Trump administration orders Pentagon to plan for 40% budget cut

Old_Joe

Following are excerpts from a current report in The Washington Post:

Defense Secretary Pete Hegseth has ordered senior leaders at the Pentagon and throughout the U.S. military to develop plans for cutting 8 percent from the defense budget in each of the next five years, according to a memo obtained by The Washington Post and officials familiar with the matter — a striking proposal certain to face internal resistance and strident bipartisan opposition in Congress.

Hegseth ordered the proposed cuts to be drawn up by Feb. 24, according to the memo, which includes a list of 17 categories that the Trump administration wants exempted. Among them: operations at the southern U.S. border, modernization of nuclear weapons and missile defense, and acquisition of one-way attack drones and other munitions.

The Pentagon budget for 2025 is about $850 billion, with broad consensus on Capitol Hill that extensive spending is necessary to deter threats posed by China and Russia, in particular. If adopted in full, the proposed cuts would include tens of billions of dollars in each of the next five years.

The memo calls for continued “support agency” funding for several major regional headquarters, including Indo-Pacific Command, Northern Command and Space Command. Notably absent from that list is European Command, which has had a leading role in executing U.S. strategy during the war in Ukraine; Central Command, which oversees operations in the Middle East; and Africa Command, which manages the several thousand troops the Pentagon has spread across that continent.

The proposed cuts, if adopted, would mark the largest effort to rein in Pentagon spending since 2013, when congressionally mandated budget reductions known as sequestration took effect. Those cuts were perceived as a crisis in the Pentagon at the time, and grew increasingly unpopular with Republicans and Democrats alike as their effects on the military’s ability to train and be ready for war became clear.

If my math is correct, an 8% cut in each of the next five years is something over 40%, including "reverse compounding".

AndyJ

Insane. Ya could say the buffoons running this administration have taken leave of their senses, but it's highly doubtful they ever had any sense in the first place.

larryB

I am way left of center and this is dangerous and reckless. Will the military industrial complex allow this to happen?

Crash

Stepping back from any kind of world leadership. After 4 years, that will be all gone. Other countries are already thinking we've gone crazy nuts. Too many of us certainly have.
https://patricemersault.substack.com/p/an-open-letter-from-a-doctor-to-americas?utm_source=share&utm_medium=android&r=397ws&triedRedirect=true

Sven

Completely incomprehensible to do that when geological risk is elevated on Russia and China fronts. The old GOPs must be rolling over on their grave.

Junkster

Sven said:

Completely incomprehensible to do that when geological risk is elevated on Russia and China fronts. The old GOPs must be rolling over on their grave.

The old GOP = RINO = not MAGA = me. And yes, we are having a fit. All this chaos here, there, and everywhere has to impact the equity markets. Not sure if today is the beginning or what. On a somewhat related note. Many of my FB friends work at National Parks. Many of the stories I am reading are heartbreaking regarding the recent firings of National Park employees. Primarily among those who have less than a year on the job. Same with Forest Service employees especially in North Carolina. Many of the fired employees there were integral in helping NC recover from the devastating impact of Hurricane Helene. Both the National Parks and Forest Service were already severely understaffed and this just exacerbates an already serious issue.

JD_co

Junkster said:

Sven said:

Completely incomprehensible to do that when geological risk is elevated on Russia and China fronts. The old GOPs must be rolling over on their grave.

All this chaos here, there, and everywhere has to impact the equity markets. Not sure if today is the beginning or what.

Equity markets might not turn today or tomorrow, but at some point Mr. Market might flinch (or worse, keel over). Leaning more into bond funds for protection - many are managed by David Sherman. But I keep reading that credit spreads are now historically tight and you have to wonder when that tide will turn as well.

The unknowns and potential issues are what makes investing "fun". 2025 has lots of "fun" built in already.

davidrmoran

not going to happen, hard as always to believe the reflexive press coverage, and yes about compounding

Old_Joe

My deepest worry is in fact our military. How are they going to respond, and what will they do, when the King orders them to invade Panama, or Greenland, or round up American civilians who Trump doesn't happen to care for?