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Obama’s Plan to Save the Military From Cuts—at the Expense of Domestic Programs

As budget wonks comb over President Obama’s outline for fiscal year 2013, a startling White House plan has become clear: the administration is seeking to undo some mandatory cuts to the Pentagon at the expense of critical domestic programs. It does so by basically undoing the defense sequester that kicked in as a result of the Congressional supercommittee on debt. This wasn’t a featured part of the White House budget rollout, and for good reason—it undercuts the administration’s carefully crafted message of benevolent government action and economic fairness.

The process for this shift is complicated, and has been flagged by the Center on Budget and Policy Priorities. Essentially, Obama wants to eliminate individual spending caps for both military and non-military spending, and institute one single discretionary spending cap instead. Here’s the basic rundown.

To understand how deep the retreat really is, one first needs to understand the difference between security spending and defense spending. Spending on defense applies to the “National Defense Function”—that is, the entire Pentagon budget, plus $24 billion for nuclear weaponry and environmental cleanup programs at the Department of Energy, the defense activities of the FBI, and a small handful of other defense programs. Security spending, on the other hand, excludes some of the Department of Energy money, along with some of the other FBI and small program funding—but includes the Department of Veterans Affairs, the Department of Homeland Security and the “International Affairs” part of the budget, which is mainly State Department funding and foreign aid.

So from a progressive point of view, to cut the most fat from the military budget you want defense cuts, not security cuts—otherwise funding for veterans’ health and diplomatic efforts is also in jeopardy.

Next: when the debt ceiling deal passed in August, it implemented discretionary spending caps through 2021. This meant that if Congress appropriated money above certain levels for discretionary spending—which is basically everything the government spends money on, minus entitlement benefits and interest on the debt—something called sequestration kicks in, which entails automatic, across-the-board cuts to bring the budget back under the spending caps.

Under the debt ceiling deal, those spending caps were split between security and nonsecurity spending areas in 2012 and 2013. Nonsecurity spending is the important domestic stuff: everything besides security spending, entitlement benefits and interest on the debt. Think scientific research, the NASA budget, national parks and forests, environmental protection, social services, Head Start and so on. Then, in every year from 2014 through 2021, there would just be one cap. So starting in 2014, Congress could theoretically take everything from nonsecurity spending in order to maintain a healthy security budget and meet the spending cap.

The failure of the supercommittee changed all this. When the twelve members failed to reach an agreement in November, the budget laws automatically changed—now, there is no single cap starting in 2014, but dual caps in both defense and non-defense spending through 2021. That’s why hawks like Senators Jon Kyl and John McCain were so upset when the supercommittee failed—with mandatory caps in defense and nondefense spending through 2014, it was a worst-case scenario for defenders of the Pentagon budget.

The Obama budget plan, quite disappointingly, proposes to reverse the configuration of these caps. It would have caps in 2013, split between security and nonsecurity spending—not defense and nondefense—and then beginning in 2014, a single cap is reinstituted anyhow. All the firewalls ensuring that defense spending is reduced would thus be torn down.

The president’s budget for 2013 follows this new scheme: Obama proposes around $5 billion in spending above the defense cap, and $5 billion in spending below the nondefense cap. This would violate the current budget laws—unless the categorization was changed to security and nonsecurity spending. Then it would comply. And every year after, the distinction wouldn’t matter anyhow under one spending cap.

This is a dramatic shift in priorities, and one that not many people are discussing. Given the massive lobbying potential of the defense industry—and the comparably weak advocates for things like Head Start funding—it’s a virtual certainty that, under the White House proposal, these strict spending caps would be met by raiding nonsecurity spending heavily in years to come. Even the president’s own budget does that. One shudders to imagine the budget of President Romney or President Rubio.

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