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 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2017-2021 | 2017-2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in Planned Defense Spending | |||||||||||||
| Budget authority | 0 | -18 | -23 | -23 | -24 | -36 | -40 | -35 | -41 | -41 | -87 | -281 | |
| Outlays | 0 | -11 | -18 | -20 | -22 | -31 | -36 | -35 | -38 | -39 | -72 | -251 | |
This option would take effect in October 2017.
Estimates of changes in spending displayed in the table are based on the 2017 Future Years Defense Program—which projects costs that are higher than are permitted under the Budget Control Act—and CBO’s extension of that plan. This option would not reduce spending and deficits below the amounts projected in CBO’s baseline, which reflect the law’s funding caps.
The cost of the plans described in the Department of Defense’s (DoD’s) most recent Future Years Defense Program (FYDP) greatly exceeds the funding allowed under the Budget Control Act of 2011 (BCA), as amended. For example, by DoD’s estimate, implementing the FYDP would require funding of $557 billion in 2018, which is $35 billion, or 7 percent, higher than the limit of $521 billion implied by the BCA for that year (roughly 95 percent of the overall BCA cap of $549 billion in 2018 for the broader category of national defense). (The gap is even larger when the resource requirements are estimated using the Congressional Budget Office’s projections of cost factors and growth rates that reflect DoD’s experience in recent years.) Closing that gap to bring DoD’s budget into compliance with the BCA would require a reduction in the size of the military (measured by the number of major combat units such as Marine regiments or Army brigade combat teams—BCTs); a decrease in the per-unit funding provided to man, equip, train, and operate forces; or a combination of both of those measures.
Under this option, the size of the military would be gradually reduced so that by 2020, DoD’s budget would satisfy the BCA cap for that year and average funding per military unit would remain commensurate with 2016 amounts (including adjustments for anticipated cost growth in areas such as pay, military health care, and new weapon systems). The size of the military would remain unchanged thereafter. Using DoD’s cost assumptions, CBO estimates that the force cuts would require $281 billion less in budget authority from 2018 through 2026 than DoD’s current plans. As a result, CBO estimates that outlays would be reduced by $251 billion through 2026. The initial cuts would be phased in from 2018 through 2020 to provide time for an orderly drawdown and to avoid sudden changes in the size of the force. As a consequence, this option alone would not satisfy the BCA caps for the years 2018 and 2019.
If reductions were spread evenly across DoD’s four military services and among all full-time (active) and part-time (reserve and National Guard) units, those reductions might, for example, eliminate the following forces by 2021: 6 Army brigade combat teams (out of a planned force of 56), an aircraft carrier and 11 other major warships (out of 238), 2 Marine battalions (out of 32), and 72 Air Force fighters (out of about 1,200 in combat squadrons). Proportional reductions would be made to most other types of units in each service and in support organizations across DoD, as well as in the acquisition of new weapons.
An advantage of this option is that it would reduce the mismatch between the cost of DoD’s plans and the funding available through 2021, the final year that funding is constrained under the BCA. Also, unlike reductions that merely postpone costs, savings from the reductions in military force structure under this option would continue to accrue after 2021 for as long as forces were held at the smaller size. Consequently, it would eliminate pressure for a sudden, large increase in defense spending when the BCA lapses in 2022. Although keeping the current force structure and using short-term reductions in average funding per unit to stay within the BCA caps might be possible through 2021, such an approach would, over the long term, pose the risk of having a so-called hollow force—one that is large but that lacks the equipment or training necessary to be effective. Under this option, units would continue to receive funding equivalent to what they had in 2016 and would not require a large increase in 2022.
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. Consequently, the number of BCTs that the Army could continuously deploy would decrease by one for every three active or five National Guard BCTs that were cut from the force structure.