This Time, It's Different

A close observer of defense-spending trends takes a look at dollars and sense and the looming budget challenges in the Pentagon.

Defense-budget headlines of late have concentrated on sequestration, as hand-wringing increased about the so-called fiscal cliff. Most coverage has focused on defense officials predicting dire consequences for the Department of Defense (DOD), or industry officials warning of job losses and collapse of certain technology sectors and associated businesses. The U.S. Naval Institute recently hosted Defense Forum Washington with a program titled “The Fiscal Cliff: What Does This Mean for Defense and National Security?” The conference focused on sequestration and its impacts. Speakers and panelists offered different perspectives on impact, ranging from disaster to a mere “pothole,” and on occurrence from irresponsible to a fait accompli that should happen to provoke fundamental changes in DOD.

Wherever you fall on that opinion swing, one thing is clear about sequestration in any form or amount: It is not the only downward pressure on DOD’s budget. (For more details on sequestration and its impacts, see “Sequestration: Coming Soon?” online at: http://news.usni.org/news-analysis/news/sequestration-coming-soon [2] .)

Sequestration is just one portion of the defense reduction contained within the Budget Control Act of 2011 and not DOD’s only fiscal challenge. Coming on top of several other existing budget factors is what makes sequestration, in combination, a daunting issue for DOD. The first of these is the Barack Obama administration’s previously mandated $487 billion reduction in defense spending over ten years. Together, these total nearly $1 trillion in defense cuts over the next decade.

In addition, several fiscal challenges have developed over time that not only shape today’s defense budget, but have greater influence on the shape of budgets to come. Those internal trends influence what is different for this era of budget downturn and are disruptive enough, regardless of whether sequestration occurs or not. This constrains choices available to defense planners—with sequestration merely magnifying the intensity—and the overall context must be considered in charting the course ahead. As this article goes to press, the final outcome of deliberations to avoid or modify the so-called fiscal cliff and sequestration is unknown. Regardless, aside from sequestration, these other defense-spending trends point to historically different conditions for this fiscal downturn.