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The Non-Existent Spending Cuts…Except for Defense

By: Daniel Horowitz (Diary)  |  November 22nd, 2011 at 01:32 PM  | 

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Yesterday, we observed the unique spectacle of a socialist president threatening to veto any bill that reinstates higher levels of spending.  Did Obama just experience an epiphany?

No.  We are merely talking about cuts in defense spending.  Those are the good kind of cuts.

Throughout the entire supercommittee imbroglio, whenever Democrats or members of the media referred to spending cuts – to the extent that they exist – they were referring to baseline cuts.  In other words, the cuts in discretionary spending will still enable the spending levels to rise each subsequent year, albeit at a slower pace.  Welfare and entitlement spending is exempt from all cuts, even baseline reductions.  Defense, on the other hand, will actually incur real reductions in ‘actual dollar’ spending in subsequent years.

House Armed Services Committee Republican Staff

Actual reductions in spending, even from the previous year, are considered unprecedented in Washington.  Yet, under the proposed sequestration gutting of the military, defense spending in FY 2017 will be lower than that of FY 2011.  If we factor in inflation, defense spending will not reach current levels again until sometime outside of the 10-year budget frame.  If we peg defense spending to our GDP, we will never recover the 45-year average of 5.2%, even if we factor in all of the war spending.  Our total defense spending for FY 2011, including base budget and war supplemental was roughly $700 billion, or 4.7% of GDP.

Even Obama’s Secretary of Defense Leon Panetta warned that under sequestration, our military will have “[t]he smallest ground forces since 1940”, “a fleet of fewer than 230 ships, the smallest level since 1915”, and “[t]he smallest tactical fighter force in the history of the Air Force.”  Panetta described these cuts to Lindsey Graham as tantamount to “shooting ourselves in the head.”

Keep in mind that all of these cuts are coming out of base defense spending, not war appropriations.  So even under an Obama foreign policy, we will continue to engage in foreign military operations and commitments.  Due to the impending defense cuts, in conjunction with an aging fleet of planes and ships, not only will our military be hamstrung by egregious rules of engagement and lack of actionable intelligence (no more interrogations), they will be forced to fight with cruddy weaponry.

The reason why defense will be hardest hit is because this vital function of government will suffer a double whammy onslaught in budget cuts.  Defense has already absorbed half of the $917 billion in discretionary spending cuts ($465 billion including Robert Gates’s “efficiencies” savings) from the first tranche of the Budget Control Act.  Now, defense is slated to absorb another $600 billion from sequestration.  Remember that these spending reductions are coming off the heels of initial defense cuts under the Obama administration, even as every other facet of the budget had metastasized uncontrollably.  Even though sequestration will affect some discretionary programs, almost all of the welfare and entitlement programs, which comprise 65% of the budget, will be exempt from any baseline reductions, let alone real dollar cuts.  Over the next seven years, we will not spend an additional penny on defense, yet total federal and state welfare spending will increase 40%.

Source: Heritage Foundation

If we would budget the next 10 years of welfare spending in the same manner that we are treating defense spending, we would be close to solving our debt problem.  Unfortunately, liberals only have an appetite to cut the few legitimate constitutional functions of government, while preserving all of the unconstitutional redistributive programs.

Sadly, as our public debt is slated to reach 252% of GDP by 2035 (June CBO report, page 32), we won’t have to worry about maintaining a military.

The best alternative for conservatives is to follow the Phil Gramm plan.  Gramm, who is the original author of the old sequester process, advocates that the GOP offer an alternative to sequestration in 2013.  Under the original Gramm-Rudman process, which was reinstated by the Budget Control Act, the majority leader in either house can offer an alternative plan to sequestration.  That motion is considered privileged, and according to Gramm, “can be amended only with relevant amendments, debated for only 10 hours and can’t be filibustered.”

What should that alternative resolution include?  Among other things, it absolutely must include repeal of Obamacare.  This plan would kill three birds with one stone; satisfy the $1.2 trillion in automatic spending cuts, save the military, and most importantly, repeal Obamacare without sixty votes.  It would be akin to political malpractice if Republicans fail to win back the Senate in 2012, given the lopsided political map this cycle.  As such, Republicans must use this campaign season to reaffirm their promise to preserve the military and repeal Obamacare; two goals that resonate with the electorate.

If they really have the gumption to trigger such a process, perhaps the entire debt ceiling deal would have been worthwhile after all.  The clock is already ticking.

