Civilian Personnel: The Missing Piece in the Pentagon’s Budget Puzzle
While most news stories have accurately characterized the Obama administration’s proposed military spending cuts as “modest,” the Pentagon is planning significant reductions in the number of active-duty troops in the Army and Marine Corps. Both forces will be larger than they were in 2001, but the active-duty Army will fall from a post-9/11 high of 570,000 in 2010 to 490,000. The Marine Corps will go from 202,000 to 182,000.
The DoD should likewise reduce civilian personnel.
The reason the Pentagon’s plan places so much emphasis on personnel is stated clearly in the document (pdf):
Military personnel costs have doubled since 2001, or about 40% above inflation, while the number of full-time military personnel, including activated reserves, increased by only 8% during the same time period.
Ben Friedman and I have argued for an even smaller Army and Marine Corps, on the understanding that we should not permanently station U.S. troops in Europe and Asia. Such forward deployments are not essential to U.S. security and might ultimately undermine global security by encouraging other countries to defer spending for their own defense.
But the current proposal is clearly a step in the right direction, and it reflects the fact that Washington—and the American people—are not anxious to repeat the bitter experiences of the past decade. The costs of regime change followed by aggressive counterinsurgency are almost never outweighed by the benefits. We don’t have to build nations in order to destroy terrorists. The Army and Marine Corps grew to fight these types of wars, and they will now shrink back to nearly pre-war levels.
Other savings are possible, but not likely to be achieved in the near future. The president will ask Congress to authorize use of the Base Realignment and Closure (BRAC) process for changes in physical infrastructure. However, some members of Congress are already linking arms to prevent another round of base closings. Still, another BRAC (if it is ever convened) won’t generate significant savings in the next five years, and perhaps not in the next 10. Additionally, the proposal calls for Congress to empower “a commission with BRAC-like authority” to review the full range of costs associated with the military retirement system, with the added stipulation that any “reforms should only affect future recruits.” Thus, any potential savings will not materialize in the near term.
The New Pentagon Budget: Better, but Not Great
The changes announced in the Pentagon’s new budget guidance are, from my perspective, mostly good news, but woefully insufficient. They show how even limited austerity encourages prioritization among weapons systems that suddenly have to compete. A few more budgets like this and we’ll be getting somewhere.
The White House has not yet released the actual budget, but the Pentagon yesterday released a new document that explains the minor cuts in line for its slice. The document, unlike all the other defense strategy and guidance documents that have come out in recent years, sticks to plain English, avoids geopolitical gobbledygook, and tells you the budgetary impacts of its assertions. For that alone the Pentagon deserves some credit.
The document claims to be a guide to savings of $487 billion over 10 years. But you only get that figure by counting against past White House budget requests and their associated spending trajectory. We are saving just $6 billion from fiscal year 2012 to 2013, or 3.2% adjusted for inflation. If we leave out falling war costs, we have essentially frozen defense spending for two fiscal years (2011 and 2012), letting it grow at about inflation and then slightly slower, respectively. The Pentagon expects defense spending to grow at the rate of inflation or faster starting in fiscal year 2014, although their estimates of inflation are self-serving.
The new spending trajectory would cut about 8 percent from the base budget by the end of the decade. That’s from a budget that doubled in real terms from 1998 until 2012. And some of those savings are not really saved; they have simply migrated into the war budget. Keep in mind also that those savings are just a plan, one that is unlikely to last, particularly as presidents and Congresses change.
The biggest change in this budget is the beginning in a reduction of ground forces. The document says we will cut 80,000 troops from the Army and 20,000 from the Marines. The rationale is solid: we are probably not going to be committing large numbers of troops to another occupation of a populous country in revolt any time soon. Yet the cut leaves both forces with more personnel than they had prior to the expansion of ground forces that began in 2008. A real strategic shift away from occupational warfare would entail a bigger drawdown of Army and Marine personnel.
