The Obama Admin plans further defense cuts


The Director of the OMB, Peter Orszag, has ordered the DOD to reduce its FY2012 budget request by 5%.

http://www.politico.com/politico44/perm/0610/the_belt_tightens_3a4f9d33-5704-48d8-b0c5-834b396ba3a7.html

The 5% reduction of the DOD’s FY2012 budget request (demanded by Peter Orszag) will reduce the DOD budget significantly. It will be a reduction of the DOD’s FY2012 budget request (not a reduction of the DOD’s FY2010 budget nor the DOD’s FY2011 budget request), but it will be a significant cut, because 1) the DOD budget will not grow (in real terms) by more than 1% per year during the next several FYs under Obama’s plan; 2) the bigger the base amount is, the bigger the percentage is. 5% of $534 bn is $53.4 bn. 5% of $549 bn is $54.9 bn.

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