The Pentagon Budget

Memorandum To: Senators-elect Ron Johnson (Wisconsin), Mike Lee (Utah), Rand Paul (Kentucky), Marco Rubio (Florida), and Pat Toomey (Pennsylvania)

Welcome to Washington. This town is eager to learn how you will pursue the Tea Party message you championed in the campaign: to seriously cut spending. As you look for targets, we wonder if all of you have actively considered examining the budget of the biggest federal government agency, the Department of Defense.



Military spending today, at $700 billion annually, is higher than at any time since the end of World War II. Beyond the 1.5 million men and women in uniform, Defense employs 740,000 civilians and literally uncounted contractors. The sun never sets on Pentagon bases and installations around the world. From 2000 to this years budget, Congress has given the Pentagon $7 trillion dollars$1.3 trillion for the wars in Iraq and Afghanistan, $5.7 trillion for routine, non-combat, operations (the base budget). That doesnt include the cost of nuclear weapons, which are in the Energy Departments domain and would add about another $200 billion.



What did our country get for that torrent of money? Well, were not sure. Seems the Pentagon has trouble with its bookkeeping and literally cannot track how it spends taxpayer dollars. Senator Chuck Grassley, Republican of Iowa, recently pointed to one key cause--"numerous breakdowns in the auditing process used by the Department of Defense Office of the Inspector General." The problem isnt new; its been around enough decades to make us think the Pentagon excuses itself from this fundamental, even Constitutional, form of accountability.



Following his in-depth review of the Pentagon Inspector General, Grassley sent his findings and recommendations to Defense Secretary Robert Gates. "Top managers in the audit office," the Iowa Republican reported, "repeatedly stated that doing contract audits are too difficult....We cant do it." If they cant do it, does that mean defense contractors are basically writing their own expense accounts for billion dollar programs? Note also, the Pentagon is virtually alone in the federal government in its failure to account for its own spending.



Grassley praised Gates efforts to eliminate wasteful spending but asserted that reliance on the Pentagon bureaucracy to eliminate waste is questionable. "Those are the very same powerful Pentagon fiefdoms that created the problem in the first place," Grassley wrote, "and the very same ones that Eisenhower warned us about 50 years ago."



Dwight Eisenhower, were he with us today, would no doubt also be appalled to discover that, despite years of hefty Pentagon budgets, our forces are now smaller, older, and less ready to fight.



The Air Force, for example, received a funding boost of 43 percent in the 2001-2011 budget period. Yet, the number of active and reserve fighter and bomber squadrons declined by 51 percent. Fighter pilot in-air training today is only one-third to one-half of what it was in the 1970s, an era not known for high readiness. During the same period the Navys budget expanded by 44 percent, while the size of its combat fleet declined by 10 percent. This is not a smaller, newer fleet. Its a smaller, older fleet. Is it more ready to fight? Almost certainly not. We keep hearing about severe maintenance problems throughout the fleet, and Navy combat training in the air has remained at historic lows. Only the Army grew. Using a 53 percent hike in appropriations, it expanded its brigade combat teamsby five percent.



"The spigot of defense spending opened by 9/11 is closing," Secretary Gates has proclaimed. Not exactly. Gates, unlike most of his predecessors, did cancel some weapons programs, such as the F-22 fighter, because they were over cost, under performing, late and irrelevant. He also announced a plan to "save" $102 billion by trimming the Pentagon bureaucracy. But that is to be done over five years, and the money is to be transferred to "force structure" rather than saved in the usual sense of the word. In fact, the Defense Secretary wants the military budget to grow for the next decade, by one percent a year plus anticipated adjustments for inflation. That would increase DODs base budget by 33 percent. Add the cost of any wars underway a decade from now. So, even with a change-minded man in charge of the Pentagon, were looking at even more massive military spending in the foreseeable future.



