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  • Congress Must Address Both Defense Sequestration and Deficits

    Earlier this week, the Obama White House criticized Members of Congress for examining the effects of the $1.2 trillion in automatic spending cuts scheduled to kick in next year. Instead, the Administration said it would prefer that lawmakers turn their attention to longer-term deficit reduction proposals. But this is not an either/or situation; both need serious attention.

    The automatic spending cuts would gut national defense—a core function of the federal government—slashing the Pentagon’s budget by $492 billion, or 9 percent, over 10 years, as this chart illustrates. Meanwhile, entitlement programs, which are the main driver of current and future spending problems, would sustain just $171 billion in reductions—less than 1 percent.

    Entitlements are on spending autopilot, full speed ahead. The Administration has offered no real solutions to tackle this challenge. However, the House budget resolution and Senator Mike Lee’s (R–UT) budget resolution, which is modeled after The Heritage Foundation’s Saving the American Dream, do address the problem of out-of-control entitlement spending with bold policy reforms.

    The defense cuts could threaten the readiness of already extended U.S. forces, which should be of deep concern to the commander in chief. Both the Pentagon and the myriad defense contractors with which it works are already feeling the threat of these spending cuts, which loom in the not-so-distant future. The cuts could easily lead to widespread layoffs, facilities closing, and infrastructure depletion. This phenomenon is akin to the uncertainty caused by Taxmageddon, an unprecedented tax increase set to strike Americans of all income levels in January 2013. Just like American families and businesses, the military and defense industry make plans well in advance. For example, projects crucial to force and weapons modernization, such as satellite and missile defense capabilities, have long lead times and require much more certainty than a year of funding—much less the threat of deep cuts.

    There is nothing stopping Congress from acting now to prevent these reckless cuts. Delaying action until the end of the year, as some predict, will be a conscious—not to mention irresponsible—choice.

    While Congress works to shift automatic spending cuts away from defense, it should also enact spending reduction measures that reduce short- and long-term deficits and debt. While the White House is right to encourage this, its idea of deficit reduction solutions can be boiled down to two flawed policies: tax hikes and stimulus spending. Americans—and the economy—cannot afford tax hikes, and more stimulus spending would be a prescription for continued deficits and further indebtedness. Excessive spending is what got us into this mess, and spending should be the target for getting out of it.

    The House has already passed reconciliation legislation that addresses the automatic spending cuts. It would impose a cap on fiscal year 2013 discretionary spending that is in line with the House budget resolution. It also would enact entitlement program reforms, yielding savings to replace the automatic cuts. The bill is not perfect: It avoids the sequestration for only one year, and its savings on entitlement programs are a minuscule 1 percent of total entitlement spending over the next decade. It does, however, mark an important accomplishment by the House: to set spending priorities and enact reforms—essentially, to budget. Getting spending under control requires this exact budget discipline.

    Congress has a horrible penchant for waiting until the last minute to pass urgent legislation. America’s military and the defense industry cannot afford for it to continue this habit, and the longer Congress delays, the more damage it will do.

    Posted in Economics [slideshow_deploy]

    2 Responses to Congress Must Address Both Defense Sequestration and Deficits

    1. Lloyd Scallan says:

      You still don't get it. Do you not realize Obama has directed his lackeys in Congress to NOT address anything constructive regardless of the consequences. Reid, Pelosi, Kerry, Schumer, and the others will not cooperate with the other side of the isle because Obama intent to use the Repbs. as wipping boys to blame them for the collapse that is sure to come if he is not removed from the Oval Office.

    2. zbigniewmazurak says:

      "The automatic spending cuts would gut national defense—a core function of the federal government—slashing the Pentagon’s budget by $492 billion, or 9 percent, over 10 years, as this chart illustrates."

      Actually, it's far worse than that. $492 bn per decade is the amount that the DOD has to cut out of its budget under the FIRST TIER of the Budget Control Act.

      If sequestration is allowed to stand, it will cut another $600 bn per decade out of the defense budget, on top of the $492 bn already ordered to be cut, which would be, by itself, a cut of more than 10% every year.

      I urge Ms Goff and the Heritage Foundation to correct this blogpost and the chart.

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