Tag: Sequestration

Too Much Ado about the Pentagon’s New Strategy

There’s more to the Pentagon’s new strategy than the emperor’s new clothes, but barely. It’s hardly new and not particularly strategic.

The document justifies a minor defense budget cut. The Obama administration wants to grow military spending at a pace slightly less than projected inflation for a decade. If we assume that plan stays in place—and we shouldn’t given that plans change, and we may soon have a new president—that new spending trajectory will cut non-war Pentagon spending by about eight percent compared to 2011 spending. You can come up with bigger numbers for the cut by comparing the new plans with past Pentagon spending plans or by including declining war costs. But however you slice it, these are small cuts compared to past drawdowns.

Conventional wisdom is that the cuts ought to be made strategically—that it is bad policy to let deficit concerns drive the size of the defense budget, so revised numbers require revised strategy. This new strategy document is a response to that conventional wisdom. It lets the president and Pentagon say that they have a strategic rationale for their budget.

Meanwhile, the Pentagon is desperate to avoid the sequestration mechanism required by the Budget Control Act, which would roughly double the size of those cuts, and would start in January 2013. That would return military spending to where it was in 2006, more or less. Pentagon leaders complain about the suddenness and broadness of sequestration—the cuts are distributed across programs and departments, which prevents prioritization.

One function of this new strategy document is to help avoid additional cuts. By making minor changes seem like a big deal, the Pentagon is pushing back against real strategic change, which could save far bigger sums without sacrificing safety.

In an op-ed published Friday in World Politics Review, Veronique de Rugy and I argue that the size of the coming defense cuts has been grossly exaggerated. Here’s a chart from the op-ed showing military spending in current dollars with and without sequestration:

We note in the op-ed that under the Budget Control Act, the Pentagon can avoid sequestration without Congressional action by budgeting at the levels it would achieve.  That would allow it to avoid the most onerous aspects of the sequester. The Pentagon has thus far refused to do that, probably figuring that offering sensible cuts would encourage Congress to allow them. But far larger cuts are possible with real strategic change. Big cuts would encourage that sort of change.

The current U.S. defense strategy is basically primacy or global military dominance. It requires policing the seas, maintaining or strengthening current alliances, and preparing for all manner of military contingencies. Both parties’ foreign policy elites basically embrace that strategy. The documents that purport to make strategy—Quadrennial Defense Reviews and so forth—are basically sales pitches for primacy. Their standard blueprint is to mix geopolitical gobbledygook about uncertainty with vague threat inflation, assert the importance of U.S. global leadership to U.S. security without any clear theory, then list things we want our military to do, without any attempt to separate big threats from small ones and large interests from hopes, or to translate their analysis into budgetary guidance. They have no obvious effect on budgets.

This strategy offers only minor change in form and content. It embraces the strategy we have with at best a few minor tweaks. Like those past strategy documents, this effort insists that the world is getting more complex but makes no effort to demonstrate that assertion. It lists ten objectives without prioritization, although it identifies certain goals as those that drive the size of the force. It suggests a few minor shifts but gives no budgetary guidance.

The document suggests that we might shift forces from Europe and perhaps add some in Asia. No details are given. It sensibly suggests we might get by with fewer nuclear weapons but again avoids details. The most relevant bit of the document is the argument that we are less likely to fight occupational wars and thus can cut the size of the ground forces. That is a sound idea, one that should be taken further, but a reflection of current policy rather than a change. If we are really to avoid such wars, far greater cuts in the ground forces are possible.

So what we have here is a largely inconsequential defense of the status quo. It offers incremental changes to stave off the real strategic change and savings that our geopolitical fortune allows.

Supercommittee Tax Fight Is About Increasing Spending, not Reducing Deficits

Some people have asked why I’m so agitated about the possibility that Republicans may acquiesce to tax increases as part of the Supercommittee negotiations.

Rather than get into a lengthy discourse about the proper role of the federal government or an analysis of how the Bush-Obama spending binge worsened America’s fiscal situation, I think this chart from a previous post says it all.

Republicans are considering a surrender on taxes because they are afraid that a deadlock will lead to a sequester, which would mean automatic budget savings. And the sequester, according to these politicians, would “cut” the budget too severely.

But as the chart illustrates, that is utter nonsense.

There are only budget cuts if you use dishonest Washington budget math, which magically turns spending increases into spending cuts simply because the burden of government isn’t expanding even faster.

If we use honest math, we can see what this debate is really about. Should we raise taxes so that government spending can grow by more than $2 trillion over the next 10 years?

Or should we have a sequester so that the burden of federal spending climbs by “only” $2 trillion?

The fact that this is even an issue tells us a lot about whether the GOP has purged itself of the big-government virus of the Bush years.

