nteresting Bloomberg/Capaccio Article & Intriguing CBO Report. Guest Post by Winslow Wheeler

An important and informative Tony Capaccio article (from Bloomberg; shown below) came out today.  It summarizes (accurately) CBO's analysis of the budget effects of sequester: if sequester were to occur, the Pentagon's "base" (non-war) budget would be $469 billion for 2013.  This is slightly above what was spent in 2006, and it is "larger than the average base budget during [the Reagan era of] the 1980s." (See page vi and the table on page 11 of the attached.)

 

This amount is also significantly more than the Pentagon received, on average, during the Cold War, and it is multiples of the defense budgets of China, Russia, Iran, Syria, and North Korea--combined.

 

This $469 billion is the same amount that Secretary of Defense Leon Panetta calls "doomsday," that House Armed Services Committee Chairman Buck McKeon (R-Calif.) calls a "catastrophe" and that others, both Democrats and Republicans, want to rescue the Pentagon from--by adding money above the $469 billion level. 

 

These same people will likely argue that this new CBO report is a reason to spend more money, not less. The new report, "Long-Term Implications of the 2013 Future Years Defense Program," is CBO's annual update of its re-estimate of what it would actually cost to implement the Pentagon's programs in the "FYDP," in this case the 2013-2017 version.  Basically, like its previous iterations, CBO says DOD would need $53 billion more than it received in 2012 for each of the next five years to accuratey fund all its programs, as currently planned and implemented. 

 

Ergo, the spending advocates will argue DOD needs more money, not less.  Their logic is that nothing in the Pentagon should change--other than the amount of money it receives. 

 

How can it be that more money than Ronald Reagan and George H. W. Bush spent on defense, tens of billions more than spent all through the Cold War and multiples of what any conceivable combination of opponents spend on defense are all a catastrophe for the Pentagon? 

 

Such questions are prompted by Tony Capaccio's article and the new CBO report. 

 

When the House of Representatives debates the Department of Defense Appropriations Act for FY 2013 next week, will these basic questions to be asked, or will there be only more hysteria and table pounding for more money? 

 

Capaccio's interesting article follows; CBO's intriguing report is attached and at http://cbo.gov/publication/43428.

 

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Pentagon Would Keep 2006 Spending Power Under Cuts, CBO Finds
2012-07-12 05:30:00.6 GMT


By Tony Capaccio
July 12 (Bloomberg) -- The Pentagon's basic budget for next
year will be larger than in 2006 when adjusted for inflation
even if automatic budget cuts take effect, according to the
Congressional Budget Office.
The Department of Defense's $526 billion request for fiscal
2013, not including war spending, reflects a reduction of $45
billion from previous plans. If automatic cuts known as
sequestration take effect in January, the funding would be
further reduced to $469 billion, the nonpartisan CBO said in a
report released yesterday.
"Accommodating those automatic reductions could be
difficult for the department to manage because it would need to
be achieved in only nine months -- between the cuts taking
effect and the end of the fiscal year," the congressional
budget analysts wrote. "Even with that cut, however, DoD's base
budget in 2013 would still be larger than it was in 2006," when
calculated in 2013 dollars.
The CBO report buttresses the view of some independent
budget analysts, such as Gordon Adams of the Stimson Center in
Washington and Todd Harrison of the Center for Strategic and
Budgetary Assessments, that sequestration wouldn't be the short-
term budget disaster described by Pentagon and defense industry
officials.
The independent analysts said the automatic cuts would
essentially reverse the buildup after the terrorist attacks of
Sept. 11, 2001, and the wars that followed in Iraq and
Afghanistan.
"Even with the sequester, we will be going back to roughly
2007 levels of spending in defense dollars," Adams said last
month at a defense conference sponsored by Bloomberg Government.
"And while it's a very ugly way to get to that level, it is not
the end of the world."

Reagan-Era Buildup

The Congressional Budget Office said defense spending in
fiscal 2013 if the automatic cuts take effect also would remain
"larger than the average base budget during the 1980s" in the
Reagan-era defense buildup.
The defense cuts are part of $1.2 trillion in automatic,
across-the-board reductions to domestic and national-security
programs that will start in January if Congress and President
Barack Obama don't act to avert them. The cuts were imposed
after talks failed last year on a bipartisan plan to curb the
nation's soaring debt.
Even without sequestration, the Pentagon faces a shortfall
in delivering on its announced plans, the CBO said. It estimated
the Pentagon's program for fiscal 2013 to 2017 will cost $123
billion, or 5 percent more than planned, to execute.
The costs of replacing and modernizing weapons systems
"would grow sharply during the next several years, from $168
billion in 2013 to $212 billion in 2018" in inflation-adjusted
terms, a 26 percent increase, the CBO found.

For Related News and Information:
Top Government Stories: GTOP
Defense Budget Outlays: USBODEFN GP
Obama Budget Proposal: BUDG

--Editors: Larry Liebert, Michael Shepard

To contact the reporter on this story:
Tony Capaccio in Washington at +1-202-624-1911 or
acapaccio@bloomberg.net

To contact the editor responsible for this story:
Mark Silva at +1-202-654-4315 or
msilva34@bloomberg.net

_____________________________
Winslow T. Wheeler
Director
Straus Military Reform Project,
Center for Defense Information at the
Project On Government Oversight (POGO)
301 791-2397 (home office)
301 221-3897 (cell)