No wonder the Pentagon loves this deal; they should. Sequester is kicked away for two years. Congress, being devoted once again to the short-term, is now likely to be kicking this budgetary device off into the future forever. Nobody knows what will happen two years from now, but you can bet that sequester is deader than a doornail.
For the Pentagon, however, the budgets are flat, no inflation adjustments, and in the “long term” there is no correction upwards. That means all those plans they made for $500 billion more in funding over the next nine years have got to be trimmed, as my colleague Russell Rumbaugh has pointed out. Not as hard as you think. From 1985 to 1998, the Pentagon “lost” more than $1.5 trillion -- they lost it because budget growth went away and they did not even get increases for inflation. But the budgets they got were plenty healthy to keep the military sharp and ready, as the takedown of Saddam Hussein showed in 2003.
It will be all too tempting for the Pentagon to try to sit this one out and hope for sunny fiscal days somewhere out in the near future. Watch out for that illusion, too. Unless serious choices are made now, those gradually shrinking “real” dollars won’t buy everything and they will be back to the squeeze they are in now.