Fears Over Sequestration Are Overblown

EXPERT COMMENTARY

Fears Over Sequestration Are Overblown

By Veronique de Rugy |
Sep 14, 2012

Thanks to the Budget Control Act of 2011, the Pentagon is due for a cut of $500 billion over nine years, starting on Jan. 2, 2013. Next year's cut comes in at $54 billion. That prospect has generated a lot of end-of-the-world-type rhetoric from Washington hawks.

Yet with the national debt exceeding $16 trillion, a gross debt-to-GDP ratio above 100 percent, and Moody's Investors Service warning the country of a potential credit downgrade, we need to cut through the rhetoric and face the facts. Defense sequester cuts simply do not warrant the fears they inspire.

The sequester will certainly pose management challenges in its first year of implementation. Yet even under sequestration, defense spending merely reverts to its level in 2007 -- a year in which America was ably defended and plenty of cash flowed to the armed forces. And that's in real, inflation-adjusted terms. By 2018, the defense budget returns to its fiscal 2012 level.

In nominal terms, cumulative nonwar defense spending over the FY2012-FY2021 period will increase to $4.8 trillion with sequestration, as opposed to $5.3 trillion without it. In other words, even with sequestration, nonwar military spending will still grow by about 10 percent over the next decade.

According to the Congressional Budget Office, over that period, the Department of Defense will also spend an additional $400 billion on war, on top of its base budget. And if a decade's worth of behavior is any indication of the future, we can predict that Congress will continue to use this war account to provide additional nonwar spending to the military.

For instance, according to defense spending expert Russell Rumbaugh, Senate appropriators moved some $10 billion in requested funding from the base budget to the war budget last November, when they marked up the 2012 defense appropriations bill. CQ Weekly's Frank Oliveri reported that the House-passed 2013 appropriations bill shifts an additional $5.9 billion of nonwar spending into the war column as well for ordinary nonwar spending on bases.

Defense spending is not just one of the most sacrosanct parts of the budget, but also one of the largest and most inscrutable. Adjusting for inflation, military spending has grown for an unprecedented 14 consecutive years and is now higher than at any time since World War II. Even excluding war costs, the military base budget has grown by about 50 percent over the past decade. And figuring out how much is actually spent on the military is not an easy task.

Perhaps more important for those concerned about the United States' defense standing, even after the sequestration cuts, the United States will remain the biggest global military power in the world.

Rather than complaining about a somewhat smaller spending increase, the secretary of defense should start preparing for sequestration. Otherwise, he should offer an alternative to the sequestration's across-the-board reductions by coming up with cuts that are consistent with our national security priorities. If he does, Panetta would kill two birds with one stone: He would secure our safety as well as help put our country on a more stable financial footing.

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