The Federal Budget – Fiscal Uncertainty, Global Challenge, and the Value of Commercialization

In its annual budget request last month, the Administration proposed increasing the defense budget to $534 billion in 2016, about $35 billion more than the limit set by the Budget Control Act, aka Sequestration. The budget also predicted that the DoD would exceed the budget caps by a total of about $155B through 2020.

These numbers might look high at first glance at a time when discussions occur each day across the government about limiting budgets and reconsidering fiscal priorities.

The numbers themselves do not tell the whole story though, at least according to DoD officials. At a recent Pentagon press briefing, Deputy Defense Secretary Robert Work said the budget leaves “no margin for error or strategic surprise,” and if Congress doesn’t enact it largely unchanged—including force structure reductions and base closings to make the rest of the bills affordable—the national defense strategy would have to change.

Many observers believe that the United States has not faced a more diverse and complex array of crises since the end of the World War II. From Russia to the Middle East and North Africa, negotiations with Iran and North Korea, the ongoing struggle against ISIL in Syria and Iraq — these challenges to U.S. national security seem to come from every direction.

Tom Donnelly from the American Enterprise Institute recently summed up the current situation during a Congressional hearing on the FY16 Budget Request:

“There is no theater, there is no domain of warfare, in which American strength isn’t being seriously called into question.”

At a tactical level, many have suggested solutions to the crisis. Acquisition reform shows great potential, and concerns are growing that without substantial change in how the DOD does business, the U.S. will lose its technological and material advantages.

In recent Congressional testimony, Frank Kendall, Under Secretary of Defense for Acquisition, Technology & Logistics, said he was “deeply concerned” that U.S. armed forces were losing technological superiority, and talked about how sequestration would accelerate this trend.

Against this backdrop of fiscal uncertainty and global challenge the U.S. government must press even harder for greater reliance on commercial space capabilities. The benefits are more relevant now than ever. The billions of dollars of taxpayer investment in technology and material improvements are now coming of age in robust commercial space systems. In remote sensing, space situational awareness, weather, and of course, satellite communications, commercial companies can provide affordability, resilience, rapid technology refresh and many additional launch opportunities.

By embracing a greater reliance on commercial capabilities for a vast diversity of missions, the DoD can save money, while improving capability. It can increase resilience and survivability against a growing array of threats. And it can reduce the trend of technological and material decline. Greater reliance on commercial can help address staffing problems, and free up precious uniformed personnel for more challenging issues related to the growing threat.

The DoD should rely on commercial for “state of the world” technology and use scarce development dollars for those technologies that are truly “state of the art.” Government resources should be used for what commercial can’t do, not what commercial companies are actively doing and can easily partner with the department to provide.

It’s often a cliché, but this transformation starts with a dramatic culture change. When I was in government and planning and programming for future Air Force Systems, many of today’s advanced commercial options were unavailable. Those options are available now. Leaders, acquisition professionals, and operators need to take advantage of that fact to alleviate at least some of the fiscal and other pressures they face daily.

There are many leaders who understand this across all sectors of the U.S. government. Some are quoted here, and we have highlighted many of them in previous articles on SatCom Frontier. But we need more urgency, because we don’t have time to waste. In this current context of dramatic fiscal uncertainty and global challenges, the United States needs leaders to press to change the culture now.

 

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