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COMMENTS

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  • septembergurl

    agenda.
    Either his tax hikes go into effect, or the military gets cut deeply.

    Despite his escalation of Afghanistan, invading various countries and waxing terrorists and dictators, Obama is not at all pro-military. He inherited a working national defense strategy from Bush (in contrast to a failed economic policy of bailouts etc) and he sensibly continued and expanded it.

    However, don’t forget the fundamental Democrap goal of hollowing out the military when they are in power. They always do it. truman did it after WWII. Carter did it, so did Clinton.

    • aesthete

      we should remain in a state of war? Because otherwise, you are going to see the military get “hollowed out”, and lots of generals who should be earning their keep in the private sector shriek about how there’s going to be a war on account of these cuts. They are right, in the same sense that I am correct in saying, “it will rain in Tucson at some point”: in the most utterly useless way possible.

      • Raven

        Last I checked, we had ongoing fighting on at least 3 fronts. Afghanistan, Iraq, and, now, Ethiopia. Combat troops under fire in 3 separate nations on 3 separate continents.

        “After” a war?

        • aesthete

          about Truman and Clinton’s de-escalations after WWII and the Cold War (or that’s how it read to me, anyways). I don’t see how continuing to have a wartime state after WWII would have been helpful at all.

          Regarding Ethiopia, Iraq and Afghanistan, all qualify to me as countries where we’re wasting our time, money and troops, but are tangential to my response to the poster above.

  • ashland_avenue

    Even had the Donks gotten their way, the deficit problem remains one of over spending not under funding.

    They had asked for $1 trillion of new taxes; over ten year’s that’s $100 billion a year. The deficit this year is $1,700 billion.

    Personal income tax receipts in FY 2010 were $899 billion. Even if receipts were to rise 50% or to $1,350 billions, there would still be over $1 trillion in deficit.

    An increase in income taxes of that magnitude would cripple ‘the economy.’ It would destroy incentives and encourage as many as possible to work for Johnny Cash.

    The national debt now stands at over $15 trillion. Rates are at or near historic lows. An increase of only 1% in annual funding costs would cost $150 billion.

    Ultimately, funding costs will return upwards, perhaps by a few percentage points. Costs of lugging around the debt we will have created will be back breaking.

    The only plausible way out will be even more trashing of the currency. Greece would have taken this route, but no longer has its own currency to trash. But we do and we will.

    • ashland_avenue

      I mis spoke. Deficit this year is $1,597 billion.

      http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/tables.pdf

    • YnotNOW

      And I think most of us at RS understand this. The problem is getting the message to all of the ostriches sticking their heads in the sand to pretend that it will all go away.

    • aesthete

      Politically? No. Defense cuts, spending cuts and *some* tax hikes are going to be necessary to sell the plan to the general public.

      • ashland_avenue

        Imagine a wealthy and sophisticated woman. Sophisticated in that she eats in very best restaurants, takes exotic vacations, and belongs to a family which has been well into the one percent for five generations. Not exactly a coupon clipper, she isn’t active in any of the various interests her ancestors established.

        Very distantly related to me, her thoughts began to emerge recently on my social networking page. When I tried conveying to her the issues in this thread, following was her response:

        “Let’s end the wars and bring our kids home! That will go a long way toward cutting spending.”

        I tried to convey that halving the military budget would still leave a trillion dollar plus deficit. There is an absolute unwillingness — on her part and and in minds of most of my extended Blue State family — to grasp the exact size and nature of the problem.

        None of them have children in the military. The ‘our kids’ amongst these folks are either away at Ivy League type colleges, working on Wall Street or Madison Avenue, or doing various types of social work. None of the younger ones are Occupying Wall Street.

        As a group, though, they have a fuzzy sense that health care should be paid for (by someone else), that defense spending is unethical, that Social Security won’t be there for them.

        My son, who’s in the military, allocates much of his savings to precious metals, and thinks the only way out is monetization of the debt and trashing of the currency.

        He’s in the real one percent: the single per cent or so who has given thought to what we all owe and how we’re going to resolve those debts.

        • aesthete

          You could completely eliminate the military, and would still have a structural deficit. Scary. Most people don’t understand, or find it convenient not to understand, this basic reality — and these people vote!

          • ashland_avenue

            I know it’s not politically correct on these pages to favor Mitt Romney. However, his remarks re cutting federal work force by ten percent, and making sure that federal compensation levels are no higher than prevailing local ones, ring true with me.