The Trouble with the State of the Union: America Is Not a Military Unit
At both the beginning and end of his state of the union address last night, the president suggested that the country can solve its problems by modeling itself after the military. Near the start he said:
At a time when too many of our institutions have let us down, [members of the military] exceed all expectations. They’re not consumed with personal ambition. They don’t obsess over their differences. They focus on the mission at hand. They work together. Imagine what we could accomplish if we followed their example.
He ended on the same note, comparing the unity of the Navy SEAL team that killed bin Laden to the political cooperation between himself Hillary Clinton and Robert Gates, and then suggested we all follow that example:
This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other’s backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we’re joined in common purpose, as long as we maintain our common resolve, our journey moves forward, our future is hopeful, and the state of our Union will always be strong.
One problem with this rhetoric is its militarism. Not content to thank the troops for serving, the president has adopted the notion that military culture is better than that of civilian society and ought to guide it. That idea, too often seen among service-members, is corrosive to civil-military relations. Troops should feel honored by their society, but not superior to it. We do not need to pretend they are superhuman to thank them.
There is an even bigger problem with this “be like the troops, put aside our differences, stop playing politics, salute and get things done for the common good” mentality. It is authoritarian. Sure, Americans share a government, much culture, and have mutual obligations. But that doesn’t make the United States anything like a military unit, which is designed for coordinated killing and destruction. Americans aren’t going to overcome their political differences by emulating commandos on a killing raid. And that’s a good thing. At least in times of peace, liberal countries should be free of a common purpose, which is anathema to freedom.
The more we get shoved together under a goal, the less free we are, and the more we have to fight about. Differing conceptions of good and how to achieve it are the source of our political disagreements. Those competing ends are manifest in different parties, congressional committees, executive agencies and policy programs. Our government is designed for fighting itself, not others.
There’s no danger that this suggestion that we emulate military cooperation to make policy will actually succeed. Our politicians are hypocritical enough to rarely believe their own rhetoric about escaping politics, thankfully. But the happy talk is at least a distraction from useful thought about successful legislating. Productive deals get done by recognizing and accommodating competing ends, not by wishing them away. That means better politics, not none.
Setting the Record Straight on Military Spending Levels
As David Boaz recently demonstrated, the jeremiads emanating from Washington over proposed cuts in military spending are unfounded. Howard P. “Buck” McKeon’s op-ed in today’s Washington Post is only the latest to decry the “damaging blow to our military” that will be done by “massive defense cuts.”
Not only is Pentagon spending not at its lowest level in 60 years, as the Heritage Foundation claimed, it will not fall to such a level even if the Budget Control Act’s sequestration spending caps are implemented. David shows that charts can obscure the relevant facts or contribute to poor arguments.
But charts can also help shed light on the truth. For example, in the first chart below, prepared by my colleague Charles Zakaib, one might conclude that the reductions being contemplated as an outgrowth of President Obama’s strategic review (the brown line) would represent a dramatic cut in the Pentagon’s base budget. The automatic sequester cuts (the red line at the bottom) appear even more draconian.
There’s No Machine-Readable Government Org Chart
At a recent Cato event on transparency, I emphasized that there is no federal government “organization chart” published in a way computers can use.
Here’s what I mean:
Appendix C of the Office of Management and Budget’s Circular A-11 is the White House’s definitive public listing of agencies and bureaus, along with their OMB and Treasury codes—unique identifiers for the agencies and bureaus of the federal government.
First problem: It’s a PDF document. To be computer-usable this should be represented in digital form as a lookup table.
But beyond that, it doesn’t follow a coherent organization. There’s an agency code (“200″) called “Other Defense Civil Programs,” for example. There’s obviously no agency called “Other Defense Civil Programs.” That’s a catch-all description, not an agency.
With most agencies, the bureau codes refer to bureaus, such as the Bureau of Land Management (bureau code: “04″) in the Department of the Interior (agency code: “010″), but with respect to the Department of Defense (agency code: “007″), the bureau codes become functional descriptions such as “Military Personnel” (“05″). There is no bureau in the Department of Defense called “Military Personnel.”
Even the most basic organizational information is a hash, and it’s published in PDF, unusable for computer-assisted oversight of the government!
