Pentagon’s Shanahan Warns of China’s Growing Military Might

(Bloomberg) -- Acting Defense Secretary Patrick Shanahan defended President Donald Trump’s efforts to divert military construction funding to build his wall along the Mexican border, as a top Democrat faulted the Pentagon’s “casual approach” to the move.

“Military construction on the border will not come at the expense of our people, our readiness, or our modernization,” Shanahan told the Senate Armed Services Committee on Thursday as he presented Trump’s proposed $750 billion national security budget proposal for fiscal 2020.

He spoke hours before the Senate was expected to vote on a resolution disapproving of Trump’s declaration of a national emergency to justify the border funding.

Shanahan said the Defense Department’s proposed budget includes $3.6 billion for military construction funds to make up for money that Trump plans to shift to the border this year and an additional $3.6 billion “in case additional emergency funding is needed for the border.”

But he acknowledged that the Defense Department hasn’t yet determined what diversions of funds are justified by their “military utility.” He said only that no projects in the current year would be canceled, without commenting on which would be postponed.

“This appears to be a pretty casual approach to the issue,” Senator Jack Reed of Rhode Island, the panel’s top Democrat, told him.

Democratic Senator Tim Kaine of Virginia said that even as the Trump administration moves to “ransack the Pentagon budget,” the Defense Department has ignored requests from Congress to provide a list of military construction funds that aren’t yet obligated and could be diverted.

Shanahan was deputy defense secretary under Jim Mattis and has been acting secretary since Mattis quit in December over Trump’s “America First” policies. Shanahan, a former Boeing Co. executive, has drawn praise from Trump but no commitment yet to nominate him as the next defense secretary.

On other issues raised at the hearing:

OVERSEAS BASES: Shanahan said in response to a question that “we won’t do Cost Plus 50.” Under White House direction, the administration has been drawing up demands that countries hosting U.S. troops pay the full price of American soldiers deployed on their soil -- plus 50 percent or more, according to a dozen administration officials and people briefed on the matter. Shanahan said allies should simply pay a fair share of defense costs. “We’re not going to run a business, we’re not going to run a charity,” he said.

CHINA: Shanahan cited China as a primary military threat. As Trump seeks to negotiate a trade deal with China, Shanahan said its military buildup, coupled with its “organized approach to steal foreign technology, has allowed China to modernize its missile, space, and cyber capabilities, as well as project power far beyond its borders.”

SYRIA: He said the U.S.-led coalition in Syria has “liberated virtually all of the territory” that Islamic State held but that some American troops need to remain to prevent a resurgence. Trump has agreed to keep about 400 U.S. troops in Syria after announcing in December that he would pull out all 2,000 of them.

CARRIER FLEET: Senator James Inhofe, the panel’s chairman, signaled he’s opposed to the Navy’s plan to retire the USS Truman years earlier than planned to save more than an estimated $3.4 billion through 2024 instead of refueling the aircraft carrier’s two nuclear reactors.

The retirement would draw down the carrier fleet to 10 from a congressionally mandated 11 vessels, Inhofe said. “I’m a little disturbed by the idea,” he said. Shanahan said the decision “represents some of the strategic choices we made in this year’s budget” as the Navy plans a two-in-one contract for new carriers built by Huntington Ingalls Industries Inc.

WAR FUNDS: The Pentagon’s proposal to pump up a war-funding account to $165 billion drew skepticism. Republican Senator Tom Cotton of Arkansas said that’s “a big patch” to sidestep statutory budget caps.

There are “a lot of people on Capitol Hill who are not going to like it,” but the alternative of failing to pass a defense policy bill and funding the military through a stopgap “continuing resolution” would be worse, he said.

But Democratic Senator Elizabeth Warren, who’s running for president, called the increase in the Overseas Contingency Operations account a “slush fund” to “fund activities that have nothing to do with” its war-fighting purpose.

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