Reid's Deficit Plan Reportedly Includes Military Cuts

The deficit reduction plan being proposed by Sen. Harry Reid would not trim entitlement spending, meaning the $2.7 trillion in cuts needs to come other programs. Among those likely on the chopping block is the Pentagon. Robert Siegel speaks with Todd Harrison, senior fellow for Defense Budget Studies at the Center for Strategic and Budgetary Assessments, about proposals to trim the Pentagon budget.

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ROBERT SIEGEL, host:

Well, as we've heard, Majority Leader Reid's plan for spending cuts includes a trillion dollars in savings created by the wind down of the wars in Iraq and Afghanistan. The two wars are among the biggest causes of the growth in the federal deficit, but would an end to the wars actually achieve those savings? And what other defense savings are there to be found?

Well, to help us answer those questions, Todd Harrison joins us now. He is senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments. Hi.

Mr. TODD HARRISON (Senior Fellow for Defense Budget Studies, Center for Strategic and Budgetary Assessments): Good afternoon.

SIEGEL: And the last number I saw for Defense Department spending request was about $700 billion. If the great majority of U.S. troops were to come home, how much could we save?

Mr. HARRISON: Well, if you look at the 2012 budget request, what the president put forward as for $118 billion for the wars in Iraq and Afghanistan, that's down from about 160 billion in the current fiscal year. But that budget came out in February. That was before the president announced the drawdown from Afghanistan. By my analysis, the president's drawdown plan from Afghanistan would actually reduce funding even further so that we'd only need about 101 billion in 2012. So we're already looking at a pretty significant reduction in war spending.

SIEGEL: So is Senator Reid and Senator Schumer, who appeared with him today, are they accurate in saying that when you do the accounting, it could work out to a trillion dollars less in defense spending?

Mr. HARRISON: I don't think those are real savings. I think the confusing part that you have to look at is what baseline are you comparing it to. So what they're comparing it to is the CBO's baseline projection...

SIEGEL: That's the Congressional Budget Office.

Mr. HARRISON: Congressional Budget Office's baseline project for future deficits. That means that the funding for Iraq and Afghanistan would stay at $160 billion a year, where it is right now, for the indefinite future. So over the next 10 years, that's about $1.6 trillion in the baseline. But of course, we already know that we're starting to bring troops down from Afghanistan. By the end of this year, we will largely be out of Iraq already, so that spending is going to come down. So the CBO also puts forward an alternative fiscal scenario where they take into account some of these more realistic assumptions about what will happen in the future. So if you look at that, then you'll see that there's not much of a decrease in war funding.

SIEGEL: OK. Other defense questions. Let me play something that Robert Gates has said on this program last month. He said, typically, he would recommend pay increases for the military, Congress would look at his numbers, and they'd increase them.

(Soundbite of archived interview)

Mr. ROBERT GATES (Former U.S. Defense Secretary): The Congress, every year, has added a half percent to whatever recommendation the president and I have made for increase military pay. And, you know, over time, that adds up to real money.

SIEGEL: And Gates also spoke of the very generous deal that retired DOD employees of less than retirement age get for their health insurance, couple of hundred dollars a year, I think. How much money could be found by taking a more Gates-like approach to spending on a DOD personnel?

Mr. HARRISON: When it comes to military health care, Secretary Gates has said this a number of times, and I agree with him completely, it's eating the Defense Department alive.

Already we spend nearly 10 percent of our defense budget on military health care. You know, just to clarify, we're talking about people who've served 20 years in the military and gotten out but they're not yet at the age of 65 to qualify for Medicare. Right now, those people pay about $460 a year. That has not increased one penny since 1995. And what that's doing is incentivizing more of these retirees to stay in the military health care system rather than take health care from their private sector insurers that they can get through their employers.

SIEGEL: So it's a big expense on the (unintelligible).

Mr. HARRISON: It is a big expense and it's growing.

SIEGEL: Todd Harrison, thanks a lot for talking with us.

Mr. HARRISON: Thank you.

SIEGEL: Todd Harrison is senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments in Washington, D.C.

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