            What you describe as a structural deficit doesn’t have to be so. It was probably ‘structural’ at the airlines till it wasnt, and structural at the railroads until it wasnt.

            I have never spoken or written these words before, but Romney’s days at Bain & Co. and fixing the Olympics are awfully appealing when what we need now is restructuring.

          • aesthete

            and here’s why: most of our deficit is made up of entitlements, and he’s essentially been running as the pro-entitlements candidate. I understand not scaring people and voicing things in a tactful way, but right now Romney has no plans (that I can see) regarding how to fix entitlements.

            Now, I’ve heard of stealth big-government candidates, and seen them all over the Republican party. I haven’t seen much of the opposite: that is, stealth small-government conservatives running as big-government or status quo types.

            I do understand what you’re saying about good management and a keen eye towards graft going a long way, but when 80% of your budget is tied up in MediCare, Medicaid, Social Security and the military, then that approach only takes you so far.

  • writescribe

    day-to-day politics as a lot of others here, but I was struck by the image of the President yesterday on TV vowing to veto any attempt to undo the automatic cuts. Has the world been turned on its head? A Democratic president defending spending cuts with the veto pen?

    Look, I don’t like the military cuts any more than others here, but wasn’t that the deal? I’m certainly not defending those who want to weaken the military, but do we share any blame in making the deal in the first place? I note that in the comments sections of other posts on this site, a lot of Tea Partiers are complaining that their supposedly conservative Tea Party representatives betrayed them and became overnight Washington politicians.

    Am I missing something big here? Was it betrayal? Or was it simply being outmaneuvered? Or was it something else entirely? Really, I’d like to know because I’m not clear how we got to this state of affairs where the President, of all people, is defending spending cuts (whether such cuts are real or smoke and mirrors).

    • http://redmeatconservative.blogspot.com/ Daniel Horowitz

      You are right about the fact that this was all predicted when Republican leaders signed off on this inane process, as part of the agreement to raise the debt limit. We protested it vigorously then, and we will protest it now.

      • writescribe

        on the Right when the debt-limit deal was made. I just kept hearing how the Tea Party “won” the fight. Like I said, I’m not as actively up-to-speed on the day-to-day as others are…plus, I’m probably getting too much info from MSM.

        Thanks for the info.

        • http://redmeatconservative.blogspot.com/ Daniel Horowitz

          what we said at the time Compare that to what is currently taking place.

          • YnotNOW

            as a way to force Republicans to the table. Just as the lack of tax increases (sequestration was all cuts, no revenues) was to force Democrats to the table. That way, each side would have a burning platform forcing them to negotiate real concessions in order to avoid those painful consequences.

            At least that was the “conventional” thinking.

            In actuality, the Democrat platform was much less painful, because they wanted at all costs to avoid cuts to Entitlements. And they could avoid this pain, all the while screaming that we should raise taxes, just by stonewalling the negotiations to a standstill.

            And they got it.

            The only solution is to vote in a substantial R majority in both the House and Senate, that can tackle some real budget solutions. Right now, I’m not too hopefull, because I think we will take R majorities, but not sufficient or sufficiently conservative to delivery on the need.

  • kestrel

    I’ll have to reread your piece, DH, (and read Gramm’s piece) to fully understand it (such as why they are cutting *real* defense spending instead of “baseline” spending like they do with everything else, and how the alternative to sequestration works), but I will say this:

    Republicans had better do the STRONGEST thing possible, because I am LIVID, and I mean LIVID, that they have raised the debt ceiling FOR NOTHING. That is, in exchange for nothing. Even in exchange for “a negative”, as in, “Here, I’ll give you my shirt if you’ll take my pants too.”

    From the beginning, this “deal” smacked of a Democrat “head’s, we win: tails, you lose” and that is exactly how it has turned out.

    • writescribe

      but I also think we got sold out by the Republic establishment leaders, i.e. Boehner, McConnell, Cantor, etc. who HAD to know this was the result but let it happen anyway, all the while basking in taking credit for saving the nation.

      Yes, the “deal” was rigged. I expect this from the Left so that is not surprising. However, what makes me even more mad/disappointed is that the Dems couldn’t have pulled this off without help, and they got it in the form of the R establishment.

      • YnotNOW

        see my comment above.

      • kestrel

        It is exactly the Republicans who voted for it at whom my anger is directed, particularly the leadership who relentlessly bullied freshmen and conservatives to go along with it. You expect radical Dems to act like radical Dems, but Republicans should not be joining them. We elected Republicans in 2010 to put a stop to the torrent of spending. They have not done it. In fact, they’ve increased it. There is no reasonable excuse. None.

