Can't Touch This?: The Pentagon's Budget Fortress

Nearly six years after the fall of the Berlin Wall, all talk of a peace dividend has evaporated. The very phrase seems quaint, an echo from another era. Whole domestic agencies, meanwhile, are targeted for extinction. Welfare and every other form of safety net--home heating subsidies, housing and homeless programs, food and nutrition programs--are under the budget knife. Medicare, long considered too politically risky to cut, has lost its immunity. Only the military budget remains secure from cuts, not only off the table, but slated for increases by both the Clinton administration and congressional Republicans.

Yet credible defense analysts across a wide ideological spectrum, including former Department of Defense officials, congressional budget analysts, think tank scholars, and at least one former head of the Central Intelligence Agency, say the Pentagon could be further cut, saving as much as $200 billion over the next five years. Why the immunity?

Two propositions are working in tandem to maintain the Pentagon's protected status, one erroneous, the other problematic. The first is the belief that, since the end of the Cold War, defense decreases have cut the military "to the bone"--to its very marrow. The second is a vague but widespread belief that, while the Cold War may be over, the world is still a dangerous place. Both propositions, critics say, combine fact, mythology, ideology, and theology and need to be thoroughly reexamined. Analysts of diverse political stripes argue that the military has not been cut to the bone, that it has the fittest, best-trained force ever, and that the global dangers faced by the United States have been exaggerated.

America's behavior in a wide variety of international hot spots, from Bosnia to Somalia to Chechnya, suggests an era with few strategic threats to the U.S., in which both the administration and Congress are reluctant to intervene in foreign conflicts, no matter what the Pentagon budget. The most hawkish figures in both parties tend to be the most isolationist. An expanded military could find itself all dressed up with no place to go.




Has the military budget been cut since the end of the Cold War? Yes, definitely. How much has it been cut? Estimates vary from 15 percent to 40 percent, depending on what years are compared and whether inflation is taken into account.

Secretary of Defense William Perry says the military budget has been cut by 40 percent, a figure widely cited by politicians who support current levels of spending or who are trying to save their states' military bases or defense contracts. California Senator Dianne Feinstein used the 40 percent figure in arguing against the recommended closure of McClelland Air Force Base. Defense hawks in the House and Senate use it routinely.

This percentage sounds dramatic until its basis is understood. Laurence Korb, a former assistant secretary of defense, now affiliated with the Brookings Institution, says the 40 percent figure is technically correct only if you use the Reagan 1985 budget year as a base. Between 1980 and 1985, Reagan increased defense spending slightly over 50 percent. Korb offers a different comparison: "Let's take the military budget and put it in today's dollars. The Clinton plan is higher than it was in 1972."

In adjusted dollars, the U.S. is spending more on defense today than it did in 1955, or 1975, or most years of the Cold War with the exception of the Vietnam and Reagan peaks. The 1996 budget will be approximately $267 billion, or 85 percent of average Cold War budgets.

These comparisons, of course, leave out the defining event, the end of the Cold War, and the many geopolitical changes that have accompanied its ending. Together, the United States and its allies account for between 70 and 80 percent of the world's military spending. Although estimates vary considerably, most experts say that the next highest spending countries-France, Japan, and Russia-each spend somewhere between $30 and $50 billion annually.

Numbers like these lead such politically different figures as Bob Borosage, director of the Campaign for New Priorities and a former Jesse Jackson advisor, and William Colby, former CIA director under Nixon, to argue that we have a desperate need for new thinking. Colby breaks down previous military expenditures to demonstrate that the lion's share of annual trillion-dollar expenditures was due to the conflict with the Soviets: "About $300 billion of it was our defense budget, about $300 billion was our guess about what the Russians, the Soviets, were spending, and about $200 billion was what NATO and Warsaw Pact allies were spending. So, of the trillion, $800 billion was mostly, not exclusively, devoted to the Cold War. And it's over."

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On the libertarian right, the Cato Institute questions the need for today's spending levels. In a July 1995 report, the institute urged military spending be immediately reduced to $205 billion, with a goal of reaching $140 billion (in today's dollars) by the turn of the century. In releasing the report, its authors note: "One of the most tenacious myths, especially among conservatives, is that there has been a dangerously excessive reduction in U.S. military spending since the late 1980s. By almost any measurement, that is not the case."


