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Obama’s fuzzy math on defense “savings”

Obama’s fuzzy math on defense “savings”

The White House today adopted Rep. Paul Ryan’s dubious claim that winding down the wars in Iraq and Afghanistan would save $1 trillion over the next decade.

"The plan produces approximately $4.4 trillion in deficit reduction net the cost of the American Jobs Act," the White House said in a fact sheet issued to accompany President Barack Obama‘s new plan to cut the deficit. "$1.1 trillion from the drawdown of troops in Afghanistan and transition from a military to a civilian-led mission in Iraq."

The more than $1 trillion in defense "savings" that the White House claims is based on a projection the Congressional Budget Office (CBO) put out last March, which found  that war costs would top $1.7 trillion over the next ten years. However, that projection was never meant to accurately forecast the costs of the wars over the next decade. The report just took this year’s costs for Iraq and Afghanistan ($159 billion) and added inflation for every year in the future.

In other words, the CBO number was the projection if the United States kept the current number of troops in Iraq and Afghanistan until 2020. However, nobody ever thought that was the plan. The CBO was required to do the math that way, as they do with all such projections.

At today’s White House briefing, reporters were quick to point out that Obama never planned to keep that many troops in Iraq and Afghanistan for the next ten years. Office of Management and Budget (OMB) Director Jack Lew‘s response was to point out that the House GOP had used the same faulty logic in Paul Ryan’s budget plan.

"There is no doubt that those are going to be savings when presented to Congress. The Republican budget in the House took account of them," Lew said, referring to the Ryan budget plan that the House passed in April.

It’s also true that Senate Majority Leader Harry Reid (D-NV) claimed the same "savings" in the plan he released to avert a debt ceiling crisis, although that plan never got any traction. But the CBO issued a report on the day Reid’s plan was released to make it clear that its projection should not be used in this way.

"It is important to note that the administration projection is not really a policy-based estimate — CBO takes the most recent number and that becomes their baseline," said the report, which was crafted for congressional offices and obtained by The Cable.

The White House’s gambit is only its latest attempts to claim savings from cutting defense when actually no cuts exist. The White House claimed it had cut $350 billion from defense over ten years as part of the debt ceiling deal, but actually there are no defense cuts in the bill.

What the bill does is set spending caps for "security" spending, which the administration defines as defense, homeland security, intelligence, nuclear weapons, diplomacy, and foreign aid. There’s no breakdown that defines which of these agencies get what, so there’s no way to be sure that all the cuts would come from "defense." Moreover, the spending caps are split between "security" and "non-security" discretionary spending only for fiscal 2012 and fiscal 2013.

If the next five Congresses actually cut the defense budget by $350 billion and if the Congressional supercommittee fails to find another $900 billion in discretionary cuts, that would "trigger" another $600 billion cuts in defense over ten years. Added to the $350, that would total about $1 trillion in defense "savings."

But Lew was clear that the trigger, which officials are now referring to as "sequestration," is not something the administration wants to happen.

"I don’t know any serious policymakers on either side of the aisle who think sequestration is a good place to go," he said. "It was designed to be something that would have bad consequences wherever you look because it is not a serious set of policies."