This “Gang of 36″ nonsense is so typical. I’m sure you’ll notice that the only politicians in Washington demanding that the Super Committee “go big” are politicians who aren’t on the Super Committee. This gives them a plausible reason to oppose the committee’s recommendations after the fact, on the ground that they are not “big” enough. It’s an inoculation against criticism, and a way to be seen as anti-deficit and also not actually cause any loss of benefits or cuts to the interests of their wealthy contributors. It’s a sideshow.
On the other hand, there’s this business, from a senior member of the Administration:
Defense Secretary Leon Panetta warned Congress on Thursday that if lawmakers fail to agree on debt-ceiling talks and trigger $1 trillion in Pentagon budget cuts, they could add 1 percentage point to the nation’s jobless rate.
Pentagon press secretary George Little said Thursday that Panetta has relayed those numbers to lawmakers in person and in calls this week, urging Congress to avoid the deadlock that would require the sweeping cuts.
If they were being honest, they would expand this out to the entire concept of austerity. ANY cuts of $1 trillion in the near term would add 1 percentage point to the jobless rate. This is not confined to defense whatsoever. And that’s why it should be undertaken.
But to accept the premise, what Panetta is not saying is that the cuts wouldn’t be all in the near term; the time horizon is 10 years. And even if you trust Panetta’s numbers – and given the extreme waste in the defense budget I see no reason to do so, but let’s just play along for the sake of argument – you’re talking about a 0.1% change per year. This is hardly the problem Panetta’s making it, especially if the trims there mean a redirection of those funds into more productive uses.
The defense budget is bloated. It’s nearly doubled over the last decade, and the necessity for such increases is sorely wanting. Panetta is a budget insider playing an inside game. But it’s deeply insulting to throw up these wild claims about job loss. By the way, you could end the wars in Iraq and Afghanistan, which have no bearing on our national security, and get to the exact same $1 trillion in cuts. Do we have to keep killing people in those countries, too, as a make-work jobs program?
UPDATE: Ben Armbruster wrote on this today, and cited a couple studies showing that increases in the defense budget are actually a net job reducer.