The end of the Cold War has been sharply felt by individuals and communities whose livelihoods for decades have been shaped by defense jobs. The absence of more robust national investment or conversion policies that could cushion the effects on local economies has silenced traditional advocates for limiting military spending. Unions, such as the United Auto Workers or International Association of Machinists, whose leaders for years tried to trim defense spending, are overwhelmed by layoffs and meager assistance programs and no longer able to carry on that fight. Many liberal and moderate politicians, who in the past have challenged military spending and might be expected to articulate some post-Cold War new thinking, have been silenced by the need for local jobs. Some have become advocates of a strong defense, as they try to save bases and vote for bombers and submarines that even the military says are superfluous.

Senator Feinstein stunned critics of the B-2 bomber when she led the fight to continue its production. The B-2 is a bomber designed specifically to penetrate Soviet defense; since the Soviets no longer have anything we need to penetrate, the logic for continued production of B-2s has disappeared. The cost per bomber is estimated to be between $1 billion and $1.5 billion. Brookings's Korb minces no words: "We had killed the B-2 if she hadn't gotten involved. There was a handshake agreement-everybody had signed up on it-the Air Force, [Senator] Nunn-no more than 20. Even the Air Force was behaving itself. Then, she gets up and opens up the damn thing, and all bets are off." He adds, "And, you haven't heard Clinton get up and say we don't need B-2s."

Leading the fight against the B-2 was deficit hawk Republican John Kasich, chair of the House Budget Committee, and traditional dove, Congressman Ronald Dellums, ranking member of the National Security Committee, formerly the House Armed Services Committee. The vote for producing more bombers was close, 213 to 203, with 70 Democrats joining Republicans. Several weeks after this fight, the New York Times headlined a General Accounting Office (GAO) draft report that found after 14 years, the B-2 has not passed most of its basic tests, and cannot distinguish rain from other obstacles.

Many liberal politicians have long supported defense cuts, except in their backyards. Feinstein's more liberal predecessor, Alan Cranston, perennially supported production of the B-1 bomber. In recent years, base closures and downsizing have coincided with substantial job losses in non-defense areas, making the political choices more excruciating.

Many politicians say privately that they feel helpless and often unable to save private-sector jobs. At least defense jobs, as public-sector jobs, are something they have a shot at influencing. Connecticut politicians freely acknowledge that support for the Seawolf, a submarine specifically designed to fight the Soviets, is a sine qua non for re-election.

In the recent round of base closures, one expected to hear the following rhetoric from Republican Governor Pete Wilson: "We are cutting into the muscle, we are cutting into the ability of the American military to be able to project force in a firm and convincing fashion that has special significance here in the Pacific region, which is particularly volatile." One was surprised to hear both Senators Feinstein and Barbara Boxer using strong defense arguments. Closing McClelland Air Force Base, they argued, poses "risks to national security." Even an angry President Clinton, in his speech publicly accepting the base-closing commission's recommendations, stuck to economic factors to explain his anger.




During the early primaries of the 1992 election candidate Clinton advocated substantial cuts in the military budget, continuing but accelerating Bush's downward trend. Clinton promised $100 billion worth of cuts over five years, $50 billion more than President Bush. President Clinton, however, after an inaugural budget that continued the Bush trajectory, has gradually been restoring previous decreases. He had restored $36 billion prior to his proposed 1996 increases. In this year's budget resolution fight, Clinton proposed increases of $70 billion over the next six years. Some House Republicans wanted to raise military spending by as much as $150 billion during the same period.

What accounts for the shift in Clinton's stance? In his first year, the president was roundly criticized by the defense establishment for plucking a defense figure from a hat rather than using one backed by a cogent set of strategic objectives. President Clinton directed Secretary of Defense Les Aspin to conduct a strategic planning process and a thorough review of defense strategy, force structure, modernization, infrastructure, and foundations.

The Pentagon's effort resulted in the "Bottom Up Review" (BUR), released in September 1993. It has been characterized by former intelligence chief William Colby as bureaucratically self-interested, by a Cato Institute publication as "fraudulent," and by Aspin intimates as an exemplar of strategic clarity, explicitly linking global security objectives with budget estimates. The BUR's assumptions about the world's dangers now drive the Pentagon's request levels, their definitions of military readiness, and the claim that the current budget is underfunded.




