DOD, White House rework budget plan in wake of fiscal-cliff deal

DOD number crunchers, along with their counterparts at the White House’s Office of Management and Budget, are “still working through the analysis” on the fiscal 2014 plan in light of the legislation passed on New Year’s Day, Pentagon spokesman George Little said Wednesday. 

{mosads}Pentagon leaders “are still working the timeline” for the release of the budget plan, which is scheduled to arrive on Capitol Hill in February, according to Little. 

The announcement comes less than a week after DOD officials vowed not to take the $500 billion in proposed defense sequestration cuts into account in its planning. 

But the fiscal-cliff deal reached Tuesday, which delays automatic budget cuts to Pentagon coffers for two months, will likely affect when the DOD budget plan is delivered to Congress. 

“There will probably be some impact” to the spending details and eventual delivery of DOD’s FY ’14 budget plan, due to lawmakers’ decision to put off the across-the-board cuts to the department under the White House’s sequestration plan. 

Little would not provide any specifics on what particular segments of the budget proposal will have to be changed due to the fiscal-cliff deal, noting “those details are still being worked out” in concert with administration officials. 

The department has not yet received any official guidance from the Office of Management and Budget on how to go about shifting funds within the budget plan for next fiscal year, Little added. 

That said, the DOD spokesman made clear the chaos created by having to readjust months of work on the budget in less than a month’s time will have a significant impact on national security priorities. 

“This is not an abstract concept,” Little told reporters. The readjustments being forced upon the FY ’14 budget plan under the fiscal cliff deal will have a “real impact on real work on real missions” within the department, he added. 

If Congress cannot come up with a plan to avoid sequestration in March, DOD will be hit with $52.3 billion in automatic spending cuts in the next fiscal year, Lt. Col. Elizabeth Robbins told The Hill last Friday. More than $500 billion in cuts to the Pentagon would be made over the next 10 years.

President Obama is set to sign the Senate-crafted fiscal cliff compromise, which was approved by House members by a vote of 257-167. 

Aside from delaying sequestration for two months, the deal also indefinitely extends marginal tax rates on annual family income up to $450,000, lifts the top capital gains and dividends rates to 20 percent, extends unemployment insurance benefits and includes a host of other tax provisions.