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The Fiscal Year 2013 Defense Budget: A Report Card

The Fiscal Year 2013 Defense Budget: A Report Card

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Lawrence J. Korb, Alex Rothman, and Max Hoffman grade the Pentagon's latest budget request.
Lawrence J. Korb, Alex Rothman, and Max Hoffman grade the Pentagon's latest budget request.

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Published by: Center for American Progress on Feb 13, 2012
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1Center or American Progress |  The Fiscal Year 2013 Deense Budget: A Report Card
 The Fiscal Year 2013 Defense Budget:A Report Card
Grading the Pentagon’s Latest Budget Request
Lawrence J. Korb, Alex Rothman, and Max Hoffman February 13, 2012
Introduction
Te Obama adminisraion’s scal year 2013 deense budge hals he unresrainedgrowh in baseline miliary spending ha has occurred over he las decade, essen-ially holding he budge seady in inaion-adjused erms hrough FY 2017. Bui does litle o bring he baseline budge back down rom is curren level, whichremains near hisoric highs.I passed by Congress, he proposal would auhorize $525.4 billion or he Penagons base budge or he scal year beginning in Ocober, a $5.2 billion or 1 percen reduc-ion rom his year’s spending level. Te proposed budge recognizes ha we can nolonger aord he runaway growh in deense spending ha has occurred since 1998. Achieving he rs real reducion in miliary spending in more han a decade is a welcome and major achievemen. We applaud he adminisraion or using he scalpressures acing he Penagon o realign miliary prioriies o reec 21s cenury hreas. And while we are encouraged by he $487 billion he Penagon says i will cu over henex decade, much more work remains o be done. Tis plan sill avoids many o hehard choices acing he Penagon—on weapons sysems, personnel benes, and nuclear weapons, o name bu a ew.Te Obama adminisraion has aken a small sep oward a susainable miliary sance wih is laes deense budge. Bu hroughou he debae surrounding he presiden’s budge reques i will be imporan o remember one undamenal realiy: Tis coun-ry needs a comprehensive budge agreemen. In order o resore our scal healh, weneed invesmen in research and developmen, inrasrucure, educaion, and a jobs bill. Tese domesic issues are he mos pressing naional securiy challenges acing hecounry. Te Deparmen o Deense budge canno and should no be ormulaed in a vacuum, wihou regard o domesic prioriies. Keeping his in mind, here are he marks we’re giving he U.S. Deense Deparmen’s budge reques.
 
2Center or American Progress |  The Fiscal Year 2013 Deense Budget: A Report Card
TABLE 1
Grading the Pentagon’s FY 2013 budget request
One-year budget
For FY 2013, the Deense Department requested a baseline budget o $525 billion, $5 billion less than what it is authorizedto spend this year. For a budget the size o the Pentagon’s, a $5 billion cut is tiny, but the Obama administration deservescredit or requesting what will be the rst real reduction in baseline deense spending since the late 1990s.A-
10-year budget plan
The Pentagon also announced it will cut $487 billion rom its budget over the next decade. This $487 billion number,however, is calculated rom projected levels o deense spending. As a result, when one adjusts or ination, these“reductions” essentially hold the deense budget steady at its current level. At a time when domestic programssuch as theWomen, Inant and Children’s (WIC) program and theLow Income Home Energy Assistance Program are acing major cuts, real reductions in deense spending must be part o our budget solution. Freezing the Pentagonbudget while cutting critical investments here at home is not good or U.S. security in the long-term.D
Ground forces
With U.S. troops out o Iraq and on their way out o Aghanistan, the Department o Deense will return the size o the ground orces to near their pre-war levels. As the Center or American Progress has long 
,shrinkingthe ground orces by 100,000 positions will yield savings o about $10 billion per year.A+
Troops in Europe
The Army will also remove two brigades rom Europe, a move that will cut the U.S. presence on the continent toabout 70,000 troops. The United States cannot aford to continue subsidizing European deense, especially whilemany o our allies cut their deense budgets to deal with their own decit woes. This is a step in the right direction,but much greater reductions are possible.B
F-35 Joint Strike Fighter
The Department o Deense will wisely slow production o the F-35 program, which continues to be plagued bytechnical problems. But Secretary o Deense Leon Panetta took the most troubled version o the plane—theMarine Corps’ F-35B variant—of probation in February. The management o the F-35 program has been a completedisaster. With the plane on track to be themost expensiveweapons program ever, Secretary Panetta should seriouslyconsider cancelling the Marine Corps and Navy versions o the F-35 in avor o the capable and less expensive F/A-18E/F.C
Nuclear weapons
The Pentagon’s strategic guidancedocument, released in early January, states
“It is possible that our deterrencegoals can be achieved with a smaller nuclear orce.Yet the FY 2013 budget makes no mention o reducingthe size o the U.S. nuclear arsenal beyond New Strategic Arms Reduction Treaty, or New START, levels,instead reafrming the Deense Department’s commitment to building a new bomber and nuclearsubmarine.
 
