Tuesday’s level 10 earthquake on the political Richter scale may not bode well for defense, specifically future defense spending. One interpretation of Scott Brown’s surprise victory in Massachusetts was extreme unhappiness with decisions being made in Washington on a host of issues from TARP, to deficit spending, health care costs, bank lending and, most important, unemployment. Polls show that the American people are concerned, not surprisingly, about the state of the U.S. economy and the federal budget. They also are confronting the fact, apparently underappreciated in Washington, that a majority of the states are facing rising budget deficits and, as a consequence, increased state taxes. Economic data clearly shows that Americans are changing their spending habits, reducing their debt, trying to balance their budgets. It is not surprising that they would want the same thing from Washington and their state capitols.
There is a growing chorus of voices among pundits and politicians alike for the administration to “pivot” its focus from health care to the economy. A central part of any shift or pivot would have to be addressing the growth in government spending and the ballooning federal deficit. It is not coincidental that the White House has begun the process of setting up a bipartisan commission to address the deficit.
The Obama Administration has sought to use deficit spending as the principal tool for battling the current recession. This has meant trillions of dollars of new spending. Even with the phasing out of the Bush tax cuts, a health care plan that “saves” $30 billion and all kinds of new taxes and fees, the deficit is projected to be at least $750 billion in 2014. It is not surprising that in such an environment defense spending has been spared the draconian cuts that were forecast when President Obama first took office. In fact, just a few months ago it was reported that Secretary of Defense Robert Gates had negotiated a $100 billion increase in the Future Year Defense Plan, the six year projected defense budget. At best, this would allow defense spending to stay even with inflation, but that would be a better situation than many observers had believed would occur.
Tuesday was not a referendum on national security, but it could have serious consequences for defense spending. If, as many observers believe, one message from Massachusetts is for government to control its appetite, then the response we must expect is an effort to alter the trajectory of future federal budgets. The problem is where cuts will be made. There is a strong historical correlation between Democratic Party control over the Congress and reduced defense spending. A crash program of deficit cutting could produce a federal budget that included deep reductions in the defense budget.
Unfortunately, recent defense decisions by the Obama Administration will make it difficult to find excess funds in the defense budget that can be cut. The administration is committed to an orderly reduction of forces in Iraq, a surge in Afghanistan, deterrence of rogue states such as Iran and North Korea, significant assistance to Haiti, expanded military activities in Africa and continuing support for allies in Europe and East Asia. In addition, the President supported Secretary Gates’ decision to increase the size of the military, provide our forces in the field with tens of thousands of armored vehicles and hundreds of unmanned aerial vehicles, and increase funding for military and veterans’ health care. So funding for ongoing operations and military personnel cannot be reduced.
This means that defense spending cuts would have to come disproportionately from procurement and R&D.
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