The <i>Real</i> Effects of Sequestration on Defense Spending

Close examination of Secretary of Defense Leon Panetta's letter to Senators John McCain and Lindsay Graham demonstrates that the effects of sequestration on the Department of Defense would not be as great as the Secretary claims.
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Cabinet officers are expected to protect the interests of their departments. Therefore it is not surprising that Secretary of Defense Leon Panetta's letter to Senator John McCain (R-Ariz.) and Lindsay Graham (R-S.C.) on Nov. 14, 2011 warns them that the effects of sequestration would be devastating for the Department of Defense. However, close examination of the letter demonstrates that the impact would not be as great as the Secretary claims.

Sequestration would mean that the Pentagon would have to absorb $600 billion in reductions over the FY 2013-2021 period compared to projected levels. Adding in the $400 billion in reductions it is already planning to make would bring the total to about $1 trillion over the next decade.

But the letter does not mention that the baseline defense budget was projected to grow by 26 percent from $554 billion in FY 2012 to $696 billion in FY 2021, and that total (non-war) spending would be $6.2 trillion over this period. A $1-trillion reduction would mean spending "only" $5.2 trillion but would still result in a defense budget increase of almost 20 percent. In other words, there are no reductions. Defense would still grow, but not as fast. Moreover, sequestration will return defense spending in real terms to its FY 2007 level, the next to last year of the Bush administration, when no one was complaining about devastating levels of spending.

Nor does the letter contain any acknowledgement that over the past decade, the baseline budget has more than doubled and that total defense spending, even in the real terms, is higher than at any time since World War II.

The most misleading claim is that that at the end of 10 years of sequestration, we would have the smallest ground force since 1940, the smallest number of ships since 1915, and the smallest tactical fighter force in the history of the air force.

What the Secretary does not tell us is that today's ground forces (Army and Marines) are among the largest and most capable in the world, and that he is referring only to the active force. Unlike 1940, we also have a large reserve component, which was used extensively and effectively in Iraq and Afghanistan. Similarly, our Navy is larger than the next 13 navies combined, and our Air Force is increasingly composed of unmanned planes.

The letter lists a whole host of weapons programs that the Secretary claims would have to be terminated or reduced. Here again he overstates the impact. Let me give but two examples. Panetta argues DOD could procure "only" 10 new ballistic missile submarines instead of 12. But he ignores the fact that by increasing the number of missiles on each submarine and the number of warheads per missile, we actually need only 8 to maintain the robustness of this leg of the triad.

Similarly, he says, without specifying when, he could terminate the F-35 Joint Strike Fighter. But what he does not say is that the Navy and Marines can continue to buy the latest models of the F/A-18 E/F and the Air Force the F-16. While these plans may not be quite as effective as the F-35, they are far better than anything any other country has.

Since it became clear that the projected levels of defense spending would have to be reduced, a number of comprehensive plans have been put forth preparing reductions of about $1 trillion of the next decade. These include those of the Deficit Reduction Commission, the Gang of Six Senators, and Senator Tom Coburn (R-Okla.). All of these show how we can reduce spending without harming national security. These should be our guide if sequestration kicks in.

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