New Law Identifies No Additional Defense Cuts, Official Says

WASHINGTON, Aug. 3, 2011 — The leg­is­la­tion Pres­i­dent Barack Oba­ma signed into law yes­ter­day to raise the nation’s debt ceil­ing and con­trol long-term spend­ing does not specif­i­cal­ly call for more spend­ing cuts than Defense Depart­ment offi­cials already were plan­ning, a senior Pen­ta­gon offi­cial said today.

The pres­i­dent asked depart­ment offi­cials ear­li­er this year to find $400 bil­lion in sav­ings, and Pen­ta­gon offi­cials have been work­ing to iden­ti­fy that amount over the next 10 or so years, offi­cials have said. “That is hard to do, but man­age­able,” a senior depart­ment offi­cial told reporters dur­ing a back­ground brief­ing today. All Pen­ta­gon-relat­ed spend­ing cuts would come from the department’s base bud­get, and not from its over­seas oper­at­ing fund, which sup­plies oper­a­tions in Afghanistan, Iraq and oth­er for­eign loca­tions, the offi­cial said.

Deci­sions about the spend­ing cuts are not made arbi­trar­i­ly, he said. “As we work to accom­mo­date these changes in the defense bud­get, we do so with pol­i­cy and strat­e­gy in mind,” he explained.

The new law rais­es the government’s bor­row­ing abil­i­ty by $2.1 tril­lion, which offi­cials said would elim­i­nate the need for fur­ther debt ceil­ing increas­es until 2013.

In its effort to curb spend­ing, the law caps dis­cre­tionary spend­ing for all fed­er­al depart­ments for 10 years in an effort to save more than $900 bil­lion. A White House fact sheet released yes­ter­day esti­mates the Defense Department’s share of that goal at $350 bil­lion, which the Pen­ta­gon offi­cial said is inclu­sive of the $400 bil­lion fig­ure offi­cials already were work­ing on. He acknowl­edged, how­ev­er, that “there are a lot of num­bers float­ing around.”

In a mes­sage to the Defense Depart­ment work­force today, Defense Sec­re­tary Leon E. Panet­ta said the esti­mat­ed reduc­tions in defense spend­ing asso­ci­at­ed with the law are in line with what DOD offi­cials have been plan­ning. “I believe we can imple­ment these reduc­tions while main­tain­ing the excel­lence of the mil­i­tary,” he said.

The law, how­ev­er, also cre­ates a bipar­ti­san com­mit­tee of Con­gress mem­bers charged with iden­ti­fy­ing an addi­tion­al $1.5 tril­lion in bud­get sav­ings by Nov. 23. While there is no way to know what the com­mit­tee will rec­om­mend, the Pen­ta­gon offi­cial said in today’s back­ground brief­ing, “I would hope they will not make fur­ther cuts in defense, because we’ve done a lot already.”

The offi­cial said he assumes the com­mit­tee will focus on find­ing sav­ings in enti­tle­ment spend­ing, such as a Med­ic­aid and Medicare, and through tax rev­enue. “Large, addi­tion­al cuts would be a prob­lem for us, as far as our nation­al defense,” he said.

An “unac­cept­able” sce­nario for the depart­ment, the offi­cial said, is if Con­gress fails to act on the committee’s rec­om­men­da­tions by the law’s dead­line of Dec. 23. If that hap­pens, an auto­mat­ic across-gov­ern­ment spend­ing cut of $1.2 tril­lion over 10 years will go into effect.

Even with exemp­tions for vet­er­an, mil­i­tary and civil­ian pay, he said, the process known as “seques­tra­tion” like­ly would cut an addi­tion­al $50 bil­lion to $60 bil­lion more per year from the defense bud­get, lead­ing to fur­loughs, lay­offs and dis­rup­tions of pro­grams.

But the offi­cial empha­sized that the Pen­ta­gon is not plan­ning for such an event. “I don’t think that will hap­pen,” he said. “The whole point is for that not to hap­pen.”

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)