CBO Details How Pentagon Can Save $1 Trillion

The Pentagon, the headquarters of the Department of Defense, located in Arlington County, across the Potomac River from Washington, is seen from the air on Dec. 8, 2019. (Daniel Slim/AFP via Getty Images)

The Congressional Budget Office (CBO) has released a report showing how the Pentagon can cut $1 trillion in spending by tweaking its national defense strategy.

The CBO’s Oct. 7 report comes as lawmakers look to boost the Department of Defense (DoD) budget by 5 percent, with supporters arguing that doing so is necessary to continue the global war on terror while also pivoting toward great-power conflicts with countries such as China and Russia.

According to the CBO, Congress can still accomplish its goals and save $1 trillion in the process by making some changes. The CBO provided three options that would save $1 trillion over 10 years compared to current planned spending increases.

All three options would reduce the number of active-duty military personnel while leaving the reserve forces intact. The CBO stated that reserve forces are cheaper to maintain.

In Option 1, the active-duty force would shrink by roughly one-fifth. The CBO said the DoD would maintain its defense strategy by moving troops from relatively safer regions to where the perceived threats are located.

“Or it could concentrate its forces in a central location and accept some risk that it would respond less rapidly to a threat,” the CBO stated.

Option 2 calls for a return to a Cold War-era strategy. Rather than trying to maintain military dominance throughout the world, the United States would rely more on sanctions and other forms of deterrence.

“In Europe, the U.S. military’s objective was not to repel the Soviets in a conventional fight, but rather to slow or stop a Soviet advance until the United States and its allies could mount a counterattack,” the CBO said of the Cold War-era strategy.

Such a strategy would entail the United States forging alliances to build defense coalitions, the CBO stated.

“For example, China would be deterred from attacking Japan or Taiwan by the presence of a coalition of regional combat forces that was far enough from China’s mainland to avoid attack but near enough to respond quickly,” the CBO stated. “The threat of a direct strike would be enhanced by the prospect of diplomatic and economic actions such as a naval blockade and an embargo on China’s energy imports.”

Finally, the third option would have the United States withdraw forces from certain regions, focusing them on controlling the “global commons”—making sure air and sea trade routes are maintained, for example. This option would rely more on Space Force, Air Force, and the Navy, and less on ground forces, the CBO stated.

“Command of the commons also requires prevailing in space, which has become vital to civilian commerce and military communications and intelligence,” the CBO stated. “To facilitate control of the sea-lanes and enhance diplomatic and economic security, DoD would boost its emphasis on controlling space and build its [intelligence, surveillance, and recognizance] capabilities.”

For deterrence, the third option also would place increased reliance on alliances, the CBO stated.

The CBO report has been well-received by groups who favor a scaled-back foreign policy.

“The new CBO report marks a refreshing departure from the cries for more Pentagon spending emanating from Capitol Hill, and lays out practical steps for achieving real reductions in military outlays,” wrote William Hartung, director of the Arms and Security Program at the Center for International Policy. “It should mark the beginning of a debate over how much to reduce the Pentagon budget, not whether to do so.”

Lindsay Koshgarian, program director of the National Priorities Project at the Institute for Policy Studies, writes: “The U.S. military budget is now higher than it was at the peak of the Vietnam War, the Korean War, or the Cold War. This report shows that there are viable options for immediate, substantial reductions to the Pentagon budget.”

However, the CBO’s findings diverge from recommendations from the National Defense Strategy Commission—a body that helps set broad U.S. security goals every four years—which has recommended annual Pentagon budget increases of 3 to 5 percent above inflation.

The commission’s recommendations have broad bipartisan support, making it unlikely that CBO’s proposals will become law.

The House passed the 2022 National Defense Authorization Act—which incorporates a 5 percent spending increase—overwhelmingly last month by a vote of 316–113.

The spending increases are supported by Democrats such as House Armed Services Committee Chair Adam Smith (D-Wash.), who has downplayed recent criticisms of the $25 billion spending increase he helped push through.

“I don’t support the argument that, ‘Oh my gosh, we can’t spend another $25 billion because we have all these other priorities.’ We’ve spent a lot of money on those other priorities,” Smith said at a Brookings Institution conference last month, referencing the roughly $6 trillion in stimulus injected into the economy over the past year-plus.