Gates is clearly aware of the full range of Pentagon problems that contribute to overruns and overstaffing. But he appears to have picked the relatively narrow issue of bureaucratic bloat as his top concern. Speaking at the Eisenhower Presidential Library in Kansas this past May, he complained that 40 generals, admirals and their civilian counterparts were still stationed in Europe more than two decades after the Cold War ended. Gates also criticized the extensive hiring of private contractors to do administrative jobs the military used to do. "We ended up with contractors supervising other contractors," he said, "with predictable results." The Secretary estimated at $23 billion the growth in this part of the DOD budgetnot counting the cost of private contractors in Iraq and Afghanistanbut in fact it was conjecture; the real figure is unknown. He must have been more than a little wistful when he told his Kansas audience:



"Eisenhower was wary of seeing his beloved republic turn into a muscle-bound garrison statemilitarily strong, but economically stagnant and strategically insolvent."



Muscle-bound aptly describes the practice of DOD, and Congress, of preserving extraordinarily expensive, underperforming weapons designed to fight the Soviet Union and Warsaw Pact and always delivered years late. The F-35, which unfortunately Secretary Gates continues to support, is a classic example. Originally promised to cost $35 million per aircraft, it will now cost at least $155 million each; it is just now being producedyears lateand aircraft design experts look at its performance characteristics and grimace. The Navys LPD-17 and DDG-1000 ships and the Marine Corps Expeditionary Fighting Vehicle are a few more of the many examples.



Practices like those have contributed to a level of military spending that almost equals that of all other countries combined. Counting just our potential enemies and taking the defense budgets of Russia, China, North Korea, Iran and Cuba combined, we spend three times that amount.



Theres a disconnect between U.S. military spending and real-world threats. Today and in the future, al-Qaeda and its global affiliates top the list of threats to the United States and our allies. $1.3 trillion dollars and nine years of fighting after 9/11, the problem is undiminished; military force cannot be the sole means to rely on, and it is likely to be most effective with astutely employed special forces.



Yet, the United States continues to maintain, for example, up to 11 classic warfare aircraft carrier battlegroups, with their associated cruisers, destroyers, submarines, oilers, supply ships and moreall in the absence of an opposing conventional navy. To the extent that naval experts worry about the Chinese, or even regional powers in the littorals, potential opponents are deploying ominous new missile and submarine systems that make our huge surface forces into little more than "targets," according to prevailing gallows humor.



Secretary Gates has indirectly explained why we do this. After suggesting fewer than 11 carriers, he relented saying "I may want to change things, but I am not crazy. I am not going to cut a carrier." Subsequent events in Virginia were a case in point. When Gates announced plans in August to close the Joint Forces Command in Norfolk, which defense experts and even former commanders dubbed superfluous, the Virginia congressional delegation protested loudly. Protecting the in-state spending elicited a rare example of bipartisanship in Congress. And, when the Navy announced that it would move one of the five carriers based in Norfolk to Florida, Representative Glenn Nye, a Democrat, proclaimed in a campaign ad: "I wont stand by while Washington tries to take away our carrier and Joint Forces Command." Nye later said in a TV spot that he had "stood up to Washington" on the Joint Command and "is winning the effort to save our carrier." The proprietary "our carrier" reflects more than local pride. It translates as: Save all of the civilian jobs in the shipyards and related businesses. In this case, "Washington" gets the political tongue lashing even without cutting a carrierjust by trying to base it elsewhere.



Every base, installation, and weapons system has its own constituency. As a result of the pressures to preserve jobs and incomes (and, some would argue, political campaign contributions), many defense decisions are made for parochial reasons. Defense decisions should be made for defense reasons. Members of Congress should act on the broader merits and, if necessary, help their defense-dependent communities adjust to change, whether due to DOD procurement decisions, base realignments, arms control treaties, or cuts in appropriations.



Where to start bringing this huge federal agencys spending under control? Your colleague, Republican Senator Tom Coburn of Oklahoma, has a sensible proposal. He has recommended to each member of President Obamas Commission on Fiscal Responsibility and Reform (the "Deficit Commission"), on which he serves, that the Pentagon budget be frozen until it can pass comprehensive audits of all programs, agencies and contractors. To reform and control defense spending, it clearly must first be understood - the very reason for the accountability clause in the Constitution.



After looking at this gigantic problem, you may come up with additional approaches. You have your work cut out for you. We wish you well.