Panetta’s Phony Doomsday Scenario

by FRANKLIN C. SPINNEY

President Obama will submit a new five year spending plan for the entire federal government in his annual budget message to Congress later this month.  Included in his message will be the Pentagon’s five year spending plan.  The new plan covers Fiscal Years (FY) 2014 to FY18, and FY14 will begin in October 2013.  That means the last year of this plan, i.e., FY18, will begin in October 2017, or nine months after Mr. Obama has left the White House and moved on to greener pastures.  So, although the President has submitted a plan that includes budget details for FY18, two-thirds of that budget will be executed, and no doubt modified, by his successor as well as unfolding events.

In other words, Mr. Obama can only be responsible for only the first four years of his new five year plan — i.e., FY14 thru FY17.

Lets take a look that these years.

The new defense plan will embody a reduction of  about $140 to $160 billion over the comparable four year period in the five year plan Mr. Obama sent to Congress last year (i.e., the FY13-17 plan).  The looming possibility of a budget sequestration in March, however, could lop off another $50 billion per year, or a total of about $200 billion between FY14 and FY17 of  the new plan.  Assuming the sequester goes into effect as scheduled on March 1, we are looking at a total reduction over Obama’s second term of about $360 billion when compared to the four common years of last year’s plan.  It is this cutback that the current Secretary of Defense is peddling as a doomsday scenario that will turn the United States into a second rate power.

Figure 1 places Mr. Panetta’s claim into the context of past defense budgets.  I have aggregated these budgets into the four year totals corresponding to each presidential term since Harry Truman’s second term began 64 years ago in 1949 (FY1950).  Bear in mind, the effects of inflation have been removed and these four-year totals are presented in trillions of FY13 constant dollars.

FigureSpinney 1

 

Figure 1

Several other points need to be clarified when interpreting the information contained in this figure.  First, note  that the Korea and Vietnam Wars were funded out of what is now known as the base budget (denoted by the solid colors), whereas the so-called global war on terror has been funded by supplemental emergency appropriations which are added each year and not planned into the future.  These supplementals are denoted by the lightly shaded colors in Figure 1.

Second, Mr. Obama’s four-year total for the base budgets for FY14 thru FY17 — i.e., his second term — is depicted by the rightmost blue bar with the yellow ‘hockey stick’ labeled ‘Obama 2.’  This bar says nothing about the war on terror, which will be funded on a pay-as-you-go basis, whereas Korea and Vietnam and all our other wars were included in the base budget.

Third, bearing in mind that the new plan has not been released. The blue bar labeled ‘Obama 2’ depicts the four year total for FY14-17 that was included in last year’s FY13-17 five year plan. The yellow box labeled “New Plan” givens the total that will be in those years when this plan is submitted to Congress later this month.  The yellow box labeled “Seq” depicts the further reduction that would take place over these same four years, should the budget sequester be triggered.

Fourth, the two horizontal dashed lines compare the budget totals for the new plan and the sequester to those of earlier presidents stretching back to Mr. Truman and the dawn of the Cold War.  The green arrow on the left side of the figure enables us to compare the four year totals of the new plan and the sequester to those  averaged during the Cold War between the first fiscal year of the second Truman administration and the collapse of the Soviet Union by the end of the GHW Bush administration.

Figure 1 shows us how the new plan lops off between $14o and $160 billion (or about $35-$40 billion per year for four years) from the four common years in last year’s plan. According to news reports, this reduction will cause the Air Force to cutback 286 aircraft  from a total aircraft inventory of about 5,500 aircraft and the Navy to reduce the increase in the growth of its battle fleet from the current level of 287 to 313 to a reduced goal of 306. Members of Congress have already expressed concern over these cutbacks, although they insist on a sequester unless Obama slashes social programs.  Mr. Panetta has already signed off on these changes, so presumably these reductions will not produce a doomsday scenario.

