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Too Soon to Call Sequester a Success

From the standpoint of a budget hawk like Steve Moore of the Wall Street Journal editorial board, the budget sequestration process may indeed look like a success. “After President Obama’s first two years in office, many in Washington expected that number to hit $4 trillion by 2014,” Moore writes. “Instead, spending fell to $3.537 trillion in fiscal 2012, and is on pace to fall below $3.45 trillion by the end of this fiscal year (Sept. 30). The $150 billion budget decline of 4% is the first time federal expenditures have fallen for two consecutive years since the end of the Korean War.”

That is certainly good news, given the long-term threat to our international standing posed by runaway spending, even if there is cause to doubt how lasting the success of sequestration will be. As R. Glenn Hubbard and Tim Kane write in the New York Times, “The C.B.O. still anticipates a 2015 deficit of $378 billion. And Uncle Sam is heading — and this is the best-case scenario — toward nearly a trillion dollars of red ink every year after 2023.”

More immediately, the danger from a military standpoint is that we are purchasing deficit reduction at the cost of a catastrophic loss of military capability and readiness. As Moore himself notes, “The defense budget is on a pace to hit its lowest level (as a share of GDP) since the days of the post-Cold War ‘peace dividend’ during the Clinton years.” He concedes that “these deep cutbacks could be dangerous to national security,” but he argues that “as the wars in Afghanistan and Iraq were winding down, defense would have been cut under any scenario.” Perhaps so, but there was nothing inevitable to dictate that cuts would be so deep–amounting to some $1 trillion over the next decade–or that they would be enacted so indiscriminately across the board.

Secretary of Defense Chuck Hagel gave an overview of the unpalatable choices facing the Defense Department when he unveiled the results of a strategic review of spending. Even assuming a 20-percent reduction in headquarters overhead and a $50 billion reduction in military compensation–by no means easy to pull off–the armed forces will still have to cut a lot of muscle to achieve their budget targets.

Option 1 would be to cut the size of the existing armed forces dramatically to preserve investment in cutting-edge technologies. This would mean: “The active Army would drop to between 380,000 and 450,000 troops [from a peak of 570,000]. The number of Navy carrier strike groups would be reduced from a target of 11 to eight or nine. The Marine Corps would be reduced from 182,000 troops to between 150,000 and 175,000. And the Pentagon would retire older Air Force bombers.”

Option 2 would be to preserve more forces in being while cutting investments in “the Air Force’s new bomber, submarine cruise missile upgrades, the F-35 Lightning II, cyber capabilities and special operations forces.”

Either way, the U.S. will suffer a dangerous loss of military capability and hence influence in the world at the same time that the long-term danger from China and the short-term dangers from Iran and al-Qaeda are only growing. Ultimately, history teaches that decline of international security and stability will have parlous consequences for the American economy (see, for worst-case scenarios, the 1930s and 1970s), which will ultimately necessitate a large military buildup and make projected budget savings illusory. It makes more sense to keep in existence the top-notch American armed forces as they have been developed at great cost and effort since the last period of major cuts in the 1970s. But that would require repealing sequestration, which appears increasingly unlikely.


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