As any household planner knows, budget needs vary greatly with how the future is viewed. Should you plan for a relatively crisis-free year? For an unexpected fire? For a fire and a flood? For one fire, one flood, and an earthquake? Clearly, you are going to need larger sums of money in the latter cases. Critics say the Pentagon constructed a vision of geopolitical dangers based on worst-case assessment of potential threats. These include not only wars, but also the potential economic collapse of Russia and China. Those two nations may well face economic calamities in the coming years, but it's not at all clear how the U.S. would intervene militarily.

The report says the Pentagon used models, war games, military analyses, and discussions with political leaders to convert strategy into force requirements. The key force requirement premise, and the central budget driver, is that the United States must be ready to fight, simultaneously, two regional wars, in geographically distinct areas. This is known in Pentagonese as the MRC, for Multiple Regional Contingencies. Most scenarios involve one war in the Gulf and one with North Korea. The MRC price tag has been estimated to be as high as $90 billion per year per war. Skeptics in and out of Congress maintain that the military has essentially substituted rogues for Soviets. One budget analyst calls it overly ambitious, a case of the Pentagon having pushed the goalposts back, trying to get a level of security we never had during the Cold War.

Former intelligence chief William Colby, who thinks the military budget can easily be reduced 50 percent from Cold War levels without endangering national security, works his way down a list of threats, often accepting the Pentagon's worst fears, but not their approach or their budget figures. Colby agrees that the Gulf is our most pressing strategic problem. "I think with these rogues, there's no use debating whether they could get a weapon or whether they have a weapon. Assume they have, now what do we do?" He believes diplomacy, mediation, and arms control are more likely to forestall danger, and that we're doing exactly the right thing with Iraq, Iran, and North Korea.

Another major danger, cited in the "Bottom Up Review" and frequently expressed in congressional debates, is that the Russian experiment will fail and, once again, the United States will be threatened. Colby, along with others, accepts the possibility of future danger but argues that the financial costs are too high to treat it as a near-term threat: "Russia could turn to a new fascism if we are so dumb as to not support them adequately, and a new aggressiveness toward their neighbors could build up again to a cold war. It would take them years-ten years, perhaps. Meanwhile, their allies are our allies."

Implicit in such critiques is the importance of nonmilitary resources, foreign aid, cooperative economic ventures, and multilateral lending. Yet, while increasing defense, Republicans have been trying to gut most nonmilitary forms of foreign assistance.




The relationship between danger and budgetary requirements is a direct one: the greater the assessed danger, the larger the budgetary needs. Congress rarely debates the merits of any of the contingency scenarios. Most of the debate centers around whether U.S. troops are adequately prepared for the contingencies. Unfortunately, most discussions of readiness get quickly reduced, bumper-sticker fashion, to the hot-button issue of a hollow army, a political code word among defense hawks meaning American troops ill prepared to fight.

The phrase "hollow army" dates back to the 1970s and refers to problems associated with the change from conscription to a volunteer army. Troops were hard to recruit in the post-Vietnam period, their quality was low, pay was inadequate, and training was poor. Democrats, especially President Jimmy Carter, were blamed for these conditions. The phrase has been kept around, Willy Horton style, and is a charge that makes Democrats skittish, particularly the Clinton administration. Korb, who was Reagan's readiness czar during his first term, says: "You've got a lot of the same people in the Pentagon who were there under Carter, and they are not going to let themselves fall into that trap again. So, the military says we're hollow, we've got a problem and they give 'em the money." Korb says today's military is high on quality: Nearly 100 percent of the recruits are high school graduates-the law requires only 65 percent-and the training budgets per capita are higher than they have ever been.

Readiness is hard to measure. The key variables of personnel, equipment and supplies on hand, equipment readiness, and training are translated into performance measures, such as hours of flying time and tank driving time, and are numerically scored. Readiness standards were heightened during the Reagan buildup, and they are used today to boost Pentagon claims of a funding gap. Richard Kogan, formerly a House budget analyst, now at the Center for Budget and Policy Priorities, argues that a good analogy to the gap can be found in modern medicine: "Technology has surpassed our ability to pay for what technology can provide. We simply can't afford as a society to buy all the things that would improve either our defense or our health. . . . It could consume the entire gross national product."

