The Bush Military Budget

There are clear indications that the Bush administration is pushing for the invasion of Iraq. Not only does the administration seem determined to invade Iraq, but it is bent to do so in a hurry. The plan to attack Iraq would serve as the first instance of President Bush’s new doctrine of “pre-emptive strike” against countries perceived, or defined, as “threats to the national interests of the United States.” Even if the administration’s rationale for “preemption” and “regime change” is accepted, the question remains: What is the rush?

The administration’s logic is that speed is a crucial part of preemption. What the administration is really trying to preempt, however, is not so much the alleged imminent threat of Saddam Hussein to U.S. national interests, as it is the threat of a national debate over the administration’s war plans that might expose some of the dubious, but submerged, motives behind those plans.

The administration is obviously wary of the fact that, in the aftermath of the heinous crimes of 9/11 and the subsequent surge of patriotism, its policy of “regime change” and its drive to war have essentially escaped a national or a meaningful congressional debate. More than anything else, the haste to change the Iraqi regime seems to be prompted by a desire not to lose this “favorable” momentum of patriotism.

American people are essentially a fair-minded people. And the administration’s case against Saddam Hussein is weak, notwithstanding his brutality and his criminal record-to which, incidentally, U.S. foreign policy makers have contributed significantly.[1] Despite a number of vague allegations, the administration has failed to produce credible evidence that would link the Iraqi regime with the September 11 attacks. Nor has any of Al Qaede’s financial sources been traced to Saddam Hussein. Nor is the administration’s claim that Saddam Hussein poses an imminent threat to U.S. national interests convincing. In fact, “A recent CIA report indicates that the Iraqis have been consciously avoiding any actions against the United States or its facilities abroad, presumably to deny Washington any excuse to engage in further military strikes against their country.” [2] The administration is understandably wary of the likelihood that the revelation of these facts during a meaningful national debate might restrain its drive to war-hence, its rush to war to preempt such a debate.

But if the fear of a national debate, and the concern for losing the “propitious” momentum for war, explain the speed with which the administration is preparing for war, they do not explain the more fundamental question of what drives the administration to war in the first place. Specifically, what are the driving forces behind its new strategy of “preemption” or, more generally, behind its “war on terrorism” and its policy of “regime change”?

Critics have pointed to a number of factors. One such factor is said to be the President’s own political needs to maintain his 9/11-induced strong status as Commander-in-Chief. A second contributing factor is the administration’s implicit hope that an even bigger military spending that would result from the war might help shorten the current economic recession. An unholy alliance between the militarist hawks in or around the Bush Administration and the equally hawkish elements of Zionism, both in Israel and here in the States, is said to be a third factor behind the administration’s drive to war. [3] Control of the major sources of world oil constitutes a widely cited fourth factor in the administration’s push for war.

While these factors have significant contributing effects on the administration’s propensity to war, the main engine for the war juggernaut, however, seems to be supplied by the military-industrial complex-the powerful beneficiaries of the Pentagon budget, the strong vested interests that derive dividends from war.

As foreign policy is often a reflection of domestic policy, the Bush Administration’s drive to war abroad also seems to be largely a reflection of the metaphorical domestic war over allocation of national resources, or tax dollars. In the debate over the allocation of the national budget, beneficiaries of the Pentagon budget have found a very effective strategy-instigation of international tensions and wars-to usurp the lion’s share of the nation’s public revenue. An examination of this relationship is the main focus of this essay.

The Role of the Military-Industrial Complex

A military force is usually a means to meet certain ends: to maintain national security or to achieve territorial, political, and economic gains. Such was also the case with the U.S. military force before WW II. In the postwar period, however, military buildup in the United State has acquired a new dimension. In addition to being a means to achieve political and economic gains, it has also become an end in itself, a military-bureaucratic-industrial empire-better known as the military-industrial complex. As such, the complex has developed a built-in mechanism that constantly drives it to war, not necessarily to defend national interests, as its representatives usually claim, but to advance its own interests, to further strengthen and expand the military-industrial empire. Indeed, the interests of the empire are better served by fomenting international tensions and wars-either actual shooting wars or the specter of war-than promoting peace.

This inherent tendency to war is what makes this imperial power more dangerous than the imperialist powers of the past ages. Under the rule of past imperial powers (whether free-trade imperialism, colonial imperialism, or pre-capitalist forms of imperialism), the subjugated peoples or nations could live in peace-imposed peace, to be sure-if they respected the interests and the needs of those imperial powers and simply resigned to their political and economic ambitions. Not so with the U.S. military-industrial empire: The interests of this empire are nurtured through “war dividends.” Peace, imposed or otherwise, is viewed by the beneficiaries of war dividends inimical to their interests as it would make justification of the continuing increase of their share of the national resources, in the form of the Pentagon budget, difficult.

