The Office and Management and Budget has told the Department of Defense to prepare for additional budget cuts in 2013 [PDF]. The move comes after months of political fighting between Republicans and the President over raising the country’s debt ceiling. The memorandum, sent by OMB director Jacob J. Lew on August 17th, instructs that:
Unless your agency has been given explicit direction otherwise by OMB, your overall agency request for 2013 should be at least 5 percent below your 2011 enacted discretionary appropriation.
The memorandum goes on to tell budget planners to also “identify additional discretionary funding reductions that would bring your request to a level that is at least 10 percent below your 2011” amounts.
According to AOL Defense, the memo was meant to prepare the DoD for the possible triggering of a potential $500 billion in defense cuts which would be automatically occur if Congress does not enact more than a trillion dollars in cuts. Director Lew stated that the two plans would “provide the President with the information to make the tough choices necessary to meet the hard spending targets in place and the needs of the Nation”.
In addition to preparing for cuts, planners were asked to identify programs to “double down” on if they offer the promise of increasing economic growth. While admitting that “finding the savings to support these investments will be difficult” Director Lew stated that doing so would be possible by closing duplicate, low-priority, and ineffective programs; improving efficiency; and making “fundamental program reforms that generate the best outcomes per dollar spent”.
The OMB Director ended the memo by admitting that “this will be a difficult year” but that the contingency plans can give agencies the chance to “make the hard decisions to invest where we can get the most done”.
Rumors of the cuts spread quickly inside the Pentagon. For a long time the military’s budget has been one of the few areas spared from major budgetary shrinkages. If the cuts were enacted, it would be the largest the military has faced in decades. Its effect would also be felt by defense contractors, whose bottom-lines live and die by Defense Department spending.
