October 30, 2012 10:37 AM
Dr. Veronique de Rugy stands by the integrity of her research. (Response to this Letter to the Editor.)
A senior research fellow at the George Mason University Mercatus Center in Arlington, she has testified many times before Congress, writes columns for Reason magazine and the Washington Examiner and blogs on the National Review Online.
The information in her graph and in de Rugy’s comments in the story are based on National Defense spending, not the Department of Defense budget. National Defense spending includes military-related spending by other federal agencies in addition to the Department of Defense, but DoD spending makes up the vast majority of the total.
The story in Virginia Business failed to make the distinction between National Defense spending and DoD spending clear in discussing de Rugy’s analysis.
Using Congressional Budget Office data, she shows National Defense spending under sequestration dropping to $493 billion in 2013 and then rising to $590 billion in 2021. These numbers are $23 billion to $27 billion higher than “nominal” (not adjusted for inflation) DoD spending shown on the fourth line of the chart on this page because of spending by other agencies. The Federal Times cites similar spending estimates by the Bipartisan Policy Center in a September story, “Sequestration might be manageable, experts say.”
The CQ Weekly story mentioned in the letter looked at options that can be used “to wield the sequester as a scalpel rather than an ax.” In the article, members of Congress and former budget officials discuss how money could be shifted so low-priority programs would be cut deeper than high-priority projects.
The war funding or Overseas Contingency Operations budget is separate from the primary Defense budget. It is not subject to the initial round of budget cuts caused by the Budget Control Act but is subject to sequestration that would take place next year unless stopped by Congress.
The article quotes Florida Republican Rep. C.W. Bill Young, chairman of the House Defense Appropriations Subcommittee as saying, “The OCO number has been very flexible, and it has been used almost as a slush fund for a number of other projects.” Some Washington insiders believe Congress still could increase war funding by labeling it a national emergency.
Original story: http://www.virginiabusiness.com/index.php/news/article/peering-over-the-fiscal-cliff/
Dr. de Rugy’s response to my letter of Oct. 30th shows that there is one thing worse than erring, and that is to persist in error. Which is exactly what she is doing.
Including extra-DOD “national defense” items in defense spending totals doesn’t change the fact that sequestration would be a deep budgetary cut. As I stated in my original letter, “If they’re included in later years’ figures, they must also be included in today’s.“ Thus, if we add $23 bn to the DOD’s base budget today ($535 bn, using CBO numbers), it totals $558 bn.
Sequestration mandates a $66 bn cut in defense spending, so that takes us down to $492 bn in January 2013. Afterwards, defense spending will not recover to today’s level for an entire decade (and probably longer): it will reach $516 bn in FY2022, a full $42 bn below today’s level, exactly as I said, and well short of the $590 bn de Rugy claimed.
That’s because including these “extra goodies” (thus using total National Defense numbers) doesn’t change the budget cuts’ depth, merely their starting and ending point. It’s simple math.
Thus, Dr. De Rugy’s graph purporting to show defense spending growing above today’s level by FY2022, and her statements to the same effect in the original story, were dead wrong. National Defense spending will not reach $590 bn in FY2021. Not even close. Not even if the extra $23-27 bn is included. There isn’t a single CBO, CRS, or OMB report supporting such claims.
Several of these items have nothing to do with America’s defense. They include arms exports to foreign countries and civilian “development projects” abroad. Including them in “defense spending” totals is therefore a mistake.
The Federal Times’ “Sequestration might be manageable…“ story was full of huge factual errors, and the BPC report cited therein used base defense budget numbers, not the National Defense budget function numbers that de Rugy claims to use. That BPC report was, of course, wrong, as proven by the CBO study cited in my original letter, which shows defense being cut to $469 bn in January 2013 and not returning to (let alone exceeding) $500 bn for the next decade under sequestration. (See here.) The BPC itself warned about sequestration’s consequences in a June 2012 study (titled “Indefensible: The Sequester’s Mechanics and Adverse Effects on National and Economic Security”) in these words:
“After reviewing the evidence, we have concluded that the indiscriminate and irrational application of sequester cuts in 2013 will have adverse impacts on our military capabilities and readiness and economic vibrancy without significantly improving our fiscal situation. in short, the sequester is indefensible.“
(http://bipartisanpolicy.org/sites/default/files/BPC Sequester Paper.pdf)
So much for sequestration supposedly being manageable.
The factual errors in the CQ Weekly story have already been dealt with in the previous letter. Suffice to say that 1) any funding shift between programs (reprogramming) requires the authorization of four separate Congressional committees; and 2) funding shifts don’t increase the overall budget available to the DOD, merely change its internal composition. Reprogramming or not, the defense budget will still be cut deeply.
As for “Some Washington insiders believe Congress still could increase war funding by labeling it a national emergency”, people’s beliefs are irrelevant. What matters is what the law says. The law says that OCO (war) funding is to be sequestrated along with the base defense budget, and no labels change this, as the BCA does not allow such exceptions. It is an extremely inflexible law. This will force DOD leaders to raid basic budget accounts by even more than they’d otherwise have to.
And while de Rugy claimed in the original story that sequestration is highly unlikely, here we are, with less than 2 months to go before January 2nd, and Congress still hasn’t reached any deal on this issue. Nor is it likely to, given that this is the same Congress which nearly shut down the entire federal government in April 2011 and nearly caused America to default on its obligations in August 2011, averting this outcome literally hours before it was about to happen.
Nov. 20, 2012 at 11:37 AM
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