Will Cutting the Defense Budget Leave America at Risk?

The debate over military spending is raising all sorts of fears -- from questions of survival to concerns about lost jobs. Here, an expert answers the trickiest questions.


Jason Reed/Reuters

In November, when lawmakers were debating budget cuts, Defense Secretary Leon Panetta issued a dire warning. In a letter to Senators John McCain and Lindsey Graham, he wrote that the threatened reduction in defense spending -- about $1 trillion over the next decade - would create "an unacceptable risk in future combat operations." It would, he said, leave America with the smallest Army since the eve of World War II, the smallest number of ships since World War I, and the smallest Air Force in its history.

But on January 5, Panetta enthusiastically embraced a plan to cut nearly half this amount from his planned budget over the same period. By modestly tweaking U.S. military strategy to accommodate these reductions, he said the country would still be able to "win today's wars and successfully confront any enemy." The chairman of the Joint Chiefs of Staff stood beside him and added that after absorbing the cuts, America would still be "immune from coercion."

House Armed Services Committee chairman Buck McKeon (R-Calif.) - the top recipient of defense industry contributions in the current election cycle -- promptly denounced Panetta's plan as repackaging "our retreat from the world in the guise of a new strategy." Several Republican presidential candidates have also raised concerns, and House Majority Leader Eric Cantor has promised to block deep cuts.

There is, in short, a lot of rhetoric being thrown about, partly because the military is at what President Obama has called "a moment of transition." After 11 years of post-9/11 budget increases, followed by an end to the intervention in Iraq, the U.S. military has suddenly lost its political immunity from the austerity pressures afflicting other parts of the government.


ABOVE: National security spending went up by nearly two-thirds over the last decade, driven partly by the wars in Iraq and Afghanistan and post-9/11 security anxieties. But the Pentagon has lost its political immunity.

The debate over how much to invest in national security will pick up speed in coming weeks, when the administration provides new details of its cuts to Capitol Hill, but it will persist throughout this presidential election year. So, as a service to our readers, we offer the following field guide to the defense budget debate:

The Obama administration is talking about taking hundreds of billions of dollars away from the military. Is this a major cut?

Actually, describing it as a cut is a misnomer. The plan actually calls for an increase in the national security budget over the next decade -- but it would scale back the 18 percent boost previously set for that period.

As Obama made clear in a brief speech while standing with Panetta on January 5, "the growth in the defense budget will slow, but the fact of the matter is this: It will still grow."  

Here's the backdrop: Between 2000 and 2009, the average annual growth in national security budget authority was around 6 percent. That made spending go up by around two-thirds, to nearly $720 billion. Today, national security accounts for more than half of so-called "discretionary" spending -- the portion decided annually by Congress.

Before Obama announced his plan, the Pentagon was counting on an annual boost over the next 10 years. While there may be a net decrease in spending over the next year, the budget will soon revert to net increases, administration officials say. They have not said what the average annual increase will be if Congress approves his trims, but two senior administration officials who asked not to be named said the result after 10 years will still be a larger budget, even after inflation is taken into account.

That means Obama's proposed changes will shift such spending less than one percent annually. If approved, the change would be much smaller than the genuine reductions that followed the Korean War (20 percent), the Vietnam War (30 percent) and the Cold War (30 percent).

So what's going to be changed, exactly?

Pentagon officials have said they will release the details beginning this afternoon. But deputy defense secretary Ashton Carter has already explained that the military will not retain "the large force structure necessary to sustain long, large-scale stability operations" like the incursions in Iraq and Afghanistan. He also said "we are obviously going to have less modernization" and as a result, the Pentagon would "stop certain things, pause certain things, slow down certain things."

Panetta announced on January 12 that around 7,000 U.S. troops in Europe will be removed - around 9 percent of the total there. Other officials have predicted that the permanent overall size of the Army and the Marines will shrink beyond the 5-8 percent cuts the Pentagon had previously planned.

