Analysts: Defense budget likely to receive increased scrutiny

Despite the Obama administration's plans to shield national security accounts from a three-year spending freeze, budget analysts Tuesday argued that any long-term efforts to bring down the federal deficit ultimately will require taking a hard look at the Pentagon's massive budget.

During his State of the Union address Wednesday, President Obama is expected to shield the Defense, Homeland Security and Veterans Affairs departments from the spending freeze officials predict will save $250 billion over the next 10 years.

But national defense has enjoyed the biggest piece of federal discretionary spending while the deficit has hit $1.4 trillion in fiscal 2009.

"There is no way -- no way -- that the defense budget will be immune to deficit reduction," Stan Collender, a former House and Senate Budget committee aide who now serves as managing director at Qorvis Communications, told reporters Tuesday.

"It cannot be, unless there is another military situation that requires further commitment of dollars. Chances are there will be continuing re-evaluation of what we spend and how we spend it on the military," Collender said.

Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments, agreed that the administration will need to consider curtailing defense spending if officials are serious about addressing the deficit. "And so there is going to be that pressure to reduce, or at least constrain, defense spending," he added.

For the fiscal 2011 budget, set to be released Monday, the Defense Department appears to have received a reprieve, with no large weapons cancellations anticipated and no cuts expected to personnel or force structure.

But possible deficit-reduction measures in future years could include cutting operations and maintenance accounts, which would yield short-term savings, Collender said. Doing so would be dependent on reducing military operations overseas, however.

When deployments to such countries as Iraq and Afghanistan taper off, the military also could consider reducing the size of the force, said Jim Thomas, CSBA's vice president of strategic studies. That could amount to a significant cost-saver as personnel-related bills are expected to grow faster than the rate of inflation over the next several years.

Alternatively, the Defense Department could attempt to rein in personnel costs by changing troops' compensation packages, Harrison said. Active-duty troops now receive 52 percent of their compensation in noncash and deferred benefits, compared with 29 percent in the private sector.

Meanwhile, efforts to control defense spending could spur discussions about which weapons systems the military truly needs, analysts said. That could delay most new program starts, they said.