The Pentagon’s New Budget

Despite the noise that will accompany today’s defense budget release, a few essential facts should be kept in mind. Pentagon spending will remain well above the post-Cold War norm. It has not been slashed, and it will not be, not even in the unlikely event that sequestration takes effect (for more on this, see Ben Friedman’s post this morning ). The military is not in danger of declining to second-class status. Indeed, if we took account of our still prodigious advantages over any conceivable combination of rivals, we could spend considerably less, and continue to enjoy a margin of security and safety that our ancestors would have envied.

The key areas that will face cuts include active-duty ground troops and possibly nuclear weapons. Unfortunately, tough decisions on major weapons programs—such as the F-35—have been kicked down the road. The looming military compensation crisis has not been resolved. And while another round of Base Realignment and Closure could begin, it is not clear that the administration is willing to use the political capital necessary to garner support in Congress.

In the end, this budget will largely confirm what we’ve learned about the Obama administration’s strategic direction and priorities since early last month. The direction is the same, it avoided hard choices, and total spending will decline only slightly in real terms.

The new wrinkle is the context provided by the non-defense portions of the budget. While the budget reduces projected military spending by $259 billion over the next five years, the administration wants to spend an additional $1 trillion elsewhere in discretionary spending. It seems the White House is intent on picking a fight with Republican hawks in Congress who are determined to fend off reductions in military spending. These hawks are sure to fix on the administration’s request for additional domestic spending as proof that the Pentagon’s budget need not be cut at all, and could even be expanded.

The administration deserves points for bowing to reality in a few key areas. For example, terrorism remains at the top of its list of concerns, but the country will fight this scourge through targeted operations, not open-ended nation-building missions. This shift allows for responsible reductions in the active-duty Army and Marine Corps, which will fall back to around 2005 levels. This is good news for the troops and their families who have suffered during a decade of unnecessary and counterproductive wars, and for taxpayers who have grown understandably tired of paying for such things.

The administration has signaled that additional savings could be realized in the nuclear weapons budget, pending completion of a review of the nation’s overall nuclear posture. Although Pentagon leaders profess their commitment to the Cold war-era nuclear triad—land-based ballistic missiles, manned bombers, and submarine-launched missiles—there is widespread speculation that one of the legs of the stool might finally be sawed off. Not content to wait and see, Congressman Ed Markey (D-MA) introduced legislation last week that could generate an additional $100 billion in savings for taxpayers over the next ten years by postponing development of several new nuclear weapons delivery platforms, including a new bomber, and a new ballistic missile submarine.

Significant changes to a few additional big-ticket items in the military’s budget have been kicked down the road, but could eventually materialize into savings for taxpayers—if some members of Congress are willing to take a tough stand now.

Military compensation: Excluding the wars in Iraq and Afghanistan, personnel costs within the Pentagon’s base budget rose by nearly 90 percent over the past decade, about 30 percent above the rate of inflation. During this period, the number of military personnel increased by just three percent. The administration opted for the politically safe course of containing cost growth in the personnel sector by cutting the size of the active-duty force. Compensation costs will continue to rise, although at a slower rate than previously projected. More can and should be done, else these expenses consume the rest of the military’s budget. The men and women who serve in the military enjoy overwhelming respect from the general public, and members of Congress are understandably loathe to tinker with their compensation. Still, structural reform of military pay and benefits is long overdue. These changes could be structured to have little or no impact on current active-duty personnel, but could be instituted for new recruits.

Base realignment and closure, beginning overseas: Participants in an online budget exercise at the New York Times ranked cutting the overseas troop presence as their top priority (85 percent). These findings are consistent with other polls showing that Americans have long grown tired of paying to defend other countries that can and should defend themselves. Last week, Rep. Mike Coffman (R-CO) called on Secretary Panetta to make much deeper cuts, especially in Europe, than are currently on offer. It is likely that other members will fall in behind Coffman’s lead. If they do, expect to see a push for base closures overseas before additional bases are shuttered in the States.

Troubled aircraft and shipbuilding programs: The administration is moving ahead with plans for another supercarrier, and more littoral combat ships. It has delayed purchases of some F-35 fighter aircraft, but remains committed to all three variants of the plane (the Air Force’s F-35A, the Marine Corps’ F-35B, and the Navy’s F-35C). Congress should revisit the strategic rationale for all three of these programs, and members should pay particular attention to the soaring costs. There are realistic alternatives, if only members are willing to challenge the entrenched interests who stand to benefit from the status quo.