Who Gains From Debt Deal? The Pentagon, for One

The last-minute deal that Congress is considering to raise the federal debt limit probably will mean trillions of dollars in government spending reductions for most agencies. But one department stands to gain: the Pentagon.

Rather than cutting $400 billion in defense spending through 2023, as President Barack Obama had proposed in April, the current debt proposal trims $350 billion through 2024, effectively giving the Pentagon $50 billion more than it had been expecting over the next decade.

With the wars in Iraq and Afghanistan winding down, experts said, the overall change in defense spending practices could be minimal: Instead of cuts, the Pentagon merely could face slower growth.

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“This is a good deal for defense when you probe under the numbers,” said Lawrence Korb, a defense expert at the Center for American Progress, a left-leaning research center. “It's better than what the Defense Department was expecting.”

To be sure, the numbers could change. Under the current debt deal the department would have to reduce its budget by $600 billion over the next decade if Congress can't agree on the deficit-reduction proposals of a new 12-member, bipartisan legislative committee that'll be tasked with recommending further spending cuts.

But the proposed figures — after weeks of drawn-out, vitriolic debate between both political parties — raise questions about what, if anything, could lead to substantial defense reductions. Military spending has more or less survived the drawdown of two wars and a domestic economic crisis. Even now, Congress can't agree on how much to cut defense spending while maintaining US military strength.

Rep. CW Bill Young (R-Florida) the chairman of the House Defense Appropriations Subcommittee, said: “We are confident that we can make this (debt deal) happen without affecting readiness and without affecting any of our soldiers.”

Die-hard conservative Rep. Allen West (R-Florida) said he'd support the bill but that to avoid deep military reductions, “I think the most important thing is to get a strong defense person on the (bipartisan) committee.”

Supporters of the debt deal, including top defense officials, said it was too risky to make major defense cuts without examining the national security strategy. They noted that the reductions still represent the sharpest baseline defense budget cuts since the 1990s.

But those who advocate more reductions said that the current proposal, in inflation-adjusted dollars, kept defense spending higher than it was at the height of the Cold War.

Top defense officials have taken to Capitol Hill in recent months to appeal for less dramatic cuts. The incoming chairman of the Joint Chiefs of Staff, Army Gen. Martin Dempsey, told lawmakers that anything higher than that was “extraordinarily difficult” to absorb. In June, outgoing Vice Chairman Marine Gen. James Cartwright said further reductions threatened to “hollow out” the force.

Before he left office as defense secretary, Robert Gates warned repeatedly that any bigger cuts could lead to a less capable force.

But the bipartisan National Commission on Fiscal Responsibility and Reform — known as the Bowles-Simpson proposal, for its two chairmen — proposed far deeper reductions last fall, saying the military could still maintain its power.

Korb, who studies defense budgets, said Congress could cut the defense baseline budget by $100 billion annually over the next decade and still spend more than it did during the height of the Cold War, adjusted for inflation. He noted that the baseline defense budget has climbed every year for 13 years, a record increase.

Adjusted for inflation, the United States spent at most $580 billion a year on defense at the height of the Cold War. In the 2011 fiscal year, the Pentagon's baseline budget is $549 billion, with another $159 billion allotted for the wars in Iraq and Afghanistan, for a total of $708 billion. That total figure drops slightly to $670 billion in the 2012 budget proposal.

Obama's $400 billion reduction would have started with the 2013 fiscal year, but the debt deal begins with the 2014 budget, effectively delaying the pain for the Pentagon by a year. Still, some defense hawks in Congress were worried that even the relatively modest cuts could go too far.

Marshall Wittmann, a spokesman for Sen. Joseph Lieberman, a Connecticut independent who's a senior member of the Senate Armed Services Committee, said Monday that Lieberman “is very concerned about rumors that the debt agreement now being negotiated will disproportionately cut defense spending and result in unacceptably high risk to our national security.”

(David Lightman and Adam Sege contributed to this report.)

© 2011 McClatchy-Tribune Information Services

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