Defensible Budget Cuts

Economic Prosperity Underpins National Security

SOURCE: AP/Charles Dharapak

President Barack Obama smiles at George Washington University in Washington, Wednesday, April 13, 2011, prior to delivering a speech on fiscal policy.

By Lawrence J. Korb, Alex Rothman, Laura Conley | April 13, 2011

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President Barack Obama’s plan to cut $400 billion in security spending by 2023, which he outlined today in a speech in Washington D.C., is an admirable but modest first step toward getting our nation’s fiscal house in order. After 13 straight years of real growth in the baseline defense budget—the longest period of sustained real growth in U.S. history—our nation now spends more on defense than it has at any point since the end of World War II, including during the peak of the Cold War. This level of spending is not only disproportionate to current national security threats but also negatively affects U.S. national security by growing the federal budget deficit and undermining the overall health of our economy.

Total defense spending today includes the baseline budget, war costs, and defense funding contained in the budgets of other departments. And in total they are more than our nation can afford. Adm. Michael Mullen, the nation’s highest-ranking military officer, is absolutely correct when he makes this same point. That’s why our nation needs to consider seriously the president’s modest proposal to bring our defense spending in line with actual threats to our country—while ensuring that other aspects of our national security, particularly diplomacy and foreign aid, are not crippled by budget cuts.

A moderate proposal

By proposing moderate reductions in security spending, President Obama’s plan, if enacted, will reduce the federal budget deficit without compromising vital U.S. national security interests. The proposed $400 billion reduction is largely intended to keep growth in baseline security spending below inflation. Given the unprecedented growth in the defense budget over the past 13 years, these savings would not constitute dramatic cuts.

The president’s relatively modest proposal is eminently achievable, although making these cuts will require a significant demonstration of political will by the president and Congress. In a recent memo, the Center for American Progress detailed our top 10 fiscally responsible defense cuts, which provide a basis for the type of reductions President Obama should consider:

1. Permanently reducing the number of U.S. military personnel stationed in Europe and Asia ($80 billion in savings by 2020)

2. Redirecting the majority of the Department of Defense’s planned efficiency savings to reduce the baseline defense budget ($100 billion through 2015)

3. Canceling the V-22 Osprey program ($10-12 billion by 2020)

4. Rolling back the post-September 11, 2001 increase in the size of the ground forces ($10.1 billion per year)

5. Reducing the number of civilian DOD personnel concomitant with the reduction in military end strength ($7 billion per year)

6. Reducing procurement of the F-35 Joint Strike Fighter ($15.2 billion by 2015)

7. Reforming military health care ($6 billion a year)

8. Reforming military pay ($5.5 billion per year)

9. Retiring and not replacing two existing carrier battle groups and associated air wings ($3 billion per year)

10. Updating the U.S. nuclear arsenal and missile defense systems to counter the threats of the 21st century ($12.7 billion per year)

Implementing these reforms would allow DOD to save $559.6 billion by 2020 while maintaining the capacity needed to meet our critical national security needs. And unlike many of the cuts touted by Secretary of Defense Robert Gates over the past few years, these reductions would trim ongoing programs, rather than claiming reductions by ending programs already scheduled for termination or rolling anticipating savings back into other programs within DOD.

Reductions should come from the baseline defense budget

While President Obama’s plan is a good first step, some elements are still cause for concern. Perhaps most importantly, it is unclear whether the promised $400 billion reduction will come from defense spending alone, or whether it will be drawn from the larger category of “security spending,” which can be interpreted to include funding for the departments of State, Homeland Security, and Defense. Unless President Obama provides additional clarification, some policymakers may push for cuts in State Department programs in order to preserve current levels of defense spending. These programs, which are already woefully underfunded, were further slashed during last week’s budget negotiations.

Due to the astronomical growth in the defense budget over the past decade, any serious attempt to balance the budget will require reductions in wasteful defense spending. For fiscal year 2012 beginning in October, total U.S. defense spending is projected to exceed $700 billion, and will constitute about 20 percent of the entire federal budget. This means that the U.S. share of global defense spending will have grown from one-third at the turn of the century to almost half today.

As a result of this inflated level of spending, the United States can afford cuts to the Pentagon without undermining our critical national security interests, whereas further reductions in foreign affairs and foreign-aid programs would risk crippling our ability to respond to crises in a nonmilitary capacity and reduce our long-term investment in building sustainable security.

The president’s proposal also lacks a specific plan to link the proposed $400 billion in cuts to our national security priorities. President Obama announced that he plans to identify cuts in coordination with U.S. military leadership, but this is not enough. The cuts should be linked explicitly to the priorities identified in the president’s Quadrennial Defense Review, Quadrennial Diplomacy and Development Review, and National Security Strategy. Another NSS is due by law this year, and although past administrations have rarely met the requirement to produce an annual strategy, doing so could help to ensure that President Obama’s deficit reduction plans are in line with our broader strategic interests. We outlined such a proposal in a progressive national security strategy in 2009.

Overall, President Obama’s plan is an excellent first step toward combating the budget deficit and a welcome attempt to restore discipline to American defense spending. As noted by Defense Secretary Gates, in this era of fiscal austerity, the “gusher of defense spending” must be turned off. It is important, however, that these cuts do not further militarize American foreign policy by disproportionately affecting civilian foreign affairs and foreign-aid programs. Instead, President Obama should capitalize on the national appetite for reductions in security spending to rebalance our foreign policy apparatus and reverse the unprecedented and impractical growth in defense spending perpetuated by the Bush administration.

Lawrence J. Korb is a Senior Fellow at the Center for American Progress. Laura Conley is a Research Associate, and Alex Rothman is a Special Assistant at the Center.