From Reason's Hit & Run blog:
Almost immediately after the Dems and Reps cut last year's debt-limit budget deal (a.k.a The Budget Control Act of 2011), all the players started carping about the draconian effects of possible cuts on subsidies to sugar and corn producers, cowboy poetry readings, and prescription drug plans for wealthy seniors. But most of the bitching and moaning centered around defense spending, which was going to be cut to the bone, right (never mind that defense spending rose 71 percent in real terms between 2001 and 2010)? If sequestration was allowed to happen, the Department of Defense was going to see about $600 billion cut from its budgets over the next 10 years.
Recall for a second the idiotic deal that was cut last year: For a $2 trillion increase in the debt ceiling, legislators agreed to about $900 billion in immediate spending cuts and pledged to cut another $1.2 trillion over the coming decade. Just to be fair, remember that we're talking about $1.2 trillion dollars taken out of a projected $44 trillion or so in spending. What kind of budget discipline is that? You get access to up to $2 trillion in exchange for spreading an equal amount of cuts (read: reductions in expected spending increases) over 10 years! The poison pill was the threat of "sequestration," or automatic cuts that would heavily target defense spending if a budget "super-committee" couldn't come up with the $1.2 trillion in broader-based cuts.
Well, needless to say, the super-commission punted, which is precisely what you should expect from a group comprising the same spendthrifts who needed to goose the debt-ceiling by $2 trillion. Sequestration will kick in come 2013 unless something magical happens. And by magical, I mean a compromise to raise taxes and cut other parts of the budget that haven't suffered through a 71 percent increase over the past decade.
Obama Defense Secretary Leon Panetta, Mitt Romney, and everyone else agrees that cutting one thin dime from current military spending would be disastrous, awakening the Kraken and laying us open to all sorts of attacks by real and imaginary foes.
But it just ain't so. Reason columnist and Mercatus Center economist has parsed the budget to chart what would happen to the defense budget under various scenarios. Here's what she found:
Total defense spending, including war funding, crested in 2010, which is what you'd expect from a country winding down a long war in Iraq and futzing around in Afghanistan. What's really in play is that red area above, but even under the worst-case outcome - Budget Control Caps and full sequestration - what you see is minor blip down before the relentless march upwards and onwards toward greater and greater military spending...MORE