Alleged War Savings and OMB Head-Butting

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You know that the tussles over Pentagon spending were going to get interesting once Battleland‘s own Gordon Adams — who ran the Office of Management and Budget’s national-security shoppe when now-Defense Secretary Leon Panetta ran OMB — started arguing math with his former boss. Gordon declaredMonday that the Obama Administration’s claim to save more than $1 trillion in war spending in the President’s latest budget proposal is “phony” because it simply pretends war costs would keep going up even as everyone knows they are coming down, along with U.S. troop numbers in Afghanistan and Iraq.

A reporter lobbed the question at Panetta like a hand grenade Tuesday: “Mr. Secretary, I wonder if you could comment on the $1.1 trillion in war-reduction savings that the President announced….Gordon Adams, who worked for you at OMB — “

Interjected Panetta: “I remember that,” to laughter from the press.

He dismissed Adams’ argument as a fight among accountants. “There are always disputes between OMB and CBO [the Congressional Budget Office] with regards to scoring, and there are going to be people that draw different numbers in terms of the savings, based on whatever baseline you’re using,” Panetta said.

Adams isn’t backing down. “The problem with the Administration’s war-costs proposal is not a scoring disagreement with CBO,” he says. “The problem is that the supposed savings are not real.”

He elaborates:

The White House is calculating their war “savings” from the CBO budget baseline. But the CBO baseline is just a mechanical projection from the war budget for FY 2011, which was $159 billion. CBO just inflates that number every year for ten years, and calls it “war costs.”  But everyone knows that war costs are already going down; in fact, the war budget for FY 2012 will be $117.8 (and, as my colleague, Russell Rumbaugh, pointed out on The Will and the Wallet – that includes $10 billion in base-budget costs the Senate appropriators slid into the war budget in their mark last week).

Calculating war savings from a non-existent war budget is a gimmick, which the White House proposal takes advantage of, as did Chairman [Paul] Ryan and Majority Leader [Harry] Reid earlier this year. It looks like savings, but it is not really savings. Real discipline in defense budgeting is the issue; these phony savings do nothing to achieve that goal.

Mere details.