By now, you’ve probably heard that the theme of tonight’s State of the Union will undoubtedly be the economy. The President is expected to propose a five year freeze on non-security discretionary spending (déjà vu?) and a ban on earmarks, while Rep. Paul Ryan, who is no doubt practicing his best Reagan impression in front of the mirror as we speak, is gearing up to deliver the Republican response.
Meanwhile, House Republicans hoping to go into the evening with a little extra rhetorical firepower spent the day working to pass another bill because they said they would. The measure, passed 256-165, would permit Rep. Ryan to reduce all non-security discretionary spending to fiscal 2008 levels or below, but it is another hortatory exercise that is not going anywhere.
Left or right, though, one thing is certain, most proposals have been carefully crafted to exclude “security spending”: Defense, Homeland Security, and Veterans Affairs.
CBS News correspondent Mark Knoller reports via Twitter that the President will call for $78 billion in defense cuts over the next five years. One would assume this means he will echo Secretary Gates’ recent announcement citing the same numbers.
The problem here is that the term “cut” is used very loosely in Gates’ plan for the defense budget.
Last year’s $100 billion efficiencies initiative was never meant to reduce the Pentagon’s budget, nor contribute to deficit reduction. Rather, it was meant to reduce Pentagon waste and boost more important mission-critical projects, since the entire $100 billion would be reinvested in DoD. More importantly, though, it was meant to stave off the harsh and inevitable reality that eventually, the Pentagon may have actually to reduce its budget.
Unfortunately for Gates, the Obama Administration was not satisfied. When Jacob Lew took over as the new director of the Office of Management and Budget (OMB), he directed Gates to trim $150 billion more, and would not allow the Defense Department to keep the savings.
Gates eventually negotiated the $150 billion figure down to $78 billion, the same $78 billion President Obama is expected to discuss tonight, but as Gordon Adams points out in his remarks to The Cable, the math is a little fuzzy:
…because Gates’ $78 billion in cuts aren’t really cuts at all. $54 billion comes from the president’s announcement to freeze federal civilian worker pay. So Gates is capitalizing on Obama’s decision without making any additional sacrifices…
Another $14 billion comes from “shifts in economic assumptions… for example, decreases in the inflation rate and projected pay raises,” Gates said. Adams explained that means the Pentagon simply changed its figure for projected inflation, which changes how much it predicts everything will cost in the future.
Moreover, in Gates’ proposed cuts, the Pentagon’s base budget will not actually go down at any point in the next five years. It will instead amount to slower growth that will eventually stop, and then begin to grow again. This is considered a reduction only because the budget will eventually stop growing with the rate of inflation, so further waste will have to be cut.
The president’s fiscal 2012 budget request, to be released on February 14 or 15, is expected to include $554 billion in base Pentagon funding (not including the costs of the wars in Iraq and Afghanistan), $12 billion less than the Pentagon had planned before negotiating with the White House, but $5 billion more than last year’s request.
What does this all mean in reality: domestic discretionary programs are told to go on a strict diet to lose 30 pounds while the Pentagon is supposed to cut down from two cupcakes a day to one.
