BUDGET

Military Spending: How Much Defense Will the American People Support?

12/1/2010
By Nathaniel H. Sledge Jr.
Americans by most measures support a strong national defense. But how much is the country willing to pay for it?

That question may be far from most citizens’ minds but it is an important one, especially with the United States facing a staggering debt.

“You cannot have a strong defense in a rotten economy,” said retired Marine Corps Maj. Gen. Arnold Punaro, an advisor to Defense Secretary Robert Gates.

The nation’s defense budget currently equates to less than 5 percent of the U.S. economy. Yet, one should ask whether 4 to 5 percent of the U.S. gross domestic product gives the nation its money’s worth.

One way of measuring the return on defense investments is whether more money translates into more capability to defeat our enemies. In this context, if the U.S. military were measured by the might of its enemies, we have little to celebrate.

It is helpful here to look at the results of military engagements during the past several decades, such as Operation Desert One in Iran, the intervention in Grenada, and actions in Somalia, Libya, Panama and the Balkans. The U.S. military merely survived embarrassment in the first three. It acquitted itself pretty well in the second three, two of which were dominated by combat aviation, an area in which the United States enjoys supremacy.

How forces are faring in Iraq and Afghanistan reflects well on the uniformed personnel fighting and sustaining the wars, but the direction and quality of overall policies, strategies, and management of the wars must be left to historians to ponder. Surely, we can do better.

The United States has enjoyed a permissive environment as the lone superpower, with unrivaled military prerogatives. Viewed broadly, the U.S. military ultimately prevails against much weaker foes in part because of its great natural resources, secure geography, dominant culture, and overwhelming political and economic power. Another reason is that enemies were inept and forgettable, but mostly the United States has prevailed because it is a rich nation. Less-than-stellar military performances have occurred against a backdrop of hegemony, relative abundance and prosperity.

This record of success and abundance has led to an entrenched and complacent culture among defense-related institutions. As Gates put it, we are maintaining “20th Century appetites instead of facing 21st Century realities.”

Now, the nation must grapple with a dismal fiscal outlook and expected downward pressures on defense spending. Current spending levels are unsustainable. Indeed, if trends persist, by 2017, annual interest payments on the national debt will be larger than the defense budget.

A more efficient allocation of diminishing resources is essential. This will require organizational and strategic reform, and much more fiscal discipline. Ultimately, the nation’s ability to execute successfully its national military strategy is at stake.

Opinion surveys tell us that, above all, the military is respected among U.S. institutions. According to a Harris Poll, “military officer” is among the most respected professions, and the annual Gallup Poll puts the military at the top of all institutions. In a world of uncertainty, military service retains a special mystique. One reason is that, since the War of 1812, the U.S. military has not fought a war for national survival. The only exception may be World War II.

Fundamentally, however, Americans know very little about the military.

Proportionately fewer and fewer families contribute sons and daughters to the armed services, and knowledge is limited to what people see on TV or in movies. For many, defense is a subculture, best left to martial bureaucrats and to those who crave the muck and mire associated with national security and government.

Lacking familiarity and information, Americans have blindly accepted that the nation must have a huge defense budget. But few know how the money is allocated or spent. Even fewer know what is going on in the broad area of defense and national security, let alone how nearly one-fifth of the national budget is allotted.

How much defense the nation can afford may not be a question that most Americans want to ask. Or they are simply too trusting of the ability of those in charge to make the right decisions. As long as someone else is involved in this complex and dirty work, why should citizens concern themselves? Out of sight, out of mind.

In the post-Cold War era, the public has been surprisingly accepting of the government’s spending prerogatives. In a country where approximately 50 percent of wage earners don’t even pay taxes, perhaps Americans have become inured to government spending. It is not their problem. They seem unaware that they have a lot of “skin in the game.” A pertinent analogy is the filtering and disguising of the high cost of healthcare through third-party payers and government programs, so that average Americans don’t feel the pain and, therefore, have insufficient concern about cost growth, inefficiencies and quality.

Despite the mounting debt and financial crisis, defense spending remains virtually unscathed. President Obama has agreed to grow annually, albeit very modestly, the already massive defense budget. The reason is that the nation is fighting a two-front war, and the chief executive is usually given the benefit of the doubt during wartime. Except for some increases in personnel end strength, this doesn’t explain the enormous growth in the underlying base budget.

