AFA members, Congressional staff members, civic leaders, DOCA members, there is much news on activities in Washington – especially about the budget. What strikes me is that to decipher much of it, one has to be almost an insider to understand the numbers. Here is the simple version:
President Obama has directed the Department of Defense to cut $450B+ over 10 years starting with its FY13 budget. [This will cut the base defense budget – and was part of the 2 Aug deficit reduction agreement with Congress.] It looks like the cut will be laid into the budget on a, more or less, flat line basis, e.g. $45B per year. The Air Force portion of that is not yet fully known, but if trends continue, it will be $11B - $13B per year – perhaps more. Once again, this does not include wartime spending – which is still off-budget.
The Joint Select Committee on Deficit Reduction is tasked to come up with $1.5 Trillion in cuts over 10 years. If it fails, then an automatic cut kicks in which will cut $1.2 Trillion in spending. Half of this must come from “national security” accounts – DOD, Department of Homeland Security, Department of Energy, and a bit from the State Department. I estimate DOD’s share would be about $450B+. This is in addition to the $450B+ in the paragraph above.
A few observations: First, the $1.5 Trillion to be cut is only a cut in the growth in spending. The federal budget is expected to grow – during the next 10 years – by about $12 Trillion by some estimates. Thus a cut in the growth in government of $1.5 Trillion is only a cut of 12%. At the end of 10 years, if nothing else is done, the US debt will still grow from about $15 Trillion to $25.5 Trillion.
Secondly, to take almost a trillion dollars out of defense spending in the next 10 years would call for draconian cuts. It would gut many programs; throw tens of thousands of troops out of work; cause major force reductions; and necessitate closing bases. Our allies would begin to question our commitments in both conventional and extended deterrence realms. And, according to some experts, result in a “new isolationism.” I do not need to remind this group that defending our nation is job one for any government. In fact, the Preamble to the Constitution says: “… provide for the common defence, promote the general welfare … “ – and not the other way around. And … base defense spending in the 2012 request amounts to 3.5% of GDP – almost a record post-WWII low. In the aggregate, the defense budget is clearly an affordable investment.
Finally, DOD base defense funding in the FY12 request was $553B. [The Senate Appropriations Committee has marked it to $513B.] The Administration request for HHS was $893B – 1/3 of a Trillion more. This gap is projected to double by 2014. It is interesting to note that HHS spending was $47B in 1977 – just one-twentieth of what it is today.
For your consideration.
President Obama has directed the Department of Defense to cut $450B+ over 10 years starting with its FY13 budget. [This will cut the base defense budget – and was part of the 2 Aug deficit reduction agreement with Congress.] It looks like the cut will be laid into the budget on a, more or less, flat line basis, e.g. $45B per year. The Air Force portion of that is not yet fully known, but if trends continue, it will be $11B - $13B per year – perhaps more. Once again, this does not include wartime spending – which is still off-budget.
The Joint Select Committee on Deficit Reduction is tasked to come up with $1.5 Trillion in cuts over 10 years. If it fails, then an automatic cut kicks in which will cut $1.2 Trillion in spending. Half of this must come from “national security” accounts – DOD, Department of Homeland Security, Department of Energy, and a bit from the State Department. I estimate DOD’s share would be about $450B+. This is in addition to the $450B+ in the paragraph above.
A few observations: First, the $1.5 Trillion to be cut is only a cut in the growth in spending. The federal budget is expected to grow – during the next 10 years – by about $12 Trillion by some estimates. Thus a cut in the growth in government of $1.5 Trillion is only a cut of 12%. At the end of 10 years, if nothing else is done, the US debt will still grow from about $15 Trillion to $25.5 Trillion.
Secondly, to take almost a trillion dollars out of defense spending in the next 10 years would call for draconian cuts. It would gut many programs; throw tens of thousands of troops out of work; cause major force reductions; and necessitate closing bases. Our allies would begin to question our commitments in both conventional and extended deterrence realms. And, according to some experts, result in a “new isolationism.” I do not need to remind this group that defending our nation is job one for any government. In fact, the Preamble to the Constitution says: “… provide for the common defence, promote the general welfare … “ – and not the other way around. And … base defense spending in the 2012 request amounts to 3.5% of GDP – almost a record post-WWII low. In the aggregate, the defense budget is clearly an affordable investment.
Finally, DOD base defense funding in the FY12 request was $553B. [The Senate Appropriations Committee has marked it to $513B.] The Administration request for HHS was $893B – 1/3 of a Trillion more. This gap is projected to double by 2014. It is interesting to note that HHS spending was $47B in 1977 – just one-twentieth of what it is today.
