Posts Tagged ‘Pentagon’’s budget’

The Pentagon Budget’s Stealth Earmarks

Monday, June 6th, 2011

Rep. Buck McKeon (R-Calif.), the chairman of the House Armed Services committee, talks a tough line on the defense budget. Members of his committee, as well as “the broader Congress—and the nation—must make tough choices in order to provide for America’s common defense,” he said when unveiling the panel’s budget plan a little less than a month ago. He was echoing the House GOP’s talking points on cost-cutting—an agenda that had spurred Speaker John Boehner (R-Ohio) to target earmarks last year. “Earmarks have become a symbol of a Congress that has broken faith with the people,” the incoming speaker proclaimed last November, after his incoming majority banned the age-old maneuver of sneaking pork spending into budget bills. Since then, McKeon has repeatedly declared how he and his colleagues have slashed fat from the Pentagon’s and White House’s military budget requests.

However, as it stripped money from the proposed budget, McKeon’s committee quietly set aside $1 billion in a newly created fund, buried within section 1433 of its 920-page bill under the heading “Other Matters.” Called the Mission Force Enhancement Transfer Fund, the money is ostensibly held in reserve so that the DOD can fund necessary projects at its discretion. In fact, the House budget would funnel more than $650 million from the MFET back to representatives’ pet projects. Critics say this stealthy bit of accounting violates the House leadership’s ban on earmarks and is little more than a “slush fund” for pork-barrel spending.

Details on the size or beneficiaries of the projects funded by the MFET are hard to discern from the defense bill’s lengthy list of procurements. But armed services committee members on both sides of the aisle have left clues. In the days following the voice vote approving their budget, they pumped out press releases trumpeting the projects they’d scored for their districts. Since the MFET funds came from other cuts in the Pentagon budget, the members could claim their projects would be offset by spending cuts elsewhere. Rep. Allen West (R-Fla.), a tea party freshman who sees himself as a budget hawk, secured $8 million for engines for Army drones, funded by savings from “wasteful DOD offsets.” Rep. Chris Gibson (R-N.Y.) bragged that he’d secured a federal study to open a nanotechnology lab on the SUNY-Albany campus in his district, as well as $7 million in funding for additional nanotech research. Rep. Martin Heinrich (D-N.M.), announced $3 million in funding for a nonprofit called the Technology Ventures Corporation, which would “help expand innovation in New Mexico’s emerging satellite industry.”

These moves have angered deficit hawks from both parties. The new fund’s workings are so mysterious that even the congressional rank and file have only a vague sense of where the money’s going. It “not only circumvents the current moratorium [on earmarks] but is actually less transparent than the earmarking process that was in place prior to the moratorium,” complained Rep. Claire McCaskill, a Missouri Democrat who is aligned with some tea party Republicans in opposing the fund’s creative accounting methods. “This is disappointing and disingenuous.” McCaskill sent a brusque letter (PDF) to McKeon and Rep. Adam Smith (D-Wash.), the ranking Democrat on the armed services committe, decrying the MFET kitty as a “slush fund” for earmarks cobbled together from “unexplained and unjustified” cuts elsewhere.

Rep. Jeff Flake, a conservative Arizona Republican, also expressed dismay over the scheme. “To identify a billion dollars in savings, then to move it into a new fund and then allow members to designate their own priorities and take $650 [million]—I am just not sure what this is all about,” he said on the House floor. In sponsoring an amendment to apply the fund’s unspent balance—about $350 million—to paying down the national debt, Flake cited news reports describing the fund as a pet-project jackpot. “This would be similar to the earmarking culture that we have had around here, a culture that hopefully has ended and that we can move beyond,” he said. “So I hope this is not what we are seeing here.” Asked whether Flake considers the MFET funding to be earmark spending, a spokeswoman for the representative would only say that “Congressman Flake has some concerns and is working to get them addressed.”

Does the MFET fund violate the spirit of the earmark ban? “It violates a lot more than the spirit,” laughs Winslow Wheeler, director of the Straus Military Reform Project at the Center for Defense Information and a former staffer for senators from both parties. The current defense bill contains earmark-style procurements, just like all its predecessors, he says. “The only difference is that we don’t even have the cursory nod toward transparency that we did in the earmark process,” he asserts, referring to former Speaker Nancy Pelosi’s requirement that members disclose their pet Pentagon projects. “It’s a real step backwards.”

Armed Services Committe chairman McKeon defended the MFET funding scheme on the House floor, saying the cash would only be spent “in furthering national security objectives” with Pentagon approval. “If we find any member pressuring the Department of Defense to use any funds other than to comply with competitive, merit-based solutions, we will go after them,” he said.

That’s plausible deniability, says Wheeler. While the Defense department has control over the fund on paper, members of the armed services committee can use their sway with informal military contacts to funnel the dollars straight to their pork projects. “If it survives the legislative process,” he says, “the Pentagon will start getting phone calls and letters saying, ‘Of course, the appropriations budget actually meant this.’”

The plan’s survival is not assured. The Senate is expected to come up with its own defense budget proposals this month, and whatever bill it passes will have to be reconciled with the House plan before heading to President Obama’s desk. In the meantime, debate over the House’s fund for stealth earmarks could further inflame tensions between veteran Republicans and their junior tea party colleagues. “An awful lot of activists in the tea party movement are veterans who had hands-on experience with wasteful and inefficient spending in the Defense Department,” Dick Armey, the former House majority leader and cofounder of the tea party group FreedomWorks, told Bloomberg earlier this week. “If you think you can sit in office and be a zealot on cutting everything except your pet projects, it don’t work that way.”