The House appears committed to improving its publication practices. If the administration wants to advance the ball on transparency for its part, it will begin to publish coherent information—starting with basic information about the organization of the executive branch—in machine-readable form, using standardized identifiers. An edict from OMB to harmonize on identifiers down to the program level could be implemented in months, if not weeks.
My recent paper “Publication Practices for Transparent Government” talks about what to do. Our data model for budgeting, appropriating, and spending articulates how government agencies, bureaus, programs, and projects—and the relationships among them—should be represented.
What the Pentagon’s New Military Strategy Should Look Like
President Obama, Defense Secretary Leon Panetta, and Joint Chiefs Chairman Martin Dempsey are scheduled to brief the media tomorrow morning on the recently completed strategic review that will inform the Pentagon’s budget priorities for the coming five to ten years. Early indications suggest that the status quo will hold. And that is bad news for U.S. troops, and U.S. taxpayers.
Obama, Panetta, and Dempsey should clearly spell out:
- The types of missions that the U.S. military will be expected to perform on a regular basis
- Those operations that the military will occasionally conduct on short notice, and for short periods of time
- How defense capacity can be augmented in those very rare cases calling for significant mobilization of additional resources.
Some suggest that the strategy document will abandon the requirement that the Pentagon must be prepared to fight two sustained ground wars at the same time, something that the country hasn’t done since well before Barack Obama was born. Such a change, if true, should be welcomed.
It is significant the president is attending, and the most important questions should be reserved for him. It is particularly incumbent upon the civilian leadership within the Obama administration, beginning with the president himself, to spell out their intentions regarding the use of force, and of the role of the U.S. military more broadly. These should go beyond vague signals; our military leaders shouldn’t be forced to guess what missions that they will be asked to perform. The president must tell them.
A Do-It-Yourself Guide to Cutting the Military Budget
The New York Times has posted a handy tool for calculating savings from the Pentagon’s budget over the next ten years. I went through the exercise, and my plan resulted in cuts of $1.144 trillion over ten years. Had I checked all of the boxes in the Times’s calculator, it would have generated savings of up to $1.4 trillion.
Though I support reform of the the military retirement system, I think some of these proposals go too far (they would have saved up to $86.5 billion). We should continue to spend money recruiting the very best force, comprised of the most-qualified men and women ($5 billion), and we might find it hard to do that if/when the economy improves. Tuition assistance is a key factor driving recruitment, and I wouldn’t scale that back ($5 billion). (Full disclosure: I attended college on an NROTC scholarship.) We need the best possible services for families, and I could foresee problems with closing elementary and secondary schools on bases ($10 billion). And I have no particular quarrel with military bands ($0.2 billion). My ideal military will be smaller and more elite, but likely better compensated than today’s force. And retirees would continue to receive many benefits not enjoyed by their fellows who never served, but we should experiment with ways to control costs. The key take-away, and the one stressed in the accompanying story by Elisabeth Bumiller and Thom Shanker, is that it is possible to reduce military spending, and the resulting force will still be larger and more capable than any conceivable combination of rivals.
A few additional observations:
1) The Times’s calculator cites my and Ben Friedman’s contribution to the Sustainable Defense Task Force report, “Debts, Deficits, and Defense,” but the main part of the report was the work of the entire task force, and they deserve proper credit. I am particularly grateful to Carl Conetta and Charles Knight of the Project for Defense Alternatives.
2) Ben and I published a stand-alone report a few months later with some numbers drawn from the SDTF report, and with some additional detail surrounding our proposals that were not endorsed by all SDTF members. Our savings were calculated against the baseline from fiscal year 2010, and these numbers are now a bit dated.
3) When I hit the submit button comparing my choices with others who participated in the exercise, I discovered 80 percent of respondents supported the plan to reduce forces in Europe and Asia. That sort of systematic restructuring is necessary to ensure that we don’t impose undue burdens on what will necessarily be a smaller force. As I have said repeatedly, if we are going to spend less, we must expect our troops to do less, and expect other countries to do more.
