Obama Care: falling

Government officials have missed several deadlines in setting up new health-insurance exchanges for small businesses and consumers—a key part of the federal health overhaul—and there is a risk they won't be ready to open on time in October, Congress's watchdog arm said.

The Government Accountability Office said federal and state health officials still have major work to complete, offering its most cautious comments to date about the Obama administration's ability to bring the centerpiece of its signature law to fruition.

"Whether [the government's] contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet ...

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The sky isn't falling on the PentagonBy William D. Hartung, director, Arms and Security Project, Center for International Policy-02/11/13 03:00 PM ET !function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");

The sky is falling, the seas are rising, the earth is moving, and catastrophe is on the horizon. Or so say alarmist Pentagon officials and defense contractors and their lobbyists in describing the potential impacts of automatic cuts known as ‘sequestration’ to anyone who will listen.

To be sure, sequestration is not an ideal way to plan a budget. Making adjustments mid-fiscal year makes little sense from a management point of view. The best solution is for the president and the Congress to come up with a balanced package of revenue increases and domestic and Pentagon spending reductions that phases in strategically over time.

But here’s a crucial point: the Pentagon can absorb an 8 percent reduction to a $500 billion-plus budget of the level called for by sequester while maintaining a strong defense, given smart management.

Insufficient management is part of the problem getting us to this point. Rather than plan ahead for the possibility of sequester last year, the Pentagon adamantly refused to plan in hopes that doing so would somehow make it easier to fend it off. Pentagon spending so far this year is also well above the levels required by the continuing resolution that is supposed to govern federal outlays until Congress passes a budget for 2013.

But despite this, President Obama’s most trusted advisors are meeting with Pentagon contractors without, it appears, asking them to make any reforms in their own practices. Of all the tradeoffs being asked of Americans, would it be so bad to ask the large contractors -- whose 2012 revenues beat their 2011 gains despite their hand-wringing throughout the year—to consider reducing CEOs’ pay that now exceeds $20 million per year on average, or to take greater responsibility for their routine cost overruns, instead of passing them onto the taxpayer?

While the military services would have to make real but manageable adjustments, major Pentagon contractors will be cushioned from significant impacts due to billions in weapons funds already in the pipeline and multi-billion dollar backlogs. They will be the least affected of any of the recipients of Pentagon funding.

And on the bigger question of maintaining security in a time of belt-tightening, even the agitated memos from the military services aren’t so scary. Take the Air Force, for example. Its sequester memo talks about slowing spending on projects like the Space-Based Infrared System (SBIRS), which the Government Accountability Office has described as one of the most troubled military satellite programs. Similarly, isn’t it just common sense to slow down the F-35 fighter program, which could cost $1.4 trillion over its lifetime for an aircraft whose capabilities are unproven and whose need in large numbers is questionable? And, as the Air Force also suggests, why not cut spending on air shows and conferences in tight fiscal times?

Sequester or no sequester, the Pentagon can afford to scale back its plans by $500 billion over the next decade, an exercise that would still leave it with over $5 trillion to spend over that time period.

There are numerous ways to get there, as outlined by a range of well-established thinkers from the left, right and center. Cost-saving proposals include gradually reducing troop numbers to pre-Iraq and Afghan war levels, scaling back on the Pentagon’s use of costly service contractors, and eliminating or scaling back projects -- like the F-35, a new nuclear bomber, and a new generation of ballistic missile submarines — whose capabilities are better attuned to Cold War.

These plans acknowledge sequestration isn’t ideal, but they also provide us with a politically and strategically sound way to bring the Pentagon budget under control after over a decade of non-stop growth that’s only (slowly) leveled off in the past two years.

What the Pentagon and its top contractors need is a good strong dose of fiscal discipline. Rather than fighting reductions in spending that are modest by historical standards, they should be thinking through how to implement them in ways that prepare our military to meet 21st century challenges.

Hartung is the director of the Arms and Security Project at the Center for International Policy, and most recently author of the report Minimum Returns: The Economic Impacts of Pentagon Spending. Follow him on twitter @WilliamHartung.

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