Author : Dennis S. Ippolito
Release : 2005-06-30
Genre : Budget
Kind : eBook
Book Rating : 119/5 ( reviews)

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Book Synopsis Budget Policy, Deficits, and Defense by : Dennis S. Ippolito

Download or read book Budget Policy, Deficits, and Defense written by Dennis S. Ippolito. This book was released on 2005-06-30. Available in PDF, EPUB and Kindle. Book excerpt: Since the war on terrorism began in earnest after September 11, 2001, defense budgets have risen sharply. It would be reassuring to believe that the resources to fight this war will continue to be made available, regardless of its cost or duration, and that Congress and the President will at the same time maintain the broader military capabilities needed to protect the nation's security interests. Fiscal realities, however, have often compromised military capabilities in the past and may do so again in the future. The short-term threat to defense is tied to deficit control. Reducing the very large deficits projected for the next several years will require cutbacks in discretionary spending. As a result, defense will be competing with domestic programs for a shrinking share of the budget, and the politics of this competition could prove highly unfavorable for defense. Over the longer term, the budget policy outlook is clearly negative. Like other advanced democracies, the United States must find a way to reform its social welfare system in response to an aging population. Unless retirement and healthcare entitlements for the elderly are retrenched significantly, these programs will generate enormous spending pressures, making it more and more difficult to support defense as well as other national needs. And since the defense commitments of the United States are unique, the fiscal challenge associated with welfare state modernization is especially pressing. The purpose of this monograph, then, is to present a fiscal policy framework that is likely to shape current and future defense funding levels. This framework is not immutable, but it does mean that defense planners need to take into account the ways in which domestic policy commitments, budget policy trends, and budgetary politics affect defense. In particular, current defense plans contain optimistic, and arguably unrealistic, assumptions about long-term funding for the core defense budget. Recent Future Years Defense Programs have projected real (inflation-adjusted) spending levels well above Cold War peaks and assumed that these levels, unlike the Cold War peaks, can be sustained indefinitely. However, with unusually severe budgetary constraints in place for the foreseeable future, defense spending levels will likely be lower and more volatile than current planning envisions. The challenge for strategic planners, then, is to impose clear priorities on a defense budget that cannot accommodate all they deem desirable. These priorities must also be prudent, which in a wartime context means protecting funding for the urgent and the necessary, readiness and traditional modernization, against the highly uncertain potential benefits of transformational modernization.