Pentagon Said to Eye Up to $28 Billion Reduction to 2012 Budget

Pentagon budget officials are eyeing a reduction of as much as $28 billion to the pending fiscal 2012 defense budget — the initial installment of the department’s contribution to the new debt-ceiling agreement, according to administration officials and congressional aides.

Under the measure President Barack Obama signed into law Tuesday, there will be an initial $350 billion reduction in “defense spending” over 10 years, with about $325 billion coming from the Pentagon, according to an administration official.

Separately, the law requires a special congressional committee to find an additional $1.5 trillion in overall deficit savings -- balanced between defense and other spending -- by late November. If the committee takes no action by that time, the deal calls for an automatic cut of $500 billion over a decade from the “defense spending” category.

Most immediately, the reductions take effect with the $553 billion defense budget for the 2012 fiscal year; $539 billion is basic defense spending controlled by the defense appropriations subcommittees, while the remainder is in military construction accounts.

One official said the Pentagon is reviewing options to present the Senate Appropriations Committee to meet a potential $28 billion cut. Lawmakers can accept or apportion the reduction to other security agencies, aides said. The House has already completed action on its version of the fiscal 2012 bill, which cut $9 billion.

Freezing Spending

A decrease of about $28 billion decrease to the $539 billion request controlled by appropriators would roughly freeze defense spending at the current fiscal-year level, officials said.

The debt agreement freezes overall “security spending” at $684 billion, $4 billion less than this fiscal year but about $35.4 billion less than the fiscal 2012 request, according to a Bloomberg Government analysis.

The fiscal 2012 request overall called for $719.4 billion in “security” spending, which includes the Pentagon.

The $553 billion Pentagon base budget had already been cut $11 billion from last year’s plan as part of $78 billion in deficit reductions through 2016 the White House directed.

In a message to defense personnel today, Defense Secretary Leon Panetta said the $350 billion is “in line” with what has been anticipated. The potential of up to $500 billion in additional cuts “would be completely unacceptable,” he said.

‘Dangerous’ Cuts

Congress’s failure to agree on further reductions would “trigger a round of dangerous across-the-board defense cuts” that may do “real damage,” he said.

President Barack Obama had said in April that he wanted to reduce security expenditures by $400 billion over 12 years. Most of those cuts would have been Pentagon spending.

Panetta said of the $350 billion: “I believe we can implement these reductions while maintaining the excellence of our military but to do that, spending choices must be based on sound strategy and policy.” That review of strategy is ongoing.

More troubling is the potential additional $500 billion, which “is not meant as policy,” he said. “Rather, it is designed to be unpalatable to spur responsible, balanced deficit reduction and avoid misguided cuts to our security.”

Panetta’s message was posted on the Defense Department website.