Debate Needed on Nuclear Weapons Spending
Nuclear weapons have played a major role in U.S. force planning for many decades. But we have never had a thorough accounting of the total cost of these weapons, and we still don’t. (The best to date is probably this study by Stephen I. Schwartz and Deepti Choubey, but they don’t claim to capture every nickel spent on nuclear weapons.)
The Washington Post‘s Glenn Kessler published a fact checker article earlier this week that challenged the claim that we would spend $700 billion on nuclear weapons over the next decade. Since then, other organizations have come forth to decry the lack of transparency within the nuclear weapons budget, and call for the government to do a much better job of documenting all of the costs associated with our many nuclear weapons programs. This would include an understanding of the full life-cycle costs for fissile material, warheads, and delivery vehicles, from design and development, to production, to retirement and waste removal and abatement. As with the rest of the Pentagon’s budget, which has never been subject to a complete audit of its assets and liabilities, the nuclear weapons portion (much of which resides in the Department of Energy) remains shrouded in secrecy.
I hope that the latest dust-up over what we are actually spending creates additional pressure on the bureaucracy to open up its books.
This an excerpted version of a longer post from “The Skeptics” at the National Interest.
Panetta’s Obligatory Warning to NATO on Military Spending Will Accomplish Nothing
On Wednesday, Defense Secretary Leon Panetta issued a warning to NATO allies that reducing military spending on both sides of the Atlantic will risk “hollowing out” the alliance’s capabilities. Panetta implied that Europeans cannot continue to rely on the United States for their security. Following former defense secretary Robert Gates’s comments in June, Panetta joins the long list of U.S. presidents, secretaries of defense and state, and innumerable lower-level officials who have pleaded with Europe to pick up the slack on military spending, provide for their own security, and close the gap in capabilities.
But Secretary Panetta’s speech also praised NATO for the mission in Libya and he extolled Europe’s leadership in the campaign: “The alliance achieved more burden-sharing between the U.S. and Europe than we have in the past…on a mission that was in the vital interest of our European allies.”
Relative to past NATO operations, it may be true that Europe contributed more in this instance. But this ignores the fact that the mission would not have been possible without the unique capabilities of the U.S. military. As Justin Logan pointed out, the Europeans quickly ran out of munitions and relied on the United States to conduct air strikes. “Thus, Washington essentially borrowed money from China to buy ordnance to give to Europe to drop on Libya.”
Panetta’s finger-wagging will do little to alter the incentive structure European states confront when determining what they should spend on defense. As I explain in an article recently published at Big Peace, until the United States takes concrete steps to force Europeans to spend more for their security, they will continue to free-ride on the U.S. taxpayers’ dime.
Cutting the Pentagon’s budget without imposing additional burdens on our troops requires getting our allies to do more. That is unlikely to happen unless U.S. officials, beginning with Secretary Panetta, force the issue. Unfortunately, he is merely one of many in Washington who seem to forget how incentives work:
Those who simply assume that others would not do more to defend themselves and their interests often ignore the extent to which U.S. actions have discouraged them from doing so. Just as some welfare recipients are often disinclined to look for work, foreign countries on the generous American security dole do not see a need to obtain military power. Our great power, and our willingness to use it, even when our own interests are not at stake, has allowed others to ignore possible threats, always confident that the United States will be there to rescue them.
The Obama administration’s rhetoric merely reinforces this message. The National Security Strategy, published in May 2010, declares “There should be no doubt: the United States of America will continue to underwrite global security.” Taking their cue, U.S. allies have proved understandably disinterested in military spending.
Despite Panetta’s pleas, U.S. strategy—and NATO’s very existence—allows this free-riding to continue. The Libya operation appears to have reinforced these destructive tendencies. If Washington really wants our allies to spend more to defend themselves and their vital interests, U.S. officials must jettison their reflexive attachment to the NATO alliance, an organization that has been irrelevant to U.S. vital security interests for at least two decades.
Secretary Panetta understands the United States is dealing with its own fiscal problems, but he has missed a perfect opportunity to offload a share of our burdens on to our rich allies.
