defense spending

DEFENSE DOWNLOAD: Week of 1/10/19

Welcome to the Defense Download! This new round-up is intended to highlight what we at the Cato Institute are keeping tabs on in the world of defense politics every week. The three-to-five trending stories will vary depending on the news cycle, what policymakers are talking about, and will pull from all sides of the political spectrum. If you would like to recieve more frequent updates on what I’m reading, writing, and listening to—you can follow me on Twitter via @CDDorminey.  

How Ready Is Ready Enough?

The incoming Trump administration and the Congressional majority plan a push to repeal federal spending caps in order to boost military spending. A key talking point for this push claims that the Obama administration’s anemic military spending has caused a “readiness crisis,” where the U.S. military lacks the men, weapons, and funds to do its job.

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.

Some Context on Pentagon Spending

General David Petraeus and Brookings Fellow Michael O’Hanlon recently took to the Wall Street Journal to assure the American people that, despite sequestration, there is no military readiness crisis. A few days later, Thomas Donnelly and Roger Zakheim published a rebuttal in the National Review claiming that the challenges of too few personnel and aging, overextended equipment induced a “wasting disease.” They alleged that the size of the defense budget was a misleading statistic without context.

So, here’s some context. After a rapid demobilization following World War II, the United States slowly rebuilt its forces to balance against the Soviet Union. Spending remained far above pre-World War II levels for the remainder of the decades-long conflict, and ever since. The Pentagon budget averaged $462 billion from 1948–1990 (in FY2017 dollars), with notable spikes for the Korean War, Vietnam War, and the Reagan build up in the 1980’s (See Figure 1). With the end of the Cold War, we see a fairly steep decline in military spending during the H.W. Bush and Clinton years. In the aftermath of the 9/11 terrorist attacks, the reductions of the 90s gave way to much larger Pentagon budgets, as the George W. Bush administration embarked on the wars in Afghanistan and Iraq. Defense spending during the early years of the Obama administration remained above $750 billion as the president ramped up the war in Afghanistan while working to end the war in Iraq. In constant, 2017 dollars, annual Pentagon spending during Bush 43’s eight years in office averaged $612 billion; under Obama, the average is $675 billion (See Figure 2).

One side-note regarding the grouping by presidential administration: Taken alone, the picture can be misleading, in that Reagan inherited Carter’s final budget, Clinton inherited H.W. Bush’s, etc. And, besides, Congress, not any single president, makes the final decision on what the government spends. It is also true, however, that Congress has typically deferred to presidential preferences, particularly when it comes to military spending. Had Clinton wanted more, he likely would have gotten it (and did, starting in 1999); Obama, meanwhile, could have requested less (and, eventually, did). Those variations within four- or eight-year terms get lost in a graph that lumps all the years together in one fat bar for each president.

With respect to whether current spending levels are far too low, far too high, or somewhere in between, the Budget Control Act (BCA) of 2011 and its threat of sequestration tried to rein in spending on both defense and non-defense discretionary spending, but has been only partly successful. Congress has found ways around the defense caps, in part by funneling extra money to the base budget through the Overseas Contingency Operations (OCO) account, which is exempted under the BCA. And, under the BCA caps revised late last year, estimated military spending would average at least $551 billion from 2017 to 2021 (.pdf, see page 15) – and likely more than that if Congress doesn’t kick its OCO addiction. That’s 28 percent higher than in 2000, and 19 percent higher than the Cold War average.

In short, if there is a readiness gap, it’s not due to lack of funding. The BCA, by itself, has not resulted in significant cuts in military spending. In inflation-adjusted dollars, we spend more today than during the average Cold War year, and more than we spent at the start of the War on Terror. It would appear that we are mostly getting less “bang for our buck” than during previous generations.

America Has Dependents, Not Allies

America’s international position is distinguished by its alliance networks. Presidential candidates fear today’s dangerous world, but the United States is allied with every major industrialized power, save China and Russia. It is a position that Washington’s few potential adversaries must envy.

Yet as I pointed out in National Interest: “littering the globe with security commitments is costly. The U.S. must create a much bigger military to project force abroad to protect countries that often matter little for this nation’s security. Moreover, while policymakers hope to prevent war with treaty guarantees, the resulting tripwires ensure involvement if deterrence fails.”

Equally important, America’s involvement tends to turn friends and allies into dependents. The principle is the same as domestic welfare: Why should they do for themselves if they can get someone else to do so?

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.

Closing America’s Security Deficit

The RAND Corporation has published the second report in its “Strategic Rethink” series, this one entitled “America’s Security Deficit: Addressing the Imbalance between Strategy and Resources in a Turbulent World.” It is a noble undertaking, conducted by well-respected scholars and analysts. But I’m not particularly optimistic that conditions are ripe for the strategic rethink that they seek, and that the country desperately needs.

The strategy-resources gap should be corrected by adopting a new strategy, one that pares down the United States’ permanent overseas presence, and compels other countries to take on more responsibilities for their own defense (as Japan shows signs of doing). Instead, U.S. policymakers seem willing to undertake merely incremental changes at the margins, retaining U.S. primacy, and trying to cover the strategy-resources gap with wishful thinking and unrealistic assumptions.

RAND’s summary of the report explains “currently projected levels of defense spending are insufficient to meet the demands of an ambitious national security strategy.” And its Key Finding reads as follows:

Limitations on defense spending in the context of emerging threats are creating a “security deficit.”

  • Fielding military capabilities sufficient, in conjunction with those of our allies and partners, to deal with the disparate challenges faced by the United States will require substantial and sustained investments in a wide range of programs and initiatives well beyond what would be feasible under the terms of the Budget Control Act.

Advocates for higher military spending have been saying this since the BCA was first passed. Those who also claim to care about the nation’s persistent fiscal imbalance typically note that the Pentagon’s budget is not the primary driver of the nation’s debt, and they would focus, first, on so-called mandatory spending (Social Security, Medicare, and Medicaid) which accounts for a far higher share of total federal expenditures, in order to find the additional money needed to close the security gap.

They are correct on the first point, the need to reform entitlements, but not on the need for more military spending.

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