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Five myths about defense spending

Friday, January 14th, 2011

Defense spending is a massive part of our federal budget – and a cause of equally massive debate, whether in wartime or in peace. With fiscal pressures rising, Defense Secretary Robert Gates has detailed a reprioritization of Pentagon resources and a $78 billion reduction in planned defense spending over the next five years. But he has also argued that “when it comes to the deficit, the Department of Defense is not the problem.” Still, the $720 billion defense budget is a very large share of federal discretionary spending – more than half in 2010. We can no longer separate national security from fiscal imperatives. Unfortunately, several myths keep us from a more disciplined defense budget.

1. Defense spending is dictated by the threats we face.

The challenges posed by terrorism, cyber-threats and military buildups by potential adversaries clearly play a role in shaping our national security strategy and defense budget. But so do competing government priorities in the face of limited resources, political and bureaucratic interests, and the influence of the defense industry. At times, these issues overwhelm security concerns.

As a result, budgeting decisions can appear off-course. Should we invest in our military’s capacity to rebuild post-conflict societies, even if we are unlikely to engage soon in another war of regime change? Or should we spend as if we will soon confront China at sea and in the air, even if we are unlikely to do so? The White House, the Pentagon and Congress have enormous discretion in these decisions.

Sometimes funding also meets purely parochial or industrial needs. In August, for example, Gates announced his decision to close the Joint Forces Command in Norfolk, which costs $240 million annually to operate. But after heavy criticism from state officials, Gates decided that half of the command’s activities should continue, to be carried out by other Defense Department organizations in Virginia’s Tidewater region. Local politics trumped efficiency.

2. The larger the Pentagon’s budget, the safer we are.

Excessive defense spending can make us less secure, not more. Countries feel threatened when rivals ramp up their defenses; this was true in the Cold War, and now it may happen with China. It’s how arms races are born. We spend more, inspiring competitors to do the same – thus inflating defense budgets without making anyone safer.

For example, Gates observed in May that no other country has a single ship comparable to our 11 aircraft carriers. Based on the perceived threat that this fleet poses, the Chinese are pursuing an anti-ship ballistic missile program. U.S. military officials have decried this “carrier-killer” effort, and in response we are diversifying our capabilities to strike China, including a new long-range bomber program, and modernizing our carrier fleet at a cost of about $10 billion per ship.

This country has remained secure in eras of declining defense budgets, such as the postwar period of the Eisenhower presidency and the early post-Cold War years. Presidents George H.W. Bush and Bill Clinton reduced active-duty forces by 700,000, Pentagon civilians by 300,000, defense procurement dollars by 53 percent and overall national defense spending by 28 percent – and we were still able to carry out one of the Pentagon’s top planning scenarios: occupying Iraq in 2003. (The wisdom of that decision is a different matter.)

3. Republicans like defense spending; Democrats don’t.

Since 1945, defense spending has risen in wartime and fallen as conflicts end. Dwight Eisenhower reduced national defense outlays by 28 percent from their 1953 Korean War peak. Presidents Richard Nixon and Gerald Ford went even further, cutting 37 percent from the defense budget after the Vietnam-era high in 1968. And President George H.W. Bush had cut 14 percent compared with the 1989 Cold War budget by the time he left office.

All these presidents were Republicans. Meanwhile, after adjusting for inflation, the most expensive defense budget in more than 60 years belongs to President Obama, a Democrat.

Of course, Democrats have also found savings at the Pentagon. Clinton extended the post-Cold War drawdown through his 1998 budget, and Obama will probably start post-Iraq and Afghanistan defense cuts soon – potentially with support from new Republican House leaders such as Eric Cantor (Va.) and Paul Ryan (Wis.), who have said that defense will not be exempt from the fiscal axe.

4. Today’s levels of military pay and benefits are necessary.

Just as in any other labor market, the supply of and demand for workers determines the pay needed to maintain a professional military. But military pay and benefits are affected by other factors: Congress has learned that boosting military compensation is the easiest way to show that you’re supporting the troops.

Gates expressed frustration in May with Congress’s practice in recent years of adding half a percent to the military pay raises the Pentagon requested. While it does not sound like much, that increase is enormous – as much as $450 million a year – because it applies to all active-duty troops rather than targeting key specializations that the military needs.

Benefit costs for the military have also been increasing. Health care has been a particular problem, with Pentagon health-care budgets rising from $19 billion in 2001 to more than $50 billion today. This increase has been driven largely by the growth in the cost of health care generally and the expansion of the beneficiary pool to include more retirees and reservists. Congress has also resisted the Pentagon’s recent annual requests to increase enrollment fees for working-age retirees, even though these have not changed in 15 years.

5. Gates’s cuts are enough.

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.

Our security situation permits us to spend in a more disciplined way, and our fiscal circumstances require it. Publicly held federal debt takes up a greater share of the U.S. economy – roughly 64 percent, according to the Office of Management and Budget – than any time since 1951. Failing to control this debt means that interest payments will consume future budgets and limit our spending, even for defense.

As we detail in an essay in the latest Foreign Affairs, 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 and building a more effective and efficient force.

Gordon Adams is a professor of international relations at American University and a distinguished fellow at the Stimson Center, a global security think tank. Matthew Leatherman is a research associate at the Stimson Center.

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