Does America Really Need to Spend More on Defense?

F-35 in flight. Pixabay/Public domain

America can’t buy perfect security.

There is little consensus about the details of President Barack Obama’s fiscal year 2017  defense budget request, and there are few challenges of the underlying assumptions upon which the request is built. Congress, pundits and thought leaders argue over the makeup of the request and question whether the U.S. Department of Defense should fund a strategy of posture or presence, capability or capacity, readiness or investment, nuclear or conventional. The debate has also questioned whether President Obama’s budget request is too small, or if it makes smart choices. For example, the Pentagon civilian leadership claims it needs at least $11 billion more in FY 2017 to execute the president's national security strategy. Eighty-four defense hawks in Congress seek a $50 billion increase in the base defense budget. The Heritage Foundation is calling for a $75 billion increase in the baseline, while the Rand Corporation wants to add $50 billion and the Brookings Institution seeks $30 billion to $40 billion more. Only Third Way seems happy with the size of the FY 2017 defense budget.

Proponents of spending increases above the requested levels, from both the Pentagon and the U.S. foreign-policy establishment, generally criticize the budget based on two major premises. First, they claim the defense budget does not provide enough funding to support the United States’ current military strategy for dealing with today’s threats. Second, to deal with the threats facing the country, they argue that the defense budget does not receive an appropriate portion of the U.S. economy or the total federal budget.

For FY 2017 the Pentagon is requesting $528 billion in its base budget, an amount agreed to by the administration and the Republican-controlled Congress in December 2015 which gives the Pentagon about $30 billion in relief from the budget caps. In addition, the Pentagon is asking for another $59 billion in the Overseas Contingency Operations, or OCO, account—not because that amount is needed to fight the nation's wars in the Middle East and Afghanistan, but because the budget deal negotiated with Congress in 2015 specified that the OCO account must never fall below that level, whether such funds are needed for the wars or not. In FY 2017, as in previous years, at least half of the $59 billion is not related to the war. The 2015 budget agreement, however, has essentially turned the OCO account into a slush fund to pay for routine defense programs and get around the budget caps, which impact all federal agencies.

In addition, the administration requested another $20 billion in the budget for defense-related activities in the Department of Energy. This amount will enable the National Nuclear Security Agency, or NNSA, to begin the trillion-dollar modernization of America’s nuclear arsenal. In addition there is another $8 billion for defense-related activities in other federal agencies thus bringing the total defense budget for FY 2017 to about $610 billion.

In spite of DOD’s significant funding request, critics of the budget point to the relatively low percentage of gross domestic product, or GDP, that defense will consume in FY 2017—which has fallen from a recent high of 4.7 percent in 2010 to the current level of 3.3 percent—as a reason for increased defense spending in FY 2017. This reasoning is not new for advocates of ever-increasing budgets: the military establishment has long fantasized about tying defense spending to GDP because it would mean an increase in funding every year there is not a recession. Data on the raw, constant (or inflation-adjusted) defense dollars prove such arguments to be little more than sleight-of-hand. When President Ronald Reagan spent more than 6 percent of the GDP in 1986 on defense, for example, the GDP stood at $4.9 trillion; in 2015, when the Obama administration spent 3.3 percent on defense, the GDP totaled nearly $18 trillion in 2016 constant dollars.