Our massive nuclear stockpile is a relic o the Cold War, expensive to maintain, and largely useless incombating the threats acing the nation today. As the Obama administration seeks to nd responsible reductions indeense spending, our bloated nuclear stockpile presents a tremendous opportunity or savings, yet it remains oddlyuntouched in the FY 2013 budget.F
Health care
The Pentagon will add new ees or working-age military retirees, based on their ability to pay, as well as anenrollment charge or Tricare-or-Lie. These reorms are a strong step toward restoring the scal sustainability o the Tricare program, while also ensuring that all retirees and their dependents continue to have access to afordablehealth care.A
Retirement
Secretary Panetta has asked Congress to establish an independent BRAC-like commission to review the military’sretirement system, which has been plagued by unsustainable cost growth. Secretary Panetta is right to drawattention to the structural problems acing the retirement program. But the secretary has the authority to reormthis system himsel. Asking an outside group to make the hard choices to address this politically toxic issue seemslike a surere way to ensure nothing happens.C
Pay
In recent
, Congress has repeatedly authorized pay raises above and beyond Pentagon requests. As a result,since 9/11, military salaries have grown ar
than the rate o ination and now consume about one-th o theoverall deense budget. To begin to address this issue, Secretary Panetta announced that the Pentagon will phase inmore limited raises beginning in FY 2015.B
Defense Base Closure andRealignment Commission,or BRAC
Trying to get a BRAC setup in an election year is a non-starter. Secretary Panetta wisely chose not to rely on a newround o BRAC closings to achieve his target o $487 billion in cuts (any cuts resulting rom BRAC would come on topo the $487 billion total). But the announcement distracts the debate rom cuts that would reduce excess spendingwhile updating our national security strategy.C
Investing in a 21st centurymilitary
The Pentagon requested $3.7 billion or drones, primarily the Predators and Reapers which have been so efective inAghanistan and Pakistan. Additionally, the budget requests $3.4 billion or U.S. Cyber Command.A
Overseas contingencyoperations
President Obama deserves a tremendous amount o credit or ending the war in Iraq and putting the U.S. on track to end the combat mission in Aghanistan by 2013. His budgetary reward—a $27 billion decline in the OCO budget(unding or the wars in Iraq and Aghanistan), which will all to $88 billion in FY 2013. In the past, however, the OCObudget has been a slush und or programs that should have been included in the baseline budget. In FY 2012, orexample, about $10 billion in deense programs were transerred rom the base budget to the OCO budget in orderto help Congress stay within the caps set by the Budget Control Act. It is imperative that the Pentagon does not relyon such budget trickery again. As the troops leave, the OCO budget should be an arena or real savings.TBD
 
$487 billion in cuts”
 A rs glance, nearly hal a rillion dollars in reduc-ions migh sound like a huge cu. Bu in realiy, i Secreary Paneta’s reducions survive Congress, he baseline deense budge will all by jus 1 percen, or$5 billion, nex year and resume is growh hereaer.Because hese “cus” come rom projeced increases indeense spending, he Penagon’s budge will coninueo grow a abou he same rae as inaion, as shownin Figure 1. Presiden Obama and Secreary Panetaare reducing he amoun ha he Deparmen o Deense plans o spend, bu no enough o bring he budge down signicanly.Tis sands in sark conras wih previous pos-wardeense drawdowns. Presiden Dwigh Eisenhower cu he budge by 27 percen aer heKorean War, Presiden Nixon reduced he budge by 29 percen aer Vienam, and herieca o presiden’s Reagan, H.W. Bush, and Clinon slashed deense spending by 35percen aer he end o he Cold War.Under he proposed reducions, in real erms, he Penagon will spend abou 8 percen lessover he nex decade han i originally projeced. Tese cus all shor o a number o bipar-isan deci-reducion proposals, including hose o he presidenially appoined DeciReducion (Simpson-Bowles) Commission and he Gang o Six deci-reducions plans.In ac, he Penagon will sill spend $2.73 rillion over he nex ve years, abou $150 bil-lion more han he $2.59 rillion spen over he las ve years. Tis is no auseriy.
A more nimble force
 While he Deense Deparmen’s plan or he nex decade shelers he deparmen romhe cus acing domesic programs, Secreary Paneta has skillully used he budgeary pressures acing he deparmen o creae an opporuniy o updae and improve U.S.naional securiy sraegy or he pos-Iraq and Aghanisan era.Te cornersone o he Penagons eors o achieve $487 billion in savings over he nexdecade is a reducion in he size o he ground orces. Te Army, which added 65,000posiions o carry ou he wars in Iraq and Aghanisan, will reurn o is 2005 size o 490,000. Te Marines will shrink rom 202,000 o 182,000. Wih he Unied Saesunlikely o underake exended naion-building operaions in he oreseeable uure,his shi will move he U.S. miliary o a more agile and susainable posure ocused onproecing U.S. ineress in he Middle Eas and Pacic.
3Center or American Progress |  The Fiscal Year 2013 Deense Budget: A Report Card
FIGURE 1
U.S. defense spending still on the rise
Continued budget growth, iscal year 2010 to iscal year 2017
540530520510500550560570
580
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Baseline Defense Budgetnominal terms
Source: Department of Defense, “Fact Sheet: The Defense Budget” (2012), available at http://www.defense.gov/ news/Fact_Sheet_Budget.pdf.

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