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  • Remedying the BCA’s Impacts on the Defense Budget

    An increasing number of leaders in the House and the Senate recognize that the Budget Control Act (BCA) of 2011 will impose a disproportionate burden on an already strained defense budget. The latest corrective effort comes from House Majority Leader Eric Cantor (R–VA).

    The BCA established caps on spending for national security and discretionary spending over the next 10 years. In addition, the law mandates a sequestration process that will apply $500 billion or more in deficit reduction to the defense account over the nine-year period covering FYs 2013–2021. These reductions are front-loaded, which will result in significant damage to readiness, modernization programs, and research and development.

    Under sequestration, the FY 2013 defense budget will be 25 percent less than the President’s FY 2011 request. The BCA is already having an effect as program managers at the Department of Defense (DOD) are holding off on awarding contracts.

    Cantor acknowledged the difficulty of replacing automatic defense cuts over the next 10 years. He said Congress should find at least enough to offset next year’s defense cuts and proceed from there on a year-by-year basis. While a year-to-year approach would help to remedy some of the BCA’s impacts, there are problems that DOD would still have to face. For starters, President Obama threatened to veto any legislation that would avoid defense cuts.

    A year-to-year effort to remedy cuts mandated by the BCA would not give DOD and the defense industrial base the stability it needs. The U.S. military will need to replace most of its equipment over the next 10 years, a result of a high operational tempo and an under-funding of the procurement accounts since the end of the Cold War. With uncertainty regarding year-to-year appropriations, DOD would not be able to credibly plan its activities over even a five-year period required by DOD’s budget process, let alone the 10-year period covered by the BCA.

    The Constitution states that the primary role of the federal government is “to provide for the common defense.” The consequences of the BCA—and increases in the overall and per capita costs of compensating military personnel—will create a force too small to defend U.S. national interests in the future. Aside from taking steps to remedy implications of the BCA, Congress and DOD should reduce the currently projected rate of growth in the cost of compensating service members.

    A sound way to proceed with these changes is to transition military retirement and health care programs to the system for addressing broader health care and retirement needs of the American people as outlined in The Heritage Foundation’s Saving the American Dream plan. These savings from reductions in the rate of growth in compensation should be reinvested in modernizing the forces.

    Posted in Security [slideshow_deploy]

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