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News Release
FOR IMMEDIATE RELEASE
February 1, 2007

$1000 Popcorn Poppers
Bloated U.S. Defense Budget Makes Room for Fraud and Waste While Security and Troop Support Suffer

Quadrennial budget review by government itself reveals millions for obsolete weapons, worn-out equipment on the front lines, record-high earmarks and—yes, really—$1000 popcorn makers

In 2005, a retired army reserve officer complained to the Pentagon's fraud hot line that the Defense Department had overpaid for kitchen appliances, shelling out $1,000 for popcorn makers and toasters and $5,500 for a deep-fat fryer that cost other government agencies $1,919. Although he provided a four-page spreadsheet showing 135 cases of higher prices, the Defense Department dismissed his tip without checking with him.
—David Isenberg, Budgeting for Empire


With its thousands of pages of fine print and seemingly innumerable programs, America’s spare-no-expense defense budget has long been a convenient place to look for waste and fraud in the federal budget.

However, a recent examination of a federally mandated defense budget review reveals error, waste and fraud of historic proportions. The “whole new direction” promised for America’s defense budget has been reduced to a minor change—shortchanging current battlefield needs and long-term planning for pointless spending on obsolete programs, pork barrel spending, blatant waste and fraud, and documented mismanagement.

In the newly released study, Budgeting for Empire: The Effect of Iraq and Afghanistan on Military Forces, Budgets, and Plans, David Isenberg, Research Fellow at the Independent Institute, examines the most recent Quadrennial Defense Review (QDR). This report, mandated in Title 10, Section 118 of the United States Code, is an appraisal of American “defense strategy, force structure, force modernization plans, infrastructure, budget plan, and other elements.” Isenberg shows that this QDR—the first such assessment conducted during wartime—reveals the Pentagon as deficient in numerous areas:

  • Front line equipment is wearing out—and there is no budget to replace it. “Senior marine officials admitted that if the war in Iraq ended tomorrow… it would cost $12.8 billion to reequip … vehicles and gear lost in combat and through wear and tear. That outlay would take up a significant portion of the corps' yearly budget….”

  • The Army’s plan to boost combat power is built on the unlikely assumption that “no new major demand will arise for U.S. soldiers at home or abroad”—yet the U.S. military is spread thin around the world, and the political climate is volatile.

  • The final tally for earmarks—spending inserted in a bill to benefit a specific Member of Congress— in the 2006 Defense Appropriations bill is expected to top $12.2 billion. This is a record high.

  • In 2005, the Defense Department paid $1,000 for popcorn makers and toasters and $5,500 for a deep-fat fryer. When a retired Army officer with evidence of the problem came forward, he was dismissed without any investigation.

  • The wars in Iraq and Afghanistan cost even more than the public thinks because of accounting “tricks” and questionable budget rules used by both the executive and legislative branches, such as excluding the costs of the war from regular budget appropriations.

  • Nearly two decades after the fall of the Berlin Wall, and despite Defense Secretary Rumsfeld’s proclaimed mission of transforming the military, every single Cold War weapon system that was previously in the procurement pipeline remains.

“The levels of deceit and ignorance are so high that we cannot even begin to understand how bad overall American fiscal irresponsibility is,” said Mr. Isenberg.

* * *

David Isenberg is a research fellow at the Independent Institute and senior research analyst at the British American Security Information Council. He has a wide background in arms control and national security issues, and brings with him close to 20 years experience in this field, including three years as a member of DynMeridian's Arms Control & Threat Reduction Division, and nine years as Senior Analyst at the Center for Defense Information. He has a BA in International Studies from the University of Oregon and an MA in International Affairs from American University.

Read Budgeting for Empire.

----------------------

Excerpts:

The Return of the $600 Toilet Seat:
• Defense Department pays $1000 for popcorn poppers—tipoffs dismissed.

Instances of fraud, waste, and abuse are rife within the Pentagon. Examples range from the absurd to the surreal. In 2005, a retired army reserve officer complained to the Pentagon's fraud hot line that the Defense Department had overpaid for kitchen appliances, shelling out $1,000 for popcorn makers and toasters and $5,500 for a deep-fat fryer that cost other government agencies $1,919. Although he provided a four-page spreadsheet showing 135 cases of higher prices, the Defense Department dismissed his tip without checking with him.

• Military spending at an all-time high—rife with waste/documented mismanagement.

To sum up, the situation in regard to the U.S. military is not only bad, it is worse than we think. Current U.S. military spending exceeds both the maximum levels of the Reagan era spend-up and the Vietnam war, in inflation-adjusted terms. Actual levels of military spending are higher than commonly assumed, due to budgetary artifices used by both the executive and legislative branches, such as excluding the costs of fighting in Iraq, Afghanistan, and elsewhere from regular budget appropriations. The costs of fighting the two wars are rising, but the U.S. military does not effectively program or manage military spending. The levels of deceit and ignorance are so high that we cannot even begin to understand how bad overall American fiscal irresponsibility is.

What you don’t hear from the front:
• The heavy use of our military equipment is wearing it out earlier than expected

In 2005, senior marine officials admitted that if the war in Iraq ended tomorrow and marine units were shipped home, it would cost $12.8 billion to reequip them with vehicles and gear lost in combat and through wear and tear. That outlay would take up a significant portion of the corps' yearly budget, which in 2004 stood at nearly $17 billion.

In July 2006, Democratic lawmakers sent a letter to President Bush noting that up to two-thirds of the army's combat brigades were not ready for wartime missions, largely because they were hampered by equipment shortfalls.

Much of the equipment deployed in Iraq is beginning to wear out as a result of heavy use, harsh operating conditions, and frequent insurgent attacks. Furthermore, the quantity and quality of weapons in units away from the war zone are eroding as equipment is transferred to deploying units. The latter problem is particularly pronounced in the reserves, which already were functioning with a deficit of modern equipment when the war began.

• Army builds “surge”—assuming “no new demand for soldiers at home or abroad”

The Army has embarked on a six-year plan to boost its combat power by 40,000 troops while reducing the number of noncombat jobs -- essentially giving the nation more forces to deploy without a costly increase in the active-duty Army's authorized strength of 482,000.

But this plan is based on two key conditions that remain far from certain: (1) that no major new demand will arise for U.S. soldiers at home or abroad, and (2) that the Army will be able to recruit between seventy-five thousand and eighty thousand new soldiers each year through 2011 -- a target the service missed this fiscal year, when only 73,400 signed up.

Military stretched to the breaking point:
• Congress lards up Defense budget with record pork-barrel spending

Stuffing the military budget with unnecessary projects is a very old story but a sad one nevertheless. A preliminary analysis by the Washington, DC,-based Taxpayers for Common Sense found that the FY 2006 Department of Defense Appropriations bill is expected to exceed the level of earmarks in the 2005 bill, which had 2,671 parochial and politically motivated earmarks worth $12.2 billion, both record highs

Nearly two decades after the fall of the Berlin Wall:
• Every single Cold War weapon system remains in defense procurement pipeline.

Despite Defense Secretary Rumsfeld’s proclaimed mission of transforming the military, another goal whose eventual total cost do not know, every single Cold War weapon system that was previously in the procurement pipeline remains. A review that was supposed to aid in restructuring the military to deal with asymmetric threats revealed that the Pentagon’s biggest asymmetrical threat is its own internal planning.



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