This is the Cato Daily Podcast for Thursday, August 4th, 2011. I'm Caleb Brown.

The debt deal could compel some substantial cuts to U.S. military spending and how that spending gets cut may require the

stirring of some competitive impulses in various agencies trying to protect their budgets.

Ben Friedman, Research Fellow in Defense and homeland security studies at the Cato Institute comments.

The budget deals effect on the defense budget is kind of hard to pin down because mostly what it does is create a bunch of fights over

spending but it doesn't resolve those fights. It sort of defers a lot of decisions about spending

including defense spending. So you're hearing a lot now in the

media that the deal creates up to 850 or 900 billion dollars in defense cuts and that's true but it's important to keep in mind that it's a maximum figure

And it's also possible that the deal won't cut defense spending at all.

And just to quickly explain what I mean, what the deal does is two things that could cut defense spending. First, it creates security spending

caps for fiscal years 2012 and 2013. Security spending includes not just defense spending but veterans

Homeland Security and the State Department and the amount that it caps

those things at for fiscal year 2012 is only $5 billion below what

spending on all those things will be for fiscal year 2011 and the 2013 cap for those things is just 2.5

or close to 3 billion dollars below what we spent on those things.

So in other words, we're looking at very minor cuts

across this whole category of things in security

as a result of this first cut mechanism and those cuts don't have to go to

the Pentagon that could go to Homeland Security that could go to state and that

remains to be resolved. Then the White House says, through this mechanism,

we're going to save $350 billion on defense over a decade.

And as far as I can tell, that number is just a PR invention.

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