How Much Should We Spend on National Defense?

On 4 August 1822, James Madison wrote a letter to W.T. Barry about the importance of popular education and, by inference, the importance of the relationship of the First Amendment to the task of holding an elected government accountable for its actions. He concluded his opening paragraph, setting the tone for the entire letter, by saying, “A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”

Nowhere is the farce and tragedy feared by James Madison more evident than in the national debate over if, or how much, the defense budget should be cut back as part of our efforts to reduce the deficit. With the defense budget at war with Social Security, Medicare, and needed discretionary spending in education, investments in infrastructure, and elsewhere, it is a tragedy that must be undone if we are to protect our middle class way of life.

A recent Rasmussen poll of 1,000 likely voters illustrates the farcical aspects of the defense debate. Rasmussen asked two question that concern us here:

Does the United States spend too much on the military and national security, not enough, or about the right amount? Answers:

Not enough: 27%
About right: 37%
Too much: 32%

To ensure its safety, should the United States always spend at least three times as much on defense as any other nation?

Yes: 25%
Not sure: 35%
No: 40%

An earlier poll by Rasmussen, conducted just over 2 months ago on 27 November 2010, found that only 58% of the people thought the United States spends more on defense than any other nation in the world.

So, to the extent that these polls reflect what Madison called popular knowledge and the means for acquiring it, they can be summarized as follows: 64% of the people think the defense budget is “about right” or too small, but only 25% think we should three or more times as much as any other nation, while 58% think we are spending more than any other nation.

Let’s see how this popular knowledge matches up to reality.

First, how large is the current Fiscal Year 2011 defense budget?

Rasmussen’s report tries to shed light on this question by saying the total defense budget is estimated to be about $719 billion, but acknowledges that this number does not include veteran’s care, which amounts to $124 billion, implying a total of $843 billion. These budget numbers are misleading, however, because they are outlays, and as such, they represent the result of several budgets. Moreover, these numbers are not inclusive.

Outlays measure the amount of money the Pentagon is spending, not what Congress has authorized it to spend. There are two measures of authorization: TOA (Total Obligational Authority) and BA (Budget Authority).

The differences between TOA and BA are technical and small, and most people use BA to measure the size of the defense budget. BA is the amount of money Congress gives to an agency each fiscal year. It can be thought of as the annual deposit in that agency’s checkbook. The money in a given year’s BA is often spent over a period of years (in the case of a new aircraft carrier, that period could be as long as 10 years), so ‘outlays”, like Rasmussen is quoting, in a given year, can include BA appropriated from Congress in several earlier years as well as the current year. Debates over the appropriate size of defense budget (often referred to in shorthand as ‘spending,’ as appears to be the case in Rasmussen’s questions) are really about how much BA should Congress appropriate each year.

This question of new BA is at the heart of the political issue concerning the Pentagon’s contribution to deficit reduction, for example.

The appropriate budget total (BA) for the 2011 Defense Department’s budget (budget category 051) — $712 billion — can be found in Table 5.1 in the historical tables of the current President’s Budget (051 outlays appears to the be number Rasmussen is using).

Some additions to the DoD budget are quite obvious and are clearly laid out in Table 5.1. For example, Table 5.1 adds the $18.8 billion appropriated for the Energy Department’s (category 053) nuclear warhead program and $7.6 billion for the direct defense related activities of other agencies (category 054). These direct additions yield the President’s estimate of total BA for national defense of $738.7 billion, or $20 billion higher than Rasmussen’s estimate. This should be considered the lower bound of any estimate for the current defense budget.

The Rasmussen report, correctly in my opinion, implies budgets to support veterans should also be included when comparing total US defense budgets to those of other countries. But this addition is only one of many. The entire picture is quite complex, but adding in indirect defense induced/related budgets results in an annual security budget of just over one trillion dollars for 2011.

So, in answering the first question: how large is the current defense budget? Reasonable estimates place it between $739 billion and one trillion dollars for 2011 — take your pick.

According to Rasmussen’s poll, 64% of the people think this is about right or too small, and only 58% think this range is more than that of other nations. This brings us to the second question: How does our defense budget compare with the defense budgets of other nations?

The most recent estimates for China and Russia, the nations with the next two largest defense budgets, compiled by the Stockholm International Peace Research Institute (SIPRI) are for 2009. If one assumes that recent growth rates continued through 2010 and 2011, and we added in estimates for the effects of inflation, the estimate for China’s current defense budget would rise to $125 billion and that of Russia would rise to $69 billion. Bear in mind, these are very rough estimates, but this estimate for China’s is higher that that used by Rasmussen, and therefore more conservative in a comparative sense.

These numbers tell us that the US defense budget is between six and eight times as large as that of the next largest nation. (Bear in mind, we are ignoring the contributions of our Allies in NATO, Japan, etc.) Note that only 25% of the likely voters interviewed think we should spend more than three times as much as the next largest nation, but at the same time, 64% think the current budget is about right or too small. One wonders how this response would have changed if Rasmussen asked the real question: Do you think we should continue to spend between six and eight times as much as the next largest nation?

