Defense spending: Embarrassment of riches

The United States seems to be experiencing a never-ending, rapidly growing demand for money from the armed services and Defense Department. On an upward slope since 2001, this demand now stands at unprecedented levels. If Congress provides all of the resources requested by Defense in its new budget, the United States will spend more on defense in comparable (constant) dollars than at any time since World War II.

Back in 2000, before the global war on terror (GWOT), the Pentagon spent $290 billion on defense. Not on U.S. national security mind you, but on defense. The foreign policy portions (diplomacy and foreign assistance) cost another $22 billion. Then Al Qaeda struck, and the wars in Afghanistan and Iraq began.

In February, Defense submitted a budget to Congress asking for $481 billion–or 66 percent more than it received eight years ago. And that’s just the “base” budget for defense–more or less the cost of turning over the military machine, i.e., current training, base salaries, normal operating levels for ships. In comparable dollars, it’s more than the United States has spent for defense in any year but 1985, which was at the height of the Reagan buildup.

Just turning over the machine is not enough, however. There is the GWOT, including Iraq to pay for. Despite the large base budget, the armed services are paying for the GWOT using so-called “emergency” funding. From 2001 to February 2007, the military’s role in the GWOT cost taxpayers another $485 billion in emergency funds.

For fiscal year (FY) 2008, Defense asked Congress for another $141.7 billion in emergency money for its dominant role in the GWOT. So, if you follow the bouncing budget ball, the defense budget request for the coming fiscal year is $481 billion plus $141.7 billion, which comes to nearly $623 billion. It’s a 115 percent increase over the 2000 defense budget, or, to put it another way, more than the United States has spent in any one year on defense since Germany and Japan surrendered in 1945.

From the services’ point of view, even that is not enough to do their job. So they have suggested how much more they need to meet the “unfunded requirements” that didn’t make it into the base budget or the emergency GWOT budget. Congress first invited them to do this in 1995, when the new majority in Congress thought the Clinton administration was not prioritizing defense enough. The Armed Services Committees asked the services to write budget “wish lists” for the items the administration neglected, which the services called “unfunded requirements.” Since 1995, each service chief has delivered such a list to Congress. But Defense’s comptroller office does not vet these lists; the Pentagon budget planning system does not process them; and the Office of Management and Budget (OMB) does not touch them.

Despite the enormous amount of money spent for baseline defense and the GWOT, the wish lists have grown–from under $10 billion in the Clinton years to more than $35 billion this year. In other words, the unfunded military spending requirements for this coming fiscal year amount to nearly the entire defense budget for allies such France, Britain, or Japan.

The GWOT explains some of this year’s budgetary escalation. But the increasing emergency supplementals and wish lists suggest a much bigger and more fundamental problem: U.S. defense budgeting is out of control. When Al Qaeda struck and emergency funding emerged as a budgetary opportunity, discipline began to disappear from the defense budget process. By 2007, roughly 25 percent of all of the resources coming into Defense were coming through the emergency funding “window.”

It’s a historic first for this to go on for so long. Even during Vietnam and Korea, Defense put war costs back into the regular budget within a year or two of the conflict’s start, after the budgetary surprise of war subsided. But Defense continues to draw up the GWOT emergency budgets at a different point in time than its work on the base budget–last year it was done in November, long after the bulk of the work on the base budget was done. The budgets are then rapidly pushed through Defense (less than two months for the latest), virtually unexamined by OMB, and pushed up to Congress.

The message from Defense to Congress is to hurry, or Defense will run out of money. As Defense Secretary Robert Gates put it on February 27: “If these additional funds are delayed, the military will be forced to engage in costly and counterproductive reprogramming actions starting in April to make up the shortfall.”

When Congress gets the emergency request, it does not go to the Budget or Armed Services Committees; the Appropriations Committees examine it quickly and superficially because no elected official wants to look nitpicky or critical of the troops. As such, the definition of a true emergency item has gotten slippery. So the emergency budgets include helicopters and aircraft that take several years to build, long-term research and development programs, and army restructuring plans–none of which qualify as an emergency.

But as the definition of emergency funding becomes more muddled, its convenience becomes more clear. Without normal budgetary discipline, the procurement side of the baseline defense budget expands through the emergency budget. Emergency funding added another $20.4 billion to service procurement budgets in FY 2006, $39.7 billion in FY 2007, and $32.9 billion in FY 2008 (if Congress goes along with the latter two). All the while, baseline procurement funds are increasing, too. The Bush administration proposes raising base procurement funding from $81.3 billion in FY 2007 to $103.7 billion in FY 2008.

The wish lists constitute a kind of “piling on” to this process, and they would add significantly to procurement if Congress took them to heart. Some of the procurements suggest how slippery the various defense budgets have become–some wish list items could appear in the base or emergency budgets. For example, the biggest item on the list is the Mine Resistant Ambush Protected Vehicle (MRAP), which the army and marines want to buy at a cost of $5.5 billion for 5,000 MRAPs. The program is not quite ready to go, but sounds like it meets a military need for vehicles that are less vulnerable to mines and improvised explosive devices (a need amply demonstrated in Iraq). The MRAP is not in the base budget, though a much smaller amount ($672 million) is in the emergency budget.

But the army and marines seem worried that the MRAP provides only a “quick fix” to the problem and may get in the way of what they believe is the longer-term solution–the Joint Light Tactical Vehicle. Perhaps for this reason, a more urgent item ends up on the wish list.

Much of the wish list, though, is procurement plus. The navy would like to build more ships, specifically another LPD-17 amphibious transport dock ship, two T-AKE dry cargo ammunition ships, and 12 F-18 fighter aircraft. The air force is particularly ambitious, seeking nearly $17 billion (roughly half of the wish list total). For another $2.6 billion, it imagines buying five more CV-22s (beyond the five in the regular budget), 15 C-13J cargo planes, nine trainers, plus other aircraft. For another $1 billion, it could purchase two C-17 cargo planes not found in the other budgets.

Why didn’t these long-term acquisition requests make the regular budget? The air force has a consistent (although uninformative) answer on every justification document: “The impact of increasing personnel and operations costs, an aging fleet, and 16 years of combat have put pressure on the air force’s limited funding, and significant requirements remain unfunded.” It’s all about trade-offs. But in this case, the services put the systems that weren’t in the baseline budget in the emergency budget, or, at worst, onto the wish list. Everything, you see, is important.

The curiosities of the emergency budgets and the wish lists for FY 2008 raise a fundamental dilemma: With collapsing discipline in the defense budget process, there is little or no penalty for asking for more and little effort in the Pentagon to make trade-offs stick. With only $38 billion in the FY 2008 budget (including emergency items) for foreign policy measures, diplomacy advocates can only wonder what it’s like to have $623 billion in resources and still need more.