Op-Ed: Pentagon Should Embrace Larger Budget Cuts

Analyst: All stakeholders could sign onto strategic-based funding cuts

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Editor's Note: Matt Leatherman is a research analyst at the Stimson Center's project on budgeting for foreign affairs and defense, as well as a regular contributor to its blog, [The Will and the Wallet.] Leatherman has been published in other notable publications, including Foreign Affairs. DOTMIL will feature expert contributions from time to time.

Leon Panetta thinks it would be "nuts" to sequester the defense budget, a view he will likely reiterate to Congress Monday when he unveils the 2013 Pentagon budget request. The process known as sequester would force a nearly $500 billion cut in addition to $350 billion in already planned reductions over the next decade.

He is not wrong. Sequester would be a mechanical savings process, the opposite of the discretion required for funding our military. But his hyperbole still is misguided. The additional $500 billion in cuts is entirely responsible, even if the process is not.

Rather than directing another broadside at Congress, Secretary Panetta and the Obama administration should embrace the larger savings target and use the 2013 funding debate to lay out a plan that manages the process instead of automating it.

[Pentagon Budget Ends Post-9/11 Era, Launches Pacific Era.]

Some perspective: The Congressional Budget Office calculated last August, immediately after Congress passed a sweeping federal debt-reduction deal, that continuing at that spending rate would cost the United States $5.7 trillion on national defense between 2013 and 2021. That is before adding in the costs of the wars-but also before crediting Congress for getting a head start on the savings plan by capping national defense spending this year.

At stake from sequester is a $492 billion cut to projected spending, and it would come on top of the reductions enacted when a special congressional panel failed last year to produce a debt-reduction deal. Together, national defense could fall $858 billion, or 15 percent, below CBO's August defense-spending projection. That is significant—and barring any new military operations—the potential savings from ending the wars could double the reduction.

Yet, even then, the total reduction would be entirely in line with each of the U.S.'s three previous military overhauls since the end of World War II. President Dwight Eisenhower cut national defense spending by 28 percent after the Korean War; Presidents Richard Nixon and Gerald Ford cut it by a full 40 percent after the Vietnam War; and Presidents George. H.W. Bush and Bill Clinton together reduced national defense spending by 28 percent.

Setting $858 billion as the total defense savings target would require cutting defense spending by less than a percent each year from the previous one. Holding national defense spending constant in 2012 helped. Americans have every right to expect the Pentagon to be savvy enough to manage this fluctuation without endangering our national security. Management, however, is the key.

Automating the cuts, as the sequester process would do, is the exact opposite. Instead of allowing time for deliberate strategic adjustments and cuts, the military would trip over a one-time ledge next January. This outcome represents the worst of two worlds. A sudden drop could create a strategic stir, while resetting all at once would leave the unhelpful impression that fiscal discipline is an exception.

So far the only thing the Defense Department has done to avoid this has been resisting the $500 billion cut that sequester would force. Asked by NPR in January if he had a plan for sequester, Panetta bluntly replied: "Not at all."

[See pictures of Navy SEALs.]

However comfortable that answer may be for the Pentagon, it is counterproductive. Take the administration's new defense plan. Sequester-level savings would be in keeping with previous defense build-downs, but Panetta believes that "we'd probably have to throw [the new strategy] out the window and start over" to achieve such a target.

Instead of protesting sequester by ignoring the likelihood of deeper reductions, as Panetta has done, the Pentagon should focus on adapting defense strategy and management for a sequence of modest cutbacks through 2021. The mechanical cuts from sequester would not actually come for another 11 months. There is ample time to prepare an alternative plan.

Showing forbearance is its own challenge, of course. If the Pentagon has a plan to manage cutting on this scale, it would show that such cutting is manageable. Congress then would be much more likely to impose it. That is because lawmakers could burnish their collective fiscal credentials without looking soft on security.

Still this is exactly what the Defense Department should do. Fiscal restraint is not the problem. U.S. finances strongly suggest it should spend less on defense and, backed by some sober strategizing, our national security would not be threatened.

With a new plan on the table, things likely would start looking better for defense. Just as elected officials will jump at the chance to appear both fiscally and strategically responsible, they would look for every escape possible from a trade-off between the two. An $858 billion cut may still come, but the Pentagon could retain its discretion by leading the way to that target.

Congress and the administration meant to manufacture this very kind of defense budget dilemma as a way to keep debt reduction at the fore. It is clear they have succeeded. Automatic but non-strategic Pentagon spending could stall the military exactly when it needs to be proactive. Fortunately, the 2013 congressional budget cycle offers Secretary Panetta another chance to start managing our way out of this impasse. The country is ready for a strategy and management plan that anticipates the tougher fiscal restraint still to come.

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