This thirst for reducing risk through technology found its ultimate expression in Reagan's Strategic Defense Initiative (SDI), better known as Star Wars. Scientific ridicule of this plan, which would build a kind of shield over the U.S. to protect us from Soviet missiles, along with the end of the Cold War, sank SDI for a time. Now, remarkably, SDI has been renamed the Ballistic Missile Defense Organization (BMDO) by the late Les Aspin, and Republicans and Democrats have both proposed money for a renewed effort. The Clinton administration put money in for theater defense-the ability to defend ships and troops stationed close to dangerous areas where their vulnerability to missile attacks are increased. The Republicans added money for a national ballistic missile system defense, a version of Reagan's shield. (For reasons that are not entirely clear, Star Wars is a theological issue to many Republicans, who regard support as a litmus test of party loyalty, as potent an issue as abortion rights are for Democrats.)

Proponents argue that a national shield is now more likely to work than it was during the Soviet era, because the defense is against, say, three or four missiles launched by rogues rather than against several thousand Soviet missiles. Critics say such a defense is still a pipe dream and unlikely to provide the promised security. In the meantime, BMDO has qualified as another national security need and added billions to the military budget.




During his first term, President Clinton has been constrained from further cuts by a variety of factors, some of which are unlikely to change during a second term. First, Clinton starts from a position of weakness, not only lacking the credibility of military service, but having avoided the draft and opposed the war in Vietnam. Second, his position was further weakened, some say fatally, after he took on the issue of gays in the military. Said one former Pentagon official, "Once they rolled him on the gay issue, the battle was really over."

A third factor is more ideological: Bill Clinton shares the conviction, along with other founding members of the Democratic Leadership Council (DLC), that Democrats have lost previous national elections (McGovern, Mondale, Dukakis) because they were seen as soft on defense. He is determined never to be vulnerable to these charges. In Elizabeth Drew's book on President Clinton's first year, On the Edge, Clinton worries how his defense budget figure will be perceived politically, knowing it will peg him as either a centrist or a liberal. In later budget cycles, according to one White House insider, the Pentagon got an increase strictly because Clinton was worried about how the military might perceive him. At the same time, there is no evidence that Clinton is uncomfortable with the current budget figures, or that if he were somehow freer, he would slash them.

Some of Clinton's harsher critics believe the administration has squandered a critical opportunity to define post-Cold War priorities. But most congressional Democrats, however critical they may be of spending levels, have muted their criticism in favor of supporting the president. The Black Caucus budget, which called for lower levels of defense spending, garnered only 56 votes this year. Congressman Dellums, as the ranking minority party member on the National Security Committee, sent his own letter to Budget Chair Kasich. The letter, temperate in tone, recommends $82.5 billion worth of reductions to the Clinton plan over the next five years. (Activists outside Congress say Dellums unfortunately did not mobilize support for his position either in or outside Congress.) Senator Tom Harkin tried to amend the military budget in the Senate, and found similarly that he he had few allies. The amendment failed 28 to 71. These congressional failures are also indicative of the lack of public clamor to cut the military budget.

The only serious fights in Congress to cut defense spending have been led by Republicans over specific weapons: House Budget Chair John Kasich fought against the B-2 bomber, and Senator John McCain of Arizona fought against the production of a third Seawolf submarine. Like the B-2 stealth bomber, the Seawolf was specifically designed to counter the Soviet fleet. Now, there are no enemy fleets to counter. Both fights were lost. McCain, it should be noted, simultaneously advocated a $120 billion increase in defense spending generally. In the House, Kasich also voted initially against the new Star Wars. His position got him in trouble with the Speaker and contradicted the Contract with America, however, and he soon shifted his position, further dampening any thoughts of a bipartisan coalition between Republicans concerned about the deficit and Democrats concerned about the military budget.

This spring, while both parties were rewarding the Pentagon with increases, the General Accounting Office issued a report on the Pentagon's ability to keep track of its spending. Not only was there a $28.8 billion gap in past expenditures that no one could account for, but the Pentagon currently can't find vouchers for approximately $1 billion of monthly expenditures. These findings went largely unnoticed in the media, but they outraged Republican Senator Charles Grassley of Iowa. The Pentagon's sacred cow, he said, had become a fatted cow. Threatening to deny further budget increases, Grassley asked: "Why is it that members on my side of the aisle send their management principles on vacation whenever the defense budget is mentioned?"



