New Law Identifies No Additional Defense Cuts, Official Says

By Lisa Daniel
American Forces Press Service

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.”