Jan. 25, 2013 - NS/FR Weekly Update

National Security

1. Defense Budget: Navy orders cuts to begin

Navy flag officers and top executives were told Thursday to begin cutting expenses -- laying off thousands of temporary civilian workers, reducing base operations and preparing to cancel maintenance work on more than two dozen ships and hundreds of aircraft.
Adm. Jonathan Greenert, chief of naval operations, directed the reductions in a memorandum sent to senior Navy officials. The cuts are driven by uncertainty over how much a divided Congress and the White House might approve for the Pentagon's 2013 budget.
The cuts include:
-- Plans to cancel maintenance for about 30 Navy ships at private shipyards between April and September.
-- Plans to cancel depot maintenance for about 250 aircraft between April and September.
-- Terminations of temporary civilian employees and a civilian hiring freeze. This will reduce the shipyards' workforce by more than 3,000 people.
-- Reductions in base spending and plans to cancel most repairs and upgrades of piers, runways, buildings and other facilities.
The cutbacks are in response to Congress' continuing to fund the Navy at the 2012 budget level, rather than providing what the service was expecting for 2013. Unable to agree on an annual budget, Congress approved a continuing resolution to keep the government operating at 2012 budget levels until March 27.
The reductions are separate from about $1 trillion in automatic budget cuts -- known as sequestration -- with more than half coming from the military. Those are set to begin March 1, unless Congress intercedes.

Panel report urges DoD to account for “full” cost of personnel
The Reserve Forces Policy Board’s report, online at http://ra.defense.gov/rfpb/reports/ argues that, unlike defense contractors bidding to build ships or new combat vehicles, Defense policy makers don't have to account for “fully-burdened and life-cycle costs” of personnel, even though military personnel costs have reached $250 billion a year or about half the entire defense budget.
The report claims the “fully-burdened per capita” cost to the government of an active duty member is $108,307 in pay and benefits, a figure 20 percent higher usually calculated because it includes their health care, dependent education, housing and commissaries. The equivalent per capita cost of reserve component members is $34,272, with 30 percent of that linked health care improvements under Tricare Reserve Select.
Total Defense Department per capita costs triple, to $330,342 for active duty and to $100,380 for reserve component members, when non-compensation items such as training, military construction and base support costs are calculated. They climb by another 15 to 20 percent when military personnel costs covered by other federal departments, including Veterans Affairs, Treasury, Labor and Education, are calculated. These non-DoD costs for personnel include the GI Bill, VA disability benefits, job training for vets, and a portion of retirement and Medicare obligations paid by Treasury.
A large proportion of total personnel costs is deferred, paid to retirees who can draw an annuity with benefits at 20 years even though most will live, on average, another 40 years, Punaro said. If this sounds familiar, Punaro also served on the Defense Business Board, another advisory panel to DoD that produced recent reports criticizing military retirement and retiree health benefits as too generous to be sustained for future generations.

2. Military Readiness: Panetta lifts ban on women in combat specialties

The Pentagon on laid out a three-year plan for integrating women into most combat positions on Thursday as the Pentagon’s leaders officially ended the ban on women in combat.
Not all of the positions will be opened, and no decisions have been made whether women would be allowed the serve in special operations units or other similar positions, according to the officials. For the services to have a position exempted, both the chairman of the Joint Chiefs and the Defense secretary must sign off.
Service chiefs have until May, after Panetta departs the Pentagon, to outline their incremental plans to work women into frontline units.
Inhofe threatens to block DoD changes: Sen. James Inhofe (R-Okla.), the new top Republican on the Armed Services Committee, threatened to block some positions from being opened to women, through legislation if he had to.
“I want everyone to know that the Senate Armed Services Committee, of which I am the Ranking Member, will have a period to provide oversight and review,” Inhofe said in a statement. “During that time, if necessary, we will be able to introduce legislation to stop any changes we believe to be detrimental to our fighting forces and their capabilities. I suspect there will be cases where legislation becomes necessary.” (thehill.com)

Foreign Relations

1. Global War on Terrorism: Secretary of State Clinton testifies on Benghazi

On Wednesday, staff attended the Senate Foreign Relations Committee hearing on the September 11, 2012 attack in Benghazi. Secretary of State Hillary Clinton was questioned about the State Departments role before, during and after the incident in which four Americans, including Ambassador Christopher Stevens, were killed. A full video of the hearing can be found here.

2. Asia-Pacific: China, Japan seek to cool tensions over islands

China and Japan sought to ease tensions from a mounting territorial dispute over the Diaoyu/Senkaku Islands on Friday as Communist Party Chief Xi Jinping told a Japanese envoy he would "seriously consider" a summit (KyodoNews) between the two countries.

North Korea’s nuke test threat draws concern
North Korea warned Thursday that it will conduct its third nuclear test in defiance of the UN Security Council's expanded sanctions, making clear that its long-range rockets carry warheads aimed at striking the United States (Reuters). The threat came after a special U.S. envoy, after talks with a South Korean counterpart in Seoul on Thursday, warned Pyongyang (Yonhap) against conducting nuclear tests. Meanwhile, China called on all relevant parties to "refrain from action" that might escalate the situation. Beijing backed Tuesday's Security Council resolution--a move that analysts said angered its northern neighbor.

John Stovall
Director, National Security / Foreign Relations Division