Are you beginning to get a feel for how cognitive dissonance creeps in to shape the debate over the defense budget?

The people whose opinions are being sampled have good reason to be confused. In fact, their cognitive dissonance reflects a tiny tip of the iceberg that is Madison’s nightmare. On 26 January, that farce-tragedy mutated into a comic opera.

First a little background.

For years, Pentagon decision makers have admitted, and members of Congress have understood, the Pentagon can not keep track of the money Congress authorizes it to spend, for the simple reason that the Pentagon’s bookkeeping systems are an un-auditable shambles. This is an old problem that I, among others, have been writing about since the late 1970s. Auditability and transparency go to the heart of the idea of a representative republic. A government of the people, by the people, and for the people must be answerable to people.

That is why accountability is an absolute requirement of the Accountability and Appropriations Clauses of the Constitution, which assign the power of the purse to Congress. This was made an explicit legal requirement by the enactment of the Chief Financial Officers Act of 1990, which required the Inspector General of each agency in the Federal government to certify that its agency was in fact accounting for the funds Congress gave it.

Yet to date, the Pentagon has been unable to comply with the requirements of this law. I testified about this problem many times to Congress — and I refer interested readers to my last statement to Congress in June 2002, which pretty well summed up this mess, describes its ramifications, and describes one pathway toward fixing the problem. My sources in the Pentagon tell me the situation is worse today than it was in 2002.

The Pentagon leaders in successive administrations have addressed this problem by urging patience, telling Congress repeatedly the Pentagon has a plan in place to solve the audit problem. That is true, the Pentagon does have a plan, but it is what we in Pentagon used to call a ‘cape job’, because decision makers in successive administrations keep moving its deadlines further into the future. Obama’s Pentagonists are just the most recent in a long line of snake oil peddlers. John Hamre, the Comptroller and Deputy Secretary of Defense during the Clinton Administration, for example, promised to fix the problem by 1996. After a couple of stretch outs in the Bush Administration, Obama’s minions are continuing the scam by ‘promising’ to “fix” the problem by 2017 or 2018, long after they are forgotten in the dustbin of history.

Twenty years after passage of the Chief Financial Officers Act, only one conclusion is possible from the repetitive charade: either the Pentagon’s leadership is not competent to fix the problem or, more likely, it does not want to fix it. As I explain here and in the Domestic Roots of Perpetual War, there is good reason to have a bookkeeping shambles. It serves a useful, if nefarious, purpose: think of it as a kind of intellectual grease that keeps the money flowing throughout the Military – Industrial – Congressional Complex (MICC) — a lot of people are getting rich, building careers, and accreting power out of hyping the money flow. While soldiers at the pointy end of the spear and taxpayers are getting hosed, generals are going through the revolving door to big jobs in industry; congressional staffers on defense committees move into high ranking political jobs in the Pentagon, which then gives them a spring board to big jobs with the defense contractors; industry titans move between jobs in industry, the Pentagon, and back to industry; and contractor pac money flows to congressmen. The result is a self-sustaining harmonious circular flow of money through the political economy of the MICC — what we in the Pentagon call a self-licking ice cream cone.

This Madisonian farce-tragedy took a thoroughly comic twist on 26 Jan 2011 at a congressional hearing, where the new, ‘pro-defense’ Chairman of the House Armed Services Committee (HASC) and card carrying member of the MICC, Buck McKeon (R-CA), signaled his objection to the tiny reductions in the defense budget that President Obama was recommending in the name of improved economic ‘efficiencies.’ After the hearing, Rep. Randy Forbes (R-VA), chairman of the HASC readiness subcommittee amplified McKeon’s signal by invoking a truly bizarre leap of logic: Forbes argued that, since the Pentagon doesn’t really know where the money is being spent, then perhaps it should not talk about finding efficiencies!

Welcome, dear reader, to the Hall of Mirrors that is Versailles on the Potomac!

I have a better idea for providing the popular information needed to exit Madison’s nightmare: Perhaps the Congress ought to use its Constitutional oversight (as opposed to its ‘overlook’) powers to force accountability on the Pentagon in the spirit of the Constitution.

Congress should freeze the defense budget in current dollars (or better, in my opinion, reduce it each year by two to three percent) until the Pentagon can pass an audit, as explained in this letter a group of former DoD employees and congressional staffers (including myself) sent to the Simpson-Bowles deficit reduction commission.

But the courtiers in the Hall of Mirrors needn’t worry about this threat to their patrimony. We never received an answer, perhaps because everyone in Versailles is too busy licking their chops over the emerging opportunity to hack away at Social Security and Medicare and the other wasteful ‘entitlements.’

Franklin “Chuck” Spinney is a former military analyst for the Pentagon. He currently lives on a sailboat in the Mediterranean and can be reached at chuck_spinney@mac.com


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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

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