Under-budgeted Afghan War Spending to Swallow All Pentagon “budget savings” and more

Budget Memo by Charles Knight. 14 February 2011.

For several years now White House budget projections have included a “placeholder for outyear overseas contingency operations” most of which are accounted for by the wars in Iraq and Afghanistan. This placeholder number has been and remains $50 billion. Every year actual OCO (overseas contingency operations) spending turns out to be several times that number. FY11’s OCO is $159 billion and FY12’s is $118 billion.

Adjusting for the effect of the new OCO for FY12, the $68 billion budgeted above the placeholder of $50 billion eats up most of the $78 billion in Pentagon cuts that Secretary Gates offered up in January to fiscal responsibility (only $76 billion actually shows up in the 14 February budget release.) The remaining $8 billion (and much more) will go to the war budgets when reality collides with placeholder projections.

On 14 February Pentagon Comptroller Hale confirmed that the $50 billion placeholders for FY13 and beyond was the “best we can do.” Others make an attempt to be more realistic. The high tech industry association called Tech America annually projects DoD budgets for ten years out. In their 2010 projection they estimate that OCO spending will be $102 billion in FY13, $69 billion in FY14 and $57billion in FY15. When we subtract the $50 billion placeholder for each of those years and total the remainder we find that the Pentagon is likely to spend $78 billion more in the years FY13 through FY15 than in the White House budget projections.

In sum, not only does the President’s FY12 budget plan give an exemption to the Pentagon from contributing anything substantial to deficit reduction, but the likely cost of the war in Afghanistan will push up the national debt substantially higher than the White House budget projections.

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Commented on: 12 Apr, 12:38 pm