Pentagon Could See Deep Cuts In Debt Deal

Aug 3, 2011

For several GOP lawmakers, the decision on whether to vote for the debt deal hinged on how the prescribed cuts will affect defense spending. In the end, enough Republicans in the House put their concerns about cutting the deficit over their concerns about cutting defense spending.

But no one really knows how much the Pentagon will have to cut as a result of the deal or when.

"We are in uncharted territory here," said David Berteau, an expert on budgetary issues with the Center for Strategic and International Studies.

He says the Pentagon hasn't had this much uncertainty about its budget since the end of the Cold War.

"We just don't know what the future looks like," he said. "What's the bottom? Where are we headed for here?"

Defense officials seemed just as confused about what the debt deal means for the future of the U.S. military.

"I don't think that we fully know yet," said Pentagon spokesman Col. Dave Lapan. "We're still looking through this to determine those impacts."

The debt package essentially calls for two phases of defense cuts. In the first, the Pentagon and other agencies, including the State Department, the CIA and the Department of Homeland Security, will be forced to collectively cut hundreds of billions from their budgets over the next 10 years. Senior lawmakers on Capitol Hill and defense officials were still unclear Tuesday about how deep those initial cuts would be.

"I think we can handle them although they are fairly deep cuts," said Sen. Carl Levin (D-MI), chairman of the Senate Armed Services Committee. "We don't know the precise number. They're going to be pretty tough, but I think we can do it."

The Pentagon had already planned on cutting roughly $400 billion over the next 12 years, a figure President Obama asked for this spring. The initial cuts in this deficit plan are expected to be around that number. So for the Pentagon at least, these initial cuts are a wash. But it's the looming possibility of a second phase of cuts that raises big concerns.

Under the deal, a bipartisan commission will be appointed to come up with a combination of tax increases and spending cuts by the end of November — that could include more defense cuts or not. But if the commission can't reach a compromise, that first round of defense cuts could double — approaching $800 billion.

Sen. John McCain (R-AZ) asked Gen. Martin Dempsey about this at the general's confirmation hearing last week to be the new chairman of the Joint Chiefs of Staff.

"What would an $800 [billion] to trillion-dollar cut in defense spending over the next 10 years do to our readiness, general?" McCain asked.

"Senator, I haven't been asked to look at that number, but I have looked — and we are looking at $400 [billion] and I will react in this way: Based on the difficulty in achieving the $400 billion cut, I believe $800 [billion] would be extraordinarily difficult and very high risk," Dempsey said.

Cuts that large would force the Pentagon to start making some tough choices. The size of the Army and Marine Corps was already expected to decrease in the next couple of years as the wars in Iraq and Afghanistan draw down. Now those forces may have to be cut back even more.

"The only thing that's harder than cutting the force itself is cutting their benefits and cutting retirement," said Dov Zakheim, the Pentagon's chief financial officer from 2001 to 2004.

"The biggest single part of the defense budget is being spent on personnel — the health spending, which is currently at about $52 billion [a year] ... You have a retirement plan that basically starts paying people if they've served 20 years as low as the age of 38," he said.

Adm. Mike Mullen, outgoing chairman of the Joint Chiefs of Staff, was asked about the pending defense cuts when he visited U.S. troops in Baghdad on Tuesday. Mullen said he's not sure where the cuts will come from, but they are coming and at this point everything is on the table.

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