A few Republicans say that a sellout on tax hikes is necessary to protect the defense budget from being gutted, but this post shows that defense spending will climb by about $100 billion over the next 10 years under a sequester. And that doesn’t even count all the supplemental funding bills that doubtlessly will be enacted.

In other words, anyone who says we need to raise taxes instead of taking a sequester is really saying that we need to expand the burden of government spending.

So even though Ronald Reagan and Calvin Coolidge are two of my heroes, now you know why I don’t consider myself a Republican.

Cutting Military Spending, Rethinking Grand Strategy

The Associated Press’s Pauline Jelinek has a story on the wires/Interwebs today that pokes holes in Leon Panetta’s claim that Pentagon budget cuts on the order of those contemplated under the debt deal’s sequestration provisions would be “devastating to the department.” Jelinek quoted me, as well as the Center for American Progress’s Larry Korb, and the Center for Strategic and Budgetary Assessment’s Todd Harrison.

Assuming that sequestration will actually happen (a big if), I tried to put the possible cuts in perspective, given the significant increase in military spending over the past decade.

But we shouldn’t put the budgetary cart before the strategic horse. I have said on several occasions that we should not cut military spending without rethinking our strategic ends.

Although Ben Friedman recently made a strong case for using fiscal austerity to drive a change in our grand strategy, I still believe it possible – and wiser – to do this in the reverse order; rethink the strategy first, and then shape the force to fit the strategy.

As Ben has taught me, austerity is a good auditor, but it doesn’t require us to cut anything, or increase taxes on anyone. The current fiscal situation doesn’t even force us to choose to make any difficult decisions now – so long as we’re willing to borrow money to make up the difference. It is that latter point, however, that people are getting hung up on. And rightly so. We’re doing a disservice to our children and grandchildren by saddling them with these debts, and no reasonable plan for retiring them. August’s debt ceiling deal pits two different factions within the Republican Party against one another: budget hawks and tax cutters (OK to cut, not OK to raise taxes) vs. hawkish hawks (not OK to cut military spending, OK to tax increases). Within this battle, the fiscal hawks are OK with sequestration. The hawkish hawks are not.

Leaving the fiscal constraints on military spending to one side, the underlying strategic logic to my argument that we can responsibly cut military spending still holds. Cuts on the order of $800 billion, or even $1 trillion, would not pose a grave risk to U.S. security. Panetta’s claim that it would rests on the dubious assumption that a nation’s strategic ends are fixed. They are not. What the United States chooses to do to advance its security are just that: choices. Some are wise in retrospect. Others are foolish. Some are understood to be foolish before they are undertaken. But it need not be so ad hoc.

This was one of Barry Posen’s pleas in his article “The Case for Restraint.” Posen made the case for rethinking our strategic goals well before the present fiscal crisis. But he began by reminding readers of the importance of strategy, or, more simply, what grand strategy is:

A state’s grand strategy is its foreign policy elite’s theory about how to produce national security. Security has traditionally encompassed the preservation of a nation’s physical safety, the country’s sovereignty and its territorial integrity, and its power position—the last being the necessary means to the first three. States have traditionally been willing to risk the safety of their people to protect sovereignty, territorial integrity and power position. A grand strategy enumerates and prioritizes threats and adduces political and military remedies for them. A grand strategy also explains why some threats attain a certain priority, and why and how the remedies proposed could work.

Our grand strategy has done none of those things (or at least not well), because the particular strategy that we have pursued for more than two decades—primacy, benevolent global hegemony, unipolarity, pick your term—is loathe to choose. Every crisis is a primary concern for the United States. No regional conflict can be handled by regional actors. Every humanitarian disaster, manmade or heaven-sent, demands U.S. intervention.

The list of goals that flows from such a grand strategy is just that—a list—with little or no consideration of how these should be ranked. We must be everywhere. We must do everything. The various strategy documents, meanwhile, are all based on the assumption that primacy is the only reasonable strategy for the United States. Taking the ends and ways as a given, they begin with a force structure (the means), and work backwards. Sometimes they don’t even do that.

Most of us who believe that we can responsibly reduce military spending without undermining U.S. security argue that point from the perspective that our strategy is flawed, and, therefore, that our resources are misallocated. The alternative claim—that our strategy is sound, but we can achieve the same ends with fewer means—is not tenable.

Cross-posted from the Skeptics at the National Interest.

Sequestration Is a Small Step in Right Direction, Not Something to Be Feared

I have sometimes wondered whether it is accurate to say that Republicans are the “Stupid Party.”

We’ll soon know the answer to that question. As part of the debt limit agreement, the politicians agreed to set up a “Supercommittee” comprised of six Republicans and six Democrats that was responsible for producing at least $1.2 trillion of supposed deficit reduction.