The New Plan in Context 

Note that the total of the Obama 2 budgets is approximately equal to that that of the LBJ administration during the Vietnam War and almost equal to those of the Reagan 1 and 2 administrations (especially when one accounts for the uncertainties implicit in the inflation adjustment).  But if this year’s budget driven reductions were made from comparable levels during the Johnson and Reagan administrations, the quantity reductions would have come from a much larger base: the AF quantity reductions would have been measured against its far larger inventories of about 13,000 aircraft and 8,300, aircraft respectively.  Similarly, if the reduction in the Navy’s goal of 313 to 306 ships is compared to size of the fleets the Navy averaged during the Johnson and Reagan administrations would be reduction from  910 and 570 battle force ships respectively.

In other words, the proportional severity of today’s force cutbacks today is far more a function of shrinking inventories than of shrinking budgets.  The shrinking inventories are a reflection of the simple fact that the unit costs of buying and operating our weapons are increasing much faster than budgets, even when those budgets increase rapidly as they did in the early 1980s and the especially during the last decade — this is more a problem of management incentives and bureaucratic game playing, as I have described detail repeatedly since I began studying these problems in the late 1970s, see for example, here,  here and here.

Sequester

The yellow box in Figure 1 labeled “Seq” is Mr. Panetta’s doomsday scenario. This is the terrifying budget sequester.

Note that the sequester would reduce the four year total of Obama’s base budget to level of Harry Truman’s Korean era budget total, which, we should remember, was sufficient to support 960 ships, about 15,000 aircraft, and a high tempo Korea War in which we maintained a deployment 300,000 US troops and sustain it by rotating  5.7 million troops thru the Korean theater.  This was a war where we suffered 36,000 KIA, lost over 1,400 aircraft and flew well over 200,000 combat sorties. Oh, and I almost forgot: there was sufficient money left over for the AF to buy over 15,700 airplanes, for the Navy to purchase over 8,000 planes, and for the Army to buy almost 9,000 tanks.  Note also that the doomsday budget is also approximately equal to that averaged during the Cold War.

But in the post-cold war world of today, the current Secretary of Defense would have us believe the same level of level of spending would create a doomsday scenario for the Pentagon’s ambitions to (1) defeat a few thousand lightly armed Jihadis, who main firepower is the kamikaze-like suicide bomber and (2) to fund the pivot toward China to start a new Cold War against a country that spends about $143 billion on defense, only about 30% of the US defense budget assuming that budget is in fact reduced to sequestered level .

Does anyone see a problem?

So, with this in mind, I want to respectfully submit two closely connected questions for the next Secretary of Defense, whoever he or she may be:

1. Can you explain how a budget sequester that reduces future defense budgets to levels averaged during the cold war can possibly produce a doomsday scenario for the far smaller forces of the post-Cold War era, particularly when there is no superpower threat to counter?  Or is the question of spending levels really a question triggered by incentives and bureaucratic gaming fueling the greed for money and power of the factions within Military – Industrial – Congressional Complex ?

2. Before answering my second question, consider please the following facts: (a) Mr. Stephen Friedman’s financial transformation panel, which was established in 2001 at the behest of Secretary of Defense, issued a report, Transforming Department of Defense Financial Management: A Strategy for Change, on April 13, 2001 (Executive Summary, page i) that concluded the Defense Department’s accounting systems do not provide reliable information that “tells managers the costs of forces or activities that they manage and the relationship of funding levels to output, capability or performance of those forces or activities.”  (b) You testified to the Senate Armed Services Committee on page 3 of your 14 February 2012 budget request that the Defense Department will not be able to meet the legal requirement for audit readiness until 2017 (and by implication will not be able to solve the problem posed in 2001 by Friedman until that time).  With (a) and (b) in mind, my second question is this:

How can you possibly claim the sequester will now make America a second rate power, when your own management information system cannot reliably connect accounting inputs to performance and capability outputs, particularly in this case, where the sequester will only reduce the defense budget to levels averaged during the Cold War?

