Center for Arms Control and Non-Proliferation

How about a Strategy for DOD Spending?

by Laicie Olson [contact information]

Published in Veterans' Vision in their October 2010 edition.

It is no secret that the US deficit is high and rising. In fiscal year (FY) 2009, in fact, it rose to a record high. As if that wasn’t enough, the latest forecast from the White House Office of Management and Budget (OMB) shows the deficit continuing to rise through this year and next. At a projected $1.47 trillion for FY 2010, the government will need to borrow 41 cents of every dollar it spends. According to OMB projections, in FY 2018 the federal government will begin spending more on net interest payments than on national defense for the first time in modern history.

In the coming years, as attention focuses even more sharply on deficit reduction, the entire budget will come under increased pressure. At 19 percent of US federal spending and about 56 percent of discretionary spending, the defense budget is unlikely to escape the spotlight. Whether or not one agrees with such scrutiny, the fact is that in a time of intense economic pressure, tough choices will have to be made.

Defense Secretary Robert Gates has already made a concerted effort to trim overhead and call for further spending reductions. In August, Gates announced a series of cuts, including the closure of the U.S. Joint Forces Command in Norfolk; a reduction of 10 percent in funding for support contractors in each of the next three years; and a slimming of the number of generals, admirals and senior Defense Department civilians. While these cuts were anything but painless, they have generally been regarded as a necessary step.

In recent years the Defense Department’s budget has grown accustomed to at least a 3-4 percent annual “real” growth rate. As a result, US defense spending today is more than it was during the peak years of the Korean War, the Vietnam War, or the 1980s Reagan-era buildup. In fact, US defense spending is higher today than at any point since World War II. Since 2001, the DoD’s base budget, which excludes funding for nuclear weapons and the wars in Afghanistan and Iraq, has grown by an inflation-adjusted 38 percent.

Can Gates Actually Cut Spending?

Gates’ stated aim is to reduce the military's "tail" of bureaucracy and overhead by $100 billion over the next five years, cutting 2-3 percent in annual growth. This is not to say that the Pentagon’s budget will begin to decrease by 2-3 percent each year. Instead, the budget will continue to grow at a slower rate of about 1 percent per year.

While Gates’ efforts are admirable, they fall short of addressing the full extent of the problem. Some analysts have suggested that budget and economic realities mean that the US may have to reduce the size of the Defense Department by one-quarter to one-third or more over the coming years, something that is already happening throughout Western Europe. Pressure on the defense budget is likely to increase further with the end of the U.S. combat mission in Iraq.

The question is no longer whether cuts must be made, but where they must be made.

Too often we begin with the numbers. We calculate what it will take to reduce the deficit and work from there. The issue at hand, though, is not just how we might rearrange the budget to conform to a set of calculations. The question we must also answer is how to rearrange that budget to maximize national security.

Both Secretary Gates and his predecessor, Secretary Rumsfeld, have acknowledged that the Pentagon’s budget contains wasted and misdirected resources. Gates has launched a high profile effort to rid the DoD of such waste, but it is important to step back and take a longer view, not just when money is tight. History demonstrates that nations which develop more responsive systems for evaluating their force are able to maximize their military power and ensure sustainability. Those who do not fall victim to their own inefficiencies.

The DoD should seek to further reduce those programs that stray from its core mission to “provide the military forces needed to deter war and to protect the security of our country.” Programs and activities within the DoD, such as military commissaries and exchanges, should be closely examined to determine their necessity and value to the core mission of defense.

Military personnel and force structure must also be examined. In many cases, current arrangements are neither cost efficient nor strategically valuable. The same is true for defense acquisitions.

One example of a key decision that will need to be made in the coming years concerns US nuclear weapons in Europe. Vice Chairman of the Joint Chiefs of Staff General James Cartwright has acknowledged that these weapons have no military value, since their response time and capability pale in comparison to weapons stored on US soil, but others argue that the weapons’ political value to NATO allies is worth the high cost of their maintenance.

The option to further reduce, consolidate, or remove these weapons is a tough one, but a necessary one. Choices like these must be made if the superiority of US defense is to be maintained. If the budget and corresponding structure of the DoD is ignored or viewed with disinterest, the US may no longer be able to ensure that its national defense is second to none.