DoD faces a fundamental choice in how it prepares to trim its budget under such a high degree of uncertainty. It can change the way it does business or change the business it does. Under the deepest cuts proposed, it may well need to do both.
"Nobody does defense policy better than CSBA. Their work on strategic and budgetary topics manages to combine first-rate quality and in-depth research with timeliness and accessibility—which is why so many professionals consider their products indispensable." – Gideon Rose, Editor, Foreign Affairs.
While the Budget Control Act of 2011 resolves the debt ceiling issue through 2012, it leaves many budget issues unresolved. The future of the defense budget remains uncertain
US policymakers and other world leaders have watched intently as civil war has erupted in Libya. In recent days, reports of air strikes on Libyan rebels and civilians have led some in the international community to call for a no-fly zone. Some argue that since US vital interests are not at stake, America should not become engaged in yet another military operation while the conflicts in Afghanistan and Iraq remain unresolved. There are also those who argue that given the United States’ declining fiscal position, those African and European states whose interests are directly involved in Libya should step-up and implement a no-fly zone. The Pentagon has weighed in, urging caution, and noting that the costs and difficulties of no-fly zones are generally higher than perceived.
The Obama Administration today unveiled its defense budget request for FY 2012, which totals $553 billion in discretionary funding for the peacetime costs of the Department of Defense (DoD) and $5 billion in mandatory funding. In addition to the “base” budget, the administration also requests $118 billion for Overseas Contingency Operations (OCO) and $27 billion for national defense activities in the Department of Energy and other agencies. Altogether, the total national defense budget request is $703 billion for FY 2012.
This backgrounder addresses the current state of the FY 2011 defense budget, identifies insights stemming from Secretary Gates’ announcement on the FY 2012 budget, and raises budgetary and programmatic issues likely to complicate DoD’s planning over the Future Year Defense Program (FYDP).
With a federal budget deficit that exceeded $1.3 trillion in FY 2010 and a rapidly mounting national debt, the findings of the Fiscal Commission established to identify ways to balance the budget have been much anticipated. Tackling the deficit is important to restoring the government’s fiscal health and the nation’s economic prosperity. It is also important to national security. History has demonstrated that in times of major conflict, the fiscal might of the United States and the ability to mobilize resources on a massive level have been a source of enduring strategic advantage. But with the deficit near record levels, the debt load rising, and interest payments on the debt consuming a greater share of the budget each year, this advantage is rapidly eroding.