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11.17.10

Surprise! A Pentagon Spending Hike

The president’s deficit commission may call for defense spending cuts, but Obama and Gates are actually proposing to boost military outlays in the coming years.

Surprise! Forget what you think you’ve heard for months about deep reductions in Pentagon spending. Defense outlays are not being cut by President Obama. In fact—hold on to your wallets—Mr. Obama and Defense Secretary Robert Gates are actually proposing to increase it slightly yearly for the next five years. 

Yes, everyone is to be forgiven for not understanding what’s going on. With all those Washington lions, especially Mr. Gates himself, roaring about slashing $100 billion, confusion is inescapable. The first step on the road to comprehension is to understand that when Washington officials speak of axing the Pentagon budget, they could mean any one of three things: (1) increasing it; (2) slicing less worthy parts of that vast money pot so that the savings can be applied to more worthy parts of that budget; or (3) actually wanting to decrease it, but hoping someone else will take the blame. It's a very complicated story. 

Few in the nation’s capital appear to know what’s really going on. And that’s what our forefathers probably intended. Mr. Gates is prime among the initiates. You can clearly see his enjoyment of the game. As Gates told Newsweek, “As an old Soviet analyst, I read the speeches of their leaders very, very carefully. And people should read my speeches very carefully.” This most justifiably esteemed Defense Secretary is telling us not to read his lips, but to watch his hands—if you can. 

My only hope is that the cuts are not made willy-nilly to fit a political agenda, but in accordance with a strategy that takes a hard look at the real threats America faces and the forces actually needed to defend and defeat them.

At first, Mr. Gates seemed to be saying that military spending would be brought under control in the great tradition of President Dwight Eisenhower. In May, Gates delivered a speech at the Eisenhower library in Abilene, Kansas in which he stressed the links between America’s economic strength, its military might, and its security. He said, “Eisenhower strongly believed that the United States—indeed, any nation—could only be as militarily strong as it was economically dynamic and fiscally sound.” Surely, he was signaling that big cuts were on the way in order to help reduce America’s gigantic debts and restore America’s economic vitality. Only months later, however, he revealed a very different take on what he was really doing.

Step back now and watch the full story unfold. 

The Obama administration is requesting $738.7 billion for the current fiscal year (beginning October 1, 2010 and ending September 30, 2011). That is not a reduction from the previous year. It’s actually an increase. The increase, and future increases come from two sources: the White House agreement to give Mr. Gates one-percent real growth in spending (i.e. over and above inflation), and a further agreement to give the Pentagon about A four-percent bump for inflation rather than the three-percent increase given to the rest of the government. Supposedly, defense goods and services have a higher inflation rate than others—and given the out-of-control charges by defense contractors, it’s probably true. 

Meantime, this fiscal year’s budget request by the Pentagon has been sitting in Congress for months on end. The relevant congressional committees have voted for tiny reductions on the order of about $7 billion, which still means a significant increase over the previous year. The bill probably won’t get acted on before this Congress ends in January. The don’t-ask-don’t-tell legislation, among other issues, is holding up the works. 

Now, here comes the really complicated part. Mr. Gates has said repeatedly that he will slash his budget by $100 billion. (Almost certainly, he won’t be around by the end of next year to bring this about.) What he means is that his successors will have to cut this amount over five years or an average of $20 billion annually. And what he further means is that he won’t actually cut that $100 billion out of the Pentagon’s overall tab. Rather, he is proposing to take that money out of wasteful or duplicate programs or unnecessary overhead and put all of that cash into weapons modernization and other needed programs. In other words, he intends to chop waste and apply the savings to muscle. 

Here’s the point in his own—usually overlooked—words: “Let me be clear, the task before us is not to reduce the department’s top line budget.  Rather, it is to significantly reduce its excess overhead costs and apply the savings to force structure and modernization.” It is a very commendable idea, but it won’t produce net savings in military spending. The overall budget either will stay the same or rise by about two percent annually. Alas, the news media focused entirely on Gates’ idea of robbing Peter, but said little about using the booty to pay Paul. 

It would be tempting to conclude the story right here—with military spending rising every year for the next five years to a grand total of something like $3.5 trillion dollars.  But not so fast; never so fast regarding the Pentagon budget and Washington. The two chairmen of the debt reduction committee, Erskine Bowles and Alan Simpson, have observed the Gates scheme of robbing Peter to pay Paul, but they argue for a very different outcome. They just want to rob Peter of that $100 billion and save it. Their argument is that if the nation is to get truly serious about slashing its huge debt, it must sharply reduce military as well as civilian spending, and it is precisely at this point that the political debate will be joined in the next two years. It was only a matter of days before Gates labeled these real cuts "catastrophic” to national security.

America’s economic situation is so bad that Pentagon spending will have to be cut in the coming years. The only question is who will be given the blame or who will take the blame. My only hope is that the cuts are not made willy-nilly to fit a political agenda, but in accordance with a strategy that takes a hard look at the real threats America faces and the forces actually needed to defend and defeat them.

Leslie H. Gelb, a former New York Times columnist and senior government official, is author of Power Rules: How Common Sense Can Rescue American Foreign Policy (HarperCollins 2009), a book that shows how to think about and use power in the 21st century. He is president emeritus of the Council on Foreign Relations.