Defense Sense and the Budget Control Act
After the U.S. economy slid into the Great Recession in 2008, the Federal Government’s deficit spending and the national debt grew rapidly. President Obama responded to this perceived fiscal crisis by establishing the National Commission on Fiscal Responsibility and Reform which worked through most of 2010 to craft a bipartisan deficit reduction package. However, the Fiscal Commission failed to find a solution supported by the super-majority of commission members which its mandate required. What followed in 2011 was a dysfunctional seven months of partisan conflict in Congress over the budget process. Finally, in August of 2011, Congress passed the Budget Control Act (BCA), which requires at least $2.2 trillion in deficit reduction over ten years.
The two-pronged approach outlined in the Budget Control Act requires two steps: first, the Budget Control Act requires $1 trillion in discretionary spending reductions over ten years. Congress is currently considering how to achieve the first portion of mandated spending reductions. It is notable that the National Defense Authorization Act recently passed by the House exceeds BCA caps by $8 billion. The Senate is expected to mark its Defense Authorization to the Presidents budget which is $4 billion over the caps.
The second portion of the Budget Control Act (sometimes referred to as the “sequester” provision) goes into effect on January 2, 2013, and mandates an additional $110 billion in automatic cuts to federal spending in fiscal year 2013 and similar cuts for each of the following nine years.
Remarkably, both parties in Congress and the Administration have essentially ignored the requirements of sequestration up to this point. Because Congress refuses to address the spending reductions mandated by the Budget Control Act that will happen on January 2nd, this year’s lame duck Congress returning from recess after the November election faces an unprecedented challenge.
Many in Washington assume that the Budget Control Act will be amended to avoid sequestration. However, the major political parties are likely to remain at an impasse. Republicans have pledged not to allow tax increases while Democrats resist reforms to earned benefit programs such as Social Security and Medicare and are reluctant to agree to additional cuts to domestic programs in the discretionary budget. While each party’s leadership remains loyal to their respective ideological position, neither currently acknowledge the possibility of compromise that involves further Pentagon spending reductions.
Today, the Pentagon’s “non-war” base budget comprises over 50 percent of discretionary spending. Since 2000 it has risen by 90 percent in nominal “inflated dollar” terms and 42 percent in real terms. The Pentagon base budget is currently around $550 billion annually. There is no realistic compromise on deficit reduction which does not include a substantial contribution from the Pentagon.
Reaching across ideological differences to produce a new report called Defense Sense, analysts from the Project on Defense Alternatives and the Cato Institute have identified 18 specific options that will yield up to $20 billion in additional defense savings in 2013.
These are not “draconian” cuts that threaten national security. They total about 4% of the Pentagon’s current base budget. Many involve deciding now to end troubled programs and instead use systems that are field-tested, reliable, and much less costly. Others savings involve making modest shifts in the posture of forces such as making additional reductions to troops stationed in Europe sixty-seven years after World War II and twenty-two years after the Cold War.
Examples of troubled programs to cancel are the Littoral Combat Ship and the Marine Corps variant of the new F-35 Joint Strike Fighter, both of which are prime examples of the current problems in U.S. defense acquisition. Deciding to cancel these and to replace them with proven systems at much lower costs will save an estimated $3.8 billion in Fiscal Year 2013 alone.
There are also sensible changes to the United States’ strategic nuclear posture that involve eliminating and reducing capabilities which are excessive and redundant or designed to counter threats which no longer exist.
The options outlined in Defense Sense are modest in scope. If we are to ensure a stable fiscal future for generations to come, it is imperative that the United States responsibly balance the requirements of military power and national strength.
It is national strength in its many facets that will ultimately determine our security and our position internationally. Military power is but one part of national strength. The Pentagon’s budget, and our overall federal budget priorities, must reflect this reality.
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Defense Sense:
Options for National Defense Savings in Fiscal Year 2013
Recommendations focus on seriously troubled weapon programs and on capabilities that significantly mismatch or exceed defense requirements. This is a practical first step. More might be saved by rethinking our national security commitments, strategy, and missions -- as we and our colleagues at Cato have suggested elsewhere.
In developing our recommendations, we drew on and adapted previous efforts to identify safe and sensible defense savings, including the President's own National Commission for Fiscal Responsibility and Reform and the Sustainable Defense Task Force (of which we were members).
Defense Sense has already played a significant role in Congressional efforts to amend the National Defense Authorization Act.
