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That Was Easy: Disciplining Defense in the New Budget Era

14 Apr 2011
Posted by Gordon Adams

We have definitively entered the era of budget discipline, starting with the most recent agreement on federal funding for the full 2011 fiscal year.  And the defense budget is finally beginning to head towards a draw-down, ever so gently.  And it is easy to do, with little or no sacrifice to our defense capabilities or our security (though the stalwart defenders of the faith would have you imagine otherwise). 

The defense appropriation passed last week with the bill funding the government.  It actually provided $5 billion more for defense than DOD received in FY 2010.  But it also fell $19 billion short of Gates' request, and $9 billion below the absolute minimum  of $540 billion the Secretary said would be needed "to properly carry out its mission, maintain readiness, and prepare for the future." 

Instead of watching the Pentagon begin to close down this week, however, it turns out it was a trifle to find that $19 billion; Congress scarcely broke a sweat.  Nearly half of it ($9 billion) came from trimming funding for procurement programs most of which the Pentagon had already stretched, cancelled, or replaced, like the Marine Corps F-35 fighter or the Army's ground combat vehicle.  A good part of the remainder involved scooping up spare cash in DOD's revolving "working capital fund" and, yes, assuming a lower rate of inflation than previously projected (an inflation rate war DOD has had with OMB for decades, but this time it was convenient to concede to OMB).

House Budget Chairman Paul Ryan issued a proposed FY 2012 budget resolution which would substantially make up the lost ground, by agreeing to the FY 2012 administration defense budget request of $553 billion, or $23 billion (or 4.3%) more in one year.  But there is no relief for the Pentagon there; Ryan was just tossing the ball to the Senate Democrats so he could say they were soft on defense when they come in at a lower level.

The President took a timid step in front of this draw-down parade yesterday, when he suggested the administration would seek to remove another $400 billion from projected defense budgets over the next ten years.  Of course, those budgets are currently projected to grow more than inflation through FY 2014, and with inflation in the succeeding two years, about the only part of discretionary spending projected to grow.

And, frankly, a $400 billion reduction from defense over ten years is also trivial.  The Department plans to spend more than $6 trillion over those years; $400 billion is less than 7% below that projection.  A good comptroller can find about $40 billion a year to save with his or her eyes closed. 

And it is less than half the defense reductions the President's own deficit commission proposed last December.  And less than half the proposed defense reductions contained in the Bipartisan Policy Center's debt commission (Rivlin-Domenici) proposal of November 2010.  Odd that the White House did not back up the views of its own commission.

These cuts are easy to do.  It would be nice if they were sensible, too, so the idea of a review of strategy, roles, and missions is a good one.  But the President is wrong to leave it to the Pentagon.  The last time they did such a review (last year's Quadrennial Defense Review). it was a useless mish-mash of unprioritized missions which argued that the Pentagon's job was to reduce risk as close as possible to zero for all of them. That is no recipe for budget discipline. 

Better to run the review in the White House, redefine US engagement, and then carve off some of that mission excess, like being a global police officer, as Erskine Bowles suggested.

There are plenty of proposals for how to do this, and still leave in place the most globally dominant military force the world has ever seen.  And the result would be welcome discipline in the Defense Department.  As Adm. Mike Mullen, Chair of the Joint Chiefs put it in January: "The budget has basically doubled in the last decade.  And my experience here is that in doubling, we've lost our ability to prioritize, to make hard decisions, to do tough analysis, to make trades."  He is right and the time is now.<!--[if gte mso 9]> <![endif]--><!--[if gte mso 10]> <![endif]-->

"Defense" Department

Of course Department of Defense is a misnomer. It is really our Imperial War Department. Those who think otherwise are sadly naive.

They’re a small step in the

They’re a small step in the right direction, but the proposed cuts would still leave the level of defense spending far above what we need. The United States spent more on national defense last year, in inflation-adjusted dollars, than in any year during the Cold War, even though we no longer face an existential Soviet-style threat. The national defense budget proposals could be lower by an aggregate of roughly $1 trillion through 2020, still leaving us to spend $6.3 trillion on defense over that period. This can be done while retaining our military dominance. Moreover The latest reports state that the government may be shut down in case the lawmakers don’t negotiate about the budget issues before Friday midnight. Such federal governmental shutdown can cause problems with FHA loans as the Federal Housing Administration that issues almost a half of all home loans will be shut down either. In fact, with FHA loans, borrowers still take out the installment loans from the mortgage broker, though, the loans are insured by the federal government.

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