Thursday, August 4, 2011

The magical $1 Trillion

My co-blogger is confused (see below) by a 'vanishing' $1 Trillion opportunity in the great debate on "budget cuts." When Senator Reid proposed his plan it contained $1 Trillion in "defense cuts". How did he get to this figure? Well, the CBO Baseline of March 2011, against which all proposals are scored to determine their effect, included $1.7 Trillion of overseas contingency operations funds (i.e. funds for the operations in Afghanistan and Iraq) over the next ten years. The assumption that this level of spending would continue for the full next ten years at the current pace clearly is risible given the fact that operations in Iraq might be wrapped up by the end of this calendar year (unless we can "persuade" the Iraqis to ask for some U.S. troops to remain) and that some troops are already being pulled out of Afghanistan...

However, it's definitely in the CBO baseline, see the above, which shows the money in the baseline (green highlight), what Reid projected it would actually cost (yellow highlight), leading to the Reid plan "savings" (pink highlight).

OK, so the Reid plan didn't come to pass and this money wasn't "saved." However, since the baseline wasn't revised to remove it, this magical money would seem to still be available for someone (perhaps the Congressional Joint Select Committee on Deficit Reduction?) to yet claim as a "savings."

Can anyone believe that this is something they would not stoop to?? And given this magical pot of money, it is hard to have much symapthy for those shedding tears that the military will be devastated if the automatic triggers kick in and reduce "defense" (or is that "security", or budget function 050'?) by $600 Billion over ten years.

The Debt Deal and the Alleged Defense Cuts
CBO analysis of "Reid plan"
The Debt Deal and Defense Spending

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