But the Democrats appointed a group of hardcore leftists to the Supercommittee, which means that it is virtually impossible to get the necessary seven votes for a good agreement. Indeed, the more relevant question is whether one or more of the Republicans surrenders to a big tax hike.

Fortunately, there is an alternative. The law says that there will be automatic spending reductions if the Supercommittee does not reach an agreement. The political establishment in Washington thinks that this outcome—known as sequestration—would be horrible.

They tell as that a sequester would mean “savage” and “draconian” budget cuts. The only “responsible” approach, we are told, is to go along with a tax increase.

This is hogwash. The automatic spending cuts are only “cuts” using Washington’s dishonest budget math. Here’s a chart showing how much spending will grow over the next 10 years, and the relatively tiny reduction in budgetary growth that will be caused if there is a sequester.

We’ve actually been down this path before. There was a small sequester back in the mid-1980s, shortly after the Gramm-Rudman-Hollings law was enacted. There was much wailing and gnashing of teeth, but the sequestration helped restrain the growth of spending and helped bring about a record amount of deficit reduction in 1987.

There was a similar (unsuccessful) fight in 1989. Here’s what then-Senator Bob Packwood of Oregon wrote in 1989.

…the sequester has become the focus of partisan debate . Each side accuses the other of being responsible for “deep and arbitrary” budget cuts . Some legislators say we should do whatever it takes to cancel the sequester, even if it means higher taxes. While a sequester is certainly not the ideal way to resolve this year’s budget dispute, there are reasons to believe that the fiscal discipline of a sequester is the medicine we need to cure the budget process. For all its drawbacks, a sequester is real deficit reduction . Instead of budget gimmicks, accounting tricks, phony cuts, and “revenue enhancements,” a sequester would reduce spending levels by a fixed percentage in eligible spending programs . In other words, unlike most deficit reduction packages, sequestration would actually reduce the deficit.

The only argument against a sequester, at least among conservatives, is that a sequester would impose too much of a burden on the defense budget. But I’ve already explained in this post that the defense budget will climb by about $100 billion under sequestration.

I don’t know whether Republicans are the stupid party, but I know they will be very stupid if they don’t take the sequester and declare victory.

Senator Corker Explains His Plan to Cap Spending and Reduce the Fiscal Burden of Government

America is in fiscal peril in the short run because of a 10-year spending binge by Bush and Obama and in the long run because of a toxic combination of entitlement programs and demographics.

Congressman Paul Ryan has introduced a budget plan to address America’s fiscal crisis, but Senator Reid and President Obama have summarily rejected his proposal, so it appears the United States will continue to drift in the wrong direction.

Something is needed to compel action. One might think that such an impetus would have been provided by the recent decision by Standard & Poor’s to downgrade the fiscal outlook for the United States. But this development hasn’t affected the spending culture in Washington.

But there is hope. Senator Corker has legislation that would force Congress to act – and automatically impose fiscal discipline if they don’t. His bill caps – and then slowly reduces – government spending as a share of national economic output (gross domestic product).

I’ve already written about the merits of this proposal, including an explanation of the all-important enforcement mechanism of sequestration (automatic spending cuts). Here’s Senator Corker’s description of his plan, as delivered at a Cato Institute conference on the Economic Impact of Government Spending.

To build on the Senator’s comments, there are two things that deserve special emphasis.

  1. He correctly understands that the problem is the size of government. As explained in this video, spending is the problem and deficits are a symptom of that problem.

    Unfortunately, many policy makers focus on the budget deficit, which often makes them susceptible to misguided policies such as higher taxes. At best, such an approach merely substitutes one bad way of financing federal spending with another bad way of financing federal spending. And it’s much more likely that higher taxes will simply lead to more spending, thus exacerbating the real problem.

  2. Senator Corker’s legislation has a real enforcement mechanism. If Congress fails to produce a budget that meets the annual spending cap, there is a “sequester” provision that automatically takes a slice out of almost every federal program.

    Modeled after a similar provision in the successful Gramm-Rudman-Hollings law of the 1980s, this sequester puts real teeth in the CAP Act and ensures that the burden of government spending actually would be reduced.

Some people complain that Senator Corker’s plan is too timid and that it doesn’t balance the budget by 2021. While it would be desirable to impose additional fiscal restraint, the Tennessee Senator has deliberately chosen a more modest goal in order to attract support from colleagues on the other side of the aisle. And he does have Democratic co-sponsors, something that is critical given the composition of the Senate.

Since I’m just a policy wonk, I’ll leave it to the other people to argue about what’s feasible in the current political environment. My final comment, though, is that we’re on an unsustainable path that will lead to the end of American exceptionalism and turn the United States into a decrepit, European-style welfare state. So I’m not going to complain if someone has a plan that finally moves policy in the right direction, albeit not quite as fast as I prefer.