Growth in defense has occurred as U.S. government spending as a proportion of the economy continues to steadily increase. In 1948, government constituted about 20 percent of the nation’s output. During the Korean War it peaked at 29 percent. At the height of the Vietnam War it was more than 31 percent. Today, the government sector accounts for about 44 percent of gross domestic product, and economists project it will reach at least 50 percent in the next few years. For a country that touts free markets and capitalism, this is a troubling trend.

Historical numbers suggest an overall relative decline and consolidation in defense spending around 5 percent of GDP. Defense spending relative to GDP during wars and conflicts tells a story of this relative decline: War World II, 38 percent; Korean Conflict and nuclear weapons race, 14 percent; Vietnam, 10 percent; Reagan era build-up, 7 percent; Kuwait liberation, 5 percent; Clinton era Reductions, 3.5 percent; and post 9/11 peak, 6 percent.

Defense spending has also declined as a portion of the U.S. budget, too, but less so when measured against GDP. This says more about the growth of the federal budget and U.S. willingness to borrow to finance government operations than it does about defense. The bump in defense spending since the Clinton years in relation to national output may presage a new, more troubling trend. Total defense spending now accounts for 20 percent of the federal annual $3.8 trillion budget. This is not a redeeming statistic, yet it seems to be acceptable to most Americans.

Despite the relative declines of defense against GDP and the budget, inflation adjusted defense spending has grown along with the government sector of the economy. Gates has described a chart of annual defense budget allocations as resembling the “EKG of a defibrillated heart patient.” Defense may have been volatile, but in absolute terms, since the Clinton years, it has enjoyed a steady uptrend. The U.S. defense budget is now above $750 billion annually which, compared to a GDP estimated at $14.6 trillion, amounts to 5.1 percent of GDP. When adding other national security costs such as Department of Energy (nuclear weapons) and intelligence agency budgets, the total exceeds $800 billion.

The next question is whether today’s high defense budgets are needed to defeat militias and lightly armed insurgents, as opposed to nuclear-armed, peer competitors with large conventional ground and air forces. The $50 billion the United States spends on intelligence agencies alone exceeds the GDP of 53 percent (96) of the 180 United Nations member states that are tracked by the International Monetary Fund. U.S. defense expenditures of $750 billion exceed the GDP of 90 percent (162) of them. As Gates has noted, the defense budget is larger than the defense budgets of all other nations combined. Does this reflect an appropriate and efficient application of our resources?

Advocates have argued that this spending is necessary to ensure readiness for future threats. Others disagree, and contend that the current path is unnecessary and unsustainable given U.S. long-term fiscal problems. It’s funny how the future threat always looks like the threats of yesteryear, which makes the solutions strangely reminiscent of yesteryear’s — nuclear weapons, missiles, tanks, ships, bombers, interceptors, submarines and carriers. These capabilities most likely will be needed. The issues are how much and in what proportions. The American people should be asking hard questions, no matter how complex and esoteric these issues might be.

The public should be concerned that much of the decision making is carried out in secret. Anyone who has ever submitted a Freedom of Information Act (FIOA) request can confirm that government opacity is real. Information about the Defense Department is among the most challenging to acquire, and strangely, not for reasons of protecting national security.

Shielded from the vagaries of foreign policy and defense planning, programming, and budgeting, it is no surprise that few Americans are monitoring the enormous treasure sinks of defense spending. Oh sure, the topic occasionally attracts interest from the news media, such as when TV networks seek to make ratings hay out of government mismanagement. Remember the $800 toilet seat? Unfortunately, the public has a short attention span. Like most issues in America, defense scandals, once exposed in the 24-hour news cycle, are soon forgotten.

In the early 2000s, few questioned the increases in intelligence and defense spending, or the deficits that naturally come with war. Today, in the midst of a great recession, many are concerned about the mounting federal budget deficits. In the near future, as slow economic growth and cultural malaise set in, perhaps citizens will question the nation’s mounting defense bills.

A wake up call is in order.

It is exceedingly important for citizens to understand the role that the industry and Congress play in how defense dollars are spent.

For industry, budget decisions become matters of survival. Procurement is the mother’s milk of defense contractors. Historically, defense industry profits have come from procurement rather than research, because the profit margins for research and development have not been as favorable. Research and development projects are relatively short term. Thus, they do not provide a long-term and stable contribution to corporate bottom lines.

Defense firms, especially the top-tier primes, need production contracts or their contemporary substitutes: re-manufacturing of “current” systems and service contracts.

