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$1 Trillion Pentagon Budget Cut Is Possible but Not Wise: View

December 06, 2011

Nov. 28 (Bloomberg) -- Before the body of the congressional budget supercommittee was even cold, we heard outcries over the Pentagon budget cuts mandated by its demise.

“I will not be the Armed Services Committee chairman who presides over the crippling of our military,” vowed Howard P. “Buck” McKeon, a California Republican, on Tuesday.

None of us wants him to be. The supercommittee failure will mean some $500 billion to $600 billion in military cuts over the next decade, on top of $450 billion the Pentagon has already agreed to. In addition, the budget-cutting mechanism called for by the law is seriously flawed when it comes to military spending, demanding an even cut across all programs, rather than allowing the Pentagon discretion. Fortunately, Congress is unlikely to allow things to play out that way, and in the next 13 months legislators will argue over a way to let the Pentagon out of the straitjacket.

That does not, and should not, mean that the military won’t play a serious role in the effort to bring the nation’s finances under control. Although we agree that reducing projected spending by $1 trillion over the decade is very worrisome, we feel that Secretary of Defense Leon Panetta overstated the matter in calling it a “doomsday” scenario that “invites aggression.”

What would $1 trillion in cuts look like? Several folks -- the Congressional Budget Office, the Simpson-Bowles commission and Senator Tom Coburn, Republican of Oklahoma, in his “Back in Black” deficit reduction plan -- have suggested cuts to programs that would get the Pentagon under the wire. This potpourri of proposals has been collated and tallied by Robert Levinson, an analyst with our sister operation Bloomberg Government, who came up with following menu of potential savings that totals $1.2 trillion over fiscal 2013 to 2021. Choose wisely:

-- Reduce funding for National Guard’s antidrug program. ($225 million)

-- Eliminate Army’s Global Combat Support computer system. ($469.9 million)

-- Shut down Joint IED Defeat Organization by 2017. ($1.2 billion)

-- Terminate Navy’s vertical-takeoff drone. ($1.6 billion)

-- Cut some medical research not tied to military need. ($2.3 billion)

-- Close elementary schools on U.S. bases. ($4.9 billion)

-- Cut most college tuition assistance. ($5.3 billion)

-- Cancel the Joint Light Tactical Vehicle. ($5.3 billion)

-- Retire two aircraft carriers. ($5.8 billion)

-- Delay fielding of Army Ground Combat Vehicle until 2025. ($6.3 billion)

-- Reduce travel expenses by 15 percent. ($6.9 billion)

-- Increase cuts to contractors who support headquarters staffs. ($8.7 billion)

-- Terminate V-22 Osprey vertical-takeoff aircraft. ($9 billion)

-- Consolidate and raise prices at commissaries and exchanges. ($9.1 billion)

-- Reduce purchases of Virginia Class submarines to one per year from two. ($12.2 billion)

-- Cut facilities maintenance by 15 percent. ($13.9 billion)

-- Cap increases in military pay at 0.5 percent below inflation for five years. ($15.3 billion)

-- Reduce Marine Corps strength to 145,000 from 182,000. ($21 billion)

-- Retire 6 Ticonderoga Class destroyers. ($27.2 billion)

-- Cut housing and construction costs by 20 percent. ($33.1 billion)

-- Cancel planned purchase of nine Arleigh Burke Class destroyers. ($33.1 billion)

-- Replace retirement program with 401(k) system for new enlistees. ($37 billion)

-- Cancel the F-35 jet program. ($43.2 billion)

-- Cut planned purchase of Littoral Combat Ships to 12 from 42. ($46.2 billion)

-- Reduce missile-defense spending by 70 percent. ($67 billion)

-- Reduce Army strength to 430,000 by 2021 from projected 554,000 in 2016. ($70.7 billion)

-- Cut research and development by 10 percent. (Savings: $73.1 billion)

-- Reduce health benefits and increase fees for retirees. ($134.2 billion)

-- Cut civilian workforce by 30 percent. ($162 billion)

-- Cut nuclear arsenal to 1,000 warheads, which allows reductions in missiles, submarines and bombers. ($180.4 billion)

-- Curtail small purchases such as ammunition and computers across the board. ($212 billion)

How practical is this list? Some measures are fairly obvious: The problem-plagued Osprey can be replaced by MH-60 helicopters; our high-quality current generation of F-16 and F- 18 jet fighters makes Lockheed-Martin Corp.’s F-35 an unnecessary luxury; the vertical-takeoff drone is a lemon; medical benefits for retirees are overgenerous compared with the private sector; U.S.-based military children can attend local public schools. (There are also programs not part of the budget discussion that deserve scrutiny, such as the Ford Class supercarrier and continued purchases of M1 Abrams tanks.)

Other cuts make sense when viewed in context. The tuition- assistance program sounds good, but is inferior to the newest G.I. Bill benefits available to troops. (The Veterans’ Administration picks up that tab.)

But mostly these are tough calls. The Littoral Combat Ship is very vulnerable to attack, but could be an important vessel for military and humanitarian missions in the Indian and Pacific oceans, where China has been increasingly projecting its power. Limits to pay raises could harm recruitment. And, of course, cutting the size of the Marine Corps and Army would be very difficult to sell politically, and can be rejected out of hand by the president.

The bigger point, as we have argued before, is that making the size of the Pentagon’s budget dependent on factors that have nothing to do with national security is an odd way to go about things. As Congress, inevitably, plans its end run around the automatic cuts, it should consider the list above not based on dollar signs but on what we really, truly need to keep the nation secure. If that doesn’t add up to $1 trillion in cuts, lawmakers should look elsewhere for increased savings and revenue.

--Editors: Tobin Harshaw, Stacey Shick

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To contact the Bloomberg View editorial board: view@bloomberg.net.


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