U.S. military spending peaked in 2010 at $668 billion. It has dropped slightly since then, as the military started withdrawing troops from Iraq and Afghanistan.
But real austerity has yet to come. So far, the looming budget cuts have been a bogeyman lurking in the dark.
The administration and Congress already have agreed to remove $487 billion from future defense spending beginning in 2013. There is the possibility of further cuts as part of a new deficit-reduction deal expected next year that would avert the congressionally mandated 10 percent across-the-board sequestration. Depending on how the chips end up falling during the negotiations, defense could be squeezed a percentage point or two more.
But the crunch is likely to be relatively benign compared to previous post-war defense drawdowns when budgets plunged by more than 30 percent. The presumption now is that the defense spending curve will stay flat for several years. While that would be welcome news for other federal agencies, no-growth budgets amount to real pain for a Pentagon that, for the most part, still lives in a world where money is no object/.../
Slashing payroll and benefits would provide temporary fiscal relief, but might be counterproductive in the long run, some analysts contend.
“The recent wars in Afghanistan and Iraq have revealed the volunteer force’s Achilles’ heel: In order to attract large numbers of qualified personnel who are willing to serve in dangerous and unpleasant wartime conditions, the Defense Department has had to raise salaries and benefits substantially,” says Andrew F. Krepinevich, of the Center for Strategic and Budgetary Assessments. The Pentagon will need to set priorities and stop trying to do it all, he writes in a paper titled, “Strategy in a Time of Austerity.”
For the past 20 years, he says, a “stable international order and generous budgets have enabled the United States to avoid making difficult choices about defense and strategy. Decisions were often dominated by the domestic politics of defense policy, parochial bureaucratic interests and sheer inertia rather than rigorous planning.”