A Defense Budget at the Crossroads
Author: Jonathan Masters, Associate Staff Writer
February 7, 2012

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As the above chart illustrates, the Defense Department projects "savings" of approximately $259 billion over the next five years (white column), the first phase of $487 billion in reductions over the next decade. The "projected savings," which do not account for declining war costs in Iraq and Afghanistan (Overseas Contingency Operations), are calculated by subtracting the current FY2013 budget projections (blue columns) from prior FY2012 projections (red columns) that assumed larger annual increases (PDF). The budget is only set to fall in actual dollar amount from 2012 to 2013, after which it will continue to grow at or near the rate of inflation. So in effect, it would be more accurate to portray the real budget (green line) as roughly frozen for this period, rather than achieving the "savings" advertised by the Defense Department.

Some critics chide the Pentagon for failing to make meaningful cuts to a base budget that has risen by nearly 80 percent since 2001. "Mr. Obama is only barely shifting the needle," says Edward Luce in the Financial Times. "He is still reluctant to make an explicit trade-off between confronting a bloated U.S. military and rejuvenating U.S. economic competitiveness."

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More:
http://www.cfr.org/us-strategy-and-politics/defense-budget-crossroads/p27318