The debt deal struck by Congress and the president to raise the debt ceiling calls for immediately enacting “10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.” Furthermore, a bipartisan “super committee” is created and “tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform.” If the committee fails to agree on a way to find $1.5 trillion by the end of 2011, then automatic spending reductions (split 50/50 between defense and domestic spending, but excluding Social Security, Medicare beneficiaries, and low-income programs) are supposed to be triggered.
One trillion dollars sounds like a lot of money — and it is. But spread out over 10 years, $1 trillion is $100 billion each year. One hundred billion dollars is also a lot of money. But the Obama administration’s proposed fiscal year 2012 budget is a whopping $3.7 trillion, so $100 billion is only a 2 percent reduction in total government spending. Moreover, the projected deficit for fiscal year 2012 is $1.1 trillion, so we would still be $1 trillion in the hole.
Of that $1 trillion, $350 billion is supposed to come from the Department of Defense (DoD) — on average, $35 billion a year over 10 years. The fiscal year 2012 budget for DoD is $676 billion, which includes $117 billion for overseas contingency operations (OCO), i.e., Afghanistan and Iraq, so $35 billion is 5 percent of total DoD spending (6 percent if measured against the $558 billion base budget) — a reduction, but not a drastic cut. But even if DoD spending were reduced to $641 billion in fiscal year 2012, that would still be more than every year since fiscal year 2007 (which was $607 billion) and more than twice what was spent in fiscal year 2001. And it’s worth noting that according to an analysis by the Center for Strategic and Budgetary Assessments, half of the growth in Pentagon spending over the last decade has had little to do with prosecuting wars in Iraq and Afghanistan (let alone defending America against terrorists).
But what about the out years? This is where you need to understand Beltway math legerdemain. Reductions in spending don’t necessarily have to be measured against a fiscal year 2012 baseline (assuming that’s the correct baseline year to use). Instead, reductions can be measured against projected increases in spending. So, for example, the DoD baseline budget is expected to grow from $558 billion in fiscal year 2012 to $575 billion in fiscal year 2013 — a $17 billion increase. So a $35 billion decrease would really only amount to an $18 billion decrease — only about 3 percent of the DoD budget. And that $18 billion could easily be made up in a subsequent OCO request, which would be less likely to come under intense scrutiny because of political pressure to not deny funding to troops. (And this same type of “math” can be applied to the whole federal government: a $100 billion spending reduction doesn’t necessarily mean spending $100 billion less.)
So the prospect of significant reductions in defense spending may be largely sound and fury signifying nothing. (Ditto for overall government spending.)
But what is apparently keeping newly minted Secretary of Defense Leon Panetta up at night is the prospect that the bipartisan congressional panel cannot reach agreement on $1.5 trillion in budget savings over the next decade, resulting in what Panetta calls the “doomsday mechanism” — $600 billion in defense cuts over 10 years. According to Panetta, this would “result in a further round of very dangerous cuts across the board — defense cuts that I believe would do real damage to our security, our troops and their families, and our military’s ability to protect the nation.”
We already know that $600 billion in defense cuts over 10 years doesn’t mean reducing the current defense budget by $60 billion a year for 10 years — indeed, that would be the equivalent of zeroing out the Department of Defense. More likely it means an additional $60 billion reduction to projected DoD yearly budgets. If that’s the case, the Pentagon will still probably have about $500 billion a year to spend. Given that we have no rival expansionist military superpower to challenge us (and none on the horizon), no other country with the ability to project large-scale conventional force to invade America, and a strategic nuclear force capable of deterring any direct nuclear attack on the United States (even against so-called rogue states such as North Korea), $500 billion ought to be enough (if not more than enough) to be able to protect the nation.