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USMC view of federal budget constraints

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USMC Programs and ResourcesMCAA Brief LtGen Duane Thiessen Deputy Commandant, P&R

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This is just an average year. It is not as good as last year and better than next....

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Federal Budget Historical TrendsIn the past 40 years, mandatory spending has grown1965 1975 1985

Discretionary

M andatory

Interest

Discretio n ary

M an d ato ry

In terest

Discretionary

M andatory

Interest

1995

2005

2009

Discretionary

M andatory

Interest

Discretio n ary

M an d ato ry

In terest

Discretio n ary

M an d ato ry

In terest

reducing discretionary spending to about 1/3 of outlaysv6

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Presidents Budget ~$3.6 Trillion in FY2009Troubled Asset Relief ProgramMedicare 12% Medicaid 7% TARP 7% Other Mandatory 19%

Social Security 19% Non-Defense Discretionary 17%

DoD 19%

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DoD BudgetDefense Agencies / Defense-Wide 17% $85.5B

$513B in FY2009*Army 27% $139.2B

Air Force 28% $141.2B

DoN 28% $147.4B5

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DoN Budget as a Share of DoDOther USA17% 27%

USAF28%

DoN28%

Navy 73%

Indirect 4%

Marine Corps BISOG 17% 6% BISOG equals direct aviation procurement & flying hour program Marine Corps + BISOG $ = 6% of DoD TOA 6v6

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There is an optimistic, idealistic, euphoric vision where unicorns no longer poop in the streets....unfortunately, there is also reality.

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The Spending Trend is Not Sustainable50%

40%

Federal Revenue in 2008 17.1% of GDP

30%

Stimulus Package20%All other spending (including other mandatory spending)

Interest

Medica

id

10%

Medicare Social Security1965 1971 1977 1983 1989 1995 2001 2007 2013 2019 2025 2031 2037 2043 2049

0%Source: Congressional Budget Office The Long-Term Budget Outlook, June 2009v6

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Federal SpendingT re n d s in F e d e ra l S p e n d in g(Percent of Federal Budget) 100% 90% 80% Percentage of the Federal Budget 70% 60% 50%Projection

De f e n s e Dis c r e t io n a r y

No n - De f e n s e Dis c r e t io n a r y Ne t In t e r e s t

Stimulus Package

40% 30% 20% 10% 0%19 69 19 71 19 73 19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17 20 19v6

M an d ato r y

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Defense Funding Trends800 Bas e 700 600 500 TY $ in B 400319 506 444 443 537 602

De fense Budge t TrendsOCO (T Y $ in B)667 654 664 Projection 592 601 611 625 639

187 164

141

130

50

50

50

50

50

103

116

69342

66

300 200

17

14 438 480 513 534 542 551 561 575

589

302 100 0 2001

328

375

377

403

421

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

FY09 does not include the DoD portion of the American Reinvestment & Recovery Act ($7B)

Fis cal Ye ar10

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Federal Surplus/DeficitFederal Surplus/Deficit(Percentage of GDP)19 69 19 71 19 73 19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17 20 19

3% 2% 1% 0% Surplus/Deficit as a % of GDP -1% -2% -3% -4% -5% -6% -7%$400

OM B CBO Actual

Projections

Federal Surplus/Deficit(TY $ in B)

-8% -9% -10% -11% -12% -13% -14%TY $ in B

$200 $0 -$200 -$400 -$600 -$800 -$1,000 -$1,200 -$1,400 -$1,600 -$1,800 -$2,000

40-year average (1968-2008): -2.4% TY $ in B

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1 19 8

3 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17 20 19

19 79

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Conventional wisdom always makes straight-line projections and they are always wrong.~ Charles Krauthammer

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Strategic Landscape

The defining principle of the Pentagons new National Defense Strategy is balance. The United States cannot....eliminate national security risks through higher defense budgets, to do everything....buy everything. The Department of Defense must set priorities and consider inescapable tradeoffs and opportunity costs....~ Secy Gates, Foreign Affairs, Jan / Feb 2009

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Fiscal Landscape The Secretarys vision is clear. The writing is on the wall. Fiscal Challenges. Hard choices have to be identified; tough decisions will be made. Grand visions underwritten by blank checks are not sustainable. Top lines will be more pressurized.The Marine Corps will make the tough decisions that will result in a lean, agile and adaptable fighting force that is expeditionary and better able to address ever-evolving hybrid threats in complex environments.v6

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CMC Guidance-MC Vision and Strategy 2025

..future operational environments will place a premium on agile expeditionary forces, able to act with unprecedented speed and versatility in austere conditions against a wide range of adversaries. We must be a two fisted fighter able to destroy enemy formations with our scalable air-ground-logistics teams in major contingencies, but equally able to employ our hard earned irregular warfare skills honed over decades of conflict. ..we must be prepared to move with speed, live hard, and accomplish any mission.15

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CMC Priorities Achieve victory in OIF / OEF Right-size the Marine Corps Resetting for today while modernizing for tomorrow Improve quality of life for Marines and familiesv6

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and a Miracle happensUNCLASSIFIED

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