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Archive for April 6th, 2013

CDI: Defense Budget Tutorial #1: What is the actual size of the 2006 defense budget?

Posted by picard578 on April 6, 2013

Straus Military Reform Project

January 19, 2006

 

On Dec. 21, 2005, Congress passed a defense appropriations bill, which according to the press releases of the House and Senate Appropriations Committees, and many news articles subsequently written, funded “defense spending” for the United States for the current fiscal year, 2006. The impression made by the press releases and the news articles was that the $453 billion advertised in the bill, H.R. 2863, constitutes America’s defense budget for 2006.[1] That would be quite incorrect. In fact, the total amount to be spent for the Department of Defense in 2006 is $13 billion to $63 billion more, the latter figure assuming full funding for the wars in Iraq and Afghanistan. If you also count, non-DOD “national defense” costs, add another $21 billion, and, if you count defense related security costs, such as homeland security, the congressional press release numbers are more than $200 billion wrong.

Having observed, and in past years participated in, the obscuration of just how much the United States actually spends for defense, this author believes it would assist the debate over the defense budget in this country by identifying its actual size.

 

The “defense spending” bill enacted in December had the title, “Making appropriations to the Department of Defense for the fiscal year ending September 30, 2006 and for other purposes.” It was a little heavy on those “other purposes” [2] and it did not comprise all the money the Defense Department received and will receive for 2006.

To peer through the opaqueness of congressional defense appropriations, it is necessary to run through the numbers; all the numbers.

The first step is to understand the “defense spending” bill, H.R. 2863, as enacted:

• Division A of the bill appropriated $453.3 billion, but not all of it for DOD. $522 million went to the CIA for unclassified “intelligence community management” and to the Coast Guard. This makes the DOD total in Division A $452.8 billion.[3]

• Division B, Title I, Chapter 1 of the bill adds to DOD $4.4 billion for its expenses to rescue and relieve civilians and to undo damage to DOD contractors from Hurricane Katrina.

• Chapter 7 of Division B adds another $1.4 billion to rebuild DOD facilities damaged by Hurricane Katrina.

• Division B, Title II, Chapter 2 adds $130 million for DOD work for protection from the threat of the Avian Flu pandemic.

• Division B, Title III, Chapter 2 cuts the DOD budget by $80 million in rescissions (cancelled spending). More importantly, Chapter 8 in this title cuts DOD, and all other federal spending, except the Department of Veterans Affairs and “emergency” spending, by one percent “across the board.” The cut is mandated to occur in every single program of the affected accounts, nothing is exempted. The reduction to DOD is $4.0 billion.

 

The actual total for DOD in the bill is $454.8 billion, over a billion more than what the appropriations committees implied.

But that’s not all for the Defense Department’s budget. Add $12.2 billion for military construction.

For reasons of politics and jurisdiction, Congress appropriates money for the Defense Department in two separate bills: the Department of Defense Appropriations bill and the Military Construction Appropriations bill — which these days is also wrapped in with other spending, such as the Department of Veterans Affairs. The “MilCon” bill funds military bases in the states and districts of almost every member of Congress. A major Capitol Hill activity is writing press releases for local newspapers about the goodies the senators and representatives add for their military facilities back home. They also write press releases about the goodies they add in the DOD appropriations bill. (Having two bills to write press releases about is better than one.)

So, that gets DOD spending for 2006 to $466.7 billion. That’s all, right?

 

Nope. Add about another $50 billion for the wars in Iraq and Afghanistan.

There is already $50 billion for Iraq and Afghanistan in the $466.7 billion appropriated in H.R. 2863. However, war spending in 2005 was over $100 billion, and most expect 2006 to cost at least as much. Nonetheless, Congress decided to provide just $50 billion for ongoing military operations, about enough money for the first six months of the fiscal year. It will run out in about March 2006. Before then, Congress and the president will need to add more, up to another $50 billion. It is that amount that Pentagon and congressional officials privately say they anticipate will be added in a “supplemental” appropriations request in early 2006.[4]

OK, that gets the total to $516.7 billion. Done now, right?

 

Nope. There are other defense activities in the Department of Energy to keep America’s nuclear arsenal reliable and effective and to develop new nuclear weapons. Add another $16.4 billion.

There are also defense related costs in the Selective Service, the National Defense Stockpile, parts of the General Services Administration, and other miscellany. Add still another $4.7 billion.

That gets the total to $537.8 billion. This figure constitutes the “National Defense” budget function (known to budget geeks as budget function “050”) in presidential budget requests and congressional budget resolutions.

