Understanding the Debt Deal and Defense

Baker Spring /

Yesterday, the House of Representatives voted to increase the nation’s debt ceiling, restrict federal spending, and reduce the deficit in a bill called “the Budget Control Act of 2011.”

This legislation would increase the debt ceiling by at least $2.1 trillion and would impose initial caps on discretionary spending from fiscal year (FY) 2012 through FY 2021 of just under $1 trillion. Third, it would establish a congressional joint committee to draft legislation with a goal of reducing the federal deficit by an additional $1.5 trillion. If the committee’s recommendations are not enacted by Congress, then automatic spending cuts kick in. These spending cuts would be evenly divided between defense and non-defense discretionary spending only—leaving aside altogether mandatory spending, which accounts for roughly 60 percent of the federal budget.

Congress has just imposed upon the defense of the nation a disproportionate burden of debt reduction. These provisions put more pressure on the defense budget than the other portions of the federal budget. It is likely that Congress will end up either undermining the nation’s security or abandoning its own proposal.

In the first batch of cuts totaling nearly $1 trillion, the bill caps security spending in FY 2012 at $684 billion and in FY 2013 at $686 billion. It defines security as covering discretionary appropriations for the Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management account, and all such funding under Budget Function 150 (International Affairs).

By way of comparison, the Administration’s February budget request for FY 2012 in budget authority for security under this definition is roughly $728 billion in discretionary appropriations. Thus, this bill mandates a cut of $44 billion for discretionary budget authority in “security” spending from the President’s requested level, or about 6 percent. For FY 2013, the cuts total $55.5 billion, or 7.5 percent. For FY 2014 through 2021, the caps apply to total discretionary spending. While the same definition of security spending applies for these years, there is no security breakout under the caps.

It is reasonable to expect the core defense budget (050)—which excludes money for operations in Afghanistan and Iraq—in current dollar budget authority (in billions) to be funded as follows under the debt ceiling deal:

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
549.7 557.2 565 575.6 586.7 599.4 612.7 626.5 640.2 654

The Heritage Foundation has long said this level of funding through 2016 is too low to adequately provide for U.S. security. The initial step of spending restraint in the debt ceiling legislation imposes even greater gaps for national security in the years following FY 2016. Heritage’s recommended funding levels for the base defense budget look much different to appropriately match resources to missions:

2012 2013 2014 2015 2016
613.8 672.5 720.3 760.2 801.6

The debt legislation permits adjustments in the discretionary spending caps to pay for overseas contingency operations in Afghanistan and Iraq. It does not provide specific funding levels for these permitted adjustments. It is assumed that these funding levels will be determined later based on Administration requests.

After the first round of spending cuts, the bill establishes a joint committee in Congress to provide recommendations for deficit reduction with a goal of an additional $1.5 trillion in deficit reduction over 10 years. If the committee cannot agree on specific recommendations or Congress fails to enact the recommendations that it does make, automatic spending reductions are required to meet the deficit reduction goal. These automatic cuts will be split evenly between security and non-security spending—in the discretionary account only—starting in FY 2013.

However, this section of the bill revises downward the definition of security spending. Security is narrowed to include only discretionary spending under Budget Function 050, which is overwhelmingly Department of Defense spending and does not include Department of Homeland Security, the Department of Veterans Affairs, and Budget Function 150 (International Affairs). For the second series of cuts, the revised definition of non-security funding is broadened to include all discretionary appropriations outside of defense. This means that the “trigger” of automatic spending cuts would impose up to an additional $750 billion in spending reductions on defense from FY 2013 through FY 2021.

The legislation is designed to impose deep and risk-laden cuts on our nation’s defense. The real-world consequence is that the American people will not be provided the level of defense they need and deserve. The nation’s vital security interests are likely to be undermined according to the debt ceiling deal. History has repeatedly shown that these kinds of reductions in defense are penny wise and pound foolish, because they often serve to increase the likelihood of conflict. And weakness that invites war is much more expensive than deterring our enemies by maintaining an adequate defense budget all along.