For your consideration.
Michael M. Dunn
President/CEO
Air Force Association
Posts
11 comments:
For comparison, it would be interesting to know what the DOD base defense funding was in 1977.
It isn't realistic to propose paying the national debt down to zero. It would be better to assume the historical average debt of roughly 30% GDP, or come up with a number that is a reasonable debt for an enterprise the size of the United States economy. Paying down to that number and then having a scheme to maintain it there would be more realistic and perhaps doable.
We should tell the President to meet his radical budget reductions and still fight the wars, we will have to cut some programs all together and reduce flying hours on all CONUS planes. So when he flies to Andrews and AF One deserted, he will realize what he was asking of us was impossible.
Recognizing the debt is contingent with revenue, what is the most effective way to raise revenue? Stimulus fails because of the foreign goods on the market far outweigh any domestic gains. Class warfare as raising tax levels for select income brackets harms growth by negative prosperity. To effect growth enforce the separation of powers, such as dual proxies where Federal obfusactes State and vice versa where State obfuscates Federal, where as both entities mixed effect negative growth.
(Internet sales) generally are not assesed for sales taxes.
Your numbers sounded wrong, as I knew the 3 top items in the budget are Social Security, Medicare/Medicaid (2 non-discretionary budget items) and Defense (which normally accounts for 50% of the discretionary budget). In checking the President's Budget, I find that at some point Medicare/Medicaid have been added to HHS. Actual discretionary spending in HHS for 2012 amounts to $89 billion - only a slight increase from 1977.
Let's be accurate on our arguments - otherwise we hurt ourselves. DoD is the #1 discretionary program, there is no way to balance the budget without changes to DoD (along with Medicare and SS). DoD itself is in three parts - acquisition, O&M, and Personnel (which pays active, reserve, & retired pay & benefits). These are where changes will happen - cutting programs, reducing op tempo, and reducing personnel costs (cutting people or pay/benefits). The question is how to do this smartly, while meeting the mission we are given.
A couple of unpopular observations. First: we cannot ever reduce the debt to zero under current conditions. With zero national debt there is no money! All U.S. money is debt. It is debt and debt only that allows the FED to print money. No debt no money.
Second: WE MUST reduce social security, medicare, and defense spending by 50%. If we don't the currency will collapse,because the only alternative is to print and print and print new dollar bills to cover our obligations. Growing out of our prediciment is no longer viable, we are in too deep. With massive printing goes the U.S. empire. It's just simple math. That means no more policeman of the world. No more troops overseas. Drastic cuts in procurement, personal, and BENEFITS. The reality is that you get 60% of what was promised to you now, or you will get ZERO later when this second Roman Empire collapses.
No one who benefits from the current system is willing to do that, therefore the currency and the country is doomed to total collapse. It's not a matter of if, it's a matter of when. Again reality. Simple math.
Regards,
Icarus
THE ONLY WAY IS TERM LIMITS AND A FLAT TAX OF I BELIEVE 8% WOULD DO IT> EVERYONE IN THE US SHOULD TAKE ON THE BURDEN AND UNTIL WE DO WE ARE GOING TO CONTINUE TO GO DOWN HILL> CWM
What about the $200.00 annual fee for TRI-CARE FOR LIFE starting in F?Y 2013? Is this going to really happen?
This is very drastic to cut bases, etc. from the DOD.
Sandra Genetin
I agree with Anonymous on reducing flying hours on all C"ONUS planes. Would this really include AF one and any other planes the Pres. and family and the congress?
Mr Dunn,
Wake up! You state "In the aggregate, the defense budget is clearly an affordable investment."
How can you possibly argue that we in the United States need to spend almost half of the ENTIRE WORLD's military expenditures?
And how can you possibly state that it is clearly affordable when we are running a 1.5 TRILLION dollar budget deficit every year. WE ARE BORROWING the entire defense budget from the Chinese!!!!!!
Call a spade a spade and stop pandering to your base of support.
WE ARE BROKE AS A NATION. Like it or not, WE CAN NO LONGER AFFORD SPENDING HALF OF THE WORLDS MILITARY BUDGET! The money just isn't there.
If you and your peers keep promulgating this nonsense we will no longer have a nation!!!!! Every great empire in history has imploded from within, and we are following that script exactly with this kind of rhetoric.
Those citizens who chose not to protect our nation or defend the Constitution must still pay the cost of their freedoms.
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