The National Security Implications of a Balanced Budget Amendment
November 10, 2011
The passage of the Budget Control Act (BCA) has broad implications for every program and agency that is funded through the Federal budget process, but consequences for the American defense and national security apparatus are both unique and important to analyze. A little-discussed provision of the BCA requires that a Balanced Budget Amendment (BBA) be brought to the floor of both houses of Congress before the end of year. While both the initial caps and potential sequestration cuts would have dramatic impacts on short-term defense spending, the possibility of a Balanced Budget Amendment would prove to have much more extensive implications for medium and long-term defense spending, as well as the broader national security apparatus and the defense-industrial base.
The debate over a BBA should be taken very seriously by policymakers and members of the national security establishment, as any such proposal would have critical implications for the future funding of US national security and for the nation as a whole. It would dramatically reduce future funding levels and could create institutional structures that pose significant challenges to the effective management of the federal budget for years to come. The Burke Chair in Strategy has prepared a detailed report that analyzes the possible types of Balanced Budget Amendments, relevant trends in defense spending, and the likely impact of such an amendment on US national security. This report is entitled The National Security Implications of a Balanced Budget Amendment and is available on the CSIS website at:
This is not the first time that a Balanced Budget Amendment has been proposed, and numerous different forms currently exist. There will likely be two different broad and significant consequences for the defense establishment, however, no matter which language is incorporated into the amendment that is ultimately brought before Congress. First, a practical ceiling will be placed over the growth of the national security base budgets—a ceiling that is likely to be lowered over time as entitlement spending consumes a growing share of the Federal budget. Second, a greater share of defense spending is likely to be shifted to emergency or supplemental appropriations. This increased reliance on less predictable and stable sources of funding would have consequences for a wide range of operations, such as long-term policy planning, force alignment and sizing, procurement, as well as lasting effects on the defense-industrial base.
While these two broad consequences are likely, irrespective of the type of amendment that is written, the details are vitally important. As Congress—and potentially state legislatures—debate whether to adopt this type of Constitutional change, they will need to consider the implications of the different possible structures, arrangements, and mechanics available within the framework of a BBA.
This report analyzes these options in light of their likely impact on the American national security and defense apparatus and concludes that:
- If the BBA cap falls below the recent trend in federal spending, real and substantial changes will have to be made to the scope and scale of government in American life. In particular, rising healthcare and entitlement costs will mean that defense and discretionary budgets will not simply be growth-constrained, but will steadily shrink—in real dollars—over time.
- A supermajority requirement for approving new revenue or reconciling end-of-year deficits will likely become highly politicized and result in a parliamentary hurdle that is nearly impossible for a majority party to clear—even when economic or national security conditions make such a move necessary.
- A BBA would result in major acquisition reductions, eliminating the development and procurement of weapons systems for all services and potentially causing irreversible loss of development capability within the US Defense-Industrial Base.
- While some effort to reform military health care and retirement programs is probably inevitable, a BBA is likely to dramatically increase the scale of those changes and accelerate their implementation in ways that may not be able to spare current beneficiaries.
- A BBA would require immediate downsizing of the Defense Industrial Base, releasing a large number of unemployed workers into an economy unlikely to be able to fully absorb them for quite some time. If the BBA regime has the effect of delaying or reversing the current economic recovery, this unemployment effect would be further compounded.
- Any proposal will require a fundamental realignment of our end strength, forward basing, equipment, and strategic force-projection capabilities. Policymakers would be wrong to think that they can continue to maintain the current defense posture, troop levels, and mission capacity under the fiscal restraints imposed by a Balanced Budget Amendment.