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Trump Administration Adds $52B to DoD Budget, Seeks Base & Healthcare Savings

The Trump administration’s 2018 budget calls for $640 billion in military spending, $52 billion over current year spending and breaking the current budget caps.

Nevertheless, the Pentagon claims it has found “efficiency” savings of $1.2 billion in savings for fiscal year 2018, reports Federal News Radio, and that this will result from changes to business processes in the headquarters of both the Office of the Secretary of Defense and the office of military services.

The department touted savings of $200 million from a lower than usual pay raise for military members and employees. While the 2018 budget proposes a 2.1 percent raise for military members and a 1.9 percent pay raise for employees, that figure is lower than the 2.4 percent Employment Cost Index federal employees otherwise receive.

DOD health beneficiaries will also have to foot more of the cost of their own medical plans. Active-duty service members will receive treatment at no cost, but there will be deductibles and new enrollment fees for retirees, and family members would have copays, too. The plan also calls for an annual open enrollment period similar to the one that employees in the Federal Employee Health Benefits Program have.

The Department of Defense also believes it could save an additional $2 billion each year forward if Congress allowed it to conduct another round of Base Realignment and Closure (BRAC) in 2021. The Pentagon estimates that it costs 22 percent more to maintain bases than what is militarily useful at this point.

Although the BRAC request has been made every year since 2012, Congress has repeatedly failed to approved it because it is unpopular in many districts that rely on base employment for their local economies.

“The sum-total of the five rounds we’ve had since the 1990s has resulted in approximately $12 billion a year in savings. It’s a gift that keeps on giving,” said John Roth, career senior executive who’s currently performing the duties of DoD comptroller, reported Federal News Radio. “All we’re asking for at this stage is the authority: we can’t even do the detailed analysis under current law. What we have is a parametric estimate. If that number is anywhere near correct, we are forgoing a very significant opportunity to get some savings. [BRAC] is a very structured, systematic, rigorous process that ultimately, Congress has the final say on. We think we’re getting some signals from at least a couple of committees that are more amenable to it and so we will be pushing that pretty hard.”

DOD classifies one out of every five facilities as in “failing” condition; and last year’s budget provided only 74 percent of the funding needed for upkeep. This budget would pad several billion dollars into the account, about 25 percent over last year’s number.

The DOD plans to be “audit-ready” by September as mandated by Congress.

Roth said not to expect the department to receive a passing score in 2018.

Previously, “no one really cared,” said Roth. “That’s why we didn’t move the ball. In the last six or seven years, it became a high priority for the entire department.”

Roth highlighted that the importance of the audit process for 2018. The DOD will be coming to terms with either changing business or accounting processes and getting the department quote ready, he said.

 

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