SUMMARY OF THE DOD FISCAL YEAR 2014 BUDGET PROPOSAL

PRINCIPAL OBJECTIVES

The Fiscal Year 2014 budget submission builds on decisions made in recent budget cycles. It continues to pursue goals that are of enduring significance to the Department of Defense, the men and women of the armed services, and the nation’s taxpayers.  Specifically, with the FY2014 budget the department seeks to:

1. Act as good stewards of the public funds.
2. Implement and deepen program alignment to the new defense strategy.
3. Create a force that is ready across a spectrum of missions.
4. Keep people central to our plans.

Good Stewards of Public Funds

The FY 2014 budget builds on the Department of Defense’s reform agenda that began several years ago.  That agenda generated $150 billion in efficiencies in the five-year plan submitted with the FY 2012 budget and another $60 billion in efficiencies in the five-year plan submitted with the FY 2013 budget.

For 2014, savings of approximately $34 billion have been identified to make better use of resources across the five years of this Future Years Defense Plan.  To permit infrastructure consolidation, the budget requests a round of Base Realignment and Closure (BRAC) in 2015.

BRAC is the only effective means of achieving infrastructure consolidation.  This BRAC round adds $2.4 billion to costs in the next five years but would eventually save substantial sums.  The actual closing of any bases would involve a multiyear process that would not start until 2016, after the economy is projected to have more fully recovered.

In order to maintain balance and readiness, the budget also includes savings associated with additional weapons program terminations and restructuring ($9.9 billion), continuing efforts to capture more favorable medical cost growth recently experienced in both the Military Health System and national medical cost trends ($8.9 billion), and restructuring of military construction plans ($4.14 billion).  By September, a study of Military Treatment Facilities should have identified options that will eventually lead to further reductions in healthcare costs.

The department is also working to slow the growth in military compensation while continuing to support the All-Volunteer Force.  The increase in military basic pay will be set at 1.0 percent in FY 2014, slightly lower than the 1.8 percent increase in the Employment Cost Index; the budget also provides service members with increases in their housing and subsistenceallowances of 4.2 and 3.4 percent respectively.  The department is also resubmitting some changes in military health care enrollment fees and pharmacy copays that were denied last year by the Congress, but after making modifications designed to accommodate concerns.  Together these initiatives reduce costs by $1.4 billion in FY 2014 and a total of $12.8 billion in FY 2014-2018.

To make better use of America’s defense dollars, the department continues to pursue its commitment to effective financial management controls.  The overall objective is unchanged – to provide decision makers with accurate, reliable, and relevant financial information and to ensure that all DoD financial statements are audit-ready by the end of FY 2017, with budget statements audit-ready by the end of FY 2014.

The department continues to pursue its Better Buying Power (BBP) initiative. BBP 2.0 will further the department’s commitment to continuous process improvement in acquisitions.

 

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