Zbigniew Mazurak's Blog

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Rebuttal of Veronique de Rugy’s repeated lies about sequestration

Posted by zbigniewmazurak on October 11, 2012


The French libertarian Veronique de Rugy, who now lives in the US and spends time writing garbage for the Mercatus Center, has written yet more garbage about sequestration, garbage which, sadly, has been reproduced by a local newspaper in Virginia, the Virginia Business.

De Rugy again falsely claims that “adjusted for inflation, defense spending under the first year of sequestration would revert to its 2007 level.”

But that’s not true, because sequestration would cut the base defense budget from $535 bn today down to $469 bn in FY2013 (the first year of sequestration). This would be the lowest level of defense spending since FY2003, i.e. it means setting defense spending by an entire decade. The FY2004 defense budget was $473 bn, and the FY2007 budget was ca. $493 bn, in today’s money.

De Rugy further falsely claims that:

“With sequestration, she says, core Pentagon spending would fall to $492 billion in FY2013 (which began Oct. 1), rebound to $502 billion in 2014, rise to $549 billion by 2018 and reach to $590 billion in FY2021. If sequestration is avoided, the base budget will rise to $541 billion in the next 12 months, return to $560 billion in 2015 and reach almost $640 billion in 2021. “

In support of her blatant lies, De Rugy is propagating a completely fabricated chart, which she admits she made herself.

But the chart is a complete forgery, and De Rugy’s claims are blatant lies. Here’s a CORRECT chart, produced by the CBO, which shows what would REALLY happen to defense spending with and without sequestration:

As you can see from the graph, defense spending would see a deep cut under sequestration and not recover for the remainder of the decade (or even long afterwards). Even without sequestration, however, defense spending would be effectively frozen in the first 5 years and resume modest growth thereafter.

The CBO’s July 2012 report on sequestration, which provides detailed, specific numbers on how deeply defense spending will be cut under the Budget Control Act, is available here.

Table 1-4 of the report, which is on page 11, says that under sequestration, defense spending will be cut to $469 bn in FY2013, and not reach $502 bn (let alone today’s level of $535 bn) for the remainder of the entire “Sequestration Decade” – a stark contrast to De Rugy’s lie that it would “rebound to $502 bn” in FY2014. It would never rebound to $502 bn. In fact, under sequestration, defense spending would be below that level, at $493 bn, in FY2022, in the last year of the sequestration decade.

So under sequestration, defense spending would be cut so deeply that it wouldn’t rebound to today’s level at least for an entire decade, and probably much longer than that.

By FY2018 and FY2021, despite de Rugy’s lies, it wouldn’t even be close to $549 bn or $590 bn; it would be at barely $483 bn and $489 bn, respectively. So De Rugy’s claims are such blatant lies that they’re off the mark by over $100 bn in the latter case.

But even without sequestration, defense spending would still be cut to $521 bn in FY2013 and not return to its current level ($535 bn) until FY2021. By FY2022, it would still be at $539 bn (all figures here are in real-term FY2013 dollars, i.e. they’re adjusted for inflation; if you don’t adjust for inflation, the FY2022 defense budget would be at $632 bn without sequestration, closer, but not matching, de Rugy’s false claims).

De Rugy also has made further false claims:

“The Pentagon’s core budget currently is on track to rise about 2 percent every year through 2021, or a total of $5.27 trillion, according to de Rugy. If sequestration cuts are fully enacted — which de Rugy doubts will ever happen — the budget still would increase by an annual average of about 1 percent to $4.84 trillion.”

Again, blatant lies. Even without sequestration, the defense budget will be cut in real terms during the next 5 years as a whole (and in 3 out of 5 individual FYs of the next 5 year window, FY2013-FY2017), and will need 9 fiscal years to recover to its current level of 535 bn. So there will be ZERO growth in real terms through FY2021.

Under sequestration, defense spending will not increase at all, and as already mentioned, and as proven irrefutably by the CBO’s July report (see Table 1-4 on page 11 of the report), it will still be way below today’s level, at 493 bn (42 lower than today), in FY2022, at the end of the sequestration decade. There will be no net growth in defense spending; sequestration would represent a deep real term cut from which defense spending would not recover for a decade (and probably longer than that).

De Rugy’s claim that sequestration is doubtful to ever happen is just as ridiculous and foolish as her other false claims. As things stand today, sequestration is the law of the land, and Congress has less than 3 months to overturn it (if it wants to). If it doesn’t do so within less than 3 months, it will kick in.

But overturning sequestration would require this divided, hyperpartisan Congress (whose members are more interested in pandering to their base than in doing something meaningful), and specifically, a majority of Republicans and Democrats alike, to reach a compromise, which means both sides would have to give away some ground.

