery ($46M)
Military Personnel
46% Other 1%
Procurement/ RDTE
Military Construction/ Family Housing/BRAC 1%
17%
Operation and Maintenance
35%
Request supports end strengths of 490,000 for the Active Component and 552,200 for the Reserve Component Civilians provide critical support to the operational needs of the Army Plans for Decisive Action CTC Rotations and continued expansion of Regionally Aligned Forces Brigade Combat Team Restructure completes in FY 15, bringing total number BCTs to 60 Aviation Restructure Initiative to divest 898 helicopters from the fleet Research, Development, and Acquisition continues to decline as the budget balances end strength and training to build readiness
“The Army's largest asset and greatest expense is, and has always been, its people.” -HON John M McHugh, Secretary of the Army, 13 February 2014
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Modernization Summary Major Portfolios: Soldier Air (Aviation) Air Missile Defense Ground (Mobility) Indirect Fire Intelligence Mission Command Science & Technology
Appropriation Title ($B) Aircraft (ACFT) Ammunition (AMMO) Missile (MSLS) Other Procurement (OPA) Weapons and Tracked Combat Vehicles (WTCV) Procurement Totals : Research, Development, Test & Evaluation RDA Totals:
FY13 Base FY 14 Base FY 15 Enacted Sequester Request Enacted Request 4.8 5.1 6 5.7 5.0 1.4 1.0 1.6 1.6 1.5 1.5 1.0 1.5 1.4 1.3 4.9 5.7 5.7 6.5 4.9 1.6 1.5 1.9 1.8 1.6 16.8 16.3 15.9 14.3 13.5 8.7 8.0 8.0 7.1 6.6 25.5
24.3
23.9
21.4
20.1
Apache WIN-T
Warrior Stryker Patriot MSE
Near Term Readiness Priorities Force Modernization Risk 8
Effect of Inflation Over Time
While the increased funding is very helpful, even with a low inflation rate, buying power does not increase 9
Return to Pre-Growth Army is not the Answer • The Army of 2001 (1.04 million) would cost 55% more ($78B in FY 01 to $121B in FY 14) – Military personnel expenses grew over 47% (from $29B to $43B) – The Army doubled what is spends on civilian personnel (from $12B in FY 01 to $25B in FY 14) Organization Manpower
2001
2014
Division Based Forces
Modular Brigade Combat Teams
1.04M MIL (482K AC) 216K Civ
482K AC = $29.3B 216K Civ Wk Yrs = $11.9B
1.08M MIL (520K AC) 264K Civ
482K AC = $43.3B 265K Civ Wk Yrs = $24.7B
Readiness Model
Tiered Readiness
ARFORGEN
Training Focus
Combat Operations (Phase III)
Full Spectrum Operations (Phases 0-V)
Equipment
Insufficient investment ($56B “holes in the yard”)
EOH: 79% AC, 80% ARNG, 74% USAR MOD: 51% AC 44% ARNG, 57% USAR
Fully equipped, more heavily equipped, and highly modernized organizations
EOH: 95% AC 91% ARNG, 87% USAR MOD: 91% AC 86% ARNG, 76% USAR
Facilities
Underfunded Base Operations /SRM
Sustainment funded to 70%
Family & Soldier Programs
Immature Programs
Mature, Institutionalized Programs
Total Force
Minimal Reliance on RC
Heavy Reliance on RC
Soldier Experience
Panama, Desert Shield/Storm, Somalia, Bosnia, Herzegovina & Kosovo
Over 1 million deployed to OIF/OEF
Wounded Warriors
Transition to Veterans Affairs
Warrior Transition Units >52K Wounded 260K with TBI, ~119K with PTSD*
Physical Disability Evaluation System
11K in 2008 (2001 data inconsistent)
21.8K (15.7 AC, 4.1K, ARNG, 2K USAR)* * Source: Defense Medical Surveillance System (DMSS)
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FY 15 Challenges (Fiscal reality under Bi-partisan Budget Caps) • Congress reversing compensation savings ($595M) • Basic Allowance for Housing - $143.4M • Commissary Subsidy - $83.4M • Health Care Reforms - $367.5M • General Officer Pay Freeze - $0.4M
• Congress not supporting Aviation Restructure Initiative (ARI) ($699M) • Senate’s proposal to have Army provide for the Air Force to retain A10s ($200M) • Potential 0.8% increase to military pay raise ($226M) • Army - $171.1M • ARNG - $35.3M • USAR - $19.5M • Potential 0.8% increase to civilian pay raise ($193M)
• Civilian reductions, overall and within Headquarters • Contract Services spending reduction caps (Section 802)
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ARI freeze costs • Fort Rucker Training Costs (TT): $48,011,180 • OH-58 Costs(SS): $65,674,983 • 2 Heavy CABs O&S (minus ARB costs): $425,000,000 • 3 Aerial Reconnaissance Squadrons O&S: $159,900,000 • Total: $699,071,263 for FY15
CLOSE-HOLD / PRE-DECISIONAL / PPBE DOCUMENT / FOR OFFICIAL USE ONLY
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