Tag: pentagon

How Much Defense is Enough? The Outlier’s Take

A new study from the Center for Strategic and Budgetary Assessments, “How Much is Enough? Alternative Defense Strategies,” reports on military spending plans produced by teams from five think tanks, including Cato. CSBA asked each team to use its “Strategic Choices” software to make hundreds of choices amounting to a ten-year budget plan for the Pentagon and to provide a brief statement of their strategic rationale. The report includes those rationales, summaries of each budget, and comparative analysis of them.

As you can tell from the chart below, the Cato team’s answer was that way less is enough. We cut $1.1 trillion over the period. We’d have cut even more had the software allowed us to target all the spending going to “Overseas Contingency Operations,” intelligence programs and nuclear weapons. You can also see that our plan was the outlier. The others all raised spending—in AEI’s case, massively, by $1.3 trillion.

America Should Stop Paying to Defend the World

Donald Trump is a genius for gaining media attention. Sometimes his opinions also reflect basic common sense.

Consider his complaint that Washington’s prosperous allies in Asia and Europe don’t pay enough in return. Defenders of the status quo contend that it is in America’s interest to subsidize its allies, as if they were defending the United States.

Advocates of the status quo also argue that U.S. allies contribute to U.S. basing costs. That’s true but irrelevant. The fact that countries defended by America help cover Washington’s cost of stationing U.S. troops is notable only because allied free- (or cheap-) riding has been so shameless for so long.

As I pointed out in CNN online: “The most important cost for America is that of creating the forces deployed, wherever they are stationed. Every security commitment requires additional personnel and equipment. America’s oversized military budget reflects America’s many formal and possible security guarantees: 27 NATO members, alliance wannabes Georgia and Ukraine, various East Asian allies and friends, several Middle Eastern and Central Asian nations.”

Washington accounts for roughly 40 percent of the globe’s military outlays in order to project power on behalf of other states. Providing a defense shield for war-ravaged nations originally made sense. But that world has passed away.

Washington should stop defending its prosperous, populous allies. They should pay for their own defense and confront future security threats as equals.

 

Waste in Military Purchasing

The longest running show on Broadway is The Phantom of the Opera at 27 years. The longest running show on television is Meet the Press at 68 years. The longest running show of waste in Washington is cost overruns on Pentagon weapon systems. That show has been ongoing for more than 220 years.

As one of the first major procurements under the Constitution, the federal government bought six Navy frigates in 1794. The ships were projected to cost $688,889, but a myriad of problems pushed the ultimate cost up 70 percent to $1,176,721. Nicole Kaeding and I mention that project and many recent ones in our new study “Federal Government Cost Overruns.”

The Washington Post reports today on yet another troubled defense program:

As the Gerald R. Ford-class aircraft carrier enters the annals of troubled acquisition programs—billions over budget, years behind schedule—it follows a familiar script, becoming yet another example of how the Pentagon struggles with buying major weapons systems.

The Navy’s program has become “one of the most spectacular acquisition debacles in recent memory. And that is saying something,” McCain (R-Ariz.) said during a Senate hearing on the troubled program Thursday.

The program is now $6 billion over budget, according to a review by McCain’s staff. And while the lead ship is expected to be delivered next year, the second ship in the fleet is five years behind schedule and won’t be ready until 2024.

Like many other programs, the Ford-class carriers suffered from unrealistic cost estimates and overly optimistic timelines. And key Pentagon officials pushed the program forward even though key technologies hadn’t been fully tested, developed or designed, officials testified.

The problem with Pentagon procurement is not just that federal officials deceive taxpayers about the costs of projects, but also that many cancelled projects—which never should have been started—end up throwing billions of dollars down the drain.

A story yesterday in the Washington Post put a staggering number on that aspect of waste:

The Pentagon spent $46 billion on at least a dozen programs, including a new fleet of presidential helicopters, between 2001 and 2011 that never became operational, according to an analysis by the Center for Strategic and Budgetary Assessments.

