CBO Raises Concerns About Military Spending Plan

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The Pentagon’s 5-year plan will significantly exceed current spending caps, according to a new analysis by the Congressional Budget Office (CBO).

The spending caps were established by the 2011 Budget Control Act. In making its projections, the CBO used some assumptions that it considers more realistic than those used by the military.  

The military’s spending request for this fiscal year is within the legal cap. But CBO says the Pentagon plan would exceed the caps by a total of $308 billion over the next seven years, after adjusting for inflation.

The excess spending could be even greater if scheduled decreases in the active-duty force do not take place — a possibility that military leaders have recently raised.

Their 5-year plan includes requiring working-age military retirees and families of active-duty service members to pay more of their health costs. It also would slow the growth of military pay. Many lawmakers, though, have opposed such changes in the past.

Some lawmakers, including Republican leaders, have said they want to increase military expenditures beyond the caps. But it remains unclear how they would do this without increasing the deficit. In addition, if the defense caps are raised this would inevitably lead to demands that caps on non-defense spending also be raised.

External links:
Long-Term Implications of the 2015 Future Years Defense Program (CBO)
Obama Ready to Tackle Sequester For Fiscal Year 2016 Summary (Bloomberg BNA)
Approaches to Reducing Federal Spending on Military Health Care (CBO)

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