Belfast Telegraph

Saturday 30 August 2014

Poor Robert Gates left with just half a trillion dollars

Love or loath the place, there's no denying that the US usually does things on a grander scale that the rest of the world.

From its past railroad and skyscraper construction, to its current unemployed and homeless legions, America has always seemed super sized.

Still, even considering such historical largesse, recent budget cuts proposed by Defence Secretary Robert Gates are truly striking. On January 6, Gates called for $78bn (£49bn) to be cut annually from the Defence Department over the next five years. He insisted this shows the military moving from a "culture of endless money" to one of "savings and restraint."

In post-9/11 America, defence cuts are big news. However, as always, the devil is in the details.

For example, beginning in 2015, about 27,000 troops will be shaved from the Army's ranks, and 5,000 from the Marines - provided the 2014 Afghanistan withdrawal target date is met.

As for the Pentagon's famed weaponry, Gates has put the kibosh on the Marines' Expeditionary Fighting Vehicle and the Army's Surface-Launched Advanced Medium-Range Air-to-Air Missile. However, defence observers had already relegated both systems to scrap heap.

In reality, the proposed 'cuts' are a trimming of increases in the Defence Department's budget over the next five years. The annual budget will continue to grow at 1% or 2% above inflation, until 2015, after which time, Gates says, growth will mirror inflation.

The proposed cuts (which Congress must approve) are on top of $100bn (£63bn) in operational savings Gates identified last year, which are to be implemented over the next five years.

But occupants of the world's most famous five-sided building won't soon be starved for cash.

In fact, the Defence Department's non-war 2012 budget is expected to be $553bn (£348bn) - an amount more than the combined military budgets of the rest of the world. Accounting for inflation, America's non-war annual defence spending is higher than during the height of Cold War or the Vietnam War.

And then there is war spending, Congress has approved $160bn (£100bn) for Afghanistan and Iraq this year. That is on top of the $12bn-per-month (£7.5bn) outlay the wars have cost for years.

The size of the Pentagon's bureaucracy is also staggering. The annual budget for the office of Defence Secretary alone is $5.5bn (£3.4bn). And, as the details of Gates' budget cuts plan are debated in Congress, it's a sure bet that the Pentagon's bureaucracy will be mobilised to fight its corner.

With the gargantuan budget deficit now a dominant topic in Washington, Gates' announcement was tactical. Now the Pentagon can claim to have got the ball rolling, and thus can oppose deeper cut proposals claiming it's already trimmed tens of billions.

The Defence Secretary has won praise from many for appearing to join the cost-cutting band wagon. But he had little choice. In an age when deficit hawks across the nation are amplifying hard times for millions of people by slashing spending on a wide array of social programmes, Gates and his army of Pentagon bean counters couldn't sit idly by and do nothing.

Still, Gates' proposed cuts fall short of recommendations made by Obama's debt commission, which calls for more than $80bn (£50bn) in annual defence cuts between 2012 and 2016.

But, at the end of the day, proposed cuts also have to be kept in perspective. Regardless of whether the budget recommendations of Gates or Obama's budget reduction commission are accepted, the Pentagon will continue to have more than half a trillion dollars to play with yearly.

As one Pentagon budget official told Defence News after Gates' announcement: "Clearly, defence spending has crested, but it's hardly a crisis when we are talking about $550bn (£347bn)."

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