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Up With a Bullet!

Mismeasuring the Defense Budget

by WINSLOW T. WHEELER

The new 2008 defense budget has been on the street for two weeks. A consensus has emerged in Washington about its size. That consensus has little to do with the facts and much to do with political maneuvering, which has been orchestrated with brilliant success by the very same White House that everyone in Washington discounts as washed up.

President Bush’s request for a Pentagon budget for fiscal 2008 (FY 08) is $481 billion.

To determine total U.S. security costs, add $142 billion to cover the anticipated costs of the wars in Iraq and Afghanistan; add $17 billion requested for nuclear weapons costs in the Department of Energy; add another $5 billion for miscellaneous defense costs in other agencies, such as the General Services Administration’s National Defense Stockpile, the Selective Service, and some Coast Guard and international FBI costs; and you get a grand total of $647 billion for 2008.

That amount will strike some as incomplete. An inclusive definition of our defense budget might also include homeland security costs; for those expenses (beyond the ones already in the Defense Department), add $36 billion.

In addition, there are other essential U.S. security costs in the budget of the State Department for diplomacy, arms aid to allies, U.N. peacekeeping, reconstruction aid for Iraq and Afghanistan and foreign aid for other countries; add all or most of the International Affairs budget ($38 billion).

Some might want to include some of the human costs of past and current wars; add another $84 billion for the Department of Veterans Affairs. Still others might want to add the share of annual payments on the interest of the national debt that can be attributed to the Defense Department; add another $75 billion. There’s more–various defense-related costs, such as costs to the Treasury for military retirement, are distributed all over the federal government.

The total for costs identified here come to $878 billion for 2008, a huge amount, but there will probably be even more.

Many analysts believe the war costs will grow in the year ahead, especially if the tempo of fighting grows in Iraq or Afghanistan, which has been the pattern for both up to now. Moreover, if the White House and Congress have cut corners on the costs to repair and replace equipment worn out by war operations, which has been their routine all the way through 2007, there will be additional "reset" costs for 2008, probably in the billions of dollars.

There are also the costs estimated by the Congressional Budget Office to actually execute the 2008 Pentagon budget.

For many years, the CBO has found that the Defense Department underestimates its own costs to develop, produce and maintain weapons and to support military personnel–beyond the other underestimations of war costs. If the CBO is right (and just about every Pentagon budget analyst says it is), add somewhere between $50 billion and $100 billion, just for 2008.

The actual total for 2008 is unknown; it will not be the $878 billion cited above.

Include or exclude any of the incremental costs listed above according to your own biases of what you believe should be counted; by any measure, it is not puny. Spending just for Pentagon expenses in 2008 ($625 billion) is today larger in inflation-adjusted dollars than at any point since the end of World War II.

According to the International Institute for Strategic Studies in London, the rest of the world spent just over $611 billion on defense in 2005, the latest year available. That compares to the $510 billion we spent on just Pentagon costs that year. And with most foreign defense budgets stagnant or shrinking and ours growing rapidly, we can be confident that the United States now exceeds the rest of the world combined in defense spending.

According to the CIA’s World Fact Book, the next biggest defense spender in the world, China, spent $81 billion in 2005–a very poor second place; it’s just 13 percent of the $625 billion that our Pentagon will spend in 2008.

The U.S. budget for security is not posed against a competing giant; it faces only pigmies in relative dollar terms.

And yet the White House, Defense Secretary Robert Gates, the military services and some big defense spenders among Washington’s think-tank punditry would have you believe that the American budget colossus is puny and shriveled, desperately needing augmentation.

The lens they apply to make the mountain appear a molehill is to describe the percentage of gross domestic product that America spends on defense; the FY 08 Pentagon budget amounts to an inconsequential 4 percent. The figure is made to look even more anemic when these advocates compare today’s share of GDP for defense to that spent by President Reagan in 1985 (6.1 percent) or better yet, by President Kennedy in 1962 (9.4 percent).

By using (or rather, misusing) this measure today, we appear to be strangling the defense budget, and clearly we should pay more, they argue.

Advocates do not point out that although our defense budget has grown since the Kennedy and Reagan administrations, the economy has grown much, much more, thereby making the percentage for defense smaller. These enthusiasts are literally arguing that our defense spending should be a function of the number of McDonalds in the country.

They cook their arguments because they have plans to expand defense spending further. The chiefs of the military services are just now sending to Congress what they describe as their list of "unfunded requirements" (also known as "wish lists") for additional programs to be added to the FY 08 Defense Department budget.

The Army has a list that totals $10.3 billion; the Marines have one for $3.2 billion; the Navy’s comes to $5.7 billion; the immodest Air Force has one for $16.9 billion; even the Special Forces Command has one for $400 million. The total is "only" $36.5 billion.

Although these considerable lists exceed what Bush and Gates permitted in the defense budget, neither will do anything to deter this bootstrapping. Indeed, Bush and Gates have already tacitly endorsed the end run around their own budget. They are both quite happy to have the additional spending. Indeed, their budget anticipated the gambit; this game has been played every budget year for the last 10.

Now in control of Congress and having made multiple promises to restore oversight of the war in Iraq and the executive branch in general, the Democrats have been successfully rolled by the White House, the military services and the big-spender pundits.

For example, the new House Armed Services Committee chairman, Ike Skelton, D-Mo., already has said how sympathetic he is to the military service’s "wish lists," and other Democrats are rushing to prove their stalwartness on defense by agreeing to the whole package.

Left completely unaddressed is how to pay for it all.

The advocates of the GDP measure imply that there are piles of loose cash lying around because the share of GDP is down and we should afford more. But, of course, there is no free money. Their rhetoric lacks integrity; they fail to say how or who should pay.

There are only three choices: increase taxes, cut domestic spending or borrow more money from our grandchildren to pay it off.

The Democrats in Congress are unlikely to make any tough choices. Neither will the Republicans. None of them will tell us how they will pay for the gigantic national security budget. On the other hand, their decision will be very clear to our grandchildren.

WINSLOW T. WHEELER is the Director of the Straus Military Reform Project of the Center for Defense Information and author of The Wastrels of Defense. Over 31 years, he worked for US Senators from both political parties and the Government Accountability Office on national security issues. He can be contacted at: winslowwheeler@comcast.net.