Not Yet the Meat
Wednesday, January 25, 2012 at 5:36PM | Russell Rumbaugh As we ready for the FY13 budget, it’s worth reviewing where we’re at now: year 3 of flat budgets. Which means when you factor in inflation the defense budget has already been declining for two years.
It seems like this year is the big year because the rhetoric hasn't kept up with the reality. We’ve long pointed out that the President’s FY12 request wasn’t a real number. Neither was the FY11 request: by the time the CR fight was done, FY11 was held at the FY10 level, 3% less than the request. And the final FY12 appropriations extended that same level another year. So the reality is three years of DoD at about $530B.
Those flat budgets mean savings from defense are actually ahead of the big savings proposed by the debt commissions. Both the Simpson-Bowles Fiscal Commission and the Rivlin-Domenici BPC Commission froze FY12 at FY11 levels, but since both were looking for savings from FY12 on, they assumed FY11 would grow from FY10. In reality, we’ve already been reaping “savings” from defense for two years.
Yet even with some savings already pocketed, we’re still cutting mainly the fat from the defense budget. Former Vice Chairman of the Joint Chiefs, Hoss Cartwright, in what is likely to be an oft-cited quote, implied that this year's cuts aren’t yet making the services change their plans: “Achieving the $487 billion in cuts was sufficiently doable that it didn't require really hard decisions.” To illustrate his point, when savings are coming—as is rumored—from multi-year contracts for destroyers, subs, and V-22s or from pushing the purchase of JSFs to outside the FYDP, we aren’t yet seeing hard decisions being made.
A cut in ground force endstrength may be the first sign of actual change, although how big a change is still dependent on how those cuts are implemented. As we prepare for the roll-out, its worth remembering on one hand that this isn’t that big of a cut from last year or the year before that or the year before that and, on the other, that we haven’t yet seen the hard choices. We aren’t cutting meat yet.