The Post reports that there are serious efforts to reform procurement currently moving forward. After 220 years of waste, military purchasing is long overdue for an overhaul.

Budget Caps? What Budget Caps?

House Republicans have found a way to circumvent those bothersome Budget Control Act (BCA) spending caps. On MSNBC’s Morning Joe this morning, Rep. Mac Thornberry (R-TX), chairman of the House Armed Services Committee, brazenly stated that the $611.9 billion defense authorization bill, which was passed by the House today, adheres to the BCA cap on discretionary defense spending. How, you may be asking, is it possible to authorize $89 billion more than the caps and still adhere to them? Simple: funnel the money through a slush fund that is not beholden to the spending caps, in this case the Overseas Contingency Operations (OCO) account.

Using the OCO account to supplement discretionary defense spending is so common nowadays that Chairman Thornberry explains the Republicans’ actions as if we should applaud him and his colleagues for saving the defense budget.

The caps are a concern, but we found a way to add to the Overseas Contingency account, so that we in the House budget and the defense bill on the floor right now meet exactly the amount the president has ask for.

You see what he did there? He is able to say that the Republicans are honoring the caps (the ones they agreed to in 2011) while giving the president the defense spending he requested. Clever. But maybe too clever. Congressional Democrats don’t seem to be persuaded. Even the president is opposed to the bill (albeit because of some particulars of the bill, not the topline spending amount).

House Minority Leader Nancy Pelosi (D-CA) called the bill “disingenuous” and “dangerous,” stating that the “Republicans are trying to use war funding as a virtual slush fund for one part of the budget while letting the ax fall on everything else.” While I’m not in the habit of agreeing with Rep. Pelosi, she is right in this case.

The Congressional Pack Rats

The U.S. Congress hoards real estate like proud pack rats. For example, the Department of Defense has 562,000 facilities that cover 24.7 million acres—an area about the size of Virginia.

The Pentagon has surprisingly indicated that it might be wise to shed some of its real estate. Congress has stonewalled the Pentagon on this. Indeed, Congress has barred the Pentagon from even thinking about the Department of Defense’s excess asset problem.

The congressional—and often bureaucratic—asset-hoarding pathology is a result of perverse economic incentives that accompany public ownership. These incentives encourage bad behavior. The fact that capital carrying charges or rents are not paid for publicly owned assets means that no costs have to be budgeted for holding them. Once assets are under government ownership and control, they are viewed as being free; nothing must be given up for the assets’ use and retention. Furthermore, if a decision is made to dispose of some of those assets, the revenues from their disposal are usually not earmarked for use by the department or agency that initiates the sale. Hence, there are no bureaucratic or budgeted benefits that flow from the liquidation of government property.

I ran into both congressional and bureaucratic stonewalling over 30 years ago when I designed President Reagan’s privatization program. Until capital carrying charges on public assets are budgeted (read: charged), the game will remain rigged in favor of the pack rats.

The Smart Way to Cut Pentagon Spending

Former Undersecretary of Defense for Policy Michele Flournoy has an op-ed at the Wall Street Journal this morning (may be pay walled) that calls for cutting the Pentagon’s bloated budget in a smart way, one that doesn’t hit training and readiness as hard as across-the-board cuts. She chooses to focus on reforming how the Pentagon procures goods and services, but that isn’t the only way to cut spending without undermining the nation’s security.

Early last month, I, along with scholars and analysts from nine other think tanks, including Flournoy’s own Center for a New American Security, signed a letter calling for reductions in excess base capacity, a smaller civilian work force, and changes in how pay and benefits are calculated for active-duty military. Some of those reforms would generate significant savings quickly, whereas Flournoy’s proposals might not.

Of course, the reason why Americans spend so much more on the military than any other country in the world is because policymakers in Washington ask U.S. soldiers, sailors, airmen and Marine to do a lot more than simply defend the United States. For example, a significant portion of U.S. so-called defense spending actually goes to defend other countries that could defend themselves. If the busy-bodies in Washington asked our military to do less (a popular proposition), Americans could spend less while still keeping faith with those who wear the uniform of the United States of America.

