Monday, 21 February 2011

Defense Department Builddown Coming?

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As calls for cuts in the defense budget increased, Secretary of Defense Robert Gates knew what he would have to do: throw the cutters a bone, and then dig in against any further reductions. By admitting that he could shave $78 billion out of the defense budget over the next five years, Gates then went to work defending any further suggested incursions into the future spending plans by the military-industrial complex.

In testimony before the House Armed Services Committee, Gates said We shrink from our global security responsibilities at our own peril. Drastic reductions in the size and strength of the US military make armed conflict all the more likely with an unacceptably high cost in American blood and treasure.

This is how you hollow out a military when your best people, your veterans of multiple combat deployments, become frustrated and demoralized and, as a result, begin leaving military service.

I want to make clear that we face a crisis on our doorstep if the Department of Defense ends up with a significant fund cut. 

The chorus favoring cuts in the Departments budget used to be limited to just a few noisy but otherwise invisible critics:  the Progressive Caucus, the Black Caucus and the inevitable Rep. Ron Paul (R-Texas). However, that chorus has now been joined by many newly-elected representatives, led by House Majority Leader Eric Cantor (R-Va.) who has been waiting for reinforcements since he was first elected in 2001. At the start of the 112th Congress, Cantor made sure every member of the GOP caucus received a letter, written by Americans for Tax Reform, urging each member not to exclude the Department of Defense in his quest to reduce spending.

We write to urge you to institute principled spending reform that rejects the notion that spending cuts can be avoided in certain parts of the federal budget. Department of Defense spending, in particular, has been provided protected status that has isolated it from serious scrutiny.

The Sustainable Defense Task Force, was formed in response to a request from Representative Barney Frank (D-Mass.), working in cooperation with Rep. Walter Jones (R-NC..), Rep. Ron Paul (R-Texas), and Senator Ron Wyden (D-Oreg.) to explore possible defense budget contributions to deficit reduction efforts that would not compromise the essential security of the United States. Their report covered the full range of Defense Department activities, including procurement, research and development, personnel, operations and maintenance, and infrastructure, and found nearly one trillion dollars of savings over the next nine years.


The Cato Institute found even more. On January 19th, over 150 congressional staffers attended a forum sponsored by Cato where cuts of more than $1.2 trillion were identified and explained. 

A cursory look at the actual Defense Departments budget for 2012 as proposed by the Obama administration would see only $553 billion for the department, But once costs for the wars in Iraq and Afghanistan are added in, the number jumps to $700 billion.  These are impressive (and frightening) numbers, and in real dollars defense spending today is 13 percent higher than during the Korean War, 33 percent higher than during the Vietnam War, and 23 percent higher than under President Reagan. But spending more doesnt necessary make the country safer. A case can be made, according to Veronique de Rugy, writing for Bloomberg, that:

Excessive defense spending may ultimately make the country less safe. Today, the U.S. militarys missions include containing China, turning failed states into democracies, capturing terrorists, protecting Europe, Asia and Middle Eastern states from aggression, keeping oil cheap and cyberspace secure, delivering humanitarian relief, responding to natural disasters, and more. 

There will never be enough moneyto do it all. Yet, a military that is stretched so thin leaves the nation less safe from true threats.

The actual cost of military spending is even higher than those numbers suggest. Professor Robert Higgs of the Independent Institute did a careful study that showed that when other military-related expenses were added to the $700 billion above, such as the Department of Veterans Affairs, the Department of Homeland Security, and interest attributable to past debt-financed defense outlays, the real cost exceeds $1 trillion annually. 

But the drain of resources away from the productive sector also has a hidden cost, according to Professor Tom Woods. Since government is parasitic, not productive, it lives off the body of the economy. When resources are redirected away from productive uses:

The real cost of the military establishment, as with all other forms of government spending, includes all the consumer goods, services, and technological discoveries that never came into existence because the resources to provide them had been diverted by government.

Reasonable questions arise about military spending, such as: why does the Defense Department have 865 facilities in more than 40 countries, with 190,000 troops stationed in 46 countries and territories? Why isnt the Defense Department subject to audit? Is historical pricing for military bids the most effective way to obtain military hardware, or is it instead an effective way to be able to increase continually those costs without any check, balance, or limitation? Perhaps the most important question is ask is: does the 112th Congress now, finally, have the will to take on the military-industrial complex, and begin to whittle it down to size? 

Citizens may find the answer to that last question very soon as the battle over the Pentagons latest toy, specifically the highly costly engine for the next-generation F-35 fighter jet, is joined.  Here, interestingly, Secretary Gates has stated that this project isnt needed and would waste $3 billion over the next few years. If approved, however, the engine would generate $450 million for General Electric and Rolls-Royce which happen to have plants in states including Ohio, the home state of Speaker of the House John Boehner.

When Gordon Adams of the Stimson Center was asked what the chances are for big bites coming out of the Defense Department budget this year, he responded Its startlingly likely. Because of the build-up of pressure from the increasingly larger chorus of deficit fighters, including anti-DOD liberals, antiwar activists, Tea Partiers who want to slash government spending across the board, and libertarians who want to shrink the Pentagon by 90 percent, to say nothing of freshman congressional representatives who havent yet sold out on their tax-cutting promises, Adams remarked:

Were on the edge of a build-down. And the build-down is inevitable.