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2014 Defense Budget: What's New?

by Michael Tasselmyer / /

Sixty-five days past due, the President has released his Fiscal Year 2014 budget request. The National Taxpayers Union Foundation analyzed the data, and posted some of our findings here. We found a lot of overlap between the President's previous proposals and his "new" ones he submitted Wednesday morning. In addition, it assumes historic levels of tax revenue -- which rely on rather optimistic economic projections -- to pay the bills.

The same can be said of the Department of Defense (DoD) budget. Earlier this week I posted a run-down of some of the proposals we were likely to see in the DoD budget. Now that the official budget is out, let's take a closer look.

The President is pushing for a return to pre-sequester spending levels. The DoD budget requests $526.6 billion in discretionary spending. The problem? That's more than $52 billion more than it's actually allowed to spend under the provisions of the Budget Control Act (BCA). It may be just a political move, but unless the President can strike a deal that turns back the BCA spending limit, he'll have to find a way to work with the $475 billion he's slated to get instead.

Some feasible savings proposals are mixed with more weapons spending. The President has proposed halting the Army's Ground Combat Vehicle (GCV) program, and has suggested further rounds of base re-alignment and closures (BRAC). The BRAC program wouldn't begin until at least 2016, in order to give local economies a chance to prepare for the upfront costs. However, it would consolidate excess materials and facilities that DoD has itself acknowledged are unnecessary: in 2005 it was determined that as much as 24 percent of DoD facilities were not needed. Closing those facilities could offer significant long-term savings for taxpayers. As far as the GCV program is concerned, CBO has determined that retaining current units would save over $24 billion with "essentially no programmatic risk" to the service.

Speaking of weapons technology funding, the President opted to continue subsidizing the F-35 fighter jet development and procurement program to the tune of $8.4 billion. Just before the sequester deadline earlier this year, NTU's Nan Swift opined on some of the controversy surrounding the program. Additionally, the budget includes $5.4 billion for nuclear attack submarines, $4.7 billion for "cyber operations," and $1.7 billion for a new air-craft carrier.

Some "savings" -- in exchange for more spending elsewhere. In keeping with last year's practice, the President counts "reductions in Overseas Contingency Operations" as an offset to additional infrastructure spending. However, those reductions -- $167 billion through 2019 -- have already been going on for some time now, as U.S. combat force involvement in areas like Iraq and Afghanistan gradually winds down.

Veterans' benefits programs are growing rapidly. The number of people receiving benefits under many entitlement programs, including veterans' health and pension programs, is expected to grow significantly over the next decade. In Table 26-4 of the budget's Analytical Perspectives section, we can see that beneficiaries for "veterans' compensation" programs are expected to increase by 1.7 million, or 45 percent, by 2023. That's the fastest rate of growth for any program except Medicare's prescription drug plans, and could spark debate on how to handle the additional financial obligations.