The 3 Biggest Losers in a Slashed Defense Budget
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The 3 Biggest Losers in a Slashed Defense Budget

Reuters/iStockphoto/The Fiscal Times

Imagine a military force that, for the first time since World War II, cannot fight and win a two-front war.

This version of the U.S. military would also fall behind on maintaining its nuclear deterrence. According to American Enterprise Institute’s Thomas Donnelly, this American military would not be able to accomplish U.S. strategic objectives in the coming years.

“All I can offer you are roads to failure, roads to defeat,” Donnelly said at a Center for Strategic and Budgetary Assessment event held last week  . “The current program does not maintain a two-theater force.”

This event brought together leading think tanks in Washington to present competing visions of the Pentagon’s future, in light of sequestration and defense cuts that are expected to remove $500 billon from DOD’s budget over the next decade. Each think tank assumed scenarios in which the DOD is operating with $100, $300 and $500 billion less than it is now.


The analysis was meant to mirror an ongoing Pentagon process known as a Strategic Choice Exercise, in which the DOD is contemplating spending cuts that Pentagon brass have said will decimate the American military. For years, DOD officials acted as if these cuts would somehow be avoided.

The White House’s long-term spending plans released earlier this year did not account for the full impact of sequestration.  But as President Obama made clear in a recent speech, the age of endless Pentagon spending is coming to an end. This realization has the massive Pentagon bureaucracy split. Last week, Army Chief of Staff Ray Odierno warned that shrinking the size of the Army could leave America vulnerable.

“The thing I worry about is that in everybody’s declaration that there’s going to be no more ground wars, we need no more ground forces, that we’re going to make the Army too small,” he said before a meeting of the Atlantic Council. “I see nothing on the horizon yet that tells me that we don’t need ground forces.”

Others within the Pentagon have begun to prepare for the inevitable. Defense Chief Chuck Hagel, along with a number of undersecretaries and high-level civilians, continue to tell the military to prepare for cuts.

“We'll have to get smaller and we'll have to look at some areas where we can take some more risk, get rid of more overhead and make a lot of other tough decisions," Pentagon Comptroller Robert Hale said recently.

A Pentagon spokesperson said their review had not yet been completed and delivered to Hagel, and that DOD had not yet determined if it would be made public once it’s done.

But it’s clear that the drawdown won't hit everyone equally. There are three areas where the cuts will be especially severe and will have an impact far beyond the ability for the United States to wage war.

The Pentagon currently has a civilian workforce of some 800,000. Earlier this year, Hagel said that one of the most important parts of DOD budget reduction was to drastically reduce the size of this workforce.

“Despite good efforts and intentions, it is still not clear that every option has been exercised or considered to pare back the world's largest back office,” Hagel said in April. He has argued that DOD would save as much as $34 billion per year by shrinking the civilian workforce.

The think tanks involved in the strategic review agree with Hagel’s assessment. Their cuts in the civilian workforce range from a loss of 82,000 to 263,000 workers.

Despite Odierno’s protests, nearly everyone expects the Army to shrink. This will occur through base closures and troop reduction.

The think thanks estimated that a round of base closings, known as BRAC, could save between $5 and $30 billion in the coming years. This process is likely to impact the Army disproportionately, as it has the largest number of bases.

The think tanks’ analyses also recommend reductions of Army ground forces from between 70,000 and 163,000 troops. Army reserves would be pared down by up to 58,000 reservists.

The think tank review did not address the impact of these cuts on the wider economy. And they did not address how the downsizing of the Pentagon contracting process, an inevitable result of a cut in DOD spending and one that has yet to be fully understood, would impact national GDP growth.

Because defense spending has accounted for such a large portion of government spending in recent years, including nearly 20 percent in 2012, the new changes outlined by the think tanks would be felt by not just those connected to the Pentagon, but for all Americans.

And everyone in the large defense policy community is in agreement that these cuts must occur in some way and at some level, meaning that DOD and Congress are likely to draw the same conclusions soon.

“Given the range of strategies you’ve heard here, there are some things that everyone agrees on … regardless of which strategy you end up pursuing, these are things that are likely to happen,” CSBA senior fellow Todd Harrison said last week. “It’s pretty remarkable, [that] people across the aisle, across a broad political spectrum, can agree on these things and yet Congress can’t.”