Is DoD headed for 30 percent drop in defense spending?

Wednesday - 2/29/2012, 7:50pm EST

Steven Grundman, principal, Grundman Advisory

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Cuts in the defense budget may be coming, but one expert thinks they're coming a lot faster than anyone on Capitol Hill or the Pentagon is talking about.

Steven Grundman, a principal at Grundman Advisory, joined In Depth with Francis Rose to discuss his analysis of defense spending.

Grundman predicts a 30 percent dip in defense spending over the next decade, driven by a number of factors. That figure is partly reflective of historical trends in defense spending reductions following periods of conflict. It's also inclusive of the current strategic situation, he added, which precludes defense spending returning to pre-Sept. 11 levels any time soon but likely to drop from their highest levels — about $730 billion in 2010.

"There's not a science to this," Grundman said. "I'm not trying to make it sound more precise than that. But I do think if you're a planner or if you're in the defense industry and trying to figure out where this is going, I think a third down from the ... level that was spent in 2010 is a reasonable planning figure."

Grundman also said it's important to "define a floor" in defense spending because too often simple budget numbers do not translate into an articulation of actual capabilities.

RELATED LINK:

Analyst Projects 30 Percent Drop in Defense Spending (from National Defense magazine)