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Of Defense and Deficits

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Proceedings, November 2012
To maintain their unique capabilities, the Sea Services must master the art of navigating budgets in the Age of Austerity.

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Under the authority of the Budget Control Act of 2011 and without congressional action, automatic across-the-board cuts—“sequestration”—will occur in the Department of Defense budget in January 2013. The likelihood and the consequences of this event are still uncertain, but projections by the Congressional Research Service suggest total cuts to the Defense budget in the vicinity of $500 billion over the next decade; similar cuts would be made in non-Defense spending. That this would be severe is not in doubt: Employment reductions from changes in equipment procurement in California alone are projected at nearly 126,000, with national changes in employment at more than 5.8 million. 2

Austerity budgets may prove to be the most challenging obstacle the Navy and Marine Corps have seen in a generation. Yet as painful as they may be, they must be faced. And successfully facing them begins with first developing an understanding of the current macroeconomic position of the United States, and ends with developing an effective budgetary strategy. Additionally, it will be critical to remember that Defense budgets do not exist in isolation. All actions and their costs must be gauged both against the entire federal budget as well as the larger U.S. macro-economy.

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