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5 Things You Need to Know About the Debt Deal and the Pentagon Budget

One month after the debt deal, you’re not alone if you’re still wondering what exactly was agreed to and how it all affects the Pentagon. So far, Washington has been focused on the big numbers:

  • $917 billion in spending reductions via discretionary budget caps for the next 10 years;
  • A “super” committee tasked with finding $1.2-1.5 trillion in additional deficit reduction; and
  • A $1.2 trillion “trigger” that kicks in if they fail composed of automatic spending cuts evenly split between defense and non-defense spending over 9 years.

Experts of all stripes are now debating what all of this means for the Pentagon and its out-of-control budget. While numerous analysts have long pointed to wasteful spending at the Pentagon, others argue that potential cuts would be “draconian” and “devastating” to our nation’s security. As Washington fights this out over the next several months there are several key points to keep in mind. 

 

1) Don’t believe everything you read.

To read some of the propaganda coming out in defense of the Pentagon, you’d think that Congress was considering taking a chainsaw to the military budget. Various “experts” have claimed that the Pentagon is on the chopping block of anywhere from $850 billion to $1.3 trillion in cuts. Back here in reality, the story is very different.

One of the most quoted numbers is that the first phase of the debt deal created $350 billion in cuts to “defense.” The origin of this number is a White House estimate that can at best be called wishful thinking and more accurately a complete fabrication. The debt deal created discretionary spending caps for the next 10 years, with specific “security” and non-security caps for only the next two fiscal years (see the next point to see why “security” does not mean “defense”). The White House arrived at their $350 billion number by taking these separate caps and assuming they would stay in place for the remaining 8 years. There is absolutely nothing in the debt deal, or any other law, that requires or even encourages such an assumption. Rather, after fiscal year 2013, Congress can choose to make 100% of any cuts required to keep funding under the discretionary cap from any accounts they choose. If history is any indication, the Pentagon can feel pretty safe knowing that they will be the last place Congress goes looking for cuts.

The second large cut to the Pentagon presumed to come from the debt deal is through the automatic “trigger” which kicks in if the “super” committee fails to reach an agreement. The logic goes that in a hopelessly deadlocked Congress, the “super” committee is doomed to failure and the $1.2 trillion trigger is all but inevitable. This trigger would result in $600 billion in deficit reduction coming from the more narrowly defined category of “defense” spending (technically budget code 050), comprised primarily of the Department of Defense. Again, the details are a little less dire. For starters, at least $100 billion of these savings will be attributed to lower interest payments. That leaves roughly $50 billion a year left to be “cut” from defense spending. Of course, since these “cuts” would be measured against future growth, they may not actually reduce in smaller Pentagon budgets at all, but simply a reduction in the rate of growth in Pentagon spending.

 

2) “Security” does not mean the Pentagon.

In the short term, there’s a very important battle looming on Capitol Hill thanks to the debt deal. For the next two years, discretionary spending on “security” is capped at $684 and $686 billion respectively. For the purposes of the debt deal, “security” is defined as Departments of Defense, Homeland Security, Veterans Affairs, the National Nuclear Safety Administration, the intelligence community management account, and all discretionary spending in the “international affairs” budget account (namely the State Department). This would mean that in total these accounts are in line for roughly $4 billion in cuts from their 2011 levels. Since the Pentagon makes up approximately ¾ of this spending in this category, one might think that they’d be in line for a real haircut this year. 

By looking at what the House has already passed for Fiscal Year 2012, we can see why these cuts to “security” are a far cry from meaning the Pentagon is in trouble. Recently released OMB analysis of the House’s action thus far on spending bills concluded that they are $10 billion over the spending caps. But wait, I thought they only had to cut $4 billion? The difference comes largely from a $17 billion increase in the Pentagon’s budget. While the Senate is farther behind on its appropriations bills and thus an analysis is not yet available, it’s reasonable to assume that they will not be too far off the House’s efforts. Thus, even if Congress were to take the entire $10 billion in needs this year from the Pentagon, we’d see a $7 billion increase in the Pentagon’s budget. 

Of course, it is far from certain that we’d see the Pentagon feel the brunt of these cuts. More likely we can expect to see further cuts to Veterans, diplomacy, humanitarian aid, border control, and other important efforts to stave off cuts to military accounts. By creating the “security” category for the next two years, Congress has created an inevitable battle for limited funds between the well-resourced Pentagon and every other aspect of American foreign policy and domestic security.

 

3) The 10-year Binge.

The Pentagon’s budget has been on somewhat of a feeding frenzy for the last 10 years. Today, America spends more on security than at any other time since World War II and roughly as much as the rest of the world combined. Even if defense spending were reduced by a $1 trillion over 10 years, we would find ourselves spending at 2007 levels, in real terms. By any measure, this would not be a “draconian” cut but a responsible step in response to unsustainable growth.

If all of this extra spending had gone to make the US safer, one might be able to make an argument to maintain it. Unfortunately, today our national security policy is more defined by a lack of spending restraint than by a reasonable response to 21st century threats. We have wasted trillions on wars in Iraq and Afghanistan, while we continue to waste hundreds of billions on Cold War weapon systems designed to defeat enemies that disappeared before today’s West Point cadets were even born. And for some reason still have over 100,000 US troops stationed in Europe and Japan on missions that started with World War II. In a world where budget resources are scarce, we can simply no longer afford to waste massive amounts of money on programs divorced from a rational analysis of current and future threats.

 

4) What about war?

You may have noticed that we haven’t mentioned cuts to war spending yet. That’s because the entirety of US spending on the wars in Afghanistan and Iraq, estimated to have been excess of $4 trillion in the last 10 years, is exempted from the debt deal. While spending in Iraq and Afghanistan is trending down, the US still spends over $2 billion every week fighting these wars. Recent estimates indicate that even at greatly reduced troop levels, we will continue to spend tens of billions every year on these wars. Equally troubling, because of the safety of these accounts from cuts, we are all but assured of the return of Bush-era efforts to sneak programs like missile defense and weapons acquisition into war funding. This will be one of the most important areas of the budget to watch over the next few years to see if the Pentagon budget actually shrinks.

 

5) Don’t count your chickens before they hatch.

At the end of the day, even after all of the tricks and slight of hands listed above, there’s one important caveat to remember to the debt deal and the Pentagon budget: very, very little of this is likely to ever become law. 

The “super” committee is empowered to theoretically tackle any aspect it chooses of the federal budget and it can change any of the details in this deal. And if they fail, Congress will have a full year to make any changes it wants before the trigger will actually take effect in January of 2013. In the interim, there will be an election that will change the makeup of Congress and perhaps even the Presidency. The next Congress and President can choose to abide by this deal, or not. More likely, they will have campaigned on their own “solutions” to the debt crisis that will replace the debt deal, its spending caps, the trigger…perhaps everything.

Only time will tell how much of the debt deal of 2011 ultimately comes to be and what impact it will have on the Pentagon’s budget. Despite all of this uncertainty, one thing is clear: we are at the beginning of a very long process, not the end. The next few years will be integral to defining whether America continues down the path of massive Pentagon budgets and an over militarized foreign policy focused on yesterday’s enemies, or if we will shift towards a more balanced approach that confronts the challenges of tomorrow.

Now is the time to organize, coordinate, and advocate for the policies we believe in. You can be sure our opponents already are.

 

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