World Hotspots Challenge U.S Defense Budget

Special Guests: Michael O'Hanlon

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This week on Facing the Future Bob Bixby hosted a  discussion of China, Ukraine, Gaza, and more international strategy in the context of the budget. Joining to provide an expert perspective on U.S. military spending priorities was Michal O’Hanlon, Senior Fellow and Director of Foreign Policy Research at The Brookings Institution. Concord Coalition Policy Director Tori Gorman joined the conversation.

“We spend a little more than 3% of our gross domestic product on our military,” O’Hanlon said, “roughly, 1/7th of the Federal budget is now national defense. In that sense, you could say that defense spending today is modest. However, it’s pretty hard to say that with a straight face when you look at other perspectives. The overall size of the national Defense budget is about $850 billion a year, and that exceeds the Cold War average and the Cold War peak. It’s a staggering amount of money from that perspective. It’s also about 40 percent of the world’s total defense spending.”

“Obviously, it’s hard to keep the numbers straight when we’re sending tens of billions to Ukraine. How do you count that? I am not counting that kind of money when I talk about $850 billion a year. So there have been these little mini-spikes and valleys in the Biden period, but it’s been a fairly steady, constant dollar defense budget, which some experts believe is not enough.”

Breaking down federal defense spending, O’Hanlon identified three main categories in the Department of Defense’s budget. “The procurement budget and the research and development budget are about $300 billion. Then military personnel, which includes all the pay, compensation, and deferred retirement benefits for uniformed military personnel, is close to $200 billion. The remaining $300 billion or so is almost entirely operations and maintenance.”

“Waste at the Department of Defense, of which there is definitely a lot, is marbled into the muscle. It’s there. But good luck excising it, because you’re not just going to identify it as low hanging fruit. You’re going to have to go do careful surgery to make sure that our defense functions are sustained. We don’t have the luxury of having the Department of Defense go out of business. My old boss titled his book: ‘Eliminating Waste, Fraud and Abuse at the Department of Defense: Be Realistic, But Keep Trying.’”

One of O’Hanlon’s main points was prioritizing a military capable of waging two wars concurrently. This has been the standard throughout the 20th and the 21st century following World War II. In the modern context of this strategy, O’Hanlon marked 2014 as the turning point in our thinking about China and Russia. “From that point on we’ve been trying to reprioritize towards great power rivalry and deterrence. This has actually been a point of remarkable bipartisan continuity, even through the change from Obama to Trump to Biden. On this issue, everyone’s tried to pull ourselves out of the Middle East and rebalance towards the Asia Pacific, but also towards Europe. We should have the capability to defeat either Russia or China, but not both at the same time.”

Commenting on the war in Ukraine and the United States’ role in it, O’Hanlon suggested that, “it’s testing the logistics part of our military capacity. It’s testing the reconnaissance and intelligence part. And of course it’s testing the defense industrial base. Let me underscore that without sounding, I hope, too callous about what’s going on. We are benefiting from the Ukraine war because we’re learning how much we had allowed our defense industrial base to whittle down to its minimalist size for a more or less peacetime military.”

To close the show, Bob asked O’Hanlon how the conflict in Gaza might end. “Here we have known for decades that the only way to have stability in the Levant and Israel, and for the Palestinian people as well, is a two state solution. We’ve been right about that. Netanyahu’s been wrong. He’s had no serious interest in pursuing a peace process. He assumed that through economic incentives in Gaza that Hamas could be weaned away from its emphasis on violence and the destruction of Israel. By the way, I have nothing good to say about Hamas. I’m being critical of Netanyahu in policy terms. I’m very critical of Hamas. What it did on October 7th was horrible, but nonetheless Prime Minister Netanyahu’s disinterest in a serious peace process allowed this pressure cooker to just boil from within. To our discredit, we didn’t understand just how bad that pent up pressure was.”

Hear more on Facing the Future. Concord Coalition Executive Director Bob Bixby hosts the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as The Concord Coalition team discusses issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.

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