Citing a Bloomberg Government (BGOV) report from last spring, a recent Business Week article stated that 60 percent of the $178 billion in savings claimed by the Pentagon in its FY12 budget is illusive. BGOV analyst Kevin Brancato claims that some proposals “are questionable because they lack detail, they include cuts that would have happened under existing practices, or they face likely challenges from congress.”
Even this analysis is too optimistic. The $100 billion efficiency-based shift will never actually leave the Pentagon and should be written off from the start. That leaves the $78 billion that is ostensibly heading back to the Treasury but, as BGOV rightly points out, is incredibly hard to find. As little as $29 billion (16%) of DOD’s claimed $178 billion savings may be reliable.
Still our own Gordon Adams agrees with this principle:
Pentagon officials regularly cite savings that can’t be traced, including already canceled or curtailed weapons programs
What this means is these efficiencies came from the areas of the budget most difficult to control. We anticipated this point just last week arguing that despite the potential behind these proposals, they may not actually reduce the defense budget. Rising fuel costs were one of the first signs of this danger.
In February, we provided a break down of the Pentagon’s proposed savings, and first hinted at the intricacy behind these savings – much of this money is real, but some is not.