President Obama has now outlined his deficit reduction ideas. They are a discouraging combination of tax increases that Congress wouldn’t have passed even when the Democrats were fully in charge, false savings on the wars, and specific reductions in the Pentagon budget that won't be enacted. He proposes cuts to defense spending beyond the $100 billion that Secretary Gates reduced, beyond the $350 billion cuts apportioned to DOD in last summer’s debt ceiling agreement.
Completely disingenuously, President Obama claims to pay for his $460 billion new stimulus with money already being counted as savings in that earlier $350 billion cut from Defense. The President claims his plan is “simple math,” but he is making a simple math error by pocketing the same savings twice.
Not only is President Obama double counting, it’s a reduction in name only. The Congressional Budget Office is required to project costs from current spending. Since the President’s budget includes funding for current force levels in Iraq and Afghanistan, those levels are the CBO baseline. But the Obama Administration’s policies are already decided: at most, a few thousand troops will remain in Iraq, and the drawdown of the Afghan surge is commencing. It’s a savings in accounting terms only -- it was money that wasn’t going to be spent.
The White House’s defense is that the Paul Ryan budget included those as savings, too. This line of argument completely ignores that the Ryan budget included it because the President’s annual budget did and Congressman Ryan was applying the CBO rules for scoring.
Gordon Adams from the Stimson Center estimates that 25% of the reductions in the President’s proposal come from Defense. What that portends is that even if Congress were to adopt the President’s legislative proposals in full, there would be a hole in the President’s accounting of one-fourth of the total cost. He has undershot the debt his proposals will incur by 25%. At least.
Where the President’s proposals are real cuts in defense spending, they are to military retirement and medical programs -- the kind Congress is least likely to enact. DOD does have a guns vs butter problem in its own budget, where entitlement programs are crowding out procurement and operational spending. The President’s new proposal would save $6.7 billion by imposing the first ever annual fee for military medical care and $20 billion by raising the cost of pharmacy products to the families of servicemembers. It would set up an board independent of the military services and the Pentagon’s civilian leadership to establish policy further in these areas.
This is not to say the President is wrong to reduce retirement and medical benefits in the military, just that his approach guarantees it will not succeed. All three of the major veteran’s associations have already made their opposition clear; the Service Chiefs are sure to tell Congress they need the ability to control benefit decisions because they are such an important component of recruitment. There is no way the politicians in the White House can fail to understand their proposals cannot withstand these objections. It’s just one more way to offer “reductions” without reducing the size or cost of the President’s spending plans.
(photo credit: Ryan Latta)