Championing Responsible National Security Policy

Is the Pentagon Crying Wolf over Its Budget?

The Pentagon is requesting a $38-billion funding increase in this year’s budget, claiming it can’t provide for national defense without it. However, recent reports from the Congressional Research Service (CRS) and the Government Accountability Office (GAO) paint a different picture. These reports show that even under the Budget Control Act, Pentagon funding is well above historical norms, and that the Pentagon is failing to take steps to manage this level of funding without negatively impacting operations and readiness. Moreover, the Pentagon has failed to prepare itself for the possibility of sequestration by fully studying the impact of previous automatic cuts.

U.S. military spending in the last decade is unprecedented. According to CRS, in terms of total dollars, the U.S. spends more on the military now than at any time since the Korean War, when it had about double the troops under arms. There have been two major buildups since then, one for Vietnam and the other during the Reagan presidency, both followed by significant drawdowns. In Iraq and Afghanistan however, military spending expanded far more, and contracted far less than in previous conflicts. Since peaking in 2010, it has stayed elevated despite the relatively small scale of operations, and the conclusion of major hostilities.

Furthermore, over the last decade the Pentagon has taken the irresponsible step of paying for some of its base budget requirements with cap-exempt war funding in the Overseas Contingency Account (OCO). This has created two related problems: first, it has made defense budget oversight more difficult by putting funds in opaque accounts. Second, it has made it hard to calculate budget growth and determine how best to move the Pentagon forward in the BCA era. It is in this context of historically unparalleled funding and reckless budgeting methods that the Department of Defense (DoD) has faced sequestration.

(Source: Amy Belasco, Defense Spending and the Budget Control Act Limits, Congressional Research Service, June 3, 2015, p. 19.)

DoD’s argument for an increased budget is that it can’t execute national security strategy at current funding levels. Speaking to the Senate Appropriations Committee earlier this year, Chairman of the Joint Chiefs of Staff General Martin Dempsey argued that “sequestration will result in a dramatic change to how we protect our nation and how we promote our national security interest.” This seems incongruous with DoD’s budget documents from just a year ago, which said current funding levels, though they carried some risk, were appropriate to “to protect and advance U.S. interests.” It is not clear what has changed; Russian revanchism and the rise of ISIS are requiring Pentagon resources, but expanded operations in Europe and Iraq have cost $1 billion and about $2.75 billion respectively, less than 10 percent of the requested increase.

That $38 billion increase is 6.8 percent above the budget caps, and will trigger sequestration unless it goes into the OCO or is cut from the budget. The OCO option creates long-term planning problems for the military and is a clear violation of the spirit of the BCA, so it should be off the table. Fortunately, according to CRS, modest budget cuts are far from unusual. First, the post-Iraq and Afghanistan drawdown has been the smallest since World War II, leaving Pentagon funding still well above historical norms. Second, since 1950, Congress has appropriated defense funding 3 to 5 percent below the Pentagon’s request in 4 out of every 10 years. And, while the difference is higher this year, over the next few years, the difference between caps and projected budgets will decline to an unexceptional average of 5 percent.

Graph of Department of Defense spending from FY1950-FY2025

(Source: Amy Belasco, Defense Spending and the Budget Control Act Limits, Congressional Research Service, June 3, 2015, p. 18.)

Moreover, the 6.8 percent figure does not accurately reflect the gap between military needs and military funding. According to the CRS, the Pentagon is leaving savings on the table by failing to delay high-risk acquisition programs and implement efficiency savings. The $1.4 trillion F-35 Joint Strike Fighter—the most expensive weapons program in American history—is years behind schedule and has more than doubled in cost. A large part of the problem has been simultaneous testing and production, which requires costly retrofits as new issues are discovered. Since new problems are being discovered on a regular basis, CRS writes (as POGO has advocated) that delaying the program, “could be attractive because the additional time could help ensure that problems would be resolved before production is ramped up.” There are other areas where the Pentagon (with congressional approval) could find savings as well, such as Base Realignment and Closures, changes to the military pay and compensation system, and contracted services.

DoD has also failed to fully study the impact sequestration had in 2013 despite the obvious importance of conducting an internal review. In just seven months in 2013, DoD cut 7 percent of its budget, a total of $37.2 billion. Yet, according to the GAO, the Pentagon “did not comprehensively document or assess best practices or lessons learned from their experiences.” Some measures taken by the services even drove up costs in the long term, including a deployment delay for a carrier strike group and maintenance delays for Army equipment. In future years, “[g]iven that some budget flexibilities the department used in 2013 to mitigate the size of reductions may be unavailable…it is all the more important that DOD be able to use the institutional knowledge it gained when implementing sequestration,” writes the GAO.

Our service members deserve full support, but that doesn’t mean rubber-stamping inflated budgets at taxpayers’ expense. If history is any guide, current DoD funding is sufficient, and there are cost-saving measures that should be implemented before spending is increased. If a budget increase is necessary, it should be done within normal accounting procedures, and not through accounting gimmicks like OCO that enable waste and inhibit oversight.