Budget Cuts Slice Across Defense Spending Sectors

Government

The so-called golden age of military spending, which began after the wake of 9/11, is quickly coming to an end. The recent deficit reduction law, which calls for $350 billion in security spending cuts over the next decade, was the official spending retreat that is expected to lead to canceled weapons systems, a smaller nuclear arsenal and personnel cuts.

The Defense Department will be looking to make broad cuts in numerous areas in the coming years. One of the key areas to cut will be in military personnel. About 45 percent of the Pentagon’s base budget – which was $526 billion this year – is spent on pay and benefits for the Defense Department’s 2.3 million employees. Nearly 20 percent of the growth in the defense budget over the last decade has been due to rising personnel costs.

“Personnel costs really are a major driver in the defense budget, so reducing the number of personnel can generate a significant amount of savings,” said Todd Harrison, an analyst at the Center for Strategic and Budgetary Assessments. These cuts would most likely include active duty personnel and the civilian work force.

Analysts at the Center for American Progress recommended that the Pentagon eliminate 74,200 Army and 27,000 Marine positions along with a similar number of civilians, in order to save $39.16 billion through 2015, as reported by Reuters. “The United States is unlikely to deploy large land armies in the near future due to the tremendous cost of these wars in both blood and treasure,” said the analysts, led by Lawrence Korb, a former assistant secretary of defense.

The Pentagon may also consider reforming the military’s pay and benefits structure, which include base salary, housing allowances, medical costs, retirement funding and more. The overall annual per-person cost for active duty military personnel has risen by 46 percent in inflation-adjusted dollars over the past decade, to $121,600, Harrison said.

Healthcare costs have been increasingly rapidly for the 9.6 million active-duty troops, their families, retirees and reserves, and now amount to about $52.5 billion annually. The Center for American Progress estimated the Pentagon could save $42 billion through 2015, while the Sustainable Defense Task Force estimated the Pentagon could save $115 billion through 2020 by changing the compensation and healthcare systems.

Weapons programs will most likely face cuts and face increased pressure to perform, especially the F-35 Joint Strike Fighter program, the costliest weapon program in U.S. history. The new Air Force refueling tanker and Joint Tactical Radio System programs are also expected to be cut.

The Sustainable Defense Task Force suggested the Defense Department could save $113.5 billion through 2020 by cutting deployed nuclear warheads to 1,000 on seven nuclear submarines and 160 Minuteman missiles while eliminating the nuclear bomber force.

Chandler Harris is a freelance business and technology writer located in Silicon Valley. He has written for numerous publications including Entrepreneur, InformationWeek, San Jose Magazine, Government Technology, Public CIO, AllBusiness.com, U.S. Banker, Digital Communities Magazine, Converge Magazine, Surfer's Journal, Adventure Sports Magazine, ClearanceJobs.com, and the San Jose Business Journal. Chandler is also engaged in helping companies further their content marketing needs through content strategy, optimization and creation, as well as blogging and social media platforms. When he's not writing, Chandler enjoys his beach haunt of Santa Cruz where he rides roller coasters with his son, surfs and bikes across mountain ranges.

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