Budget deal will only save a fraction of promised $38B
Edward Kenney Afghanistan Study Group
The supposedly “historic” 2011 budget deal, which barely avoided a federal shutdown, will only save a fraction of the promised $38 billion. Once defense spending and funding for the wars are included in this calculation, federal spending will have actually increased this year. That’s right, defense spending plus the wars in Iraq, Afghanistan, and Libya will cause federal spending to go up in 2011. Keep this in mind when assessing the 2012 budget proposals on defense.
With the President’s speech last night, there are now three major debt plans on the table, one by Representative Paul Ryan, chairman of the House Budget Committee, a less heralded proposal by the House Progressive Caucus, and of course the President’s second attempt at a 2012 budget presented on Wednesday. The Ryan budget makes grading the three plans difficult. Remember the super-smart math whiz that would mess up the grading bell curve; well Ryan’s plan is the opposite of that. He relies on over-optimistic growth projections, “voodoo” economics that suggest cutting taxes raises revenue, and cuts from programs that overwhelmingly favor the middle class, the poor and the elderly while letting the wealthy off the hook. As bad as this sounds, the worse part of Ryan’s budget is that he does absolutely nothing to reign in defense spending.
Afghanistan Study Group member Gordon Adams explains:
Last Tuesday, House Budget Committee Chairman Paul Ryan (R-Wis.) proposed a 2012 budget that caves to the Pentagon bureaucracy and spares the Department of Defense from fiscal discipline. Ryan’s spending plan mimics Defense Secretary Robert Gates’, which is more about the pretense of savings than actual prudence. It calls for $178 billion in reductions over the next five years, but most of these reductions are illusory and none of them lower the budget. Instead, they merely slow the growth that the department has said it would prefer.
Congressman Ryan should be ashamed.
The President’s plan is marginally better than the Ryan “joke” budget, but it is still pretty terrible. He correctly blames the wars in Iraq and Afghanistan on contributing significantly to the deficit and debt problem, and he promises to “conduct a fundamental review of America’s missions, capabilities and our role in a changing world”. But like Ryan, the specifics of his plan are pretty weak. He promises to save $400 billion from the trillion dollar defense budget. Sounds like a lot of money, but as with Ryan a lot of all of these savings will come in the form of slowing the growth of the Pentagon’s budget to the rate of inflation. As Gordon Adams suggests $400 billion is a really trivial sum:
And, frankly, a $400 billion reduction from defense over ten years is also trivial. The Department plans to spend more than $6 trillion over those years; $400 billion is less than 7% below that projection. A good comptroller can find about $40 billion a year to save with his or her eyes closed. And it is less than half the defense reductions the President’s own deficit commission proposed last December. And less than half the proposed defense reductions contained in the Bipartisan Policy Center’s debt commission (Rivlin-Domenici) proposal of November 2010. Odd that the White House did not back up the views of its own commission.
The only budget plan that takes defense spending seriously is the one proposed by the progressive caucus. It’s the only budget which actually commits to ending the wars in Iraq and Afghanistan. They also make real cuts in the defense budget of $1.7 trillion, over four times what the president is proposing. As Columbia economist Jeffrey Sachs put it, “The public says that we should get out of Iraq and Afghanistan and reduce Pentagon spending.” The progressive budget does just that. At least in terms of military spending and the war in Afghanistan, the progressive caucus has the right approach.