When the Pentagon’s strategic plans coincide with the fortunes of defense industry, a formidable entente for defense programming and budget pie cutting is born. Behind the scenes are the Pentagon leaders providing subtle winks and nods to companies that aggressively lobby Congress for their mutually favored programs. In many cases, linkages to the national military strategy, if there are any, are incidental.

The industry also generates significant revenue from support service contracts, which currently amount to about $200 billion per year. Defense contractor personnel that support military agencies are de-facto government workers. They are just paid differently and some can be more expensive. The practice of outsourcing, greatly expanded under the Bush administration, simply grew government under a different, more politically palatable heading.

Gates’ pledge to cut the white-collar contractor work force by 10 percent per year is actually a pledge to cut the government work force, because service contract personnel are just an extension of the government by another means. Recent announcements by top defense contractors of their plans to reduce staffs are an attempt to bow to the inevitable and position themselves self competitively for lower defense revenue.

Of all the things to be concerned about the defense industry, one of the most serious ones is its access to and influence of members of Congress. Influence peddling and the pursuit of business that is unsubstantiated by national security requirements are among the most confounding causes of resource and strategy mismatches.

Many weapon systems would not get to square one were it not for industry intensely lobbying Congress. This practice allows for a shadow government of sorts to coexist outside the official Defense Department, with its own protocols and procedures.

It’s always about jobs. Want to keep a combat vehicle or engine plant going? Just establish strong relations with that region’s congressional delegation, make the appropriate campaign contributions, fund a few plant visits or junkets, provide white papers, and, voila, you have secured the future of your plant with little input from the Pentagon.

This is how the system works. Members of Congress seem to be interminably focused on reelection. Many legislators appear to perceive defense spending as a way to reward selected constituents and communities, thereby gaining political influence.

Congressional culture can be self-serving and myopic, too. As long as constituents, and more importantly, campaign contributors and political supporters, are taken care of, most members of Congress are satisfied. All legislators seek the praise of constituents who laud their record of bringing home dollars to their district or state. There isn’t enough revenue for all to succeed at this, so they bring home borrowed money. This practice ultimately becomes a losing proposition for the nation as dollars are borrowed and redistributed. But as former U.K. Prime Minister Margaret Thatcher said, this scheme works well “until you run out of someone else’s money.”

The nexus between Congress, its constituents, and lobbyists can undermine defense priorities. Most lawmakers lack a national, let alone international, perspective. For clues about how this mentality shapes defense spending, again, just follow the money. One would expect better from the Senate, but it has become just as partisan and provincial as the House of Representatives.

Congressional influence of the budget process contributes to the dysfunction. The feeding frenzy for defense dollars usually begins with intense lobbying for lucrative programs and the maintenance of those that provide steady employment. When enough congressional districts benefit from a particular defense program, it achieves the “critical mass” necessary to launch and sustain a major program. It is no surprise that most successful major defense acquisition programs are developed or produced in many states to ensure broad political support and advocacy.  

The congressional authorization and appropriation committees demonstrate the abject meddling and micro-management that is characteristic of Congress and ruinous to objective strategic planning. Instead of just ensuring that broad strategic goals make sense, assessing major Pentagon policies, and determining resource levels for the major weapon systems, these committees delve into each program element, adding unnecessary layers of bureaucracy and frustrating the efforts of those specifically charged with national defense: the national command authority and Pentagon leaders.  

Obviously the legislative branch holds the power of the purse, regardless of what the executive branch has to say. But often it is involved much more than it should be. At a recent Precision Strike Association conference, an Army project manager, frustrated by congressional meddling, remarked that, “Defense Acquisition Boards will soon be held in congressional hearing rooms.” This is an exasperated and exaggerated prediction, but not by much.

Congress seems immune to the will of the people except during elections. Only better informed and more engaged Americans can bring pressure on elected officials.

Regardless of political persuasions, the American public must become better educated about the budget process and national security. Citizens should be aware that the current trends of government spending can be ruinous and unsustainable.

Will we walk the plank like Greece, Spain or Argentina into insolvency? Time will tell. Hopefully, if and when the nation stands on the edge of another economic abyss, Americans will become more concerned about the due process that spends their hard-earned tax dollars on the good, the bad, and often, the unnecessary.

Nathaniel H. Sledge Jr., PhD, is a retired U.S. Army colonel. The views expressed in this article are those of the author, and do not necessarily reflect the official policy or position of the U.S. government, the Defense Department or the U.S. Army.

Topics: Defense Department, DOD Budget

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