According to industry contractors, the Pentagon has signaled that the slowdowns will mostly affect troubled major weapons programs, such as the Air Force's F35 jet fighters and aerial tankers, the Navy's new aircraft carriers, and the Army's development of a new ground combat vehicle. The Air Force's Global Hawk drone program - which has had major cost overruns and poor reliability -- is slated for early termination, but most other cancellations will involve smaller programs.

Where would these changes leave the United States military, compared to others?

Obama said on January 5 that after his proposed cuts, U.S. military spending will still be "larger than roughly the next 10 nations combined."

He did not list them, but those countries are, in rough order (according to data compiled by the International Institute of Strategic Studies and the Stockholm International Peace Research Institute), China, Britain, France, Russia, Japan, Saudi Arabia, Germany, India, Italy, and Brazil. Experts have complained that Obama understated the American predominance, by not saying "the next 17 or 18 nations combined," but China's military budget is opaque, making this calculation imprecise.

Furthermore, when Panetta complained about the effects of a doubling of the budget reductions, he failed to mention that the number of U.S. ships and planes has long been declining. The Pentagon prefers to buy fewer but more costly weapons, which it expects to be more capable. For example, the Navy spends much more today than it did in 1990, but it has cut the number of its ships from 570 to 285; similarly, the Air Force has cut the number of its active duty aircraft and helicopters from more than 5,000 to around 3,750.


Thirty years ago, this trend caused Norman Augustine, then an executive at the Martin Marietta Corporation, to warn that by the year 2054, the entire defense budget "will purchase just one aircraft," to be shared by the Air Force and the Navy for three and a half days each, and in leap years with the Marines.

But there is no dispute that the higher capabilities of modern weaponry make simple numerical comparisons inadequate. Panetta's airplane tally, for example, only counted manned airplanes, but 41 percent of the service's winged inventory now consists of unmanned drones.

Another common way of measuring a nation's overall security investment is to compare its related spending to the size of its economy - an approach that ignores the fact that security threats are rarely proportional to a country's economic girth and more often related to its policies and its neighbors.

The U.S. currently spends 4.7 percent of its GDP on security, less than some countries in the nervous Middle East, like Saudi Arabia, or in the conflict-prone Horn of Africa, like Eritrea.  But traditional military allies in Europe - Britain, France, and Germany - all spend much less than the United States, and the average among all 27 members of the European Union is 1.63 percent of GDP, according to SIPRI data.

Budget trims under way throughout the continent will likely pull that number down even more, meaning that Washington has lately been bankrolling NATO -- the principal alliance with which its armed forces operate. As Ivo Daalder, the U.S. ambassador to NATO noted at a reporter's forum in December, the United States formerly "accounted for about 50 percent of NATO defense spending; now it accounts for 75 percent."

Defense spending creates jobs. Given the unemployment rate, is this a good moment to be trimming such spending?

A fifth of all federal spending buys goods and services for defense. But some studies suggest that other forms of government spending have a higher long-term impact on employment. There has not been a recent, peer-reviewed, economic study of how the cuts being debated may affect the nation's overall employment rate - in the short term or the long term.

Last October, the Aerospace Industries Association, the major defense contractor group, predicted a million jobs could be lost from the ripple-effects of potential cuts in weapons procurement alone. But the study foresaw much deeper cuts than Obama has actually proposed, and did not look at other, related impacts of making such a tweak in the federal budget.

For example, Harvard economist Martin Feldstein told a House committee in October that making a sizable dent in the deficit would boost the confidence of businesses and consumers. As a result, he predicted that their resulting new investments and spending would ameliorate some of the job losses.

A University of Massachusetts study in December - meant to rebut the industry's analysis - emphasized that defense spending typically creates fewer jobs than spending a comparable amount on health care, clean energy projects, and education -- or simply cutting taxes to let consumers spend as they wish. Obama, in his State of the Union address on January 24, seemed to embrace this concept when he urged lawmakers to "take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest" for public works projects.

But his formula would shift only a few tens of billions of dollars into new spending, while the brunt of the overall defense savings he seeks would be applied against the deficit. It stands little chance of winning the approval of the Republican-controlled House.

Presented by

R. Jeffrey Smith is managing editor for national security at the Center for Public Integrity, a nonprofit investigative newsroom.

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