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Written by Lynn Goya,
President Obama, Senator Harry Reid and John Boehner announced a deal (watch the president’s announcement here), Sunday, that provides a path forward to lift the national debt ceiling. According to numerous pundits and members of the House and Senate, the president “won” the debate by looking like someone who compromised, Democrats “won” because they prevented the nation from going over a cliff, Republicans “won” because they held together and didn’t “blink,” and the Tea Party “won” because they saved millionaires’ tax breaks even in the midst of dreadful economic numbers.
In a nutshell, the deal matches debt ceiling increases with $2.4 trillion (yes, with a “t”) dollar-for-dollar spending cuts to be specified in two phases. A bipartisan committee of six Republicans and six Democrats will create yet another new committee, called by pundits a Super Congress, that will decide on a second round of $1.5 trillion cuts by November, or face mandatory and equal cuts to defense and entitlements beginning in 2013. More details about the deal can be found here.
Although how the cuts will specifically work out has yet to be determined, the debt deal is clearly aimed at limiting the president’s ability to put through his programs. Unfortunately for veterans, the administration has been the first in a long time to prioritize fulfilling the promises made to soldiers. Enhancing veterans’ services to eliminate homelessness, increase access to PTSD-related medical care, reduce suicide among vets, streamline the VA approval process and more may all be on the chopping block.
Debt Deal and Defense Spending
The current debt deal cuts National Security spending from the current level of $687 billion this year to $683 billion in next year’s budget, including $4 billion in Defense spending that would become the deepest cuts in military spending since the early 1990s, after the cold war ended. In total, national defense may see up to $850 billion in spending cuts over the next decade when the deal is fully implemented. $350 billion is cut in the first half of the two-part $2.4 trillion budget trimming. Another $500 billion could be implemented if the bipartisan committee of 12, evenly divided among Democrats and Republicans, tasked with cutting another trillion dollars cannot agree on anything – a likely outcome according to many.
If the committee fails, $1 trillion in mandatory across-the-board cuts will be divided equally between defense and entitlement spending. Last week, Obama’s choice to be the new chairman of the Joint Chiefs of Staff Army Gen. Martin Dempsey, told the Senate that cuts of $800 billion “would be extraordinarily difficult and very high-risk.” Yet, defense expenditures have grown substantially over the past decade to support overseas wars and increased expenditures for homeland security. Defense spending was $295 billion in fiscal year 2000, but by fiscal year 2011 Obama’s proposed military budget had jumped to $719 billion.
According to an opinion piece released on Monday by Winslow T. Wheeler, Director, Straus Military Reform Project for the Center for Defense Information, the military may not fare as badly as many think. The White House did an little economic jujitsu to protect the defense department from drastic cuts in spending. According to Wheeler, the $350 billion savings in the “base defense budget” uses a different “baseline” (basis of comparison) and extends a two year cap on “security” spending over ten years. The White House also broadened defense spending to include all spending on “security.” Security spending for budget cutting purposes includes DOD, DOE/nuclear weapons, all State Department related spending, foreign aid, intelligence, Veterans Affairs, and Homeland Security, effectively softening the blow to the defense department.
Of course, any specifics that attempt to reveal who will be hit and where are purely conjecture because the details of the last-minute bill were not included in the rush legislation, even for the first round of cuts. Instead, broad outlines of goals allowed the House, the Senate and the Executive Branch to get something through before the country ran out of money to pay its obligations, including pay to active duty military on the front line. Wheeler wrote,
“There will not be $850 billion in reduction in the Pentagon budget as a result of this debt deal. The actual amount is unknown. The actual amount will be determined by this and future Congresses; 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.
The debt deal kicks the defense budget can down the road for this and future Congresses. People should not read precision and certainty into a political deal specifically designed to be uncertain and indistinct.”
The Hill reports that defense spending under the bill would stay frozen at 2011 levels. Colin Clark at Aol Defense.com quotes Mackenzie Eaglen from the conservative Heritage Foundation think tank, who says that the $350 billion cut would replace the $400 billion that President Obama already outlined in proposed defense cuts in his April 2011 budget proposal (that still has not passed). That would translate to about $35 billion per year over the next ten years. Clark continues,
‘The chairman of the House Armed Services Committee, Rep. Buck McKeon, reluctantly agreed to vote for the debt plan “with deep reservations.” The plan, which he called “the least bad proposal before us,” could break the military if the second round of cuts go through. With that in mind, he said “it is essential” that “strong national security voices” be appointed to the 12-member panel. (One guess who McKeon would like to see on the Super Congress.) “Defense,” he added, “cannot sustain any additional cuts either from the joint committee or the sequestration trigger.”
The Aerospace Industries Association, one of Washington’s most powerful lobby groups, said the second round of cuts — though not mandatory — “are so draconian that it’s hard to believe they are even on the table.” The possible $600 billion in additional cuts, AIA says, “could compromise our national security for decades to come, while at the same time failing to create fiscal stability. Worst of all, they could leave our troops with old, worn-out equipment, diminished capability and vulnerable to threats from across the globe.”