AFTER 1996

One factor that could force a reappraisal is the long-term politics of budget balancing. Greg Bischak, executive director of the National Commission for Economic Conversion and Disarmament, sees three budget bombs: the Pentagon's own ambitious and underfunded plans; the "back-loaded" path to a balanced budget requiring far more stringent program cuts after 1996; and the Pentagon's chronic cost overruns. The GAO and the Congressional Budget Office (CBO) both predict a procurement bulge by the year 2000, based on historical rates of cost overruns. The GAO estimated the costs could run as high as $60 billion.

Robert Greenstein, director of the Center for Budget and Policy Priorities, who is deeply involved in defending low-income programs from budget cutters, agrees that any future defense cuts are likely to be budget driven. "As these [domestic] cuts go deeper and deeper, and yet we're still a long ways from balancing [the budget] . . . at that point you could start building concern and pressure for going deeper into defense and not so much into domestic."

Yet, should such public sentiment develop, Congress has devised a technical barrier, known as a budget wall, to prevent savings from the defense budget from being used for domestic programs. During the Bush administration, these walls were created by statute, and thus had the force of law. Greenstein says virtually no one has noticed that the Senate resolution reinstates a budget wall. The resolution requires a supermajority of 60 votes to move money from defense to domestic in any one of the next three years.


What is surprisingly absent is any public outcry. While budget bombs may help drive a reassessment of spending priorities, public engagement in the debate is crucial to any substantial shift, and that will not come without effort.

Historically, most attempts to mobilize public support for a reduced military budget have failed. Activists have worked for decades, at both the national and local level, on strategies to convert defense to non-defense activities, to little avail. Most approaches to conversion have tended to be micro-plant by plant or community by community. The main advocates in the past for national level policies were progressive union leaders, such as Doug Fraser of the United Auto Workers or William Winpinsinger of the International Association of Machinists. Now, these leaders are retired, and their unions racked with the pain of unemployed workers. Their legislative battles are now mostly defensive.

Conversion advocates have imagined that companies in the business of meeting defense contracts could find something else to build. The same handful of examples is always cited, such as Grumman's development of aluminum canoes or Raytheon's microwave ovens. But most defense contractors are terrible at shifting into commercial markets, and government has failed to stimulate a large-scale "demand side" conversion program by changing what it procures from industry.

President Clinton won high praise for many of his initial diversification plans, such as dual-use (commercial and military) technologies; however, congressional Republicans have tried to scuttle this program along with Clinton's investments in education and training. In this year's budget, the president requested $500 million for the Technology Reinvestment Program within the Defense Department; it has been zeroed out in the House and halved in the Senate, with final decisions awaiting a conference committee. Bischak, whose commission monitors congressional action on conversion programs generally, estimates that total cuts in all conversion-related programs, including those programs located in other government departments, could be as high as 50 percent from Clinton's original proposals.

The Economic Policy Institute's Jeff Faux says that it is clear in retrospect that serious conversion required large-scale public-sector projects, which would literally create demand and direct new investments in, say, a new generation of public transportation. United Auto Workers' Barbara Warden lobbied for a small-scale conversion-style program in which the federal government would guarantee small loans for small and middle-sized suppliers who did wish to diversify but who couldn't obtain capital in the private markets. This $50 million program, which would cost the federal government only if the firms defaulted, finally passed Congress last year but still faces persistent opposition. The main argument against such assistance is a kind of voluntary budget wall. Republicans, and some Democrats, want nothing in the defense budget that doesn't go directly for defense. The argument that the Defense Department is no place for programs to aid displaced defense workers, or to foster commercial applications of military technology, would not be a problem if the domestic budget contained money for these programs, but it doesn't.

Thus, we come full circle. Until congressional Democrats have national policies that can ease the pain of defense workers and their communities, and confront directly the question of a post-Cold War economy, they have few alternatives but to walk in lockstep with the president. And, unless the president finds a compelling reason to reexamine the Pentagon's plans, and to make the case for a leaner military, his policies are not likely to provide those economic alternatives.

One awaits further action from outside Washington. The near-total silence over the Pentagon and its sacrosanct budget began to give way to a smattering of editorials, columns, and letters to the editor, raising the question: Why is defense spending protected? As the rest of the federal budget comes in for drastic cuts, that question deserves much greater public attention.

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