Washington is abuzz with talk of the deficit-reduction plan President Obama announced Wednesday, mostly along the lines of “wait, what does this actually mean?” The same question hovers around the year-long continuing resolution passed by Congress this week to fund government at FY10 levels. While most agencies scramble to figure out what this huge yet vague bill means for them, the Pentagon once again proves its exceptionalism by winning its own legislation, complete with a report—or rather a 54-page summary of the bill’s line-item spending, which makes for some gripping reading.

As promised, we scoured the defense report, and found it resembles the CR in one important respect. The CR was rife with budgetary gimmicks to achieve its $40 billion sticker savings, and there’s yet more where DOD is concerned. Most important to remember is that the bill's $513 billion base budget topline is a $5 billion increase over 2010, not a cut as some have claimed. An increase is always more, not less, no matter how you slice it.

As for all the cuts, too many are ascribed to the infamous “unobligated balances” and “spending ahead of need” bromides that have populated defense spending bills for decades. Other cuts fall upon programs that DOD already marked for death, such as the Expeditionary Fighting Vehicle. And many heavily-trimmed accounts also enjoyed additions, some of them major. For example, lawmakers cut $2.4 billion from the Air Force research account but added another $1.6 billion, including $600 million for military space programs, resulting in a net savings of just $700 million. Finally, lots of funds were simply moved into the $157.8 billion war spending account, such as the entire $215 million budget for the Joint Improvised Explosive Device Defeat Organization (JIEDDO).

The legislation does eliminate funding in various accounts equal to the amount they received in disclosed congressional earmarks in FY10, trimming $4.2 billion. But there are plenty of programs in there that started as earmarks years ago but have since become part of the base budget. These include the C.W. Bill Young Bone Marrow Donor Recruitment Center, which received $31.5 million; the Metals Affordability Initiative, which got $8 million; and the coterie of missile defense programs for Israel, including Iron Dome and David’s Sling, which together garnered $293 million.

There are some real cuts in here—such as the money for the Joint Strike Fighter's alternate engine—and it’s good to see a growing willingness in Congress to keep defense spending on the table in the budget debate. But more can be done. The same goes for Obama’s deficit reduction “plan,” which is still mostly TBD. Obama pledged to duplicate the $400 billion in savings he said Defense Secretary Gates had realized over the past three years. Where did that bracing number come from? Well, Gates testified a year ago that his 2009 weapons cuts saved $330 billion, a number we questioned since our own research found less than $15 billion. And the fact that GAO continues to report cost overruns in major weapons systems $153 billion in the past two years) throws a little more cold water on that fire. More encouraging was Obama’s acknowledgement of the need for a strategic assessment beyond the toothless QDDR process.   That’s some change we can believe in.