In February, President Obama proposed a $78 billion cut and $100 billion savings in the FY2012-16 DoD budget in an effort to shield defense from additional cuts some were proposing in overall deficit reduction plans. Two months later, the president proposed a $4 trillion deficit reduction plan that included another $400 billion in defense cuts through 2023. These additional defense cuts were in response to pressure to include significant defense cuts in any deficit reduction plan.
Now, it seems that even this almost $500 billion reduction in defense budgets proposed by the administration will not be enough to satisfy the budget cutters. The effort to build a firewall against further defense cuts appears to have failed.
Options being considered as part of the deal to raise the $14.3 trillion debt ceiling deal include as much as $700-800 billion cuts to defense over 12 years. But even that may not be enough. Sen. Tom Coburn (R-OK), a former member of the “Gang of Six” group of Senators now seeking to influence the final debt ceiling deal, has proposed and $9 trillion deficit reduction plan that includes $1 trillion in cuts to defense.
Even defense supporters in Congress, who have argued strongly against more reductions to the defense budget in any final debt ceiling increase deal, seem to be resigned more defense cuts. Some have tried to limit this increase by proposing a $300 billion defense cut limit in any debt ceiling deal. However, there does not appear to be enough votes in the House to support this position.
So, the range of a likely defense cut in a final deal to increase the debt ceiling will likely be $300 and $800 billion. DoD planners working on the president’s proposed $400 billion 10-year cut will probably have to refocus on a new cut target of between $500-700 billion over the next 10 to 12 years. Nevertheless, there is no indication that Secretary Panetta will turn away from his statement that recommended decisions to achieve budget cuts will be strategy-driven and will not result in a hollow force.