Pentagon Gets Approval for Modest Growth in Budget Plan for Fiscal 2012

U.S. Defense Secretary Robert Gates has won White House approval for modest growth in the base Pentagon budget in the fiscal 2012 budget, according to officials and analysts.

Gates, who plans to brief congressional leaders tomorrow, has received guidance from the White House that about $554 billion for defense, not including war spending, will be part of the budget that the administration will submit to Congress for the fiscal year that begins Oct. 1. That figure is $12 billion less than what the Pentagon planned, yet still allows for real growth over the fiscal 2011 budget, an analyst said.

If implemented, the five-year cut would represent about a 2.67 percent reduction to what is a $2.99 trillion defense plan, not including war spending, according to Office of Management and Budget long-range figures released last February.

The White House-directed cuts come as a new Congress arrives in Washington to debate defense spending in the context of federal deficit reduction.

Gates has committed to reducing overhead and inefficiencies by about $102 billion through 2016. He is seeking to forestall deep cuts in weapons and research while holding the line on overall defense spending. The Pentagon’s base budget has doubled since the Sept. 11, 2001, terrorist attacks.

Tighter budgets, Gates has said, mean that the military won’t get the overall annual budget growth of 2 percent to 3 percent above inflation needed to sustain current weapons programs, so dollars saved elsewhere must be shifted from into those accounts.

“After a decade of growth, however, it now seems to be leveling off, and it may begin to decline if defense is included in measures to rein in federal budget deficits,” said Stephen Daggett, defense budget analyst at the nonpartisan Congressional Research Service.

Meeting With Legislators

Gates probably will outline additional specifics for reporters tomorrow afternoon, officials said, after a scheduled briefing for senior defense committee lawmakers in the morning in the U.S. Capitol office of Senator Daniel Inouye, a Hawaii Democrat and chairman of both the Senate Appropriations Committee and its defense appropriations subcommittee.

Spokesmen for Senator John McCain of Arizona, senior Republican on the Senate Armed Services Committee, and Representative Norm Dicks of Washington state, senior Democrat on the House Appropriations subcommittee on defense, confirmed that their bosses will be attending a meeting of the so-called Big 8 lawmakers -- the top Democrats and Republicans on the Senate and House armed services and defense appropriations panels -- with Gates.

$12 Billion Cut

The $12 billion reduction for fiscal 2012 includes efficiency savings, reduced inflation assumptions and savings from civilian pay freezes mandated last month by Congress, officials said.

Calculating exactly to what extent the $554 billion represents real growth for the Pentagon is difficult because there has not been final passage of a fiscal 2011 funding bill. The Pentagon is operating under stopgap legislation through March 4 that keeps spending at approximately the fiscal 2010 level, or about $530.8 billion, Daggett said.

The unfinished fiscal 2011 appropriations legislation now totals about $525.2 billion, Daggett said. That’s about $24 billion less than what the Pentagon requested.

Congress may add some of that money back in. An increase to $554 billion would represent growth of about 4.5 percent in nominal terms, or about 2.5 percent after adjusting for inflation, Daggett said.

To contact the reporter on this story: Tony Capaccio at acapaccio@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.