Strength vs. Stupidity
The New York Times weighs in this morning with a timely and sensible editorial on military spending. The main focus is on the increasingly outdated pay and benefits system for the nation’s troops. Some choice excerpts:
Military pay, benefit and retirement costs rose by more than 50 percent over the…decade (accounting for inflation). Leaving aside Afghanistan and Iraq, those costs now account for nearly $1 out of every $3 the Pentagon spends.
Much of that is necessary to recruit and retain a high-quality, all-volunteer military….But current military pay, pension systems and retiree health care benefits are unsustainable and ripe for reform.
[...]
The retirement system is both unfair and increasingly expensive. Most veterans, including many who have served multiple combat tours, will never qualify for even a partial military pension or retiree health benefits. These are only available to those who have served at least 20 years. Those who do qualify can start collecting their pensions as soon as they leave service, even if they are still in their late 30s, making for huge long-term costs.
So far, so good. Two essential points bear repeating.
First, the rise in military spending over the past decade has not been driven solely by the costs of the wars in Iraq and Afghanistan. Pentagon costs are growing, and the rate of growth is rising. Programmatic reform is needed to reign in those costs; avoiding stupid wars won’t solve the problem (although it won’t hurt).
Second, the current system disproportionately rewards individuals who stay in the service for 20-plus years, and undercompensates those men and women who serve several tours, but who do not qualify for military retirement. A better system would allow anyone who has served to retain some of what they paid (or what taxpayers paid for them) into a portable retirement account that they control. Private industry has been steadily moving away from a fixed-benefit, pension-style system for years. I have heard the arguments against such a move, but I don’t find them particularly convincing.
One point from the Times editorial, however, calls out for clarification. The editors claim on two separate occasions that current military spending patterns are “unsustainable.” They conclude:
The United States already has a comfortable margin of [military] dominance….The Pentagon’s ambitions expanded without limit over the Bush era, and Congress eagerly wrote the checks. The country cannot afford to continue this way, and national security doesn’t require it. (emphasis added)
The latter point, “national security doesn’t require it,” is crucial, correct, and should be repeated at every opportunity. The former assertion, “the country cannot afford” it, is false. Repeating that claim plays into the hands of the inveterate hawks who never saw a war, or a weapon system, that wasn’t deserving of more lives/money.
The hawks are correct to point out that the United States has in the past, and could in the future, choose to spend as much or more on our military. Current spending levels amount to about five percent of GDP (when including the costs of the wars), and military spending as a share of total government spending has been falling steadily for years. According to the hawks, it is other spending, or too little revenue, that is putting our children and grandchildren into debt.
I wish that the Times had spent more time hammering the point that such spending is unnecessary. Contrary to anecdote and the evening news, the international system is remarkably stable and peaceful. The United States need not spend more than we did at the height of the Cold War in order to be secure from most threats. And those few genuine threats to our security could be handled with a smaller, more efficient military—if we offloaded some responsibilities to other countries that have sheltered under the U.S. security umbrella for decades.
The Times doesn’t directly address that last point. By focusing most of their attention on programmatic reforms to pay and benefits, and a bit on costly procurement of unnecessary weapons, but not enough to the underlying flawed assumptions that drive military spending, the editors contribute to the misconception that the U.S. military should continue to be the world’s policeman, and find ways to do this on the cheap.
That is unfortunate. Spending more than we need to doesn’t make us stronger. Ignoring our favorable strategic circumstances is simply stupid. We spend too much on our military because we ask our troops to do too much. To spend less, we must do less. The good news is that we can. The bad news is that too few people understand that.
