The Right Cuts

The Right Cuts

Controversy on Obama's new defense strategy is much ado about nothing.

When President Obama spoke at the Pentagon to outline his new defense strategy and budget reductions earlier this month, many conservatives condemned the strategy. Robert Kagan, for example, warned about the United States rendering itself weak by unnecessary defense cuts. Gary Schmitt and Tom Donnelly claimed that the new strategy means that America is no longer a superpower. In National Review, Arthur Herman accused the Obama administration of putting the United States on the brink of our weakest military posture since Jimmy Carter. Former defense secretary Donald Rumsfeld’s comptroller, Dov Zakheim, was concerned about the new defense strategy abandoning the old two-war doctrine.

Even more thoughtful commentators, like David Ignatius of the Washington Post, have overreacted. Ignatius argued that the budget cuts mark a genuine shift, one of the most important since 1945, and contend that the new strategy will shift resources to Asia at the expense of Europe. In his view, this will result in Europe feeling abandoned and China nervous.

But the fact of the matter is that the Obama speech and the roll out of the new strategy is much ado about nothing. It does not really make any significant fiscal or strategic changes.

Yes, the Pentagon will spend about 8 percent less than projected over the next decade. But this does not mean that the budget will be reduced, nor does it mean that the Obama administration will spend less than the Bush administration, which in real dollars increased defense spending to levels not seen since World War II. Obama is only reducing the projected levels of defense spending.

The Obama plan will reduce the projected levels of the core defense budget by $460 billion over the next decade. This means that from FY 2013 to FY 2017, spending will amount to $2.73 trillion. From FY 2008 to FY 2012, the Pentagon spent $2.59 trillion. Moreover, from FY 2013 to FY 2017, the defense budget will still increase, growing from $524 billion to $568 billion, an increase of about 8 percent.

The reductions fall far short of those proposed by the president’s own Deficit Reduction Commission (Simpson-Bowles), conservative Senator Tom Coburn (R-OK) and the bipartisan “Gang of Six” senators. All of those groups proposed reductions nearly double that of the Obama-Panetta plan. In addition, the cuts are far less than we made at the end of the Korean War, the Vietnam War or the Cold War. The United States will still spend more on defense than the next ten nations in the world combined and account for about 40 percent of the world’s military expenditures.

Nor is Obama abandoning the two-war strategy and pivoting to Asia away from the rest of the world. As analysts like Mark Thompson have pointed out, the charge that we are abandoning the two-war strategy ignores the fact that despite statements of secretaries of defense and flag officers going back decades, we never really had the capacity to fight two major conflicts simultaneously. As Thompson notes, the two-war construct was shot through with enough caveats and loopholes as to render it meaningless. This was demonstrated graphically in 2007 when the Bush administration had to acknowledge that it did not have enough combat forces to fight the Taliban resurgence in Afghanistan while simultaneously dealing with the violence in Iraq. Admiral Mullen, former chairman of the Joint Chiefs of Staff, summed it up very well when he told Congress that year, “In Afghanistan we do what we can, in Iraq we do what we must.”

Nor are we increasing our power in Asia at the expense of other areas. While our policy makers have paid more attention to the wars in Iraq and Afghanistan and the Arab Spring, including the war in Libya, we did not shift resources from the Pacific to the Middle East. The Navy has about fifty ships routinely deployed to the Pacific, including a Carrier Battle Group, thirty nuclear-attack submarines and eight ballistic-missile submarines. Half of the $350 million F-22 stealth fighter planes stationed outside the United States are based in the Pacific. The Global Hawk, an unmanned long-distance surveillance aircraft, had its first deployments from Guam. As Admiral Greenert, Chief of Naval Operations, pointed out a few days after the review was released, “It’s not a big naval buildup in the Far East. We’re there, we have been there, and we will be there.”

While the president acknowledged that the reductions were in part driven by deficit concerns, reductions make sense even if the deficit were under control. The last thirteen years of unprecedented real growth in the core defense budget has permitted the Pentagon’s civilian and military leadership to avoid making the hard choices that good stewards of taxpayer money should be making.

Between FY 1998 and FY 2012, the Pentagon budget grew in real terms from $360 billion to $533 billion, an increase of $173 billion or 48 percent. Since the end of the Cold War, the defense budget has never increased by so much for so long. Even the Reagan buildup lasted only four years, resulted in a real increase of “only” 28 percent and peaked at $517 billion in today’s dollars.

Over the past decade, the Pentagon let its procurement, maintenance and personnel budgets get out of hand. Historically, the costs of procuring weapons systems have exceeded their projected costs by about 20 to 30 percent; in the past decade the average was 50 percent. For example, the cost of the F-35 Joint Strike Fighter has more than doubled, as has the V-22 Osprey. The Pentagon has also spent about $50 billion on weapons systems, like the Future Combat System, that it later cancelled. Pentagon executives covered up a lot of these cost overruns by shifting core programs like the F-22 and missile defense into the supplemental or war budgets.

Similarly, while new weapons systems cost more, they are supposed to be less expensive to maintain than the legacy systems they are replacing. Not so today. The upkeep costs of the F-35 are 15 percent more than those of the F-16 C/D, and those of the V-22 have grown by 62 percent over the last three years.

The Pentagon leadership has ignored its own guidelines for determining the appropriate levels of personnel pay and benefits. In computing the annual pay raise for active-duty personnel, it has used only base pay rather than total military compensation. As a result, the average pay of an enlisted person is about $15,000 above the pay of a civilian with a comparable educational background, and the cost of the average soldier has risen to $170,000 per year.

The cost of health care has also risen dramatically over the last decade, from $19 billion to $53 billion. This is primarily due to the military leadership’s refusal to raise the fees for Tricare enrollment to meet the escalating cost of health insurance. As a result, working-age retirees can enroll in Tricare for $460 a year for themselves and their family. In addition, the Pentagon does not charge any premium or co-pay for Tricare for Life (for retirees over age sixty-five), a program that only came into being in 2001.

The Pentagon has also increased the percentage of base-pay retirees receive from 40 to 50 percent and dropped the 75 percent cap on retiree pay regardless of how long a person served. As a result, a person who serves twenty years can receive a pension of half his or her base pay, indexed for inflation, for the next forty years, while someone who leaves after thirty-five years can receive 100 percent for another twenty-five years. These plans will cost the Pentagon $47 billion in 2012 and will double over the next decade if nothing is done.

No matter how much the United States or any nation spends on defense, it cannot guarantee absolute security. The real issue is how you spend the money you have. Even after Obama’s reductions, the Pentagon has more than ample resources to protect U.S. interests. But will it spend them wisely?

Lawrence Korb, a former assistant secretary of defense in the Reagan administration, is a senior fellow at the Center for American Progress.