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Budget Director Talks Defense Cuts

OMB Director Jack Lew

There was some confusion on Capitol Hill this week on what the debt ceiling deal means for defense spending. Contractors are uncertain over what the future holds for defense spending.

Office of Management and Budget Director Jack Lew attempted to bring some clarity in a blog post Thursday on the official White House website.

Foreign Policy Reports there are no actual defense budget cuts guaranteed in the debt ceiling bill. Rather, the bill implements spending caps on security spending.

The Obama administration defines security spending as defense, homeland security, intelligence, nuclear weapons, diplomacy and foreign aid.

According to Lew, the security budget will be cut by $4 billion next year compared to this year. The oft-quoted $350 billion figure is based on comparisons to a Congressional Budget office baseline projection, not the current budget.

“Under baseline estimates, [the debt deal] would cut approximately $420 billion over 10 years,” from security spending,” Lew wrote. “Assuming roughly proportional cuts, we project that of that $420 billion, $350 billion would be from the budget category of defense, and approximately $330 billion of that would be specifically from the Department of Defense.”

Click here to read Lew’s full post.

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