DoD Threatened With $1 Trillion Cut?

The Defense Department faces nearly $1 trillion in cuts over the next ten years, unless a special Joint Committee created by the new debt-ceiling legislation can come up with an alternative in the fall.

A recent report by the Center for Strategic and Budgetary Assessments (CSBA) lays out the details. The legislation allows for an increase in the debt ceiling limit of $2.1 trillion over the next few months and requires $2.1 trillion in corresponding budget cuts or revenue increases. 

An initial series of cuts would reduce spending by $900 billion over 10 years, with about $330 billion of that coming from defense.

Unless a special Joint Committee created by the legislation comes up with an alternative plan, the legislation has an automatic trigger that would cut another $1.2 trillion divided equally between defense and non-defense spending.

What impact might this have on DoD's SBIR program?.   The legislation does not allocate cuts by specific accounts or funding lines.  If the cuts are applied equally across the board, it could mean a cut to the program on the order of 15% for FY2013.

Below are some Questions and Answers based on the CSBA analysis.

What is the likely FY2102 defense cut? $5 billion from FY2011; $28 billion from FY2012 budget request; assumes that the required cuts to "security" spending are made proportionally across all security accounts.

What is the likely FY2013 defense cut, assuming the trigger kicks in?  $76 billion from CBO baseline projections (14%); $99 billlion from President's budget projections (17%).

What is the total defense cut over the next 10 years, assuming the trigger kicks in?  $815 billion relative to the CBO baseline; $968 billion relative to the President's budget projections ($330 billion of these amounts would result from initial cuts already agreed).