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Dorian de Wind

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Defense Budget Cost-Cutters: Know Thy Patient

Posted: 08/21/11 05:33 PM ET

As result of the debt limit deal, sizable budget cuts are in store for almost every government department and federal program.

The "cost cutters" are already sharpening their knives looking for juicy targets -- the Defense Department seems to be one of the juiciest of them all.

All good and well, but shouldn't the "cutters" know precisely what to cut, where to cut, how much to cut and the implications, ramifications, consequences and ripple effects of such cuts?

In "How much is that F-35 in the window," I wrote about the difficulty of pinning down the true cost of a single F-35 Lightning II fighter aircraft or, for that matter, of the entire Joint Strike Fighter Program.

Multiply the uncertainties, vagaries, and red tape of pinning down the cost of this aircraft -- this program -- a thousand-fold and one gets an idea of the complexities of pinning down the true costs of running our Defense Department, of ensuring our national security.

It takes a lot of time and effort to come up with a "Defense Budget," a massive stratagem full of accounting complexities, ambiguousness and double Dutch.

Following the tortuous, complex and lengthy process by which the so-called "Defense Budget" is developed -- the "Planning, Programming and Budgeting System" (PPBS) -- Congress begins its machinations, turf battles, and catering to lobbyists, pet contractors and favorite congressional districts. Finally, out pops the so-called Defense Budget.


"So-called" because the several-hundred-billion-dollars "budget" one is incredulously staring at may be interchangeably referred to as the National Security budget, the National Defense budget, the Department of Defense Budget, the military budget, the Pentagon budget, etc., and may or may not live up to that name, depending on what is and what is not included in such a budget. (Presently, a task force is making the case for yet another budget, a "Unified Security Budget" that would "rebalance" U.S. security resources among accounts funding "offense, defense, and prevention.")

The following may or may not be included in the "budget" one is looking at:

  • Costs for military related items or activities in Veterans Affairs, State Department, Homeland Security, Department of Energy (such as nuclear weapons research, maintenance, etc.) and in other departments and government activities.
  • Interest paid on money the federal government borrows, or has borrowed, for defense
  • Costs for classified military intelligence activities that mere mortals are not privy to -- such as military intelligence gathering by NASA and others -- which may be hidden away in various nooks and crannies.
  • The full cost of the military retirement system funded partially under the defense "accrual" method for accounting and partially paid for by the Treasury Department.

That "budget" may or may not be the Defense "base budget" and it may or may not include various supplemental "budgets" and appropriations.

These "supplemental" requests and appropriations are perhaps the biggest -- in more ways than one -- contributors to the uncertainty, confusion and controversy as to the real size and scope of the "defense budget."

I say this because when we finally think that we are beginning to understand the defense budget, along come two or three wars -- if one includes the Libya "air war" -- along with the Global War on Terror, presenting plenty of opportunities to fudge, play games with, hide or obscure the true military costs of such actions. One has probably heard of "war-fighting supplementary funds," "supplementary spending bills," etc.

You see, the costs of the Iraq and Afghanistan wars -- amounting to approximately $1 trillion up to the FY2010 budget -- had been budgeted separately through "supplementary spending bills" not included in the military budget.

Starting with the FY 2010 budget, the costs of those wars, categorized as "Overseas Contingency Operations" (OCO), are included in the Defense budget. While the inclusion of such OCO costs in the Defense budget may appear to bring additional visibility to the war fighting costs, some disagree. For example, a recent article in Mother Jones claims:


Welcome to the world of the real US national security budget. Normally, in media accounts, you hear about the Pentagon budget and the war-fighting supplementary funds passed by Congress for our conflicts in Iraq and Afghanistan. That already gets you into a startling price range -- close to $700 billion for 2012 -- but that's barely more than half of it. If Americans were ever presented with the real bill for the total US national security budget, it would actually add up to more than $1.2 trillion a year.

While some may say that this is a predictable exaggeration by a "liberal rag," the military Stars and Stripes has just published an article by Nancy Youssef titled "True cost of wars in Afghanistan, Iraq is anyone's guess," adding, "Nobody really knows."

In the article, Youssef says that while Congress has allotted $1.3 trillion for war spending through fiscal year 2011 just to the Defense Department, "all those numbers are incomplete. Besides what Congress appropriated, the Pentagon spent an additional unknown amount from its $5.2 trillion base budget over that same period. According to a recent Brown University study, the wars and their ripple effects have cost the United States $3.7 trillion, or more than $12,000 per American."

The issue of how much the wars actually cost taxpayers is not only relevant because it is the taxpayers' money and they have every right to know, but it also important to know when, as previously mentioned, as part of our budget cutting frenzy, Congressional committees and other cost-cutters will be deciding later this year on how much to cut from the defense budget, the Pentagon budget, etc.

Whether we will have to make $350 billion in "defense and security" spending cuts through 2024, spread across several government agencies, or -- if the "super committee" fails to agree on further federal budget cuts -- we have to make across the board cuts of $1.2 trillion over 10 years, with half of that coming from the Pentagon, it would be nice to know in which budgets, in which Departments and in which nooks and corners to make the cuts.

Some of those cost cutters who see the Defense Department as a "juicy target" -- perhaps rightly so -- are beginning to fix their eyes on the military retirement system as an even juicier sub-target even though in FY 2010 the services contributed approximately $20 billion to the military retirement fund, or less than five percent of the total defense budget( Another approximately $70 billion are contributed to the Fund by Treasury and by investment income).


While all Americans must be called to sacrifice in these tough times, and while certain reforms in the system are called for, let us remember the sacrifices that are already inherent in a military career.

By all means, cut our involvement in the remnants of an unnecessary and ill-advised war -- Iraq -- and start a judicious and steadfast disengagement from a war where we have already destroyed those who attacked us on 9/11, but don't cut the military capabilities we may legitimately and justifiably need in the future.

Huffington Post blogger Patrick Takahashi says, "Cut the Defense Budget, Please!" and makes some recommendations on places to cut.

Yes, please! However, let us hope that the cost-cutters, in their zeal to cut, will truly get to know the patient, lest they cut off the wrong limb.