Championing Responsible National Security Policy

The $360 Billion Gorilla in the Sequestration Debate

The debate surrounding Pentagon sequestration—the planned reductions to Pentagon spending scheduled to go into effect in March—is raging.

Secretary of Defense Leon Panetta has said the spending reductions would lead to the U.S. becoming “a second rate power.” Chairman of the House Armed Service Committee, Buck McKeon (R-Calif.), said, “It’s going to start costing lives.”

It’s difficult to believe this hyperbolic rhetoric given that, according to the Congressional Budget Office, sequestration will still leave the Pentagon with more money than it had in in 2007—a time when the U.S. was fighting two wars, and big Pentagon contractors were providing tens of thousands more jobs than they are today.

But, there’s still a more glaring omission than this, even from those intimately aware of the waste and pork-barrel projects rampant in the Pentagon’s budget, such as Senator John McCain (R-Ariz.), who last week delivered a Floor statement on the Pentagon’s “culture of inefficiency.” (He was referring to the mindset at the Pentagon to conduct business without “regard either to affordability or what our service-men and -women actually need to defend the nation.”) The gorilla in the sequestration debate is what the Pentagon spends the majority of its budget on—contractors.

Contractors are a large source of goods and services for the Pentagon. Unfortunately, the Pentagon has become increasingly over reliant on contractors, and the cost to taxpayers is immense.

Every year for the last five years the Pentagon has spent more than $360 billion purchasing goods and services from contractors. In other words, the Pentagon has, on average, been spending nearly $1 billion a day on contractors. Even if we just looked at what the Pentagon spends on service contracts, that alone is more than what it spends on troops and civilian employees combined.

Service contractors can cost, on average, 2.94 times more than an average Pentagon civilian employee performing the same job. Yet, the Pentagon has threatened to furlough every one of its nearly 800,000 civilian employees, while not taking any meaningful steps to reduce spending on service contractors. And, when civilian employees are cut or furloughed, no cost comparisons are done to ensure that the Pentagon is utilizing the most cost effective workforce.

Last week, Obama White House officials had a meeting with Pentagon contractors lobbying to stave off the Pentagon spending reductions. After the meeting, White House Press Secretary Jay Carney echoed some of the industry’s talking points about the impact on small business. The Aerospace Industries Association has claimed that 520,399 jobs will be lost as a result of Pentagon sequestration, even though the vast majority of Pentagon contract money doesn’t go to small businesses.

So, why is the Pentagon’s largest expense curiously absent from the sequestration debate?

One possible explanation is that Pentagon contractors funnel millions of dollars into U.S. politics every year. According to data from the Center for Responsive Politics, the defense industry donated more than a million dollars to President Obama’s re-election campaign, and more than $20 million to congressional campaigns during the 2012 election cycle. The industry also spent more than $100 million on lobbying in 2012.

The industry often directs its lobbying and campaign contributions to legislators responsible for Pentagon oversight. Representative McKeon, for example, received more money—$556,100 – from the industry than any other politician in the 2012 election cycle. Pentagon contractors even went so far as to contribute big money to the California State House campaign of Representative McKeon’s wife.

Another possible explanation is that the revolving door between the Pentagon and contractors is spinning feverishly. Citizens for Responsibility and Ethics in Washington (CREW) recently reported that “70 percent of the 108 three-and-four star generals and admirals who retired between 2009 and 2011 took jobs with defense contractors or consultants. In at least a few cases, these retirees have continued to advise the Department of Defense—all while on the payroll of the defense industry.”

CREW’s investigation also found that “68 percent of lobbyists for the top five defense contractors had prior public sector experience.”

President Dwight D. Eisenhower famously said, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

It’s not hard to imagine what Eisenhower would say of the $360 billion gorilla in the sequestration debate.