Of course, tendencies to build bureaucratic empires have always existed in the ranks of military hierarchies. By itself, this is not what makes the U.S. military-industrial complex more dangerous than the military powers of the past. What makes it more dangerous is the “industrial” part of the complex. In contrast to the United States’ military industry, arms industries of the past empires were not subject to capitalist market imperatives. Furthermore, those industries were often owned and operated by imperial governments, not by market-driven private corporations. Consequently, as a rule, arms production was dictated by war requirements, not by market or profit imperatives, which is often the case with today’s U.S. arms industry.

Thus, private ownership and the market-driven character of the United States’ arms industry have drastically modified the conventional relationship between the supply of and demand for arms: It is now often the supply (or profit) imperatives that drive demand for arms. In other words, imperial wars and demand for arms are nowadays precipitated more by sales and/or profit prerequisites than the other way around, as was the case with imperial powers of the past. President Eisenhower’s warnings near the end of his second term against the potential dangers of the military-industrial complex seem to have been prompted largely by this intrinsic tendency of the complex towards war and militarism.

The fact that the military-industrial complex benefits from international conflicts explains why it has almost always reacted negatively to discussions of international cooperation and detente. Thus, for example, in the late 1940s and early1950s, the Korean War and the “communist threat” were used as pretexts by the proponents of military buildup to overrule those who called for limits on military spending. Representatives of the military-industrial complex, disproportionately ensconced in the State Department, succeeded in having President Truman embark on his famous overhaul of the U.S. foreign policy, which drastically increased the Pentagon budget and expanded the military-industrial establishment.

Likewise, in the face of the 1970s’ tension-reducing negotiations with the Soviet Union, representatives of the military-industrial complex rallied around Cold Warrior think tanks such as the “Committee on the Present Danger” and successfully sabotaged those discussions. Instead, once again, by invoking the red scare of the “evil empire,” as President Reagan called the Soviet Union, they managed to reinforce the relatively weakened tensions with the Soviet Union to such new heights that it came to be known as the Second Cold War-hence, the early 1980s’ dramatic “rearming of America,” as President Reagan put it.

Similarly, when the collapse of the Soviet system and the subsequent discussions of “peace dividends” in the United States threatened the interests of the military-industrial complex, representatives of the complex invented the “threat of rogue states to our national interests,” and successfully substituted it for the “threat of communism” of the Cold War era.

This helps explain why the Bush Administration, under the heavy influence of the Defense Department, viewed the 9/11 tragedy as an opportunity for remilitarization. The monstrous attacks of 9/11 were treated not as crimes-as they actually were-but as war on America. Once it was thus established that the United States was “at war,” military buildup followed logically.

What is more, President Bush and his circle of war-mongering advisors have made their declared war on terrorism open-ended and permanent. It is open-ended because the Bush Administration seems to have no difficulty finding “terrorism” by definition; that is, “by deciding unilaterally what actions around the world constitute terrorism,” or by arbitrarily classifying certain countries as “supporters of terrorism,” as Bill Christison, retired CIA advisor, put it. [4]

Not only has the “war on terrorism” thus been made open-ended, but it is also said to be fought best on a preemptive, first-strike basis. “As a matter of common sense and self-defense, America will act against such emerging threats before they are fully formed,” wrote President Bush in the introduction to his new foreign policy document, “The National Security Strategy of the United States.” This strategy of preemption, also called the Bush doctrine, formally replaces the half-century old Truman doctrine of containment and deterrence. The drive to make the “war on terrorism” permanent is clearly reflected in the official pronouncements of going beyond the Taliban, Afghanistan, and even Iraq:

While still wrangling over how to overthrow Iraq’s Saddam Hussein, the Bush administration is already looking for other targets. President Bush has called for the ouster of Palestinian leader Yasir Arafat. Now some in the administration-and allies at D.C. think tanks-are eyeing Iran and even Saudi Arabia. As one senior British official put it: “Everyone wants to go to Baghdad. Real men want to go to Tehran.” [5]

Justification of war has never been made so simple: it does not seem to require more than the mere fancy of the beneficiaries of “war dividends.”