 

You may also want to count even more spending, such as the costs of the Department of Homeland Security, which is certainly national defense in a generic sense. Add about $41 billion. [5] You might also want to consider some of the human consequences of current and previous wars; add about $68 billion for Veterans Affairs. Also, consider adding the costs of reconstruction in Iraq and Afghanistan which counts in the State Department’s budget, plus all the other costs for international security, diplomacy, and foreign aid, as administered by Condoleezza Rice; add about $23 billion.

If you count all these costs, the total is $669.8 billion.

This amount easily outdoes the rest of the world. In fact, if you count just the costs of the National Defense budget function, the approximate $538 billion we spend is $29 billion more than the $509 billion the entire rest of the world spends. [6]

 

Pick the number you believe to be most appropriate for “defense spending” in 2006. Presumably, you will not be using the $453 billion widely advertised by Congress and the press. Now, there can be an accurate debate on whether this budget is too large or too small. Please proceed.

Confused by this welter of numbers? Not surprising; below are the important parts in table form.

 

U.S. Defense and Security Spending

Fiscal Year 2006

Funding Source $Billions Purpose

H.R. 2863 454.5 Grand total for the Department of Defense Appropriations Act, but not all Congress has appropriated to DOD

H.R. 2528 12.2 Military Construction Appropriations

DOD and MilCon Appropriations bills 466.7 Total appropriated to date to DOD

Likely 2006 Supplemental 50.0 Possible amount to complete Iraq/Afghanistan war costs for 2006

Likely Total for DOD for 2006 516.7 Includes probable $50 billion in 2006 Supplemental for Iraq/Afghanistan

Department of Energy/Defense Activities

Appropriations 16.4 Funds nuclear weapons activities

Other non-DOD defense activities 4.7 Funds Selective Service, National Defense Stockpile, etc.

Total for “National Defense” 537.8 Constitutes the National Defense Budget Function (Budget Function 050) in presidential budgets

Homeland Security 1- Approximate amount for non-DOD Homeland Security costs

Veterans Affairs 68- Approximate amount for VA costs

International Security 23- Approximate amount for reconstruction aid, foreign arms sales, development assistance, etc.

Total for non-defense but security related costs 132-

====================================================================================================

Grand Total 669.8 Total for all international security and defense costs

# # #

[1] See Dec. 17, 2005, U.S. Senate Committee on Appropriations, “Conferees Approve FY 2006 Defense Spending Bill.” See first sentence in addition to the press release’s title.

[2] The bill was passed by Congress on Dec. 21, 2005, and it was signed into law by the president on Dec. 30, 2005. It is now Public Law 109-148.

[3] To be entirely correct, significant amounts of the funds ostensibly appropriated to DOD are actually for the various U.S. intelligence agencies, some of them outside DOD. Last year, a defense official accidentally told the press the classified intelligence budget amounted to about $40 billion. The appropriations for intelligence agencies are buried in various parts of the DOD bill. For example, the account, “Other Research and Development,” for the Air Force might have a few billion for CIA or NSA programs. The details of these intelligence appropriations are available only to members of Congress and a very small number of staffers. The paperwork resides in a secure vault in the Capitol building for those cleared members and staff to read; very few do.

[4] As this is written, the press is reporting DOD and OMB to be considering a supplemental of not $50 billion to finish out war funding in 2005 but $80 billion to $100 billion. Insiders report that the press has this wrong; it is more likely that DOD and OMB will ask for about $50 billion more for 2006 and a “down payment” for 2007 war costs of $40 billion to $50 billion.

[5] This number and those below for the VA and international security are not from congressional budget data but from “The Military Balance 2005-2006,” International Institute for Strategic Studies, Routledge, 2005, p. 42 . The final actuals for these agencies in 2006, including not just appropriations but also “mandatory” or “entitlement” spending, is not available and likely will not be for a few weeks, as of this date.

[6] “SIPRI Yearbook 2005; Armaments, Disarmament and International Security,” Stockholm International Peace Research Institute, Oxford University Press, 2005, p. 310.

 

Author(s): Winslow Wheeler

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CDI: Chitchat with Leon and Hillary on the Defense Budget

Posted by picard578 on April 6, 2013

Winslow T Wheeler

The invitation came to me from Secretary of Defense Leon Panetta’s Public Affairs Office to attend a “conversation” with Panetta and Secretary of State Hillary Clinton at the prestigious National War College in Washington. Although I knew it wasn’t me they wanted to talk to, I sat in the audience to hear Panetta and Clinton in action, especially on the subject of my prime interest: the defense budget.

