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December 6, 2011

Defense Budget is Being Cut: By Any Way You Look at It

These Aren’t Typical Washington Phantom Cuts

  • Current Dollar Cuts: Some are asserting that the defense budget cuts required under the Budget Control Act of 2011 (BCA), will reduce only the rate of increase in the overall defense budget. While precise defense budget projections under the BCA are not possible, it is a certainty that the overall defense budget will decline under its terms. This includes the circumstance where the effects of inflation are not accounted for by adjustments.
  • Defense Budget Starting Point: The starting point for the defense budget is President Obama’s requested level for the last fiscal year (FY 2011). He requested $739.3 billion in budget authority. This includes funding for the operations in Afghanistan and Iraq.
  • Ten Years After BCA: If the terms of the BCA remain in place, it is impossible that in FY 2021—which is the last year of the period covered by the act—the defense budget will exceed this figure. This is calculated in “current dollars,” which do not offset the effects of inflation.

How the Budget Control Act of 2011 Will Cut Defense

  • Projected Defense Spending in Budget Authority, in BillionsTwo Sets of Budget Figures: The first set of figures results from the application of direct spending caps in what is called the “national security category” in the first two years of the period and discretionary spending in the remaining years.
  • Sequestration: Deeper cuts result from the application of the sequestration process that is now poised to kick in following the failure of the super committee to agree to alternative deficit reduction steps. This process will apply $500 billion or more in deficit reduction to the defense account over the nine-year period covering FYs 2013–2021. This process will apply defense budget cuts in addition to those imposed by the spending caps.
  • Factoring All Cuts In: This means a 5% current dollars reduction in FY 2021 compared to the President’s original FY 2011 request. Under the sequestration process, FY 2021 budget will be reduced from its FY 2011 level by 12%.
  • But They’re Front-Loaded Cuts: Even more problematic is that all reductions to the defense budget are front-loaded and therefore will have significant immediate implications for readiness, modernization programs, and research and development. Under budget caps, the FY 2013 defense budget will be 18% lower than the President’s FY 2011 request. After the sequestration process, the FY 2013 defense budget will be 25% less than the President’s FY 2011 request.

Defense Budget Already Being Cut

  • Constitutional Priority: The Constitution states that the primary role of the federal government is “to provide for the common defense.”
  • Defense Budget Cut Already: Since President Obama took office, more than 50 major weapons programs at a value of more than $300 billion were cut or delayed. On top of this, the Administration told the military to cut almost $600 billion more over the next 15 years. This was even before the BCA took effect.

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