Debt failure leaves Pentagon budget in limbo
November 22, 2011
WASHINGTON — As lawmakers squabble over whether to allow $600 billion in mandated defense funding cuts move ahead, Pentagon planners are left with the unenviable task of figuring out how to piece together a fiscal 2013 budget with little idea how much money they’ll have.
When the debt reduction committee on Monday announced its failure to develop a plan to find $1.2 trillion in federal spending trims or new revenues, it triggered an automatic $600 billion in defense spending cuts — called a sequestration mechanism — over the next decade.
The funding cut was designed to be so politically unpalatable as to force the committee to reach a compromise. Instead, it has become the basis for the next budget fight, with Republican leaders vowing to find ways to undo the automatic cuts and Democratic leaders — including President Barack Obama — saying they’ll block any efforts to shift the debt-reduction burden solely onto other federal programs.
Defense officials are already compiling the fiscal 2013 budget, due to be unveiled publicly in February. Before the debt committee’s failure, Pentagon planners were already tasked with trimming anticipated defense spending by roughly $450 billion over the next 10 years, part of earlier cost-cutting agreements by Congress.
The new triggered cuts would push that total to more than $1 trillion in the same span. On Monday, Defense Secretary Leon Panetta called that level of cuts dangerous to national security.
“The [cuts] would lead to a hollow force incapable of sustaining the missions it is assigned,” he said. “If implemented, [they] would also jeopardize our ability to provide our troops and their families with the benefits and the support they have been promised. Our troops deserve better, and our nation demands better.”
For now, Pentagon officials are still planning as if the sequestration will not happen.
“The work is going forward on the 2013 budget, and it will be reflective of — and only reflective of — that $450 billion number,” Pentagon spokesman Capt. John Kirby said Tuesday.
The difference between the two funding targets would be a fiscal 2013 defense budget of around $525 billion — just a few billion less than the department spent this year — versus a budget of around $470 billion.
Outside experts said they expect that Pentagon leaders can hold off on integrating any of those sequestration cuts for months, hoping that Congress will find alternatives.
“It sets itself up as a kind of game of chicken,” said Todd Harrison of the Center for Strategic and Budgetary Assessments. Not planning for the smaller defense budget could force lawmakers to reach a new compromise, or jeopardize the entire military budget.
Of course, that doesn’t necessarily make it the right approach. Harrison said defense officials should be preparing an alternate budget on a separate track that fits under the spending cap.
“It’s better to make the cuts yourself so you can target low-priority areas and protect important areas,” he said.
And Mieke Eoyang, national security director for the centrist think tank Third Way, warned that military budgeters can’t wait too long to make those decisions.
“The longer they wait, the more dramatic the cuts can become in the out years,” she said. “You need to be building on savings from year to year. You don’t want to just be slicing programs at the end.”
But Eoyang said there may be a more practical reason to wait on those sequestered cuts: The Pentagon might not have its other plans in place yet.
“Until you see what that $450 billion [in cuts] will look like, you don’t know how close to the bone they are,” she said. “I would hope the Pentagon would work from there, and not panic if they need to go further.”
Defense budget expert Gordon Adams, an American University professor who served in the Office of Management and Budget for the Clinton administration, said he expects Congress and the White House to avoid the issue and find alternative cuts, even if it’s after the November elections.
And both Republicans and Democrats on the congressional armed services committees vowed yesterday to do just that. Sen. John McCain, R-Ariz., and Rep. Buck McKeon, R-Calif., said separately they’ll introduce legislation in coming weeks to get around the defense cuts. Rep. Adam Smith, D-Wash., called the debt committee’s failure “very concerning” but “not the end of the road.”
“The now pending cuts will not be implemented until fiscal 2013, but that still does not give us much time,” he said in a statement. “Even the specter of sequestration will be extremely disruptive and could lead to cut backs in defense spending well before January 2013.”