Categories  Merging & Acquisition Policy US DoD

DoD Officials Preparing Smaller 2012 Budget

The Pentagon in February likely will send Congress a fiscal 2012 budget blueprint seeking about $15 billion less than the $678 billion sought for 2011 – and some Obama administration officials want even deeper cuts, defense and industry sources say.
Since lawmakers and administration officials earlier this year began mulling ways to right Washington’s fiscal ship, it has become increasingly clear that the defense budget will shrink. Senate appropriators this year trimmed the administration’s 2011 defense request by $8 billion, with their House counterparts proposing a $7.2 billion reduction. Several high-profile debt-reduction panels called for Pentagon cuts as large as $100 billion.
The White House has ruled out a $100 billion cut for the Pentagon in 2012, sources say. White House Office of Management and Budget (OMB) and Pentagon officials late last week were using the defense topline figure for 2011 included in a now-dead Senate omnibus appropriations bill as a foundation for the 2012 mark.
That massive spending measure would have provided the Pentagon with $667.7 billion for 2011, including war funding – some $10 billion below the Pentagon’s request.
The now-nixed omnibus bill’s defense section called included $157.8 billion for the wars in Afghanistan and Iraq, leaving $509.9 billion for most other U.S. military expenditures, but excluding nuclear weapons and other military initiatives funded through other annual budget bills.
Some OMB officials want to cut the omnibus level by another $10 billion, which would mean a $658 billion 2012 Pentagon spending request, defense and industry sources said.
Senior Pentagon officials pushed back, and it now appears a net $12 billion to $15 billion reduction from the requested 2011 level is most likely, sources said.
“A cut of $12 [billion] or $13 billion would allow the secretary to go back and claim victory over those who wanted bigger cuts,” said Larry Korb of the Center for American Progress, referring to U.S. Defense Secretary Robert Gates.
While a final definitive topline figure remains unclear, sources indicated it could be about $663 billion. The likely outcome of the Washington budget deliberations “just proves the happy days for the Department of Defense are over,” said a former White House budget official. “And it’s going to happen one year sooner than I expected.”
“The senior military [officials] inside the building now know things are headed south,” the former official said. “The externalities – things like deficit-reduction – are now driving this. … The group that doesn’t seem to get it just yet is the senior civilian leadership. They seem to think the House Republicans will step in and save their bacon with more money – but I just don’t think they can count on that this time.” A Pentagon spokeswoman had not responded to an inquiry at the time of this posting.

Sources: John T. Bennett Defense News December 22, 2010

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