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Tuesday
Aug022011

How the Pentagon Makes Out in the Debt Ceiling Deal

Digital Vision/Thinkstock(WASHINGTON) -- On first glane it may appear that the $2.1 billion debt ceiling compromise hits the Pentagon’s budget pretty hard in the next decade, but the reality is that in the short term the $350 billion in defense cuts is smaller than what Pentagon officials had been fearing.

That being said, the deal also holds out the possibility that in the long term defense spending could be dramatically slashed if a bipartisan committee is unable to come up with an additional $1.2 trillion in savings by the end of this year.  

Earlier this year, then Defense Secretary Robert Gates carved out $400 billion in savings through 2015 thanks to an initiative to bring down overhead costs within the Defense Department.

But then In April, President Obama proposed the possibility of further security spending cuts totaling $400 billion over the next 12 years, with the bulk of that amount expected to come from the military budget. 

Now it appears the debt ceiling compromise could lead to smaller cuts than the Pentagon had been preparing. An administration official confirms that the $350 billion cuts in the base defense budget over the next 10 years replaces the proposed $400 billion in security cuts over 12 years that had been proposed in April.

But the $350 billion in defense cuts isn’t all going to come from the Pentagon as other government agencies also fall under the defense umbrella, so the real Pentagon component will actually be $330 billion. 

In an apples-to-apples comparison using the broader term of security cuts, the official notes that the deal actually calls for $420 billion in security cuts over 10 years versus the $400 billion over 12 years that were proposed in April. So that’s a little more than President Obama proposed in April, but in a shorter time frame.

The Pentagon will still have to make tough budget decisions even though it will have a smaller budget trimming target.  But the deal also holds out the prospect of a further drastic cut -- $500 billion in Defense spending -- that would be automatically triggered if a new bipartisan committee fails to come up with $1.2 trillion in additional savings by the end of this year. Critics have cried foul that such a deep cut would leave the U.S. military unprepared in an increasingly dangerous world.

Copyright 2011 ABC News Radio

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