The “conversation,” it turns out, was with Frank Sesno, the former CNN personality and currently the Director of the School of Media and Public Affairs at George Washington University. Sesno took the “conversation” assignment seriously; although he boldly said that it was important to “ask the tough questions” — just like a journalist — he did no such thing. Lofting over shallow dinner-talk queries, Sesno chummed it up with Panetta and Clinton and permitted them to say anything they wanted without fear of challenge.

Clinton tended toward impromptu speeches on whatever she was asked about — well articulated and forceful, much like she did as a senator at hearings where, rather than conduct oversight asking informed questions and following up, she would express her political points and neither seek nor reveal any new or deeper information.

Panetta was more subtle and single-minded. Although he comes from the same political background — White House insider and Congress — his answers were shorter and more softly stated, but they were directed at one and only one objective: defending the Pentagon’s budget.

Sesno started the “discussion” asking about budget cuts beyond the $350 billion the Pentagon has already committed to over the next ten years — saying “What’s really at stake?” Panetta whacked the softball question hard: “Very simply, it would result in hollowing out the force,” and “it would break faith with the troops and with their families,” and finally “it would literally undercut our ability to provide for the national defense.”

The bureaucrat moguls at the Pentagon, who currently preside over the largest defense or non-defense agency budget since the end of World War II, must have been delighted. After four years of sometimes tough guy Robert Gates, who fired senior officials for not toeing his line, DOD’s high spenders must be elated to have at the top someone who has leaped so quickly and with such eagerness to defending their agenda.

The $850 billion cut that Sesno was referring to does sound like a lot — if you are ignorant about the background and budget history. He offered no pushback and did nothing to probe Panetta’s budget preserving agenda, to question Panetta’s assumptions, and or even seek the data behind them.

Things didn’t get any better when Sesno allowed the audience a grand total of one question on DOD budget issues. The individual Sesno selected asked about funding for foreign language training. Panetta dutifully said it was important and that he wanted to look for “creative ways” to protect it. Clinton gave a speech about it, and the remaining 99.9 percent of the national security budget went unaddressed.

Instead of this feather-stroking chitchat, consider the following:

If the Pentagon’s “base” (non-war) budget were to be cut $850 billion, or so, over ten years, it would go down to about $472 billion annually, the approximate level of the base DOD budget in 2007. (This, not coincidently, is about the same level of a new round of defense budget cutting hysteria circulating in Washington in response to a just released memo from OMB Director Jack Lew.)

Using the Pentagon’s “constant” dollars that adjust for the effects of inflation, that $472 billion level would be more than $70 billion higher than DOD spending was in 2000, just before the wars. Over ten years, base Defense Department spending would be almost three quarters of a trillion dollars above the levels extant in 2000. And, none of the additional monies to be spent on the wars would be eliminated.

At $472 billion per year, the Pentagon budget would be almost $40 billion more than we averaged, in inflation adjusted “constant” dollars, during the Cold War when we faced an intimidating super-power, the Soviet Union, its Warsaw Pact allies and a hostile, dogmatically communist China.

At the 2007 $472 billion level our defense budget would remain more than twice the defense spending of China, Russia, Iran, Syria, Somalia, Cuba and any other potential adversary — combined.

The problem is not money. Under this so-called worse case scenario, the Pentagon would be left quite flush with money, plenty of it in historical terms.

The problem is that the Pentagon, as it exists under its current leadership, is incapable of surviving with less money. They quite literally do not understand how to face a future where the DOD budget exceeds any and all potential enemies by a multiple of only two.

Many — including Obama’s bipartisan 2010 National Commission on Fiscal Responsibility and Reform, a separate task force put together by congressmen Barney Frank (D-MA) and Ron Paul (R-TX), yet another commission headed by former budget leaders Senator Pete Domenici (R-NM) and OMB Director Alice Rivlin, and two alternative budget proposals from Senator Tom Coburn (R-OK) — have itemized how to save about $900 billion from the National Defense budget. The political landscape is littered with competent recommendations to remove many of the thick layers of hydrogenated fat from the Pentagon.

These proposals hit on many of the same soft spots in the DOD budget, such as the unaffordable, underperforming, years behind schedule F-35 Joint Strike Fighter. The implied consensus on such ideas and on the approximate amount (roughly $900 billion) suggest that the slightly lesser $850 billion in Pentagon savings is not “doomsday” (Panetta’s word) but quite endurable — and would actually leave DOD quite flush with money.

But, it is unthinkable to Secretary Panetta, as it is to those who perform the enabling chitchat.

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