Once the 9/11 brutalities were thus exploited as opportunities for war and militarism, heightened military spending followed logically. Although prior to 9/11 President Bush had promised big increases in the Pentagon budget, he had also stated that those increases must accompany a reconfiguration of the military apparatus, especially of the procurement’s shopping list. At the heart of the projected reconfiguration was the plan to prioritize military spending in favor of high-tech, “futuristic” weaponry. But the 9/11 attacks averted the contested prioritization of military spending. It saved the policy makers the pain of re-slicing the pie of the pentagon budget by drastically augmenting the size of the pie. Or, as James Cypher put it, “It allowed the Pentagon to have its cake and eat it too-continuing major Cold War-era weapons systems and funding the cyber-age ‘Revolution in Military Affairs’ (RMA).” To be sure, the high-tech weapons systems will still enjoy preferential spending, but the post-9/11 Pentagon budget provided enough funding to keep everyone happy, both the “old military” and the “new military.” [6]

In March 2001, President Bush submitted his 2002 budget that showed an increase of $14 billion in military spending over Clinton’s 2001 budget of $291 billion. At the same time, the President indicated that the United States would be moving beyond the Cold War model (of building a huge arsenal of tanks, planes, ships, and missiles to contain the Soviet Union) and into the “Revolution in Military Affairs” (of giving priority to high-tech warfare such as smart bombs, night-vision instrument, satellites, robot observation planes, highly mobile light armor, and so on). As this threatened the powerful interests that had been deeply vested in the Cold War model since WW II, tensions flared up within the military-industrial establishment. The New York Times characterized the skirmishes as a battle “as intense and intemperate as any in recent memory.”

The flow of additional $47 billion, in the form of “emergency response fund,” into the coffers of the Pentagon in the aftermath of September 11 ended those clashes as it filled all the deep pockets of the beneficiaries of the Pentagon budget. In all, military spending for the fiscal year 2002 has risen by nearly $54 billion over the initial 2001 level of $291 billion, an increase of almost 19% percent. For the fiscal year 2003 it will amount to $376 billion, the highest item in the Federal budget (of approximately $2,130 billion). [7] (Officially, military spending is the second highest item in the Federal budget after Social Security payments. But Social Security is a self-financing trust fund. So, in reality, military spending is the highest budget item.)

According to Steven Kosiak, an analyst at the Center for Strategic and Budgetary Assessments, the total 2003 defense budget will be 11% higher than the average military expenditure during the Cold War. By 2007, under the Bush plan, defense spending will be 20% higher than average Cold War levels. And according to Professor Paul Kennedy of Yale University, the U.S. now spends more each year than the next nine largest national defense budgets combined. Indeed, the United States is now responsible for about 40 percent of the world’s military spending. [8]

Manufacturers of fighter planes will receive an astonishing $400 billion in new multi-year contracts. Lockheed Martin will get $225 billion over 12 years to build nearly 3,000 Joint Strike Fighter planes for the Air Force, Marines, and Navy. According to Business Week, Lockheed will also be able to earn $175 billion from sales in foreign markets. Almost 50% of the world arms market is currently controlled by the United States, with an average annual military sales of approximately $17 billion in foreign markets in recent years. “That figure will be on the rise,” points out James Cypher of the California State University at Fresno, “as new weapons are delivered to Pakistan, Uzbekistan, Tajikistan, Oman, the United Arab Emirates, and Egypt.” Cypher further points out:

Looking ahead, the RMA’s [Revolution in Military Affairs’] fantastic weaponry-and its enormous costs-are only just beginning to emerge. Northrup Gruman, General Atomics, and Boeing are speeding robot airplanes into production. Other contractors are developing thermal imaging sensors to “see” targets through night, distance, fog, and even rock formations. The Navy is promoting a new destroyer-class warship, the DD-21, loaded with cruise missiles and guns capable of hitting targets 100 miles inland. Known as the “stealth bomber for the ocean,” the DD-21 is estimated to cost $24 billion. Cost overruns of over 300% are common, however, so there is no telling what taxpayers will ultimately pay. [9]

These numbers clearly indicate that the war industry has handsomely benefited from the 9/11 destruction. The fact that the United States’ war industry flourishes on war and destruction has also been reflected in the stock prices of the military industry in the aftermath of the 9/11 attacks. The attacks led to the collapse and temporary shut down of the Wall Street stock market. When it reopened several days later, the few companies showing increased value were the giant military contractors Alliant Tech Systems, Northrop Gruman, Raytheon and Lockheed Martin. As the US military’s biggest supplier, Lockheed Martin’s share value rose by a staggering 30 percent.

