Budget Madness

Here's Why the Sequester Cuts Hit Defense So Hard

Some fiscal hawks question why the sequester must harm US defense readiness. After all, the cuts are not so very big - not in the first year at least. Surely the Pentagon can find some waste to cut?

Here's why: at the same time as the defense budget is being squeezed on the top line, it is also being devoured from within by rising health costs.

Health care costs for the Department of Defense have nearly tripled in the last decade, from $19 billion in 2001 to $53 billion in 2011. The cost of DOD’s health care plan, called TRICARE, exceeds the entire foreign affairs and assistance budget of the US State Department.

Even if one assumes a slower rate of growth in healthcare costs over the next decade, operations budgets are doomed to be squeezed. The already announced budget cuts intensify the problem. The sequester will intensify it again.

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David Frum

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