At Least They’re Faking Defense Cuts

Both President Obama and the House Republican leadership now deem it politically expedient to pretend to cut defense spending. That’s progress. Last year, the President explicitly excluded security spending from his proposed discretionary spending freeze, and the standard Republican position on defense spending was “more.”

Obama said yesterday that he wants to cut Pentagon spending by $400 billion over twelve years through “a fundamental review of America’s missions, capabilities, and our role in changing world.” Better late than never. You cannot save big money on defense without reconsidering our defense strategy, which now essentially says that our safety requires running the world by democratizing it, stabilizing unruly states, and defending rich allies lest they develop military capability that they can exercise without our help.

Analysts will complain that the President has put the cart before the horse by saying what this review will save before it starts. But he has simply dispensed with the pretense that strategy drives spending. He also seems to be admitting that his administration’s formal efforts to make strategy, the National Security Strategy and Quadrennial Defense Review, were useless.

That’s the good news. The bad news has three parts.

First, the President falsely claimed that Secretary Gates’s efforts have already saved “$400 billion in current and future spending.” Keep in mind that defense spending, in real (inflation-adjusted) terms has grown during the Obama administration, even if we include the shrinking portion going to the wars. At least until yesterday, they planned to continue increasing non-war defense spending faster than inflation. That means these current “savings” consist entirely of spending that the Pentagon reprogrammed and kept, and the future “savings” come by reducing planned spending growth, rather than reducing actual spending.

And even those reductions are shady. The White House says that total includes $330 billion that Gates various program cancellations will save, along with his famous efficiencies. The $330 billion is an estimate (WAG) of life-time costs for those cancelled programs. But those “savings” went to replacement programs, personnel costs, and war. The efficiencies come largely from accounting tricks and shaky assumptions. In reality, they will go to under-budgeted war costs, not the treasury.

So when the President speaks of saving $400 billion and says we can do it again, “it” is pretending that moving $400 billion around and increasing defense spending is savings. I have no doubt we can do that again. For more detailed analysis, read Charles Knight.

Second, there are few, if any, real savings here. The White House claims that it will achieve these savings by holding defense spending growth below inflation. That would mean spending less in real terms, making it a real cut, albeit a small one. Most of the $400 billion comes, however, by counting this cut against planned spending rather than current spending. The administration also says that the cuts will be distributed throughout the Defense Department, Veterans, and Homeland Security, meaning that the cuts could fall entirely outside DoD. And the claimed savings will occur mostly after this administration’s would-be second term, when someone else will be drafting the budget. The budget Obama proposes to Congress early next year could be his last.

Third, the President and his foreign policy advisors have shown no inclination to jettison defense commitments. The Secretary of State openly states that our current alliances ought to be permanent—“embedded in the DNA of American foreign policy.” The administration just decided to keep 80,000 troops in Europe, rather than 60,000, as previously planned. They caused the government of Japan to fall rather than remove more Marines from Okinawa. They massively expanded the war in Afghanistan and have no real plans to drawdown there. Secretary Gates wants to extend our stay in Iraq. And we just joined a third war.

Congressman Paul Ryan’s defense spending plan is even worse. It borrows Gates’s phony spending cuts and would continue to increase defense spending, as Chris Preble shows. But at least the Republican leadership is now including defense in their deficit reduction rhetoric.

You have to give Gates credit for political acumen. His efficiency initiative intended to deflect Congressional pressure on his budget. The idea was that a budget that seemed leaner would be a less attractive target for deficit hawks who think you save by eliminating waste and overlap, doing the same thing more cheaply. It worked. Maybe Obama’s next defense secretary will attempt to make real choices about what we do with our military. But I suspect that change will be cosmetic.

Cross-posted from the National Interest