While these giant manufacturers of warfare products are the obvious beneficiaries of the “war on terrorism,” there is also a whole host of the less visible Pentagon contractors that are just as handsomely benefiting from the expanded military spending. These are the somewhat clandestine, privately-contracted companies that operate on the fringes of the U.S. foreign policy by training foreign “security forces,” or by “fighting terrorism.” “With little public knowledge, or debate, the government has been dispatching private companies-most of them with tight links to the Pentagon and staffed by retired armed forces personnel-to provide military and police training to America’s foreign allies.” [10] Thus, as Esther Schrader of the Los Angeles Times points out in her fine investigative piece, “Companies Capitalize on War on Terror,” “When the Pentagon talks about training the new Afghan National Army, it does not mean with its own soldiers.. Instead, the Defense Department is drawing up plans to use its commandos to jump-start the Afghan force, then hire private military contractors to finish the job.” [11

Referring to the fierce competition among these private military training companies to win Pentagon contracts, Pete Singer, an Olin Fellow in the Foreign Policy Studies Program at the Brookings Institution in Washington, points out, “This is big business among these companies. They are furiously bidding on involvement in Afghanistan and the war on terrorism. The minute the Pentagon started to use the phrase ‘a program to train and equip the Afghan army,’ buzzers went off.” The Bush Administration’s open-ended “war on terrorism” promises to be a boon for these companies. “The war on terrorism is the full employment act for these guys,” pointed out D. B. Des Roches, spokesman for the Pentagon’s Defense Security Cooperation Agency. [12]

In many cases, these private military firms are formed by retired special forces personnel seeking to market their military expertise to the Pentagon, the State Department, the CIA, or foreign governments. For example, MPRI, one of the largest and most active of these firms, which “has trained militaries throughout the world under contract to the Pentagon,” was founded by the former Army Chief of Staff Carl Vuono and seven other retired generals. It counts 20 former senior military officers on its board of directors. Army Lt. Gen. Harry E. Soyster, an executive at MPRI, boasts: “We have got more generals per square foot here than in the Pentagon.” Other major military firms include Vinnell, BDM International Inc., Armor Holdings Inc., DynCorp of Reston, Va., and SAIC. These and a number of the lesser known military training contractors “operate today in more than 40 countries, often under contract to the U.S. government.” [13]

The fortunes of these military training contractors, like those of the manufacturers of the military hardware, have skyrocketed in the aftermath of the 9/11 attacks: “Since Sept. 11 and the Pentagon’s launch of the war on terrorism, the stock prices of the publicly traded contractors have soared.” For example, “The per share price of stocks in L3 Communications, which owns MPRI, has more than doubled.” [14]

Sadly, though, the flourishing of the fortunes of these “modern-day mercenary companies,” as Esther Schrader of the Los Angeles Times puts it, like that of the giant arms manufacturing companies, comes about at the expense of world peace and stability. They also come about at the expense of U.S. taxpayers and their curtailed, unmet, or foregone social needs such as health and education.

What makes the militarist tendencies of the beneficiaries of “war dividends” especially dangerous is that, in the debate over military spending, representatives of these beneficiaries have almost always managed to camouflage their nefarious interests behind the national interests and, thereby, to outmaneuver the advocates of curtailment of the Pentagon budget. During the Cold War era that was not a difficult act to perform as the explanation-the “communist threat”-seemed to conveniently lie at hand. Justification of increased military spending in the post-Cold War period has prompted the military-industrial interests to be very creative in concocting “new sources of danger to U.S. interests.” These “new sources of threat” are said to stem from the “unpredictable, unreliable regional powers of the Third World,” from the so-called “rogue states,” and more recently from “world terrorism” and “Islamic fundamentalism.”

A good example of how the military-industrial complex has consistently camouflaged its interests behind national interests is the case of the Middle East oil. Heavy U.S. military presence in the Middle East is often explained by the rich oil reserves there. Without discounting the importance of sources of energy, it could be argued that U.S. policy makers for the region have deliberately mystified and misrepresented the role of oil. For one thing, evidence shows that for every dollar’s worth of oil imported from the Persian Gulf region the Pentagon takes five dollars out of the Federal budget to “secure” the flow of that oil! For another, why would the flow of oil be in jeopardy if the U.S. militarists put an end to their mischievous policies in the region? No matter how crucial oil is to the world economy, the fact remains that it is, after all, a commodity. And as such, international trade in oil is as important to its importers as it is to its exporters. There is absolutely no reason that in a world free of nefarious imperial interests, and the concomitant international mischief-making, the flow of oil could not be guaranteed by international trade conventions and commercial treaties. [15]

Another factor that makes beneficiaries of war dividends dangerous to world peace is their ominous ability, especially under the current administration, to foment international convulsions and wars in order to justify the continuous hemorrhaging of the Pentagon budget. That ability comes largely from the extensive ties and considerable influence that these beneficiaries have within the Defense Department, the National Security Council, the State Department, the White House, and the key Congressional Committees. This explains, to a large extent, how or why the Bush administration, largely under the influence of the Defense Department and/or the military-industrial establishment, has been able to manipulate the 9/11 tragedy into an open-ended “war on terrorism,” a doctrine of “preemption,” and a policy of “regime change.”

