As lawmakers return to Capitol Hill this week, all eyes will be on the deficit-cutting super committee. But for the defense industry, the first order of business this fall is tracking the Senate Defense Appropriations Subcommittee's work on the Pentagon budget for next year. The Senate panel is the only one of the four defense committees that will be marking up its annual legislation after last month's deficit-reduction agreement, which includes an initial tranche of about $350 billion in cuts at the Pentagon beginning in fiscal 2012 and extending over the next decade.
The Defense Subcommittee is expected to mark up its legislation in the coming weeks--months after the other defense committees wrapped up their work on their annual bills. The Senate appropriators' bill, the only one that will reflect the deficit-deal cuts, will provide the most realistic blueprint for defense spending for the fiscal year that will begins on Oct. 1. Taking into account the first round of cuts, the Pentagon's base budget for fiscal 2012 will be slightly below spending levels for this year. That amounts to a cut of more than $26 billion--probably closer to $30 billion--of the $539 billion requested for next year (not including war spending or military construction accounts).
Presumably, investment accounts will be the prime target. What kind of tactics will appropriators use in making their cuts? How much of the $30 billion can realistically come from trimming unnecessary fat in the budget? And how much will be taken from programs? How involved should the Pentagon be in trying to direct the cuts? And will Senate appropriators' decisions have any effect on the super committee's work this fall?