“Over the next 10 years, the growth in the defense budget will slow, but the fact of the matter is this: It will still grow, because we have global responsibilities that demand our leadership. In fact, the defense budget will still be larger than it was toward the end of the Bush administration.”
— President Obama, speaking at the Pentagon , Jan. 5, 2012
We’ve been wondering about this quote every since the president said it six weeks ago, when he spoke about the Defense Strategic Review at the Pentagon. We had previously questioned one of the statements in his speech, but we were not able to fully check this one until we could actually see the numbers in the White House budget proposal for the 2013 fiscal year released Monday.
We take no position on the right level for the defense budget. But, with numbers in hand, let’s examine the president’s assertions and whether there has been any sleight of hand. Warning: Lots of budget numbers ahead.
Under the debt ceiling deal reached by the president and congressional leaders last summer, the defense budget must be cut by $487 billion over the next 10 years. Additional cuts may be mandated because a deficit-cutting congressional committee could not reach agreement, but since all concerned say they want to avoid that scenario, let’s keep our focus on the initial round of defense spending reductions.
Of course, the word “cut” has a different meaning in Washington. It often means a reduction from a previously set rate of growth, as opposed to an actual decline in spending. In many ways, that makes sense because inflation and population growth as a general rule will make sure that $1 spent this year likely will not buy as much next year.
Here’s our favorite example of this phenomenon: Defense spending technically remained constant from 1987 to 1994 — $282 billion a year. But look what happened to the military during those seven years: The number of troops fell from 2.2 million to 1.6 million, the number of Army divisions was slashed from 28 to 20, Air Force fighter wings dropped from 36 to 22 and Navy fighting ships declined from 568 to 387. That’s because inflation over time ate away at the value of those dollars. By most measures, defense spending was trimmed in that period, though in theory, not a penny was cut.
President Obama made two distinct claims at the Pentagon.
First, he said that the defense budget in 2013 would still be larger than it was “toward the end of the Bush administration.” Administration officials said Obama was referring to the 2008 fiscal year and using inflation-adjusted dollars.
Officials at the Office of Management and Budget say that, using 2012 dollars, the core, or “base,” budget (before war spending) in 2008 was $509 billion, compared to $517 billion in the fiscal 2013 proposal.
The House Armed Services Committee, using a slightly different metric, comes up with figures that show 2013 is slightly below 2008 — $2 billion! — but perhaps that is close enough for government work. There are different deflators one can use, and the numbers are so big, that we do not want to get into a game of false precision.
It gets a little more complicated with the other part of the president’s statement: “Over the next 10 years, the growth in the defense budget will slow, but the fact of the matter is this: It will still grow.” Certainly, that is true if you use nominal dollars, but it is debatable if you use inflation-adjusted dollars in the next five years, according to a Defense Department document.
For instance, using nominal numbers, the core Pentagon budget dips from 2012 to 2013, but starts on an upward path, reaching $567 billion in 2017. That would be a 6.8 percent increase over 2013.
But using inflation-adjusted dollars, the document shows, the Pentagon budget essentially flatlines for the next five years, for an overall decline of 1.6 percent. Another Pentagon document gives a slightly different outcome, a decline of 0.3 percent from 2013 to 2017. And the year-to-year increases are minimal — zero percent in 2014 and just 0.2 percent in both 2016 and 2017. (See page 1-3.)
OMB officials provided us with a document that shows a very modest increase in real terms over 10 years, if you count from 2013. But the numbers look worse if you include 2012. We included the nominal numbers in brackets to demonstrate the impact of inflation.
2012: $538 billion
2013: $525.4 billion [525.4]
2014: $525.1 billion [533.6]
2015: $527.8 billion [545.9]
2016: $528.0 billion [555.9]
2017: $529.3 billion [567.3]
2018: $530.9 billion [579.3]
2019: $533.3 billion [592.4]
2020: $535.4 billion [605.4]
2021: $536.8 billion [617.9]
2022: $541.2 billion [634.2]
(source: OMB, except 2012 [from DOD])
Notice what is happening here? Adjusted for inflation, the real budget for the Defense Department is lower than 2012 for every year, until miraculously it just clears the old 2012 number in the very last year. So, the defense budget ultimately does grow, as the president claimed — just five years after the end of what he hopes will be his second term.
The Pinocchio Test
This is a close call. To a large extent, the administration’s hands are tied by the Budget Control Act, which set tight targets for defense and nondefense discretionary spending. And within the narrow constraints of Obama’s language (“over 10 years…will still grow”), the budget numbers do add up.
But we have trouble with such careful parsing, particularly when claims are made about spending determined long after a president would have left office.
The president’s claim about the comparison between the 2008 and 2013 budgets seems reasonable, but the notion that the defense budget will keep growing because of “global responsibilities that demand our leadership” is troublesome. By what would be the end of Obama’s second term, the budget will be lower than 2012 — and essentially the same as 2013. In the context of a $500 billion-plus budget over 10 years, the differences in these figures are essentially rounding errors.
That’s not “growth” a president should brag about.
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