FY 2013 Proposed Budget Summary

On February 13, the Obama Administration released the proposed budget for the 2013 fiscal year. We will summarize some of the highlights and changes from the previous year, specifically to the State Department’s budget and the Department of Defense’s budget.

President Obama’s proposal allows $3.7 trillion for spending in 2013 and predicts a $901 billion deficit. Only about 30% of the allowed spending is discretionary – $2.5 trillion (a little less than 70%) is mandatory spending and has already been allocated to various programs through existing laws and includes entitlement programs such as Medicare, Medicaid, and Social Security. About 6% of the budget goes towards paying down the interest on our federal debt and is included in the mandatory spending.

Of the federal budget, the State Department and USAID takes about 1%. For FY 2013, Obama’s proposed plan provides the State Department and other international programs $51.6 billion in discretionary spending. This reflects an increase of 1.6% or $0.8 billion from the 2012 level when Overseas Contingency Operations (OCO) resources are included. The budget focuses on key geographical areas, such as the Middle East, Afghanistan, Pakistan, and Iraq. It will continue to provide military aid programs to Israel ($3.1 billion), Egypt ($1.3 billion), and Jordan ($300 million). In addition, it sets aside money to promote democracy, good governance, and free market economies in the critical Middle East and North Africa region, reflecting the recent events and transitions in the region. It stands with the President’s focus on international health programs and funds the Administration’s pledges to the Global Fund to Fight AIDS, Tuberculosis, and Malaria and provides $7.9 billion to the President’s Global Health Initiative. In order to cut down spending, the aid to eastern European and Eurasian countries will decrease by 18% from the previous year. Furthermore, the State Department will hold off on a planned expansion of personnel and an overseas construction program to improve and build new secure embassies.

Many of the Defense Department’s highlights were released by Leon Panetta last week. Overall, Obama’s proposal gives $525.4 billion for the base discretionary budget for the department. This will be a decrease of 1% or $5.1 billion from the 2012 numbers. The decrease is part of the President’s attempt to save $486.9 billion by 2021. There will be a major reduction over the next five years in the size of the military ($50 billion). The end of the war in Iraq and the promised scale back of the war in Afghanistan in 2013 will save about $26 billion through cuts in operations and equipment and the slash in costs of training and equipping the Afghan security forces. The budget entails maintaining 68,000 troops in Afghanistan through September 2013 but those totals can be changed. The proposed budget would terminate low priority programs, such as C-27 airlift aircraft and a new weather satellite and reduce the number of F-35 Joint Strike Fighters the Pentagon will buy. There will be maintained spending in cyber security, special operations forces, and unmanned surveillance aircraft. The Administration wants to preserve a reliable nuclear deterrent with investments in the nuclear weapons complex and continue to promote nuclear nonproliferation by securing and neutralizing nuclear threats around the world.

For more detailed information on the FY 2013 proposed budget, see the State Department budget page, the Defense Department budget page, or the White House budget overview.

The New York Times has created an interactive budget graphic which puts the budget proposal in perspective.

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