11.23.11

Effects Of The Budget Control Act Sequester On Defense Spending

The Budget Control Act imposed caps on discretionary spending and provided a mechanism for achieving an additional $1.5 trillion in deficit reduction over the next 10 years through the Joint Select Committee on Deficit Reduction (the so-called supercommittee). The failure of the supercommittee to find that additional deficit reduction will cause a $1.2 trillion spending reduction over 2013-2021 through an across-the-board process known as sequestration. The sequester will achieve $492 billion in savings from defense, and an equal amount from the remaining 5/6 of the budget, which covers non-defense discretionary spending and entitlement programs. This will result in a total of approximately $1 trillion in defense cuts relative to the president’s request over the next 9 years.

Under the fallback sequester, defense spending will increase by 2 percent over the next 9 years relative to the president’s request for 2012. (This is sharply below the rate of inflation, which will increase by 21 percent over the same period.) By contrast, the other 5/6 of the budget will increase by 68 percent. A comparison to the CBO baseline produces a highly similar result.

NOTE: Please click here to view this analysis as a PDF, including two tables that compare the defense spending under the sequester to other major spending programs.