        John Boehner needs to be replaced as speaker. He is too steeped in the old, fantasyland ways of Congress in which money grows on trees and minuscule reductions in an autopilot rate of spending-escalation are called “spending cuts”. Nor would I support Cantor for leadership at this point. We must have a conservative. The binge must stop.

    • Raven

      you took your username from a certain fictional character by the name of “Colonel Kestrel,” did you?

      I know, OT, but I had to ask, and if you did, then please remind me of the name of the series so I can go get myself a copy.

      • kestrel

        I never heard of Colonel Kestrel.

  • drfredc

    Baseline budgeting is the unspoken political spending entitlement that needs to be killed. Raising the baseline for any department beyond zero should be made very difficult, like requiring 2/3 majority of both houses to happen, at least until the federal debt zeros out or gets to less than a couple hundred billion… Like that’s every going to happen…

  • spinoneone

    to pull off what needs to be done. 60 seats in the Senate won’t be enough because of Snowe, etc. In the House we need at least 261.

    We also need to shake-up the R establishment. I don’t know yet who I really want to be the R candidate for President, but it isn’t Romney.

  • buddyp

    Daniel,

    When you say “baseline” are you referring to CBO’s Extended-Baseline Scenario (i.e, essentially a “current law” baseline) or CBO’s Alternative Fiscal Scenario (the more politically plausible baseline), which apparently is what the “super committee” was using for calculating deficit “reductions”?

    See Table 1-1 on page 4 for assumptions of each baseline. http://www.cbo.gov/ftpdocs/122xx/doc12212/06-21-Long-Term_Budget_Outlook.pdf

    • buddyp

      I should have noted that the Alternative Fiscal Scenario is sometimes referred to as the “current policy baseline”, as opposed to “current law” (which has all the Bush tax cuts extended, AMT patched, continuation of the Medicare “doc fix”, etc.).

      Also note that the revenue assumptions of Table 1-1 are on page 5 of that CBO document to which I linked.

      • http://redmeatconservative.blogspot.com/ Daniel Horowitz

        Either baseline.

        It doesn’t make a difference. Those choices mainly affect revenues and budgeting for tax extenders. They don’t make a difference when estimating welfare spending and defense. There is just one baseline.

  • johnt

    “progressives” can do, all the dependency to be fostered, and all the insider rape and steal programs, Many Solyndras, oodles. It makes late Imperial Rome look like an 8th Ave 3 card monte hustle. That must be what makes them “progressives”.

  • aesthete

    I ask not because I think that this was a good deal or outcome — I have nothing but contempt for the process and its participants — but because going forward, an actual austerity budget is unlikely to become a reality if we don’t cut military spending. Therefore, it behooves us as a movement to determine what is wheat and what is chaff, and to prioritize certain kinds of spending over others. Not everything in the military is waste, but certainly not everything is crucial or even tangentially related to our nation’s continued prominence and success. Saying “military spending needs to go up” is meaningless without noting what it needs to go up *for*. It’s time to ask and answer that question, and to stop squealing like stuck pigs when it is possible (though not probable, with Obama) that it was one of our redundant continental US bases which is closing shop, or when it’s our constantly-training (but never active) paratroopers getting pink slips. Or (horror of horrors) we could even stop building our enemies’ infrastructure and “democracies” in the middle of nowhere.

  • gcards

    What should that alternative resolution include? Among other things, it absolutely must include repeal of Obamacare. This plan would kill three birds with one stone; satisfy the $1.2 trillion in automatic spending cuts, save the military, and most importantly, repeal Obamacare without sixty votes. It would be akin to political malpractice if Republicans fail to win back the Senate in 2012, given the lopsided political map this cycle. As such, Republicans must use this campaign season to reaffirm their promise to preserve the military and repeal Obamacare; two goals that resonate with the electorate.

  • gcards

    What should that alternative resolution include? Among other things, it absolutely must include repeal of Obamacare. This plan would kill three birds with one stone; satisfy the $1.2 trillion in automatic spending cuts, save the military, and most importantly, repeal Obamacare without sixty votes. It would be akin to political malpractice if Republicans fail to win back the Senate in 2012, given the lopsided political map this cycle. As such, Republicans must use this campaign season to reaffirm their promise to preserve the military and repeal Obamacare; two goals that resonate with the electorate.nike kobe