Franklin “Chuck” Spinney is a former military analyst for the Pentagon and a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He be reached at chuck_spinney@mac.com

Franklin “Chuck” Spinney is a former military analyst for the Pentagon and a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He be reached at chuck_spinney@mac.com

Like What You’ve Read? Support CounterPunch
August 04, 2015
Vincent J. Roscigno
University Bureaucracy as Organized Crime
Paul Street
Bernie Sanders’ Top Five Race Problems: the Whiteness of Nominal Socialism
Herbert Dyer, Jr.
Is White Supremacy a Mental Disorder?
Ramzy Baroud
The Palestinian Bubble and the Burning of Toddler, Ali Dawabsha
Pepe Escobar
Reshuffling Eurasia’s Energy Deck — Iran, China and Pipelineistan
L. Michael Hager
The Battle Over BDS
Eric Draitser
Puerto Rico: Troubled Commonwealth or Debt Colony?
Colin Todhunter
Hypnotic Trance in Delhi: Monsanto, GMOs and the Looting of India’s Agriculture
Benjamin Willis
The New Cubanologos: What’s in a Word?
Matt Peppe
60 Minutes Provides Platform for US Military
Binoy Kampmark
The Turkish Mission: Reining in the Kurds
Eoin Higgins
Teaching Lessons of White Supremacy in Prime-Time: Blackrifice in the Post-Apocalyptic World of the CW’s The 100
Gary Corseri
Gaza: Our Child’s Shattered Face in the Mirror
Robert Dodge
The Nuclear World at 70
Paula Bach
Exit the Euro? Polemic with Greek Economist Costas Lapavitsas
August 03, 2015
Jack Dresser
The Case of Alison Weir: Two Palestinian Solidarity Organizations Borrow from Joe McCarthy’s Playbook
Joseph Mangano – Janette D. Sherman
The Atomic Era Turns 70, as Nuclear Hazards Endure
Nelson Valdes
An Internet Legend: the Pope, Fidel and the Black President
Robert Hunziker
The Perfectly Nasty Ocean Storm
Ahmad Moussa
Incinerating Palestinian Children
Greg Felton
Greece Succumbs to Imperialist Banksterism
Binoy Kampmark
Stalling the Trans-Pacific Partnership: the Failure of the Hawai’i Talks
Ted Rall
My Letter to Nick Goldberg of the LA Times
Mark Weisbrot
New Greek Bailout Increases the Possibility of Grexit
Jose Martinez
Black/Hispanic/Women: a Leadership Crisis
Victor Grossman
German Know-Nothings Today
Patrick Walker
We’re Not Sandernistas: Reinventing the Wheels of Bernie’s Bandwagon
Norman Pollack
Moral Consequences of War: America’s Hegemonic Thirst
Ralph Nader
Republicans Support Massive Tax Evasion by Starving IRS Budget
Alexander Reid Ross
Colonial Pride and the Killing of Cecil the Lion
Suhayb Ahmed
What’s Happening in Britain: Jeremy Corbyn and the Future of the Labour Party
Weekend Edition
July 31-33, 2015
Jeffrey St. Clair
Bernie and the Sandernistas: Into the Void
John Pilger
Julian Assange: the Untold Story of an Epic Struggle for Justice
Roberto J. González – David Price
Remaking the Human Terrain: The US Military’s Continuing Quest to Commandeer Culture
Lawrence Ware
Bernie Sanders’ Race Problem
Andrew Levine
The Logic of Illlogic: Narrow Self-Interest Keeps Israel’s “Existential Threats” Alive
ANDRE VLTCHEK
Kos, Bodrum, Desperate Refugees and a Dying Child
Paul Street
“That’s Politics”: the Sandernistas on the Master’s Schedule
Ted Rall
How the LAPD Conspired to Get Me Fired from the LA Times
Mike Whitney
Power-Mad Erdogan Launches War in Attempt to Become Turkey’s Supreme Leader
Ellen Brown
The Greek Coup: Liquidity as a Weapon of Coercion
Stephen Lendman
Russia Challenges America’s Orwellian NED
Will Parrish
The Politics of California’s Water System
John Wight
The Murder of Ali Saad Dawabsha, a Palestinian Infant Burned Alive by Israeli Terrorists
Jeffrey Blankfort
Leading Bibi’s Army in the War for Washington