Project on Defense Alternatives, 11 February 2011
Excess defense spending is sapping our long-term economic strength. We need to find a new balance, if we hope to win the future. No serious effort at economic reform can afford to exempt the Pentagon because it presently consumes more than half of discretionary spending and 20% of the total federal budget.
The bipartisan Commission on Fiscal Responsibility and Reform recently outlined possible defense savings of $100 billion per year. So did several other deficit reduction efforts, spanning the political spectrum. These savings apply only to the non-war portion of the budget. They would roll back planned increases in spending, producing future budgets about 4.5% lower than 2010's.
Some say savings on this scale are "too much." What’s really been too much is the unprecedented rise in defense spending since 1998 – up 100% in inflation adjusted dollars.
The jump in defense spending has been responsible for more than 60% of the rise in discretionary spending since 2001. The additional money that has been showered on the Pentagon since 1998 – almost $3 trillion – is equivalent to all our recent economic bailout & recovery costs.
About half of the extra money allotted the Pentagon since 1998 was due to recent wars. But a significant part is due to undisciplined planning, budgeting, and management – not war or security needs. The Pentagon has run its business as though America has trillions to burn. It is the only federal bureaucracy that persistently cannot pass an audit.
The result? Today we are burdened with a military budget equal in size to the biggest budgets of the Cold War era – although we face no adversary today remotely as large as the former Soviet Union.
Defense savings plans – like that produced by the Sustainable Defense Task Force -- are modest remedies. They only would roll back Pentagon spending to the level of 2008, adjusted for inflation. Even the most ambitious defense-savings plans would give the Pentagon more inflation-adjusted dollars during the next decade than it had in the last. And spending would still be higher than Cold War levels.
The Pentagon says this is not enough. It wants much more. It says that anything less than a significant boost in spending courts catastrophe. But the Pentagon already enjoys the lion share of military spending worldwide. How can that not be enough? Perhaps it’s time to send Pentagon planners back to the drawing board.
We can put defense on a sustainable basis if we are willing to rethink how we produce and manage military power – and how, why, and where we put it to use. To do any less would be a disservice to the nation.
Excess defense spending is sapping our long-term economic strength. We need to find a new balance, if we hope to win the future. No serious effort at economic reform can afford to exempt the Pentagon because it presently consumes more than half of discretionary spending and 20% of the total federal budget.
The bipartisan Commission on Fiscal Responsibility and Reform recently outlined possible defense savings of $100 billion per year. So did several other deficit reduction efforts, spanning the political spectrum. These savings apply only to the non-war portion of the budget. They would roll back planned increases in spending, producing future budgets about 4.5% lower than 2010's.
Some say savings on this scale are "too much." What’s really been too much is the unprecedented rise in defense spending since 1998 – up 100% in inflation adjusted dollars.
The jump in defense spending has been responsible for more than 60% of the rise in discretionary spending since 2001. The additional money that has been showered on the Pentagon since 1998 – almost $3 trillion – is equivalent to all our recent economic bailout & recovery costs.
About half of the extra money allotted the Pentagon since 1998 was due to recent wars. But a significant part is due to undisciplined planning, budgeting, and management – not war or security needs. The Pentagon has run its business as though America has trillions to burn. It is the only federal bureaucracy that persistently cannot pass an audit.
The result? Today we are burdened with a military budget equal in size to the biggest budgets of the Cold War era – although we face no adversary today remotely as large as the former Soviet Union.
Defense savings plans – like that produced by the Sustainable Defense Task Force -- are modest remedies. They only would roll back Pentagon spending to the level of 2008, adjusted for inflation. Even the most ambitious defense-savings plans would give the Pentagon more inflation-adjusted dollars during the next decade than it had in the last. And spending would still be higher than Cold War levels.
The Pentagon says this is not enough. It wants much more. It says that anything less than a significant boost in spending courts catastrophe. But the Pentagon already enjoys the lion share of military spending worldwide. How can that not be enough? Perhaps it’s time to send Pentagon planners back to the drawing board.
