How About Those Defense Savings!!
The President's new plan for deficit reduction presented to the Super Committee today claims nearly 25% of its overall spending savings from cuts to defense, specifically, from winding down the wars in Iraq and Afghanistan over the next ten years.
Set aside, for the moment, the absence of any clear plan for doing so in Afghanistan. Focus on the size of this number; sounds enormous. And it is a phoney.
Mind you, it is the same phoney savings claimed by the Gang of Six in July (which I warned about here), by Budget Chairman Paul Ryan in the spring, and by the President's fiscal commission last year. They are phoney because the CBO budget baseline, from which all these folks are measuring, contains a mechanical plug for war costs.
You see, neither the administration, nor the Congress, has any idea about what the wars will cost in the future. The administration created a $50 billion plug for the future war costs. It had nothing to do with programs, just a budget plug - "the wars will cost something, but we don't know what."
In practice, the wars have cost more. In FY 2011, the war budget was $159 billion. CBO doesn't know what the wars will cost either. So they use another kind of plug, a mechanical projection of what was appropriated. That's $159 billion. And their current services baseline, which everybody now uses, including this "exercise" called the Super Committee, just inflates that number out into the future.
So what the What House has done is create a fictional amount - they call it "illustrative" in the new proposal, that would be saved from the CBO baseline by winding down the wars. That's not driven by policy, either, it's just "illustrative."
So they get to claim that amount as "savings." But everybody knows the war is winding down and everybody knows the CBO baseline is not adjusted for winding it down. Everybody knows, too, that CBO did some "winding down" estimates, but it has not adjusted its current services baseline for those estimates, leaving this escape hatch for the Super Committee.
So these savings are not real. And they do not touch defense at all. In fact, defense budgets would remain undisciplined, lowered only by the $350 billion from the CBO ten-year estimate the White House claimed in August. You can get to those savings in a heartbeat; just keep growing defense from the FY 2011 level with inflation over the next ten years and you will probably save that amount. And the defense budget will continue to grow.
Time for some real discipline so we can get to those hard choices and priorities Adm. Mullen said in January the DOD had been avoiding for the last ten years. The President's new proposal makes no contribution to that goal.