How the Pentagon Makes Out in the Debt Ceiling Deal

Aug 1, 2011 7:29pm

ABC News' Luis Martinez (@lmartinezabc) reports:

On first blush it appears the $2.1 billion debt ceiling compromise hits the Pentagon’s budget pretty hard in the next decade, but the reality is that in the short term the $350 billion in defense cuts is smaller than what Pentagon officials had been preparing for.  However, the deal also holds out the possibility that in the long term there could be even deeper cuts in defense spending if a bipartisan committee is unable to come up with an additional $1.2 trillion in savings by the end of this year.  

Earlier this year, then Defense Secretary Robert Gates carved out $400 billion in savings through 2015 thanks to an initiative he had launched to bring down overhead costs within the Defense Department to help offset smaller Pentagon budgets in coming years.

But then In April, President Obama proposed the possibility of further security spending cuts totaling $400 billion over the next 12 years, with the bulk of that amount expected to come from the military budget.  The Pentagon is in the process of conducting a review of all military programs to determine  where those potential cuts might come from.   

But now it appears the debt ceiling compromise could lead to smaller cuts than the Pentagon had been preparing for.   An administration official confirms that the $350 billion cuts in the base defense budget over the next 10 years replaces the proposed $400 billion in security cuts over 12 years that had been proposed in April.

But the $350 billion in defense cuts isn’t all going to come from the Pentagon as other government agencies also fall under the defense umbrella, so the real Pentagon component will actually be $330 billion. 

In an apples-to-apples comparison using the broader term of security cuts, the official notes that the deal actually calls for $420 billion in security cuts over 10 years versus the $400 billion over 12 years that were proposed in April.   So that’s a little more than President Obama proposed in April, but in a shorter time frame.

The Pentagon will still have to make tough budget decisions even though it will have a smaller budget trimming target.  But the deal also holds out the prospect of a further substantial cut of $500 billion in Defense spending  that would be automatically triggered if a new bipartisan committee fails to come up with $1.2 trillion in additional savings by the end of this year. 

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus