Pentagon budget planners set for tough decisions

No matter how high-stakes budget talks between the White House and Congress end, experts say one thing is certain -- the Pentagon will suffer major cuts. The only question is what will get the ax.

The military had already been bracing for lean years even without the showdown over the US deficit, which threatens deep across the board cuts in defense spending if an agreement is not reached by January 2.

Even if US defense budgets keep pace with the rate of inflation, as the Pentagon hopes, it is still looking at a $487 billion shortfall in funding over the next decade.

"We have done our part with regards to deficit reduction. And I sure don't intend to put anything additional on the table," Defense Secretary Leon Panetta said earlier this month during a trip to Australia.

Loren Thompson of the Lexington Institute, which has ties to defense contractors, foresees a steady decline in defense spending no matter what happens in the budget talks.

"Whether we get budget sequestration or some alternative in the new year, it's pretty clear that military spending will continue drifting downward as our divided political system grapples with deficit reduction," he said.

"The question is which part of the Pentagon budget will get whacked the most."

Gordon Adams, a professor of international relations at American University and a former White House budget official on national security during the Clinton administration, agrees.

"Think tanks and research groups that are focused on defense planning for the long run are all saying that they expect defense to go down further than what is currently projected in the Panetta budget," Adams said.

Those projections range on average from $300 billion to $500 billion in cuts over 10 years, in addition to the $487 billion shortfall already taken into account in Panetta's plans.

The Pentagon's massive budget, which has doubled since the September 11 attacks of 2001, is already starting to lose steam.

President Barack Obama's budget proposal for fiscal year 2013 calls for $614 billion for defense spending, $89 billion of it for the war in Afghanistan alone.

With the war winding down, the military is preparing for a round of budget cuts similar to those seen after the Korean and Vietnam Wars.

At the end of the Cold War, the US army's budget fell by 36 percent in constant dollar terms (taking inflation into account) between 1985 and 1998, said Adams.

In a tough environment pitting the army, navy, air force and marines against each other in a battle for funding, it remains to be seen how each branch of the military will find the money for needed restructuring.

The Center for Strategic and Budgetary Assessments asked several teams of experts how they would apportion $500 billion in budget cuts over the next decade, while maintaining the "crown jewels" -- special operations forces, cyberspace options and next-generation long-range strike capabilities.

In the center's report on the budget exercise published Tuesday, all of the teams counted on a drop in orders of the F-35 Joint Strike Fighter, as well as cuts in the army's Brigade Combat Teams (BCTs), naval ships and training programs.

"Traditionally the deepest cuts happen to procurement," Adams said.

"So the first thing that will be cut is the projected spending on weapon systems, hardware programs, support systems and all that... It's the easiest way to capture some budget," he explained.

"The second area that will be cut is personnel, the size of the military."

The army and the marines are expected to lose a combined total of 100,000 personnel. Adams says he expects the military to shed 300,000 active duty positions simply through the non-renewal of contracts.

The Pentagon's 700,000 civilian employees will not be immune to the budget knife, Adams predicted. In the 1990s, 400,000 civil servant jobs were cut, bringing the total from one million to 600,000, the professor noted.

The areas that are the most difficult to change because of their political sensitivity are the closure of US bases, and the salaries and benefits of military personnel, Adams said.

"Your average military family of four pays 520 dollars a year for its health insurance under Tricare, while the average private sector family of four pays 5,000 dollars," he said.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • German lawmakers to quiz ECB's Draghi over monetary policy Reuters - 11 minutes ago

    European Central Bank President Mario Draghi is set to face tough questions from German lawmakers on Wednesday about the bank's ultra-loose monetary policy, just as the ECB is considering even more stimulus to revive inflation. Relations have … More »

  • Dollar slightly higher after Clinton bests Trump in debate AFP - 17 minutes ago

    The US dollar earned a boost Tuesday after Hillary Clinton, who is favored by Wall Street, got the best of rival Donald Trump in the first US presidential debate. Most analysts scored the Democrat, widely ... … More »

  • Onetime rising hedge fund star John Thaler considers comeback Reuters - 17 minutes ago

    John Thaler, the tech, media and telecom stock specialist who shut down his hedge fund firm JAT Capital Management LP in 2015, is considering a return to managing other people's money, including launching a new hedge fund, two people familiar with … More »

  • Business Highlights Associated Press - 32 minutes ago

    ___ Unhappy Target customers send strong message on pill bottles Target's pharmacy customers are finding a change in pill bottle design hard to swallow. After CVS began operating Target's drugstores earlier ... … More »

  • ECB'S Lane says up to supervisors to mitigate risks of low rates
    ECB'S Lane says up to supervisors to mitigate risks of low rates Reuters - 37 minutes ago

    Ultra-low European Central Bank interest rates could lead to excessive risk-taking but it is up to supervisors to mitigate these risks as ECB policy is clearly doing the job intended, Governing Council member Philip Lane said on Tuesday. Lane, the … More »

  • Women petition UN chief to pursue Korea peace treaty
    Women petition UN chief to pursue Korea peace treaty AFP News - 40 minutes ago

    A hundred prominent women from 38 countries have directed a petition to UN Secretary General Ban Ki-moon urging him to fulfill his promise to achieve a permanent peace to end the Korean War. In a letter made public on Tuesday, a diverse group of … More »

  • Justice Dept. top national security official to leave post Associated Press - 44 minutes ago

    The Justice Department's top national security official is leaving his position next month, the department announced Tuesday. John Carlin, who has led the department's national security division since ... … More »

  • SpaceX chief envisions 1,000 passenger ships flying to Mars Associated Press - 56 minutes ago

    SpaceX founder Elon Musk envisions 1,000 passenger ships flying en masse to Mars within a century, "Battlestar Galactica" style. During a speech Tuesday in Mexico, Musk outlined his plan to establish ... … More »

  • Oil down 3 percent as Saudi, Iran dash hopes for an Algiers deal
    Oil down 3 percent as Saudi, Iran dash hopes for an Algiers deal Reuters - 1 hour 4 minutes ago

    Oil fell about 3 percent on Tuesday after Saudi Arabia and Iran dashed market hopes that the two major OPEC producers would find a compromise this week at meeting in Algiers to help ease a global glut of crude. Saudi Energy Minister Khalid al-Falih … More »

  • Iraq mediating between Saudis and Iran to support oil prices Reuters - 1 hour 5 minutes ago

    Iraq is carrying out a mediation between Saudi Arabia and Iran to bring about an agreement that would lift crude prices, at a meeting of crude-producing nations in Algiers, Iraqi Oil Minister Jabar Ali al-Luaibi said on Tuesday. Iran on Tuesday … More »

  • The Ford Focus RS was my favorite new track car — but now I like it on the road
    The Ford Focus RS was my favorite new track car — but now I like it on the road Business Insider - 1 hour 14 minutes ago

    Matthew DeBord/BI Behold, the hottest hatch? Ah, the … Continued The post The Ford Focus RS was my favorite new track car — but now I like it on the road appeared first on Business Insider. … More »

  • WHY IT MATTERS: Debate showed how divisive trade has become
    WHY IT MATTERS: Debate showed how divisive trade has become Associated Press - 1 hour 15 minutes ago

    THE ISSUE: Free trade has become a ripe target in the U.S. presidential campaign. At Monday's debate with Hillary Clinton, Donald Trump declared the need to renegotiate trade deals because U.S. trading ... … More »

  • Dutch court ruled in KLM favour in pension dispute - Air France-KLM Reuters - 1 hour 24 minutes ago

    Franco-Dutch airline Air France-KLM (AIRF.PA) said on Tuesday an Amsterdam court had ruled in favour of its Dutch arm KLM in a pension dispute with a pilots' union. The Dutch Airline Pilots Association, which represents 98 percent of KLM's pilots, … More »

  • How the Dow Jones industrial average fared on Tuesday Associated Press - 1 hour 26 minutes ago

    U.S. stocks closed higher after a survey showed consumer confidence is at a nine-year high, a sign Americans will keep spending in the months to come. Technology and consumer stocks made the largest gains. ... … More »

  • U.S. Treasury’s Lew sees no Fed surprises for emerging markets Reuters - 1 hour 33 minutes ago

    U.S. Treasury Secretary Jack Lew said major emerging market countries should be better able to anticipate a U.S. interest rate hike because of the Federal Reserve’s clear communications, a recapitalised International Monetary Fund and efforts to … More »

  • The Porsche 911 has convinced me that it’s the greatest car ever made
    The Porsche 911 has convinced me that it’s the greatest car ever made Business Insider - 1 hour 39 minutes ago

    Matthew DeBord/BI Want. If you want to, you … Continued The post The Porsche 911 has convinced me that it’s the greatest car ever made appeared first on Business Insider. … More »

  • Global stocks gain after U.S. presidential debate; oil drops
    Global stocks gain after U.S. presidential debate; oil drops Reuters - 1 hour 42 minutes ago

