The Budget Control Act told a joint congressional committee to forge a plan to reduce the deficit by $1.2 trillion. To encourage compromise, the law offered an alternative unpalatable to all: the taking—sequestration—of that amount over nine years, with half coming from the military. To maximize pain, the law applies sequestration equally to all non‐exempt agency accounts, including the Pentagon’s. The president can exclude only personnel costs, so that salaries are fully paid.
The super committee’s failure compels the president to take about $54 billion (the Pentagon’s annualized share adjusted for lowered interest payments) from the Pentagon next January, whatever its size. From 2014–2021, the law imposes spending caps for each discretionary spending category, including defense, and sequesters any excess.
The problem with sequestration is not size but method. According to the Congressional Budget Office, sequestration would reduce planned non‐war Pentagon spending from $5.3 trillion to $4.8 trillion from 2013 to 2021. That’s less than a 10 percent cut from a budget that grew by almost 50 percent, adjusting for inflation, in the last decade. The 2021 Pentagon budget would have about the same purchasing power as the non‐war 2006 Pentagon, leaving it bigger than at the height of the Cold War. Given our big debt and weak enemies, such cuts are too small.
The best way to cut military spending is to reduce missions and then cut force structure and manpower. The smaller force should need fewer vehicles, less administration, and less real estate. But those savings take time. They also require choices among accounts, which the law prevents in 2013.
Additional Pentagon cuts should be part of any deal undoing sequestration. Congress should change the law so that caps force the Pentagon to save the same total over the same period, only more gradually. That requires the Pentagon to reduce its ambitions. It should be working on that plan today.