It is this ominously built-in drive to war that makes the Bush administration “a threat to world peace,” as Nelson Mandela has recently put it. In fact, some concerned citizens, obviously moved by the ferocity of the administration’s military posturing, have begun making comparisons between the administration’s relentless drive to war and Germany’s drive to war in 1939: “I cannot stop thinking of 1939, when everyone could see the war coming and no one, it seemed, could do anything to stop it. . . . Today, the dogs of war are barking not in Europe but in the District of Columbia, and again people are looking on helplessly as the tragedy unfolds.” [16]

Is there anything that can be done to restrain the Bush administration’s war machine? Yes, and no. Yes, if the promising flickers of anti-war sentiments that have slowly begun to stir here and there among the American people become widespread-in time-to foil the poisonous propaganda of pseudo-patriotism that is relentlessly circulated by the champions of militarism. And, no, if this does not happen, or does not happen soon enough. The rest of the world seems to be helpless in the face of the overwhelming power of the U.S. war machine. As Scott Laderman of the Minnesota Daily recently put it, “As persons in possession of democratic rights, whether we allow the Bush administration’s threat to world peace to materialize is up to us.” [17]

ISMAEL HOSSEIN-ZADEH teaches economics at Drake University. He can be reached at: This article originally appeared in Payvand.


1. See, for example, (a) Mike Toner, “U.S. likely sent Iraq toxic bugs,” The Atlanta Journal-Constitution (October 2, 2002). Web version:

(b) Matt Kelley, “Records Show U.S. Sent Germs to Iraq,” Associated Press (October 1, 2002).

2. Stephen Zunes, “The Case Against War,” The Nation

3. See, for example,

(a) Richard H. Curtis, “Israel’s Lobby Tries to Widen Net Against Terrorism,” The Washington Report on Middle East Affairs (December 2001);

(b) Gilad Atzmon, “The Zionist Lobby and the American Foreign Policy,” in: Counterpunch, August 22, 2002.

(c) Brian Whitaker, “US. Think Thanks Give Lessons in Foreign Policy,” Guardian, August 19, 2002;

(d) Brian Whitaker, “Playing Skittles with Saddam,” Guardian, Spetember 3, 2002;

4. “The Disastrous Foreign Policies of the United States,” Counterpunch, May 9, 2002.

5. Roy Gutman and John Barry, “Beyond Baghdad: Expanding Target List-Washington looks at overthrowing the Islamic and Arab world,” Newsweek, August 19, 2002

6. James Cypher, “The Iron Triangle: The New Military Buildup,” Dollars and Sense, Jnauary/February 2002, p. 17.

7. Budget of the United States Government, Fiscal Year 2003 (Summary Tables);

8. As cited by Julian Borger, Guardian, February 6, 2002.

9. Cypher, Ibid., pp. 18-19.

10. Ken Silverstein, “Privatizing War, How Affairs of State Are Outsourced to Corporations Beyond Public Control,” The Nation, July 28-August 4, 1997.

11. Esther Schrader, Los Angeles Times, April 14, 2002:

12. as quoted by Schrader, Ibid.

13. Ibid.

14. Ibid.

15. On this issue see, for example, Chalmers Johnson, Blowback: The Costs and Consequences of American Empire (New York: Henry Holt and Company, 2000), pp. 87-88

16. Robert Higgs, “Helplessly, We Await the Catastrophe Our Rulers Are Creating,”

17. “U.S. Represents Threat to World Peace,”


Ismael Hossein-zadeh is Professor Emeritus of Economics (Drake University). He is the author of Beyond Mainstream Explanations of the Financial Crisis (Routledge 2014), The Political Economy of U.S. Militarism (Palgrave–Macmillan 2007), and the Soviet Non-capitalist Development: The Case of Nasser’s Egypt (Praeger Publishers 1989). He is also a contributor to Hopeless: Barack Obama and the Politics of Illusion.