Still, it is a welcome sign that another Beltway insider has come forward with plans for actually improving how the Department of Defense spends the taxpayers’ money, as opposed to simply asking for more. But one passage in Flournoy’s article cries out for more attention. She points out at the beginning of her piece that:   

Reforming acquisition practices has long been a Defense Department aim. Since 1960, the U.S. government has commissioned at least 27 major studies on defense-acquisition reform, and more than 300 studies have been undertaken by nongovernment experts.

Still, the Defense Department rarely achieves the expected return on its investments. Most major weapons programs run over cost and over schedule, costing American taxpayers billions more while delivering less capability than planned.

Her article goes on to document a number of new and not-so-new ways to save money, but she never really addresses why past attempts have failed, or were never tried, nor why her ideas are likely to be adopted this time around.

I think the main reason why defense procurement reform is a perennial loser is because getting the biggest bang for the buck isn’t the primary concern for many people here in Washington. Military spending has always been treated as a jobs program, even though it isn’t a very efficient one. If the goal is to maximize employment in a particular weapons program, or at a given military facility, then we shouldn’t expect well-intended, reasonable proposals for increasing efficiency to ever become law.  

Put another way, unless we confront the mindset that treats military spending as different from other forms of federal spending–a bipartisan affliction, but one that is especially prevalent among Republican politicians and their overpaid consultants–then we are unlikely to ever see major changes in how the Pentagon does business. And that means that Americans will continue to spend more than we have to in order to keep the nation safe and secure.

Chuck Hagel to the Pentagon: Rough Passage, Welcome Result

President Barack Obama’s nomination of former Republican senator Chuck Hagel as defense secretary forced the GOP to choose between the past—especially a discredited president who blundered disastrously in Iraq—and the future, represented by a Republican who felt more loyalty to his country than his party. Unfortunately, the GOP chose the past.

Ironically, a group of Republicans wrote the president urging him to withdraw the nomination, contending that Hagel’s lackluster performance at his confirmation hearing raised “serious doubts about his basic competence to meet the substantial demands of the office.” Yet it is his critics who failed to demonstrate even a basic interest in military policy and to justify the trust placed in them by voters. 

For instance, the hearings on Hagel’s nomination amounted to a poor imitation of Kabuki Theater, with Republicans more interested in scoring cheap political points than in discussing substantive issues. While GOP members complained that Hagel was ill-prepared for the challenges facing the Pentagon, they failed to ask him serious questions about serious issues—coping with budget cuts, simultaneously engaging and constraining China, dealing with a fading NATO.

That’s too bad, because Hagel probably had answers. Far better answers than would come from the GOP’s permanent war caucus. In fact, Republican senators like Lindsey Graham (R-SC) are traditional tax, borrow, and spend liberals when it comes to the military: bigger and more expensive is always better. They have no idea how to cope with the coming end of Washington’s wild debt party.

Hagel offers a sharp contrast that embarrasses his former partisan colleagues. Wrote Michael Hirsh in National Journal: “what has gone largely unnoticed by the punditocracy is that, over the past decade or so, the former Republican senator from Nebraska has distinguished himself with subtle, well-thought-out, and accurate analyses of some of America’s greatest strategic challenges of the 21st century—especially the response to 9/11—while many of his harshest critics got these issues quite wrong.”

Hagel’s tough confirmation battle was but the first of the many troubles he is likely to face in his new job. Recalibrating America’s role in the world to reflect greater foreign influences and fewer domestic resources may pose difficulties nearly as vexing as coping with the Soviet Union during the Cold War. 

However, Chuck Hagel has the ability to rise to the challenge. Unfortunately, he isn’t likely to get much help from Capitol Hill. Certainly not from his old GOP colleagues, who appear to be locked in the past. Secretary Hagel will need to look elsewhere to find support for the necessary transformation of America’s foreign and military policies.

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