Hawkish lawmakers skeptically assessed yesterday the deficit-reduction deal the White House and congressional leaders reached Sunday, which could cut defense-related spending by $850 billion or more over the next decade.
The Senate will vote on the legislation today, which the Republican-controlled House passed via a 269-161 vote yesterday.
Several House Armed Services Committee (HASC) members voted against the deal–despite a plea for support during a meeting yesterday with House Speaker John Boehner (R-Ohio)–including Seapower and Projection Forces subcommittee Chairman Todd Akin (R-Mo.), Readiness Chairman Randy Forbes (R-Va.), and Strategic Forces Chairman Michael Turner (R-Ohio).
HASC Chairman Howard “Buck” McKeon (R-Calif.) supported the debt deal, but said he did so with “deep reservations.”
“Our senior military commanders have been unanimous in their concerns that deeper cuts could break the force,” he said in a statement. “I take their position seriously and the funding levels in this bill won’t make their job easier.”
McKeon said he is concerned about a second round of defense cuts called for in the legislation, and said “it is essential” that a committee that will determine those cuts has “strong national security voices.” He said defense spending “cannot sustain any additional cuts” during the second round of budget trimming.
Under the debt plan, according to the White House, the nation’s debt ceiling would be raised in a two-part process that in the first stage would cut $350 billion would be cut from the “base defense budget” over the next 10 years as part of $900 billion in broader cuts. The cut to the Pentagon would be based on the outcome of the comprehensive roles-and-missions review the Pentagon is expected to complete this fall, according to a White House summary. Then, under the debt deal, a special bi-partisan congressional committee would meet later this year to decide on additional 10-year cuts of up to $1.5 trillion overall, to be approved by Congress by the end of the year, according to the White House document.
Defense analyst Jim McAleese, of McAleese & Associates in Sterling, Va., predicted that second round of cuts could result in $350 billion to $375 billion of additional defense cuts, thus making the overall defense-related reduction over the next decade $700 billion to $725 billion.
However, that grand-total defense-related cut could rise to $850 billion or more.
The legislation could, in theory, lead to $600 billion in such cuts during that second round, leading to a grand-total of $950 billion in reductions. The possibility exists because the legislation calls for an “automatic sequester” to ensure the second round of cuts results in at least $1.2 trillion in longterm savings by 2013, with half of that–$600 billion–coming from “defense,” according to the White House.
The debt plan states if the committee takes no action, “the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made,” the White House summary said.
“That outcome would be unacceptable to many Republicans and Democrats alike–creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy,” according to the document.
McKeon and House Appropriations Defense subcommittee Chairman C.W. “Bill” Young (R-Fla.) said at a press conference on Saturday, when the final deal was not in place, they would support no more than $439 billion in defense cuts over the next 10 years.
Defense observers had mixed reaction to the debt deal yesterday.
The Aerospace Industries Association (AIA) criticized the plan for dangling “s a Sword of Damocles over our national security later this year when further cuts would be triggered unless another compromise is reached.”
In a statement, the Arlington, Va. trade group argued the potential $600 billion in second-round cuts “are a dangerous approach that could compromise our national security for decades to come, while at the same time failing to create fiscal stability” and leaving “our troops with old, worn-out equipment, diminished capability and vulnerable to threats from across the globe.”
Meanwhile, analyst Byron Callan, director of Capital Alpha Partners LLC in Washington, said he sees “no net change for defense” with the new plan that he said could result in $850 billion in long-term defense cuts, because “most defense stocks have discounted a (Department of Defense) DoD budget cut between $400-$800 billion over the next ten years.” That’s because President Barack Obama proposed in April $400 billion in long-term security cuts, and congressional proposals have suggested upwards of $800 billion.
“We’d argue that nothing has really fundamentally changed in the defense outlook as a result of the bipartisan deal,” Callan said yesterday in a note to investors. “The deal brackets a best case cut of $350 billion to the DoD base budget, but if negotiations don’t go well later this year or Congress balks, then there that the total cut over ten years to the DoD base budget could be closer to $850 billion. This still doesn’t get the DoD to the $1 trillion level of cuts some of the independent commissions had proposed.”
Daniel Goure of the Arlington, Va.-based consultancy the Lexington Institute said yesterday the debt deal “actually protects defense spending.” In a blog post, he noted the defense budget in fiscal year 2012 and 2013 would be in a range of plus-or-minus 3 percent from the previous year’s level, and definitions of defense spending reach beyond the Pentagon to include such areas as the Department of Homeland Security, State Department, and intelligence community.
The committee that would meet later this year, Goure noted, “can propose any combination of reductions it sees fit.”
“This means that defense could actually be subjected to a smaller reduction than planned,” he wrote.
Meanwhile, Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information in Washington, said there are “numerous misleading and misinformed assertions being made about the defense spending parts of the debt deal.”
He noted the “defense” spending in the bill would extend beyond the Pentagon. And some of the $350 billion in first-round cuts, for the years beyond the first two, would not be set now but instead determined by Congress in the future, he pointed out.
Wheeler also predicted the new congressional committee will recommend cuts that do not impact the Pentagon as much as a potential $500 billion or $600 billion defense-related reduction would.
While “the political winds now favoring the Pentagon relative to other forms of discretionary spending may change, the most likely alterations to DoD spending appear today to be significantly less than the much touted $850 billion,” he said. “The debt deal kicks the defense budget can down the road for this and future Congresses.”