Panetta Acknowledges That Military Spending Impacts The Federal Deficit

Last June, during hearings to confirm his nomination as defense secretary, Leon Panetta, then CIA director, said the military’s budget plays no role in the federal budget deficit:

SEN. JOHN CORNYN (R-TX): Do you agree with [Defense] Secretary [Robert] Gates when he said that the defense budget no matter how large it may be is not the cause of the fiscal woes?

PANETTA: I agree with that. It is by no means the cause of the huge deficits we are incurring today.

At a press conference today announcing the Pentagon’s new budget, it seems Panetta finally came around to the reality that military spending and defense budgets impact the deficit. The new budget “does something about reducing the deficit and achieving savings,” he said:

PANETTA: So the reason you’re seeing the tough decisions that are being presented to you in the implementation of the strategy is because we had to achieve savings that would meet the requirement that Congress gave us. And that is tough. It’s real and it’s something that obviously will cause some pain, but at the same time we recognize that defense has to play a role in dealing with the national deficit.

Watch clips from the press conference:

Today’s Panetta is right. While the Pentagon’s budget alone is not the only deficit driver, military spending makes up 50 percent of the discretionary portion of the federal budget. And defense spending has accounted for 65 percent of the discretionary spending increase since 2001. Total defense spending in real dollars is now higher than at any time since World War II, and DOD’s baseline budget nearly doubled in the last 10 years.


While Panetta’s new budget does reduce military spending over the next 10 years by nearly $500 billion, the defense budget, as the defense secretary acknowledged today, will still grow. The reductions he laid out today are cuts in projected increases in DOD spending.