Make-Believe Defense Cuts
Earlier this week, the House Armed Services Committee Republican staff released a video using the anniversary of September 11 to argue for higher military spending while pretending that lately we have cut the defense budget. Chris Preble and I rebutted these outlandish claims, and Evan Banks made our comments into a cool video:
Hawks like HASC Chairman Buck McKeon (R-CA)—who thinks that “power in benevolent hands is a virtue, not a vice,”—pretend that we are about to slash military spending thanks to the Budget Control Act, the deficit deal legislated early last month. Reporters abet them by repeating the White House PR myth that the bill’s security budget cap will cut Pentagon spending by $350 billion over ten years, and writing that the sequestration provision will probably cut another $500 billion. But as I explained here, the BCA will likely produce either a miniscule defense cut in the near term or no cuts at all. That is because I consider a “cut” to mean spending less than we do now, not less than plans say, because agencies other than defense can absorb the cuts required by the security cap, and because the bill encourages lawmakers to move capped base defense funds into the uncapped war bill.
The Senate Appropriations Committee’s proposed funding levels (302b allocations in budget speak) released earlier this week bear out those concerns. Because they come after the BCA, the Senate spending levels are likely to guide those set by the House. Compared to 2011, the committee would cut just under $3 billion from the base defense budget, which is less than one percent. That cut comes entirely from the military construction and family housing account, which was recently bloated by the Base Realignment and Closure (BRAC) process. The senators get another chunk of the $4.5 billion in security spending cuts required by the BCA from State, which would lose $3.5 billion, and Homeland Security, which loses a half billion. The National Nuclear Security Administration and the Veterans Administration get minor increases. For more on these allocations, see Stimson’s The Will and the Wallet blog, especially Matthew Leatherman and Russell Rumbaugh’s recent posts.
So that’s a minor defense cut, right? Maybe not. The Senate appropriators seem to have slipped a larger amount of base defense spending into the war bill (Overseas Contingency Operations funding). The committee’s markup press release brags that it fully funded the president’s war request of $117.8 billion, but then claims that they cut $6.6 billion from that request by trimming funding for U.S. and native forces in Afghanistan. What that most likely means is that the committee, probably in league with the Pentagon, cut the war bill by that amount and shifted the same amount over from the base, keeping the war bill flat and maintaining the fiction of a minor base defense cut. We won’t know for sure until the appropriations bills are published.
The longer term prospects for the BCA cutting defense spending are a story for another time. For now, suffice it to say that the prospects of the bill’s current spending limits staying in place for ten years are slim. Future Congresses easily free themselves from legislative bonds set by prior ones, and democracies with two-to-six-year election cycles can’t stick to ten-year plans.
The Curious Case of Lloyd Chapman
Last week, I flayed the American Small Business League’s Lloyd Chapman for his absurd claim that legislation introduced by Sen. Richard Burr (R-NC) would close the Small Business Administration (see here). As I expected, Chapman’s response is equally absurd.
In an ASBL press release, Chapman actually threatens to take me to court over my calling him a “conspiracy theorist”:
The next time you call me a conspiracy theorist, be ready to back it up with facts. You just might find yourself in court.
Good luck with that, Lloyd. In the meantime, let’s allow the court of public opinion to decide if the following claim you recently made is the stuff of a conspiracy theorist:
Clearly Republicans like Senator Burr, his supporters and groups such as the CATO Institute are directed like puppets by the defense and aerospace industry.
I can’t speak for Sen. Burr, but Chapman’s assertion that the Cato Institute is being “directed like puppets by the defense and aerospace industry” is ridiculous. Cato’s Downsizing Government website, which I co-edit, lays out the case for cutting the Department of Defense.
My Cato colleagues past and present have consistently advocated for a limited U.S. presence abroad:
Cato’s foreign policy vision is guided by the idea of our national defense and security strategy being appropriate for a constitutional republic, not an empire. Cato’s foreign policy scholars question the presumption that an interventionist foreign policy enhances the security of Americans in the post-Cold War world, and maintain instead that interventionism has consequences, including the formation of countervailing alliances, the proliferation of weapons of mass destruction, and even terrorism. The use of U.S. military force should be limited to those occasions when the territorial integrity, national sovereignty, or liberty of the United States is at risk.
Does that strike the reader as anything the defense and aerospace industry would direct Cato to advocate? Clearly, Chapman is hopelessly lost in a fantasy world of his own creation.
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