Commentary

The Defense Threat to Bush’s Budget

By William A. Niskanen
February 14, 2005
President Bush and Secretary of Defense Donald Rumsfeld threw a monkey wrench in the defense planning by ordering a major review of U.S. nuclear weapons and long-term strategic defense policy. “You now have to manage the transition from the old world to the new world,” a Bush administration official told the New York Times.

A comprehensive review is long overdue. The problem is whether Bush, in the meantime, can keep a leash on defense spending as political pressure mounts to spend more on the military, a common problem for Republican presidents.

During the campaign, Bush endorsed an increase in the defense budget of $45 billion over 10 years. In contrast, the Gore campaign endorsed an increase of $100 billion over 10 years, and the last Clinton budget proposed adding $53 billion to the defense budget over the next six years. For its part, the Department of Defense is likely to present Bush with a much higher budget request than he has proposed, with the support of two recent studies.

Last year, the Congressional Budget Office estimated that an additional $50 billion a year would be necessary to maintain the current force structure and operational tempo, to replace current weapons with new weapons on a one-for-one basis, and to increase military pay in line with the projected increase in civilian pay. A 1999 study by the Center for Strategic and International Studies, based on similar assumptions, estimated that the necessary budget would be at least $100 billion a year higher than the current budget.

Moreover, none of these defense budget estimates includes funds for a missile defense, the early deployment of which is supported by both Bush and Secretary of Defense Donald Rumsfeld. The stage is set for a defense budget proposal much larger than that endorsed by candidate Bush during his campaign.

President Reagan faced a similar defense challenge to his budget early in 1981, as did President Bush early in 1989. In each case, a new Republican president sympathetic to the military approved a larger defense budget than he had endorsed during the campaign, over the lonely opposition of the new Office of Management and Budget director. These episodes are vividly described in books by David Stockman and Richard Darman, both of whom were seasoned budget analysts when they were appointed as OMB Director.

This year, the Secretary of Defense has held the job before while the OMB Director has no defense or budget experience. So there is every reason to expect that Bush, even more so than previous Republic presidents, risks losing control of his budget to calls for a substantial increase in defense spending. This week, Bush agreed to commit $5.7 billion in defense spending to soldiers’ wages, improved health care, and better housing. That is not an increase in the budget President Clinton proposed for 2002, but the total Clinton budget, $310 billion, is up $14 billion from $296 billion for 2001. President Bush has agreed to that increase and will submit it to Congress, said White House spokesman Ari Fleischer. And Bush may accept more increases, major spending hikes, under pressure from his own party.

Unless, that is, if the review of the roles and missions that our military forces are expected to perform is taken seriously by the administration and Congress. Although the Cold War ended a decade ago and the U.S. will face no substantial potential adversary for some years, the current U.S. defense budget (adjusted for inflation) is about equal to the average peacetime budget of the past 50 years and to the sum of the next seven largest defense budgets of other countries-most of which are presumably our allies. Our military forces, although reduced by about one-third, are still designed for Cold War missions.

A major review may conclude that our vital national security interests justify an increase in the defense budget. So be it. But until such a review is completed, the appropriate response is to “Just say no”-especially during this period when a new administration is vulnerable to demands for increased defense spending for the next fiscal year.

William A. Niskanen is chairman of the Cato Institute and a former acting chairman of President Reagan’s Council of Economic Advisers.