Defense Spending: How Much Is Needed?

Blog Post
Tuesday, November 27, 2018

A bipartisan commission recently released a report filled with alarming language about the country’s ability to defend itself against China, Russia and other threats.

“The security and well-being of the United States are at greater risk than at any time in decades,” said the commission, which was appointed by Congress to review the Trump administration’s National Defense Strategy.

In part because of inadequate funding, the report said, American military superiority “has eroded to a dangerous degree.”

The panel, called the “National Defense Strategy Commission,” went so far as to say the country “might struggle to win, or perhaps lose, a war against China or Russia.” The report added that the United States “is particularly at risk of being overwhelmed should its military be forced to fight on two or more fronts simultaneously.”

Given the commission’s bipartisan composition and emphatic language, the Trump administration and members of Congress have a responsibility to carefully review the report and consider its recommendations.

Such a review, however, should not rest entirely on the report itself.

Some helpful context, for example, can be found in a presentation that the Congressional Budget Office (CBO) released last week on U.S. defense costs. Information in this presentation refutes the notion -- voiced by many in Washington -- that defense funding in recent decades has been stingy.

The CBO examined the size of Defense Department budgets from 1980 through the current fiscal year. Accounting for differences in the size of the military, the department’s basic budget -- which excludes U.S. war costs such as those for Afghanistan and Iraq -- “has increased substantially over that period in inflation-adjusted terms,” CBO said.

The budget office said its analysis of individual portions of the defense budget “indicates that the cost increases are broad-based, including increases in personnel costs, operation and maintenance costs, and costs to develop and purchase weapons systems.” The budget office identifies three major contributors to increasing defense costs.

First, compensation costs for military personnel “have been rapidly increasing” since 2000. This includes the Defense Department’s health care costs, which CBO says have roughly doubled since then.

Second, the costs of operation and maintenance per active-duty service members have been steadily increasing for decades. The third factor: new weapons systems are often more expensive than the ones they replace.

This seems like fertile ground for further discussion. Why, for example, have lawmakers in the past blocked reasonable efforts to help rein in health care costs at the Pentagon? Are there better ways to encourage technological advances that would save money?

In evaluating the Pentagon’s basic (“base”) military budget, it is also important to note that the Defense Department has long boosted that budget through the misuse of special funding that is theoretically supposed to be used for overseas military operations. Such special funding is not subject to congressionally approved spending caps.

Another concern that should be taken into account is the Pentagon’s poor performance in its first comprehensive audit -- and the fact that this poor performance did not come as a surprise to many analysts and Pentagon officials themselves when it was released earlier this month.  

“We failed the audit, but we never expected to pass it,” said Deputy Secretary of Defense Patrick Shanahan. He acknowledged that the findings showed the need for greater financial discipline: “We need to develop our plans to address the findings and actually put corrective actions in place.”

Federal law has long required audits of the Pentagon and other parts of the government. The deadline for the Defense Department audit, however, was repeatedly postponed. That was obviously a mistake.

Even the bipartisan commission that urged significant additional funding for defense acknowledged the need for many improvements in the Pentagon and the administration’s National Defense Strategy (NDS).

“We believe that the NDS points the Department of Defense (DOD) and the country in the right direction, but it does not adequately explain how we should get there,” the commission said. It also said it strongly agreed that “the Pentagon’s culture and way of doing business must be brought into the 21st century.”

Yet the commission said that even with the recent boost in military funding and anticipated improvements at the Pentagon, Congress should consider abandoning budget caps and boosting the basic defense budget by 3 percent to 5 percent above inflation in the coming years.

That would be an extremely ambitious goal given the larger fiscal picture: a large and rapidly rising federal debt, an aging population, unsustainable entitlement programs, an inefficient tax system, and other pressing national priorities. In addition, defense already claims a large share of federal “discretionary” spending.

So military leaders and elected officials in Washington have a responsibility to ensure that the money sent to the Pentagon is being well spent. To help them do so, the problems reflected in the comprehensive audit should be addressed as quickly as possible.

Congress, which has repeatedly rejected past efforts to curb the rise in military personnel costs, must consider reasonable reforms in that area -- particularly health care. Priorities in the military budget must be set, with sharp cuts to non-essential programs.

If careful study leads members of the next Congress to believe that large military funding increases are in fact needed, they should find a responsible way to pay for them.

Simply borrowing more money is not the answer. As various analysts have pointed out, a runaway federal debt should also be considered a severe national security problem.

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