February 6, 2008

Spinning the Defense Budget

A firefight has broken out over the size of the Pentagon's 2009 budget request. Defense Secretary Robert Gates argues that his $515.4 billion budget - 3.4% of the nation's gross domestic product - is a bargain by historic standards. "To give you some basis of comparison in terms of the last times we were at war," he explained, "during the Korean War the percentage of GDP going to defense was about 14%, and during Vietnam it was about 9%." But critics, using a different yardstick, found the Pentagon's request historically high. The New York Times editorial page said Tuesday that next year's defense budget, after adjusting for inflation, will "be the the highest level of military spending since World War II."

So is it a bargain or a burden? The nation certainly doesn't feel as if it's engaged in a major war. Nothing is rationed, there are relatively few casualties, and the entire burden of waging the conflict falls on the shoulders of the 1% of Americans that serve in the professional military.

But Gates' pitch is also dubious. The nation's GDP didn't reach $2 trillion until 1953, and it passed $3 trillion in 1965. Arguing that Pentagon spending should be bolted to today's $13 trillion GDP ignores the inconvenient fact that it's the scale of the threats, not the size of U.S. economy, that is supposed to determine military spending.

Taxpayers also can't be blamed for scratching their heads over just how much they're being asked to spend on defense next year. That's because the budget doesn't include a couple of major items, such as the wars in Iraq and Afghanistan. U.S. Defense budgets have always omitted certain items - nuclear weapons, for example, fall under the stewardship of the Department of Energy. But with the two wars currently under way costing about $12 billion monthly, the gap between the budget presented by the Pentagon and what America will actually spend on the military in 2009 is going to be in the region of $200 billion - as much as the entire U.S. defense budget cast in 1981 - when it includes the $100 billion requested last year that Congress has yet to approve.

The Pentagon noted that it is planning no major cuts in weapons, which are primarily aimed at foes armed with tanks, planes, ships and subs, to help fund the wars on terror, in Iraq, and Afghanistan. Such hardware accounts for $184 billion in the 2009 budget.

Just three days before the Pentagon released its budget request, the Government Accountability Office released a study into how the military buys such weapons. It did not contain good news. "The cost of designing and developing these systems could continue to exceed estimates by billions of dollars if DOD continues to employ the same acquisition practices, including those for quality, as it has in the past," it said. "Excessive scrap, rework, and repair costs, as well as reliability problems impact overall quality and could ultimately present serious consequences on a weapon system's long-term support costs and affordability."

But the quality of defense spending is unlikely to figure prominently when Gates testifies on Capitol Hill on Wednesday. Lawmakers are always more concerned about how much money is being spent in their districts, rather than how well it is being spent.

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