We can put defense on a sustainable basis if we are willing to rethink how we produce and manage military power – and how, why, and where we put it to use. To do any less would be a disservice to the nation.
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Supporting Facts and Argumentation
1. An unprecedented rise in Pentagon spending
The rise in the defense budget since 1998 has been almost 100% in real terms, which is unprecedented over nearly 60 years. It is nearly as large as the Kennedy, Johnson, and Reagan spending surges combined. As part of this, non-war spending has grown by more than 50% in real terms since 1998.
2. The extra money given the Pentagon since 1998 is comparable to recent economic bailout & recovery costs.
Since 1998, the Pentagon has received almost $3 trillion (in 2010 currency) over the level set in 1998. By comparison, the net cost of economic bailout and stimulus funds will also be about $3 trillion, after the sale of acquired assets. (Much of the rest of recovery funds have been "guarantees" that have not had to be paid out. Additional recent growth in the deficit is due to tax breaks and recession-related loss of revenue.)
3. Pentagon budget growth is responsible for one-half or more of the rise in discretionary spending.
Defense budget growth accounts for almost 65% of the growth in discretionary spending since 2001. Take war spending out of the budgets and it accounts for 51%. Either way, it has grown as a part of discretionary spending.
4. Pentagon budget growth partly due to an undisciplined strategy and budget.
One reason for the surprising growth in Pentagon spending has been the unprecedented decision to pursue major wars and a major military modernization programs simultaneously. Additionally, a lack of program and financial discipline has driven modernization costs upward. The wars have been exceptionally expensive because they are large-scale protracted occupations fought with a high-cost professional military. We didn’t build our military to fight this type of war.
As if the wars were not enough, the Pentagon has been steadily adding ill-defined missions to its roster for the past 15 years. Assessing the 2010 Defense Review, Congressman Ike Skelton said it seemed "to advocate for a force that is capable of being all things to all contingencies." His Republican counterpart, Buck McKeon, said is was "tough to determine what the priority is, what the most likely risk we face may be, and what may be the most dangerous." In short: there has been a refusal to prioritize threats and missions.
6. Defense savings plans would only roll back the Pentagon budget to the level of 2008.
The plan developed by the Sustainable Defense Task Force would provide an average of $507 billion per year (2010 dollars) to the Pentagon for its base budget. The 2008 base budget was about $504 billion in 2010 dollars.
7. Even the most ambitious defense-savings plans would give the Pentagon more inflation-adjusted dollars during the next decade than it had in the last.
During 2001-2010, the DoD base budget consumed $4.6 trillion. The Fiscal Commission’s caps, if applied proportionally to defense, would produce a budget exceeding this amount by 3%. The SDTF recommendations would exceed it by 5%.
8. The current budget exceeds the biggest budgets of the Cold War years.
In 2010, the Pentagon base budget was 25% above the Cold War average in real terms and a few percent above the Reagan high-tide budgets of the 1980s. The current DoD plan is to boost the budget another 12% on average in real terms for the next decade.
9. The defense savings plans produced by the President’s Fiscal Commission and the Sustainable Defense Task Force would keep future spending at Cold War levels.
Rolling back the DoD future spending plan by $100 billion per year would leave it a few percent below the Reagan level, but still well above the Cold War average. This option is what Secretary of Defense calls "catastrophic."
10. We can also measure change in terms of total money spent on the base budget over a decade to see that the Pentagon seeks a big boost, while defense savings plans allow a smaller increase.
- The President’s FY 2011 budget plan foresaw allotting nearly 25% more money in real terms to the Pentagon’s base budget during the next decade than was given during the last decade.
- The total Pentagon base budget planned for 2011-2020 initially exceeded $5.7 trillion.
- Gates’ offer to roll back the plan by $78 billion barely dents it.
- Taking out about $900 billion, as proposed by the Sustainable Defense Task Force, would still leave the Pentagon with 6% more dollars in the next decade than during the last.
11. The lion’s share of spending worldwide is not enough?
Today the United States and its close allies account for 74% of world defense spending. Cutting the US budget by $100 billion would reduced this portion to about 72% - an option the Pentagon calls too risky.