Pentagon plans little change to war budget despite Afghan exit

WASHINGTON - The Pentagon has proposed only a slight decrease in war funding in 2015, even though most or all US troops are due to withdraw from Afghanistan by the end of the year, officials said on Tuesday.

"Overseas contingency operations" funds are separate from the Pentagon's "base" budget and have been used to finance wars in Afghanistan, Iraq and counter-terrorism efforts elsewhere for more than a decade.

After President Barack Obama came into office, his deputies vowed to shift the war spending back into the Pentagon's main budget.

But the Defence Department's proposed budget released on Tuesday calls for US$79.4 billion (S$100.7 billion) in war funding for fiscal year 2015, nearly the same as in the current year.

The overseas operations fund is at US$85.2 billion this year.

About 33,700 US troops remain in Afghanistan and the bulk of the force is due to depart by December. The Obama administration hopes to keep a small contingent of up to 10,000 troops in the country beyond 2014 - if the Afghan government signs a bilateral security agreement.

In years past, administration officials predicted that war funding would decline significantly with the planned pullout of American forces from Afghanistan.

But instead, the Pentagon has used the category to finance maintenance and other items that would otherwise be slashed under automatic budget cuts.

Unlike the main base defence budget, the war funding is not subject to the mandatory spending limits enacted by Congress, known as sequestration.

Both the Pentagon and lawmakers last year moved about US$29 billion in funding out of the base budget to the overseas contingency fund (OCO), as a way of countering the effect of the automatic budget cuts.

This practice has "largely offset the cuts to the base budget from sequestration," according to Todd Harrison of the Center for Strategic and Budgetary Assessments, a Washington think tank.

But if the war funding drops dramatically after the US exit from Afghanistan, the Pentagon could face a major shortfall in coming years, he said Monday in a teleconference.

"I think that this is a pretty dangerous situation for DoD to be in, with being so heavily dependent on the OCO funding ... because that funding stream could disappear quickly," he said.

The proposed defence budget for 2015 is US$575 billion, less than the peak in military spending of US$691 billion in 2010 but still far beyond the 2001 budget of US$316 billion.

America's military spending far exceeds any other country, with China a distant second with an estimated US$132.2 billion and Russia at about US$68.9 billion, according to IHS Jane's consultant group.

But in its budget request, the Pentagon said it faced a shortage of funding for modernizing aircraft, training and maintaining bases.

Pentagon chief Chuck Hagel already laid out the main priorities of the defence budget last week, proposing a cut in the size of the US Army while keeping up investments in hi-tech weaponry.

The budget calls for scaling back the army from 520,000 troops to about 440,000 to 450,000 soldiers by 2017, and retiring older aircraft include the A-10 "Warthog" and the U-2 spy plane.

The budget would fund the new F-35 fighter jet, more Global Hawk surveillance drones, armed Reaper drones, warships, submarines and the first new aerial KC-46A refueling tankers.

Lawmakers passed a deal in December that gave some relief to the Pentagon from the automatic cuts, but the sequester reductions are due to resume in fiscal year 2016.

If Congress fails to act before then, officials warned the automatic cuts would damage the military's combat readiness and undermine its technological edge.

The Defence Department also released a major strategic review, conducted every four years, that endorsed the budget plan and called for preserving the US military's ability to move forces rapidly around the world despite an era of "fiscal austerity." The Pentagon sees the ability "to project power around the world as sort of a signature of our US military," said Christine Wormuth, undersecretary of defence for policy who helped draft the document.

"It's one of our core strengths. It's essential to protect that," she said, citing growing "anti-access" threats from anti-ship missiles and air defences.