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As has been reported, the 4% increase in defense spending proposed by Secretary Gates is actually 4% less than what the Joint Chiefs of Staff wanted; and, if taken alongside the fact that this budget attempts to fold in spending previously funded by supplemental war budgets, the supposed 4% increase is actually a $8 billion cut in defense spending. The Army is worst hit by folding supplemental spending into the base budget, as it was receiving the most ad-hoc funding for Iraq and Afghanistan.
In case you didn't catch that, the cost of Iraq and Afghanistan operations has been handled outside the usual budgeting process, with special ad-hoc measures passed to fund the costs of actually fighting; Obama now intends to cover those costs within the actual budget, so that the costs of those wars now is counted as part of the budget and hence, even if Obama nominally grows Defense's total budget, it would constitute a cut, because Defense had been getting billions in supplemental funding that is now ended.
It's like a traveling salesman whose company pays for his hotel expenses and per-diem food expenses. Then stops paying those costs, making the salesman pay for them out of his own pocket, but boosts his base salary by a small amount.
And then tells him, "I just gave you a raise. What are you complaining about?"
Not only is he cutting the big-ticket items, he's cutting the number of combat brigades from 48, as Bush had planned, down to 45.
Apparently the world just got three combat brigades safer when we weren't looking.