Presentation on theme: "Department of Defense Budget Update to the Virginia Ship Repair Association RDML (ret) Joe Carnevale Senior Defense Advisor 20 September 2011."— Presentation transcript:
Department of Defense Budget Update to the Virginia Ship Repair Association RDML (ret) Joe Carnevale Senior Defense Advisor 20 September 2011
DoD Budget Update Budget Control Act of 2011 The Peace Dividend Fiscal Year 2012 Budget
Budget Control Act of 2011 What Does It Do? Increases the debt limit by $400B immediately. Cuts $917B over 10 years with $21B in FY12. President can request additional increase of $500B this year. –Congress may disapprove. –President may veto Congressional disapproval. –Congress may override veto with two-thirds majority. President may request an additional $ T next year. –If matched by budget cuts generated by the “super committee” and enacted by Congress, –Or a Balanced Budget Amendment is passed by Congress and sent to the states. –Subject to the disapproval/veto/override provisions above. Cuts generated by the Joint Select Committee on Deficit Reduction. –Goal of $1.5T over 10 years. –Propose by 23 Nov 11 and enact by 23 Dec 11. –Up or down vote, no amendments, no filibuster. Balanced Budget Amendment –Congress must vote on it before 31 Dec 11. –Not required to pass to support debt limit increase. Sequestration if cuts are less the $1.2T –Equal, across the board cuts to Security and Non-Security programs to get to $1.2T. –Cuts apply to Medicare but not Social Security.
Budget Control Act of 2011 Security includes: DoD, DHS, VA, National Nuclear Security Administration, and Budget Function 150 International Affairs Security Spending Caps –FY12$684B –FY13$686B FY12 equals FY11 - $5B or a 0.7% cut from FY11 levels. DoD budget for FY12 would be $525B if proportional cut. President’s Budget (PB) has DoD = $553B vs that $525B President’s Budget (PB) has DoD = $539B without MILCON Status:Proposedvs PB vs $525B Cap HASC $539B $0B +$28B SASC $533B-$6B+$22B HAC $530B-$9B+$19B SAC $513B-$26B+$0B Note: Give or take a billion or two.
The Peace Dividend
Occurred in the early 90’s. Last major cut in Defense spending. Result of the collapse of the Soviet Union. What was cut? What can we learn from it?
The Peace Dividend DoD Budget Authority (Billions of Dollars) 1989: Soviet troops withdraw from Afghanistan, Poland & Hungary become independent, Berlin Wall falls, Governments fall in Czechoslovakia, Bulgaria, and Rumania; Soviet empire ends 1990: Germany reunited 1991: Warsaw Pact ends, The Soviet Union dissolves, The Cold War Ends
Total Federal and Department of Defense Budget Authority
Total Federal Budget Authority and Receipts
Total Federal Budget Authority and Receipts Bush Tax Cuts Economic Growth and Tax Relief Reconciliation Act of 2001 Jobs and Growth Tax Relief Reconciliation Act of 2003
DoD Budget Authority DoD cut by $42B
Military Personnel (in thousands) 458,000 people leave the service from 1990 to 1994
Navy Active Ship fewer ships in the Navy from 1990 to 1994
O&MN and SCN O&MN cut by $4.0B SCN cut by $7.4B
Conclusions Significant actions taken in the early 90s to cut budgets can’t be repeated. The dramatic increase in Defense Budget over a decade was not proportionate. A proportionate allocation of future cuts will be disastrous to the Navy and the Nation.