Discretionary Spending

Function 050 - National Defense

Reduce the Size of the Military to Satisfy Caps Under the Budget Control Act

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
Change in Spending                        
  Budget authority 0 -28 -39 -49 -45 -66 -73 -80 -86 -86 -161 -552
  Outlays 0 -18 -31 -42 -43 -57 -67 -75 -81 -83 -133 -495

Note: This option would take effect in October 2014. Estimates of savings displayed in the table are based on the fiscal year 2014 Future Years Defense Program and the Congressional Budget Office’s extension of that program.

The cost of the plans described in the Department of Defense’s (DoD’s) most recent Future Years Defense Program (FYDP) would greatly exceed the funding allowed under the Budget Control Act of 2011 (BCA). For example, by DoD’s estimate, implementing the FYDP would require funding of $560 billion in 2017, which is $49 billion, or nearly 10 percent, higher than the limit of $511 billion implied by the BCA for that year (estimated as 95.5 percent of the overall BCA cap of $536 billion in 2017 for the broader category of national defense). (The gap is even larger when estimated using the Congressional Budget Office’s projections of cost factors and growth rates that reflect DoD’s experience in recent years.) Closing some or all of that gap will require reducing the size of the military (measured by the number of major combat units such as Army brigade combat teams—BCTs—or Marine regiments); decreasing the per-unit funding provided to man, equip, train, and operate forces; or both.

Under this option, the size of the military would be reduced so that, by 2017, DoD’s budget would satisfy the BCA cap for that year and average funding per military unit would remain commensurate with 2012 amounts (including adjustments for anticipated cost growth in areas such as pay, military health care, and new weapon systems). Further force reductions would be taken each year to stay within the caps between 2018 and 2021 as cost growth continued to compound. The size of the military would remain unchanged thereafter. Relative to DoD’s current plans (and under the department’s cost assumptions), the force cuts would reduce the need for budget authority by $552 billion from 2015 through 2023. The initial cuts would be phased in over three years to provide time for an orderly drawdown and to avoid sudden disruptions while substantial military forces remain in Afghanistan. As a consequence, this option alone would not satisfy the BCA caps between 2014 and 2016.

If reductions were spread evenly across DoD’s four military services and among all full-time (active) and part-time (reserve and Guard) units, those reductions might eliminate, for example, the following forces by 2021: 10 Army brigade combat teams (out of a planned force of 66 in 2017); 34 major warships (out of 244 in 2017); 2 Marine regiments (out of 11 in 2017); and 170 Air Force fighters (out of about 1,100 in combat squadrons in 2017). (As a comparison, in 2013 the Army had 73 BCTs, the Navy had 214 major warships, the Marines had 11 regiments, and the Air Force had about 1,100 fighter aircraft in combat squadrons.) Reductions in similar proportions would be made to the other types of units in each service and support organizations across DoD.

This option would not, however, reduce spending and deficits below those projected in CBO’s baseline, which reflects the BCA caps. Reducing the size of the military to obtain savings relative to the baseline would require larger force reductions.

An advantage of this option is that it would avert the risk of having a so-called hollow force—one sized to satisfy the current national security strategy but with inadequate equipment or training to be effective—because units would, in the long term, receive support equivalent to what they had in 2012, an amount that has produced the highly capable forces of today’s military. (Staying within the BCA caps from 2014 to 2016 might require short-term reductions in funding per unit, however, much like the cuts resulting from sequestration in 2013.) Also, unlike reductions that merely postpone costs, savings from the force-structure reductions under this option would continue to accrue after 2021 and for as long as forces were held at the smaller size.

The disadvantage of this option is that the size and number of military operations that could be simultaneously conducted and the duration for which they could be sustained would be reduced if the size of the force was cut. Under Army policy, for example, three active BCTs (or five National Guard BCTs) are required to support the rotation of a single BCT in and out of a combat zone. Therefore, if three (or five) BCTs were eliminated, the service would lose the ability to continuously deploy one BCT.