Panetta urges lawmakers to protect Defense spending
Despite a Defense budget that has doubled in size over the last decade, Panetta asserted on Tuesday that mandatory spending, which includes Social Security, Medicare, and Medicaid, is the primary cause of the country's burgeoning deficit.
"Pay attention to the two-thirds of the federal budget that is in large measure responsible for the size of the debt that we're dealing with," he told reporters during a news conference at the Pentagon.
As he meets with lawmakers, Panetta said he is stressing that the Defense Department is already shouldering its share of the deficit-reduction burden, including $350 billion in cuts over the next decade mandated by the Budget Control Act.
Those cuts, he said, are tough but manageable and do not pose any insurmountable national-security risks. But any additional reductions in the Defense Department's budget would "do serious damage to our ability to be able to make the kind of changes in our defense structure that are responsible and that do protect this country for the future."
Panetta particularly expressed concerns about the nearly $500 billion in across-the-board cuts that would go into effect if the super committee does not agree to a plan to reduce the deficit by $1.2 trillion and triggers sequestration, which the Pentagon considers the worst-case scenario.
"Since the cuts would have to be applied in equal percentages to every project area, we just simply could not avoid hollowing out the force," Panetta said. "That will be the ultimate result if sequester goes into effect."
Meanwhile, Panetta defended the White House's decision this week to claim $1.1 trillion in savings in its $3 trillion deficit-reduction plan because the wars are winding down in Iraq and Afghanistan. Administration officials will also set caps on future war spending.
The administration found the savings by taking a baseline of funding for the conflicts calculated by the Congressional Budget Office that simply adjusts for inflation the $159 billion appropriated for them this year and extrapolates it over the next decade.
Relying on CBO's baseline to score savings is technically accurate. But budget watchers assert that CBO's projections do not take into account current trends in war spending, which has totaled $1.2 trillion since 2001 but has been on a steady decline since it peaked at $187 billion three years ago. Indeed, the administration's funding request for the wars in fiscal 2012 is $117 billion-$42 billion less than this year.
Panetta, who directed the White House's Office of Management and Budget during the Clinton administration, acknowledged there are often debates over how to score savings, but he backed the White House's decision.
"If those recommendations are in fact implemented by the super committee, I think there would be significant savings," he said.