Yet, Congressional Republicans and Democrats have so far been unable to agree on almost anything besides kicking the can down the road. In April 2011, they nearly caused a government shutdown, averting it just days before it was to happen. In August 2011, they nearly caused America to default on its obligations for the first time ever, averting it just hours before high noon. They are still held hostage by their respective bases, which will view any compromise and any ceding of ground as betrayal (just ask Sen. Richard Lugar). Even defense cuts supporters such as Winslow Wheeler admit that “sequestration is virtually inevitable.”

Sequestration may still be averted, but the odds of that are low.

De Rugy further lies that:

“Defense spending has almost doubled in the past decade in current dollar terms and will continue to grow in spite of automatic cuts set by the BCA.”

VB’s Tim Loughran also falsely claims that:

“For the next decade annual increases in Pentagon spending will shrink to between 2 and 3 percent, down from an average of about 10 percent during the past 10 years.”

Again, those are blatant lies. Defense spending has not doubled in the past decade. Not even close. In real terms, the base defense budget has grown from 390 bn in FY2001 (the nominal dollar amount was 291.1 bn) to 535 bn today; and the total military budget has grown to 645 bn today. This represents growth of 35% and 65%, respectively. So no, even the total military budget has not “almost doubled” in the last decade. Not even close. Given that this growth occurred over 11 years, it was modest.

And, as proven above, under sequestration, it will not grow at all – it will be cut deeply below today’s level and stay there for over a decade – and even without sequestration, it will not return to its current level until FY2021.

De Rugy further lies that:

“Clarifying these figures reveals that sequester cuts do not warrant the fears of policymakers who warn about ‘savage cuts’ to the defense budget.”

That’s another blatant lie. The sequester’s cuts would be savage, and they do fully warrant the fears of policymakers who warn about them. Not only would these cuts be deep in monetary terms (as proven above), these deep budget cuts would result in crippling cuts to capabilities, making the DOD:

  • Cancel all except the most basic upgrades for F-15s and F-16s while cutting the fighter fleet by 35%;
  • Eliminate the ICBM leg of the nuclear triad completely while cutting the bomber fleet by 2/3 and cancelling the bomber replacement program (also needed for conventional penetration strike);
  • Delay the SSBN replacement program;
  • Cut the USN’s ship fleet to 230 vessels, the smallest size since 1915, and vastly inadequate (independent studies say the Navy needs 346 ships);
  • Forego the deployment of any missile defense system abroad;
  • Cut the Army to its smallest size since 1940;
  • Cancel virtually all Army modernization programs;
  • Cut the Marines down to just 145,000 personnel (which, according to the USMC’s Commandant, would make the USMC “unable to handle even one major contingency”; in other words, if big trouble flares up, don’t bother calling the Marines);
  • Cutting Israeli cooperative missile defense programs;
  • Cut personnel benefits programs to such depth that it would break faith with them (e.g. massive cuts in DOD health programs and retirement benefits), thus discouraging people from joining the military or reenlisting.

For why such cuts would be disastrous, see here.

De Rugy further shamelessly lies that:

“Congress can blunt the effects of sequestration by adjusting the amount of money going to war funding (OCO), which is not subject to most of the restrictions facing the base Pentagon budget. Congress can set the level of OCO spending above and beyond what is needed in anticipation of the impact of the sequester and caps on defense spending.”

But Congress cannot do that (short of cancelling sequestration itself), because contrary to the claims made by de Rugy, OCO spending IS subject to sequestration (as confirmed by the DOD) and will therefore be cut, and capped at a lower level, just like base defense spending. So no, Congress cannot increase OCO spending under sequestration – whether to make up for cuts to the base budget or for any other reason.

The Virginia Business, which has published de Rugy’s blatant lies, also falsely claims that:

“In addition to using war funding money to relieve pressure on the core defense budget, another tactic would be to alter the definition of certain funding categories in the budget. Cuts are slated to affect spending at the “program, project and activities level.” Congress simply would change the identification of certain types of spending to give itself more flexibility, U.S. Rep. C.W. Young, a Florida Republican, told CQ Weekly.”

But changing the “definitions” of certain funding categories would do nothing to relieve pressure, since the BCA requires that the ENTIRE DOD budget, except personnel spending, be cut. Changing definitions changes NOTHING here, since everything, by whatever name it’s called, is to be cut, except personnel.

Virginia Business also invokes “reprogramming” as a fix, but it’s no solution at all. “Reprogramming” is allowed only for a limited amount of money (a few hundred million dollars per program at most), so it’s like putting a bandaid on a huge, bleeding wound, and it can never occur without Congressional legislation, because the Congress controls the purse.

VB also says the BCA allows the President to submit an alternative deficit reduction plan to avoid sequestration. But the President doesn’t need the BCA to do that; pre-BCA, there was nothing precluding him from doing so. Yet, to date, President Obama has submitted no such plan.

In short, De Rugy’s and VB’s claims are blatant lies, and once again, they have been utterly disproven.

http://forthecommondefense.org/2012/10/01/peering-over-the-fiscal-cliff/

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