Sen. Tom Coburn, R-Okla., tried last week to cut a miniscule slice out of the defense budget with a modest plan to close 64 schools on a handful of military installations and transfer the students to local facilities. Although the government would have to compensate the schools for their added operating costs, the deficit-minded Coburn estimated his plan would save $1.2 billion over the next four years.
But Senate leaders refused to even allow the proposal to come up for a vote on the floor.
“It’s not going anywhere because of the dysfunctionality of Congress, which is more worried about ‘my base in my state’ than giving kids a great education and saving the country money,” Coburn told The Fiscal Times.
If Congress balked at this minor measure in next year’s defense-authorization bill, it’s hard to imagine lawmakers hanging tough when they must decide whether to allow nearly $600 billion in reductions to defense programs and hardware that are scheduled to take effect beginning in early 2013. Those automatic cuts were mandated by law in the event the bipartisan Super Committee failed to agree on a major deficit reduction deal.
Committee members threw in the towel on Nov. 23, announcing that they could not agree on a package of spending savings and revenue increases. That set the stage for those stiff spending cuts in defense and domestic programs during the coming years to bring down the deficit by a total of $1.2 trillion. Now, the Pentagon and its allies on Capitol Hill and in the defense industry are warning that the reductions would “hollow” the military and kill off hundreds of thousands of jobs.
But the political stars already appear to be aligning against massive cuts in the defense budget, with growing signs that Congress will blunt the full impact of the cuts with legislation reducing the cuts likely to be brought up early next year, in the heat of the 2012 election campaign. If defense hawks, including House Speaker John Boehner, R-Ohio, have their way, more of the burden for deficit reduction will be shifted to domestic and entitlement programs.
If that were to occur, then “you would be squeezing discretionary programs like housing and WIC [women and infant care], Head Start, education and so on,” said Richard Kogan, a senior fellow and budget analyst at the left-leaning Center on Budget and Policy Priorities. “You would also be cutting entitlements that constitute the mandatory part of the social safety net.”
With U.S. involvement in the Iraq war about to end this month and American troop strength waning in Afghanistan, the roughly $690 billion spent last year on the military and the war efforts looms as an inviting target for a deficit-conscious Congress. Since 2001, basic discretionary spending on defense has increased dramatically, from 3.1 percent of Gross Domestic Product to 3.8 percent of the overall economy this year. At the same time, the United States has spent about $1 trillion on weapon system acquisitions, with its arsenal brimming with modernized Bradley fighting vehicles and Humvees, super aircraft carriers and state-of-the-art airforce fighter jets and cargo planes.
“We’re 25 percent over the post-Cold War average [increase] in defense spending,” said Gordon Adams, an expert on budgeting for foreign affairs and defense at the non-profit Stimson Center. “That’s a staggeringly high amount of the budget. So is there room for it to come down? You bet. Can it be reasonably managed? You bet.”
But will Congress and the Obama Administration go along with a massive downsizing of the Pentagon budget? Don’t count on it.
There are growing signs that the enduring “ Iron Triangle” of the Defense Department, military hawks on Capitol Hill and the defense industry, is gearing up to protect the Pentagon from the worst of the potential defense savings. Adams compares the upcoming battles to an “Indonesian shadow play” in which there is a lot of “waving behind the curtain and warning of dire circumstances,” but the outcome is preordained.
Perhaps no figure will have more influence over the outcome of the controversy than Defense Secretary Leon Panetta, who succeeded Robert Gates last July. Panetta, 73, has been a fixture in the decades-old effort to balance the budget and combat massive deficit spending. His record as a deficit hawk range from his years as the Democratic Chairman of the House Budget Committee to his role as budget director and chief-of-staff in the Clinton administration between 1994 and 1997 to his stint as President Obama’s director of the CIA.
Panetta commands enormous respect and affection in Washington – probably as much or more than Obama at this point. So when he began warning that the Pentagon would be “devastated” by $1 trillion of long-term cuts – the $550 billion to $600 billion of automatic cuts and another $450 billion of savings that Gates signed off on before departing – lawmakers listened.
“Unfortunately, while large cuts are being imposed, the threats to national security would not be reduced,” Panetta said in letters to key lawmakers last month. “As a result, we would have to formulate a new security strategy that accepted substantial risk of not meeting our defense needs.”
Panetta is so adamant about the potential dangers of the deep cuts that he has publicly differed with Obama, who refuses to give conservative an easy way out and vowed to veto any effort by Congress to eliminate the automatic trigger. “There will be no easy off-ramps on this one,” Obama said late last month. “We need to keep the pressure up to compromise, not turn off the pressure.” It was Obama who insisted that the trigger of automatic cuts be included in last summer’s budget agreement.
But Panetta strongly disagrees with the use of the trigger. “In fiscal year 2013, the reduction in defense spending would amount to 23 percent if the President exercised his authority to exempt military personnel,” Panetta told lawmakers. “A cut of this magnitude would be devastating in itself, but it gets worse. Under current law, that 23 percent would have to be applied equally to each major investment and construction program. Such a large cut, applied in this indiscriminate manner, would render most of our ship and construction projects unexecutable – you cannot buy three quarters of a ship or a building – and seriously damage other modernization efforts.”
Michael O’Hanlon, a foreign-policy and national-security expert with the Brookings Institution, said he basically agrees with Panetta after completing an exhaustive study of alternatives for downsizing the military. O’Hanlon, author of the newly released “The Wounded Giant: America’s Armed Forces in an Age of Austerity,” said “I became pretty persuaded you could cut $400 billion to $500 billion . .. yet I still couldn’t get beyond roughly a half trillion dollars in ten years savings. I don’t think it’s smart.”
Panetta’s repeated warnings have resonated with strong military advocates on Capitol Hill, including House Armed Services Committee Chairman Buck McKeon, R-Calif., and Republican Senators John McCain of Arizona and Lindsay Graham of South Carolina, who have vowed to pass legislation to block automatic across-the-board defense cuts. “I’m all for $400 billion of savings,” Graham, a member of the Armed Services Committee, told the Fiscal Times. “It’s not that I don’t want to reform the Pentagon. But $600 billion plus $400 billion is ‘the sky goes dark.’”
Late last week, Boehner called on Obama to work with Congress to develop an alternative to the automatic spending cuts to protect national security. "The president is the commander-in-chief. The president, I think, understands pretty clearly that these cuts would do serious harm to our ability to defend our country and our allies around the world," the Ohio Republican told reporters.
Michael Steel, Boehner’s press secretary, said that the speaker thinks an alternate route for achieving most of the long-term savings is to consider additional reductions in mandatory programs, such as federal health care programs like Medicare and Medicaid. “We obviously have got to look at the entitlements,” Steel said. “That’s where the money is.”
The debate has been further fueled by defense corporate executives and officials of the Aerospace Industries Association (AIA), who have waged a sophisticated lobbying effort targeting virtually every lawmaker with defense contracts in his or her district or state. A study commissioned by AIA concluded that more than one million jobs would be lost – in the defense industry and related industrial sectors – if Congress allows all the spending cuts to go through.
The study, by Stephen S. Fuller of George Mason University, said that the states that would be hardest hit by the cutbacks are California, Virginia, Texas, Florida, Massachusetts, Maryland, Pennsylvania, Connecticut, Arizona and Missouri.
That’s a lot of voters with a powerful interest in the debate over spending—or lack thereof. Especially during an election year.
