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A Defense Budget at the Crossroads

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Introduction

The U.S. defense budget is an annual snapshot of national security priorities, including the resources an administration believes are necessary to protect and promote the country's interests, safeguard the global commons, and provide humanitarian aid. Defense budgets viewed over time provide a rough narrative of the role the U.S. military plays in the global security environment, where the projection of power is tightly tethered to economic strength.

The Pentagon's new strategic guidance and the budget projections it informs suggest the United States has reached "an inflection point" along its fiscal/military trajectory -- a time to pare back spending as the country restores its economic engine and transitions from more than a decade at war. Some critics suggest the Obama administration's decision to rein in the defense budget over the next several years sends a dangerous signal of decline to potential adversaries such Iran and China, while others commend the move as a practical policy that may not go far enough.

What are the defense budget projections?

The Pentagon's projected budgets for the next five fiscal years (2013-2017) correspond with the savings requirements prescribed under the Budget Control Act of 2011, which tied successive hikes in the nation's debt ceiling with planned deficit reductions over the next decade.

Changes in annual defense budget projections

2012-02-08-defensebudget.PNG

As the above chart illustrates, the Defense Department projects "savings" of approximately $259 billion over the next five years (white column), the first phase of $487 billion in reductions over the next decade. The "projected savings," which do not account for declining war costs in Iraq and Afghanistan (Overseas Contingency Operations), are calculated by subtracting the current FY2013 budget projections (blue columns) from prior FY2012 projections (red columns) that assumed larger annual increases (PDF). The budget is only set to fall in actual dollar amount from 2012 to 2013, after which it will continue to grow at or near the rate of inflation. So in effect, it would be more accurate to portray the real budget (green line) as roughly frozen for this period, rather than achieving the "savings" advertised by the Defense Department.

Some critics chide the Pentagon for failing to make meaningful cuts to a base budget that has risen by nearly 80 percent since 2001. "Mr. Obama is only barely shifting the needle," says Edward Luce in the Financial Times. "He is still reluctant to make an explicit trade-off between confronting a bloated U.S. military and rejuvenating U.S. economic competitiveness."

Are these numbers concrete?

No. The projected budgets, while they adhere to the savings requirements mandated under the Budget Control Act of 2011, do not account for an additional $454 billion in mandatory spending cuts currently scheduled to hit the Pentagon in January 2013 under the sequestration process. As stated by Defense Secretary Leon Panetta, the Pentagon's new strategy and budget projections would collapse under the weight of further automatic cuts (ForeignPolicy). However, it is possible Congress will amend or eliminate the impending budget constraints with subsequent legislation. A group of Republican senators has already proposed legislation that would avert defense sequestration by cutting 5 percent of the federal workforce.

Projecting defense spending in an evolving security environment may also be more aspirational than practical. "While everybody talks about ten years, if the American economy recovers, if there's a new threat, if technology changes, so does everything in the defense budget," says military expert Anthony Cordesman.

Who are some of the budget winners and losers?

Winners

Budgeting broadly reflects a new focus on the Asia-Pacific region and the Pentagon's growing embrace of the adaptable, expeditionary strengths of the Navy and Air Force. The Navy is set to maintain its current fleet of eleven aircraft carriers and ten air wings, and receive enhancements in the cruise missile capacity of its submarines. Funding will be sustained for the Air Force's next-generation long-range bomber as well as sixty-five drone patrols, with a capacity to expand to eighty-five.

Financing is protected for ongoing counterterrorism efforts, including special operations forces (CNN), which have nearly doubled since 2001, and new unmanned ISR systems (intelligence, surveillance, and reconnaissance). Mounting concerns over the security of the Pentagon's digital networks made cyber operations one of the few areas where funding actually increased. The so-called nuclear triad -- strategic bombers, ballistic missile submarines, and intercontinental missiles -- are also preserved.

Losers

The transition away from troop-intensive counterinsurgencies in Iraq and Afghanistan will come with commensurate reductions in the Army and Marine Corps. Two army heavy brigades are slated to be withdrawn from Europe as part of the planned elimination of no less than eight brigade combat teams. The total active army will shrink from a peak of roughly 570,000 in 2010 to 490,000 by 2017. Meanwhile, Marine Corps numbers are expected to recede from 202,000 to 182,000, shedding at least one of nine infantry regiments. Procurement of the F-35 Joint Strike Fighter will face delays -- the previously scheduled purchase of forty-two aircraft for 2013 will be cut to just twenty-nine.

Military pay and benefits, which account for about a third of the defense budget, will also face reductions. The Pentagon may also try to carve out some additional savings through another round of base closures (Boston Herald), but the proposal is likely to face significant opposition in Congress.

What are the strategic implications?

A focus on individual cuts to force levels and procurement should not distract from the larger shift from a military doctrine oriented toward land-based conflict to one primed for naval and air war. According to the Pentagon's new strategic guidance, the transition toward the Asia-Pacific region comes with the caveat that "U.S. forces will no longer be sized to conduct large-scale, prolonged stability operations."

The free, full-length article can be found at the Council on Foreign Relations.