The Foreign Policy Initiative is out with a forceful memo in defense of defense spending. The concern is the potential for a supercommittee breakdown, which will trigger the sequestration of defense and nondefense discretionary spending. The FPI make three strong points about defense spending:
First, the FPI’s memo explains that the “main driver of America’s growing debt and deficit is domestic spending — especially entitlement spending — not defense spending.” Even with supplemental spending for wars in Iraq and Afghanistan, domestic spending dwarfs defense spending both in absolute terms and as a percentage of the total budget. “Indeed, between 2000 to 2010, the U.S. government spent over $5 trillion more on non-defense programs than what the Congressional Budget Office had originally projected it would spend. If one adjusts for inflation, then that number climbs to approximately $5.6 trillion in constant FY 2012 dollars. As a result, entitlements today constitute nearly 60% of the $3.5 trillion federal budget. In contrast, total discretionary spending amounts to only 35% of the budget—with roughly half of that going to national defense.”
Second, the FPI explains the best-kept secret in Washington: Defense is the only area of the budget that has already experienced huge cuts. In three separate rounds of cuts under the Obama administration, $850 billion has already been lopped off the defense budget. The FPI explains: “During this time period, no other government agency has been asked to implement savings reductions comparable to these defense cuts.” The FPI points out that President Obama’s own defense secretary has sounded the alarm about the extent of potential cuts:
In terms of the Pentagon’s investment accounts — that is, military procurement plus research, development, testing, and evaluation — [Leon] Panetta added [in a letter to two GOP senators] that the Defense Department would face the prospect of terminating: the F-35 Joint Strike Fighter; littoral combat ship; all ground combat vehicle and helicopter modernization programs; European missile defense; all unmanned intelligence, surveillance, and reconnaissance systems. It may also have to delay the next-generation ballistic missile submarine; terminate next-generation bomber efforts; and eliminate the entire intercontinental ballistic missile (ICBM) leg of America’s nuclear “triad”. These cuts would stall the military’s modernization at a time when America’s near-peer competitors are rushing to match our current capabilities.
In turn, Panetta said that sequestration cuts would raise dangerous risks and uncertainties to America’s national security. In particular, sequestration:
“Undermine[s] our ability to meet our national security objectives and require[s] a significant revision to our defense strategy.”
“Generate[s] significant operational risks; delays response times to crises, conflicts, and disasters; severely limits our ability to be forward deployed and engaged around the world; and assumes unacceptable risk in future combat operations.”
“Severely reduce[s] force training— [and] threatens overall operational readiness.
Third, and the upshot of all this, the FPI argues, is that “further cuts to Pentagon spending — especially the ‘devastating’ sequestration cut if the Super Committee effort fails — will fundamentally undermine America’s strategy to defend its national security and international interests. In Secretary Panetta’s words, ‘we would have to formulate a new security strategy that accepted substantial risk of not meeting our defense needs.’ ”
Republican hawks fear that given the choice between making a deal with Democrats, one that would in all likelihood entail tax hikes, and slashing defense, some Republicans could well opt to sacrifice defense spending. But there is another option, one that is increasingly likely. If the supercommittee fails to reach a deal or agrees only to a portion of the $1.2 trillion savings required under the debt-reduction deal, Congress can simply agree to undo the defense cuts. That’s been the fiction at the heart of this whole exercise — the notion that sequestration has to happen. Congress can always change its mind, and with Panetta siding with defense hawks, Obama and many Democrats would be in a difficult spot to object.
That said, there is still time for a deal that obtains revenue increases only by tax reform and not by hiking rates. That’s the best of all worlds, but, unfortunately, not the most likely outcome.