    By Richard Leong NEW YORK (Reuters) - Stock prices across major markets rose on Tuesday, led by U.S. technology and consumer sectors following the presidential debate between Hillary Clinton and Donald ... … More »

  • Canada to Make Petronas LNG Announcement Tuesday, Chiefs Say (1) Bloomberg - 1 hour 46 minutes ago

    Environment Minister Catherine McKenna, Natural Resources Minister Jim Carr and Fisheries Minister Dominic LeBlanc departed Ottawa for British Columbia after a cabinet meeting Tuesday morning, two indigenous leaders who oppose the development said. … More »

  • Stocks gain after U.S. presidential debate; oil drops
    Stocks gain after U.S. presidential debate; oil drops Reuters - 1 hour 50 minutes ago

    By Richard Leong NEW YORK (Reuters) - Stock prices across major markets rose on Tuesday, led by U.S. technology and consumer sectors following the presidential debate between Hillary Clinton and Donald ... … More »

  • US stocks lifted by consumer data, Clinton debate boost AFP - 1 hour 51 minutes ago

    US stocks jumped Tuesday following surprisingly good consumer confidence data and a strong performance by Democrat Hillary Clinton in the first US presidential debate. Consumer confidence spiked to 104.1 ... … More »

  • The top 10 books on Apple's iBooks-US Associated Press - 2 hours 0 minutes ago

    iBook charts for week ending September 25, 2016 (Rank, Book Title by Author Name, ISBN, Publisher ): iBooks US Bestseller List - Paid Books 1. The Girl on the Train by Paula Hawkins - 9780698185395 - (Penguin ... … More »

  • Landec tops Street 1Q forecasts Associated Press - 2 hours 9 minutes ago

    On a per-share basis, the Menlo Park, California-based company said it had profit of 12 cents. The results surpassed Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment ... … More »

  • World Bank unanimously reappoints President Jim Yong Kim
    World Bank unanimously reappoints President Jim Yong Kim AFP News - 2 hours 11 minutes ago

    The board of the World Bank has unanimously agreed to name Jim Yong Kim to a second term as president, the global lender announced Tuesday. Kim had been the only candidate in a process criticized by World Bank staff and campaigners as lacking in … More »

  • Markets Right Now: US stocks end higher Associated Press - 2 hours 15 minutes ago

    The latest on developments in global financial markets (all times local): 4:00 p.m. U.S. stocks are closing higher, with many of the biggest gains coming in technology and consumer stocks. Solid quarterly ... … More »

  • Facebook to appeal German order on WhatsApp data
    Facebook to appeal German order on WhatsApp data Reuters - 2 hours 22 minutes ago

    Facebook (FB.O) said it would appeal against an order by a German privacy regulator on Tuesday to stop collecting and storing data of German users of its messaging app WhatsApp and to delete all data that has already been forwarded to it. The … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.141+0.003+2.17%
    N21.SI
    3.99+0.03+0.76%
    Z74.SI
    0.155+0.003+1.97%
    AFC.SI
    0.740.000.00%
    BS6.SI
    0.275+0.010+3.77%
    5ME.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.133+0.020+17.70%
    5PF.SI
    0.19+0.03+15.85%
    AWI.SI
    1.48+0.16+12.12%
    S91.SI
    0.198+0.020+11.24%
    M14.SI
    0.60+0.05+9.09%
    AZA.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.255-0.110-30.14%
    AZT.SI
    0.56-0.18-24.32%
    5VJ.SI
    0.395-0.070-15.05%
    K1Q.SI
    0.162-0.028-14.74%
    BGO.SI
    0.122-0.020-14.08%
    569.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3594-0.0001-0.01%
    USDSGD=X
    1.5248-0.0001-0.01%
    EURSGD=X
    1.7699-0.0003-0.02%
    GBPSGD=X
    73.8240-0.032-0.04%
    SGDJPY=X
    5.7033+0.001+0.02%
    SGDHKD=X
    3.03900.000.00%
    SGDMYR=X
    9,528.4180-0.03520.00%
    SGDIDR=X
    4.9046-0.0009-0.02%
    SGDCNY=X
    1.0420-0.0002-0.02%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,330.400.000.00%
    GCZ16.CMX
    19.18+0.01+0.08%
    SIZ16.CMX
    92.98-1.47-1.55%
    ^XAU
    2.170.00+0.07%
    HGZ16.CMX
    43.85+0.41+0.94%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.11-0.02
    ^FVX
    1.56-0.03
    ^TNX
    2.28-0.05
    ^TYX