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The Independent Institute
Commentary

The Defense Budget
Ignorance Is Not Bliss


Polling from Pew and Gallup reveals major public misconceptions about the defense budget. Fifty-eight percent of Americans know that Pentagon spending is larger than any other nation, but almost none know it is up to seven times that of China. Most had no idea the defense budget is larger than federal spending for education, Medicare or interest on the debt.


The scurrilous in Washington promote the misimpression of an under-funded Pentagon. They imply it is smaller than during the Cold War by saying it was at 8 percent of gross domestic product in the late 1960s, but only 4 percent of GDP now. Therefore, it’s gone down and is now low, right?


Some use hyperventilated rhetoric to pressure for more defense dollars. Sadly, this category now must include Secretary of Defense Robert Gates, who termed “catastrophic” the recommendations of the Obama deficit commission to merely maintain defense spending at its post-WWII high, and who deemed a “crisis” the idea of a 1 percent—$5 billion—reduction in the 2011 defense budget compared to 2010.

Some on Capitol Hill, such as the chairman of the House Armed Services Committee, Rep. Buck McKeon (R-Calif.), blanch at the idea of restraining defense spending, claiming it would be “dangerous” to do anything but grow the defense budget while the nation is “at war.”


They don’t just ignore the facts, they torture them—but that’s nothing new in politics.

What is different, however, is that the aggressive ignorance about the defense budget is beginning to shrivel, revealing a new paradigm: the defense budget is outrageously bloated.


The new conventional wisdom is that we now spend more on the Pentagon than at any time since WWII, and that President Obama will exceed George W. Bush’s defense spending. Some even appreciate that he will also exceed Ronald Reagan’s. Others understand defense spending does not just exceed a few other functions in presidents’ budgets, it exceeds them all, except one—Social Security. In most cases, DOD doesn’t just exceed the others; it is multiples of them.


During the Cold War, we averaged $450 billion annual Pentagon budgets. Today, with no massive conventional threat and a much-diminished nuclear one, we operate at spending levels more than $200 billion higher, if you include funding for the wars—almost $100 billion higher if you do not.


The distortion of a lesser threat compelling more spending is propelling the paradigm shift.


Moreover, the wars we have been fighting are against poorly trained and equipped irregulars. It is not to diminish the sacrifice the national leadership extracts from the men and women who serve in Afghanistan and, previously, Iraq, but today’s conflicts are—materially—minor events compared to the wars in Korea and Vietnam, when we deployed hundreds of thousands more and faced more than 200 Soviet and Warsaw Pact divisions in Europe.


While we have spent more than $1.3 trillion for Iraq and Afghanistan since 2001 (in inflation-adjusted 2011 dollars), we also added another trillion dollars to the parts of the defense budget that the Pentagon tells us is not for the wars—the so-called “base” budget.


Just before 9/11 we were operating at an annual level of spending for the Pentagon at $400 billion. Today, in the same inflation-adjusted dollars, we are operating at a “base” budget level well above $500 billion. It is in that context that we are told by Gates and McKeon that a 1 percent reduction in a single year constitutes a “crisis” or something “dangerous.”


The real crisis is what has been happening to our forces. With a $300 billion increase in funding, the Navy’s “battleforce” shrank from 318 ships in 2000 to 287 in 2010. With more than $300 billion added to its budget, the Air Force shrank from 146 combat squadrons to 72. The Army burned another $300 billion to increase brigade combat team equivalents from 44 to just 46. According to data from the Congressional Budget Office, this includes not a smaller, newer equipment inventory, but an older one.


Worse, the Pentagon can’t track its own inventory, financial transactions, or even what it has paid out to contractors and received in return. Despite the accountability clause of the Constitution, the General Accounting Act of 1921, and the Chief Financial Officers Act of 1990, the Pentagon has maintained itself in a state where it cannot be audited.


But then, if I were presiding over this mess, I would not want you to know the facts either.




Winslow T. Wheeler is Director of the Straus Military Reform Project at the Center for Defense Information, Former Research Fellow at the Independent Institute, and author of the Independent Policy Report, Congress, the Defense Budget, and Pork: A Snout-to-Tail Description of Congress’ Foremost Concern in National Security Legislation.