The Bowles/Simpson defense cuts are not “risk neutral”
Erskine Bowles and Alan Simpson, co-chairs of the bipartisan National Fiscal Commission, made news yesterday when they released their proposal to dramatically cut the federal government’s fiscal deficits. Their proposal called for a $100 billion cut to the Defense Department’s top line in 2015, a 15% cut from the Pentagon’s February 2010 spending plan for 2015 of $666 billion.
To accomplish this cut, Bowles and Simpson describe a variety of illustrative ideas, including pay freezes, cuts to contractors, overseas base closing, cuts to procurement (they seem to have a particular grudge against the Marine Corps), cuts to research, and more.
Implied in the Bowles/Simpson suggestions is an assumption that the United States in 2015 will still be fighting a medium-sized war in Afghanistan or somewhere else. The Pentagon Comptroller’s budget projection out to 2015 includes a $50 billion placeholder for “overseas contingency operations (OCOs),” a sum large enough for a multi-brigade stabilization operation. Retaining that assumption of open-ended ground combat consumes half of the savings that Bowles and Simpson wish to achieve.
As a corollary, the Bowles/Simpson list does not include any savings through headcount reductions. The Congressional Budget Office has calculated that returning the Army to its pre-2007 size would save over $92 billion over 10 years. General James Conway, the recent Commandant of the Marine Corps, expected that after Afghanistan, the Marine Corps’ headcount would shrink by 27,000, saving $20-25 billion over ten years.
The Bowles/Simpson proposals for Pentagon savings are not “risk neutral.” By protecting ground forces and assuming ongoing stabilization wars, they place a priority on mitigating risks from failed states and ungoverned spaces. But by instead cutting procurement and research, the proposals ask the country to accept higher risks from emerging peer competitors like China and higher risks to its alliances in East Asia and around the Persian Gulf.
The Bowles/Simpson cuts are merely illustrative and will no doubt be ignored by policymakers. But Bowles and Simpson have affirmed the principle that all of the federal government’s functions will have to contribute to deficit reduction if policymakers are to agree on a grand budget deal. $100 billion in 2015 is, at least for today, the Pentagon’s share. The question now is how to apportion the geostrategic risks the country is —to take.
