- Days left

Will Budget Cuts Leave America Defenseless? Hardly

×

Obama defense cutsDisaster! Surrender! Appeasement!

Reaction to President Obama's proposed cuts to national defense spending have run the gamut from panic to ... more panic.

According to The Wall Street Journal, for example, proposed cuts will result in a 14% reduction in troops for the Army, and a 13% cut to the Marine Corps. The nuclear arsenal will be slashed, production delays will strike the Air Force's new fighter jet, the F-35, and overall defense spending will fall by 8%.

Sen. John McCain denounced the cuts as representing a "budget-driven defense policy." And to judge from what he and the other talking heads are saying, you'd think the president had decided to outright gut the military. But is it really all as bad as that?

Budget-Driven Defense Panic

The document that sent Beltway critics into a tizzy last week, titled "Sustaining U.S. Global Leadership: Priorities for 21st Century Defense," does in fact suggest that change is afoot. That said, it's almost entirely devoid of actual numbers that would describe these changes. Meanwhile, what it does contain seems to contradict the panicked statements of its detractors.

In a cover letter for the report, President Obama describes a plan to preserve an "agile, flexible" military, and one "ready for the full range of contingencies" that face it. A military that, far from waving the white flag, will "continue to invest in ... surveillance, and reconnaissance; counterterrorism; countering weapons of mass destruction; operating in anti-access environments; and prevailing in all domains ..." So it's hardly a plan for shrinking violets -- or shrinking from violence when it's necessary.

Military Math

The specifics of the plan -- such as we know of them -- tend to support this view. Far from eviscerating America's armed forces, the cuts agreed upon between the White House and Congress earlier this year total $480 billion. That sounds like a lot. But remember that these cuts will be spread out over a full decade, amounting to average rollbacks of just $48 billion a year.

To put this number in context, $48 billion is about 5.4% of the $895 billion budget that the Pentagon requested last year. It's not just a flesh wound to be sure, but it's also not a mortal wound. In fact, it's a correction in spending that might be satisfied by simply following Sen. McCain's advice to eliminate "waste, inefficiency, and ineffective programs."

Waste and Inefficiency in the Old Country

In furtherance of the president's goals, the report points out that Europe is a pretty safe place right now, which should enable the U.S. military to "rebalance" part of the "U.S. military investment in Europe." (Translation: "relocate some of the troops and materiel based there.") Similarly, the end of combat operations in Iraq, and the gradual drawdown of troops in Afghanistan, should reduce costs in these theaters, while permitting the military to increase spending in places requiring more urgent attention -- namely, the Asia-Pacific region, to which "we will of necessity rebalance."

In fact, it's entirely possible the Pentagon will be spending more money in regions such as Asia-Pacific, not less.

Among the several objectives laid out in the report is the need "to ensure [the military's] ability to operate effectively in anti-access and area denial environments." Which roughly translates to places in and around nations with sizable defense budgets (China), advanced air defense and air forces (China), and plentiful reserves of long-range anti-ship missiles (China.)

It's a Long Way to China

This brings us, of course, to the question of effective ways to meet these threats. Cutting 5% from the defense budget might not sound like a lot, but it does sharpen the need to spend what's left more wisely. And to put it bluntly, equipping and maintaining large land armies probably isn't the best way to secure trade routes in the Pacific and South China Sea.

Fortunately, much of the "rebalancing" being discussed involves de-emphasizing land warfare, and focusing on power projection by sea, air and space. That's where the cuts to U.S. troop levels come in.

If the Pentagon spends less money buying main battle tanks from General Dynamics (GD), it will most likely spend more money buying Littoral Combat Ships from ... well, General Dynamics. Boeing's (BA) "Future Combat Systems" project to upgrade American armored divisions may be history, but the company can make up a lot of that revenue building refueling tankers, spy satellites, and unmanned aerial vehicles.

And those stealth fighter jets from Lockheed Martin (LMT) -- the ones that are supposedly being cut? Not a good idea if the Air Force wants to be able to penetrate "anti-access and area denial environments." Unsurprisingly, from what I hear, the actual plan is to just slow down the rate at which we purchase F-35s temporarily. But the goal to eventually buy 2,500 fighter jets? That's still a go.

Motley Fool contributor Rich Smith does not own shares of any company named above, but The Motley Fool owns shares of Lockheed Martin and General Dynamics.


Increase your money and finance knowledge from home

Intro to Retirement

Get started early planning for your long term future.

