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The Defense Budget Needs More Work

Secretary Panetta’s $6 billion reduction for the next fiscal year is a positive first step and a major achievement, but there is a long way to go to reach sustainable levels of defense spending.

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Yesterday, Secretary of Defense Leon Panetta and Chairman of the Joint Chiefs Gen. Martin Dempsey released details of the Pentagon’s plan to reduce projected military spending by $487 billion over the next 10 years. At first glance, nearly half a trillion dollars in reductions might sound like a huge cut. But in reality, if Panetta’s reductions survive Congress, the baseline defense budget will fall by just $6 billion next year and resume its growth thereafter.

Let’s be clear: Secretary Panetta’s $6 billion reduction for the next fiscal year is a positive first step and a major achievement. It will be the first real reduction in baseline defense spending in more than a decade. Even more importantly, with his budget adjustments, Secretary Panetta has seized the opportunity to address some of the long-term strategic and fiscal challenges facing the Pentagon, including shifting to a posture focused on 21st century threats and working to stem the unsustainable growth of the Pentagon’s personnel costs.

But with the fiscal year 2013 budget request topping $500 billion, there is a long way to go to reach sustainable levels of defense spending and bring the Pentagon budget back in line with historical norms—as we explain below.

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