The defense cuts contained in the sequester would be a "disaster," says Defense Secretary Leon Panetta. Implementing them would "would risk hollowing out our force," says Army Gen. Martin Dempsey. It would be a "crippling blow to our military," says Sen. John McCain.
But not as bad a blow as the military has faced in the past. This graph comes from the Center for Strategic and International Studies, and it shows real military spending since the Korean War ("real" in that the graph adjusts for inflation):
As you can see, the post-9/11 rise in military spending was larger than the rise during Vietnam and during the Cold War. And even if we implement every single cut in the sequester, the fall in spending would be less than the military experienced after Korea, Vietnam, or the Cold War.
Of course, almost everyone expects that the sequester will, eventually, be disarmed, and the actual cuts to the military will be substantially smaller than what you're seeing on this graph. That means that despite the incredible build-up after 9/11, the fall in spending will be much less than it was after Korea, Vietnam, or the Cold War, and defense spending will settle at a higher real level than it did during any of those post-war troughs.
Meanwhile, non-defense discretionary spending, which doesn't have nearly as much political protection, is getting gutted*, as you can see in this graph from the Economic Policy Institute:
But unlike with the defense sequester, no one expects that to change.
*One note: The first graph is using constant dollars while the second graph is using percentages of GDP. If you look at the defense request in President Obama's budget proposal as a percentage of GDP -- Table 6.1 -- you'll find defense spending falling to about 3 percent of GDP, which is where it was before 9/11. That's less than it's been for most of the nation's history, but it's not anything like the historic lows for non-defense discretionary spending.