View Course »

Economics 101

Intro to economics. But fun.

View Course »

TurboTax Articles

What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

Add a Comment

*0 / 3000 Character Maximum

37 Comments

Filter by:
Mike

full retirement should go to any one who wishes after serving 3 or more combat tours at highest rank held! Even if only 3 years in service! Who els goes to work and dodges bullets bombs snipers etc minute by minute? No not the police, not even close.

January 15 2012 at 2:10 PM Report abuse rate up rate down Reply
Mike

We have a CIA, NSA, HS, SS, ARMY, AIR FORCE, NAVEY, MARINES, COAST GAURD, ARMY NATIONAL GAURD in each of the 50 states, ARMY RESERVES, AIR FORCE NATIONAL GAURD in most states, AIRFORCE RESERVES, NAVY RESERVES, and MARINES RESERVES. Now realize from a vet that our active Navy can destroy all other navy’s of the world simultaneously if needed. How is China going to invade with out a navy or any one else hmm? Are they going to swim over here? Further our Marine Corp are the ones that take ground from the enemy and it's ALWAYS their ground we take never retake our ground, hmm. Armies are for occupying said taken ground. Air strike invasion you say? Our Air Force National Guard could destroy any and all incoming by themselves and yet we have active duty Air Force. Active Air Force is for controlling the skis of the rest of the world. Just the existence with our proven performance is enough to keep peace for most and in hours we can take the sky by force any where. If an enemy ever reached our shores and we had NO MILITARY they would face a heavily armed population not to mention police forces in every mid sized city or larger now outfitted with military fire power. My point is this, All active Army except SF that are not in combat or in direct support should be made reserves. This would keep all others fully funded with out any risk to our nation. A little common sense please.

January 15 2012 at 1:59 PM Report abuse rate up rate down Reply
savemycountry911

Over half the defense budget goes to pay retirement. Anyone who fights deserves everything they can get. Those who sit behind a desk for 20 years don't.

January 12 2012 at 8:13 PM Report abuse +1 rate up rate down Reply
1 reply to savemycountry911's comment
Mike

Absolutely! Further full retiremnt should go to any one who wishes after serving 3 or more combat tours at highest rank held! Even if onl 3 years in service! Who els goes to work and dodges bullets bombs snipers etc minute by minute? No not the police, not even close.

January 15 2012 at 2:02 PM Report abuse rate up rate down Reply
ha6ai

Don't bother reading this absurd leftist Obama propaganda. We obviously need to bomb Iran, soon

January 12 2012 at 3:48 AM Report abuse +3 rate up rate down Reply
tomtom2000

Yeah, yeah. I have heard this story before about how we don't really need much defense capability. I am totally opposed to "slashing" our nuclear warfare capability. Iran isn't slashing theirs!

January 12 2012 at 1:07 AM Report abuse +2 rate up rate down Reply
awpaguy

If obama gets his way, he will make the United States defenseless, and that is, and has been, his goal since he came into office. GOD help us if he gets 4 more years to do his damage.

January 11 2012 at 9:56 PM Report abuse +1 rate up rate down Reply
1 reply to awpaguy's comment
savemycountry911

He has gotten millions from his Muslim "Brothers"

January 11 2012 at 10:07 PM Report abuse +1 rate up rate down Reply
Kate

I think many of you need to start looking up the facts. Opinions are like a _ _ holes everyone has one.

January 11 2012 at 9:01 PM Report abuse +1 rate up rate down Reply
1 reply to Kate's comment
democracks0

And it takes one to know one

January 11 2012 at 11:54 PM Report abuse +1 rate up rate down Reply
"Run-A-Way Bill"

Keep the USA military in our "own" economic geography ... meaning we pay our military to be all over the world and they spend their money all over the world, thus giving Germany, Japan, etc. etc. etc. the benefits of our tax dollars.

Also, I say let Germany, Japan, & other countries have bases in the USA, so their tax money can go into the pockets of the American taxpayers!

pARTy On! USA ...

January 11 2012 at 4:52 PM Report abuse +1 rate up rate down Reply
democracks0

What should be cut is the funding for the generations of baby making machine career welfare recipients who have been freeloading off the government all their lives.

When are they going to start paying their fair share!!!!!

January 11 2012 at 4:18 PM Report abuse +7 rate up rate down Reply
Nick

Rich Smith! With very few facts to back up what you report, makes me think that fiction is your forte'.

January 11 2012 at 3:53 PM Report abuse +3 rate up rate down Reply