Analyst: Historical Trends Suggest Budget Cuts Deeper Than Sequestration

WASHINGTON — The Pentagon could face budget cuts much deeper than those mandated through sequestration if defense spending over the next decade follows historical trends, according to a prominent analyst.

The analysis by Todd Harrison of the Center for Strategic and Budgetary Assessment think tank assumes that current budget trends will follow those during defense drawdowns in the 1970s after the Vietnam War and again in the mid-1980s through the late 1990s.

“Compared to previous budget cycles, this doesn’t look right to me,” Harrison said Thursday. “I think that the sequester-level budget caps might actually be a ceiling, not a floor, for the defense budget in the coming years.”

If existing sequestration spending caps remain in place through 2021, the Pentagon budget will bottom out at $475 billion in 2014 and then start growing in 2015.

But when assuming the trends of the prior drawdowns, the DoD base budget would fall to about $415 billion in 2021, Harrison said.

“I’m not predicting it will happen,” he said. “I’m projecting out the scenario.”

Using these assumptions, DoD’s procurement budget would fall to $62 billion, which was the low point at the end of the Vietnam War and the 1980s budget drawdowns when the spending is adjusted for inflation.

Harrison’s analysis also assumes research-and-development funding would remain flat at $65 billion. It assumes military personnel would grow at a 2 percent rate, but military end strength would decline by one-third, from about 1.5 million to 1 million.

“That would be the smallest active-duty force we’ve had since 1940,” he said. “That would be consistent with drawdowns in personnel in previous downturns.”

Cuts of this magnitude would wreak havoc on acquisition programs, as DoD would need to scale back capacity and capability.

“You’re talking major cancellations, you’re talking major delays in development programs, significantly reduced buys,” Harrison said. “This would be catastrophic … for a lot of procurement programs.”

The industrial base impact would also be devastating, he said.

“You would probably end up with single vendors in many of the sectors of the industrial base,” Harrison said. “Going forward in the future, competition in many cases just wouldn’t be an option.”

These types of cuts would require a significant change in military strategy and defense posture, he said.

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