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Feb. 9, 2012—
The Pentagon could be placing itself at further risk by refusing to plan for the draconian spending cuts mandated by the 2011 Budget Control Act's sequestration clause, said Todd Harrison, a senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments.

Harrison outlined four options for tackling the complicated issue during a budget briefing with reporters in Washington, D.C., on Wednesday, just days before the Pentagon submits its Fiscal 2013 budget proposal to Congress.

The first, he said, is simply to let sequestration happen—DOD's current path. However, Harrison said this route is "messy and less desirable."

Under that first option, the sequestration clause would uniformly cut DOD's Fiscal 2013 spending request across all accounts by roughly 10 percent, returning the base defense budget to Fiscal 2007 levels, said Harrison.

This would make it difficult for the Pentagon to prioritize air and sea forces over the ground forces, as the Obama Administration's new defense strategy details, he noted.

The second option specifically targets cuts through a budget amendment. Though this would "still be painful," defense officials would be able to implement cuts where they deemed fit, enabling them to follow the new strategy, said Harrison.

However, Congress would need to approve the amended budget before the sequestration cuts would take effect in January 2013, he said.

"Such a vote could be politically difficult since members would be going on record as voting for a significantly reduced defense budget," said Harrison.

The third option uses the overseas contingency operations funds, commonly known as the war budget, to "soften the effect of sequestration," he said. This is just a short-term solution and would still require Congress' approval, he explained.

Finally, DOD could opt to backload the cuts by reducing the budget 2.2 percent each year over the next 10 years, bringing the defense budget down to $434 billion by Fiscal 2021 (in Fiscal 2012 dollars), said Harrison.

That's 18 percent below the current funding level and 10 percent below the anticipated Fiscal 2021 funding level under the original profile of the sequestration cuts, he said.

CSBA President Andrew Krepinevich said this plan hits the "political sweet spot," because it would satisfy budget hawks who want to keep slashing the budget while reducing the Pentagon's risk through gradual cuts.

"For the people who like to cut the defense budget, you end up with a lower defense budget than you would otherwise," stated Krepinevich. "For the Defense Department, it's slower . . . and who knows what's going to happen five years from now."

He continued, "It also eliminates a lot of the foolishness of having to wreck the modernization program for bad reasons."