The debt ceiling bill making its way through Congress will cut broad defense spending by $350 billion across ten years. The broad definition encompasses homeland security, veterans affairs, and nuclear programs, in addition to straight DOD spending. Those accounts totalled $881 billion in fiscal year 2012. Defense Department spending on its own was roughly $670 billion (that includes both the baseline budget and war operations). Even if DOD can offload some of the cuts onto other national security departments, it is likely to face a reduction of roughly four percent in its total spending.
Scoring of the spending cuts counts as savings a significant amount not spent in Iraq and Afghanistan. This financial windfall is the result of the president's policies to curtail our military operations in the wars -- going to zero military personnel in Iraq by the end of 2011, and refusing commanders in Afghanistan the troops they asked for to achieve the president's objectives. With these figures folded in, DOD will probably be faced with a real reduction in spending of between two and three percent -- in a budget that has more than doubled in the past decade. DOD will need to husband its resources carefully, but the roof won't fall in.
In fact, the deal Republicans in Congress were able to make reduces DOD less than the president proposed in his April budget speech. The president's proposal would have made no dent in the deficit, yet still would have cut defense by more than the legislation in its first phase.
