Despite challenges from the money heaving right, there is an emerging consensus that the Pentagon budget, now at post-World War II highs, will soon go south. The Pentagon is trying to avoid those budget cuts; it's device is to pretend reform with insignificant reductions in weapons programs, but not the money for them. Congress is trying the same with cuts that are both insignificant and deceptive. There are better alternatives.
Since Sept. 11, 2001, Congress and the Defense Department have added more than $2 trillion to the Pentagon budget. About half that increase covered the wars in Iraq and Afghanistan; the rest covered the "base" (non-war) parts of the Defense Department. Against all logic, the extra money made our military forces mostly smaller and older.
The Air Force, for example, got a budget increase of 43 percent, but the combat air fleet shrank by 51 percent. If the plans for the next few years go perfectly, the Congressional Budget Office tells us, the major equipment inventories will get even more outdated, as they shrink further.
It has likely been the most relentless squandering of resources the federal government has perpetrated since the end of World War II.
Don't blame just Defense Secretary Robert Gates. He's had lots of help. Defense secretary Donald Rumsfeld before him had accelerated the decay. Almost no one in Congress opposed this hyper-spending: The military services welcomed it, and the defense contractors were not exactly complaining.
Gates started in April 2009 a series of weapon program terminations and so called Pentagon reforms. He announced the defense budget "gusher" had been turned off. Yet the number of major defense acquisition programs he has eliminated is only down to 87 programs, costing $1.6 trillion, from 91 programs -- costing $1.6 trillion.
His gusher-off budget for the next 10 years would grow 1 percent each year, plus inflation, to $735 billion in 2020 from $554 billion in 2010 -- a 33 percent compounded increase adding another trillion dollars.
Gates' efficiency reforms have been all too modest. His plan to "save" $102 billion would be over 5 years. The money is not being saved: It is being transferred inside the Pentagon budget. Even if the $102 billion were real savings, it is only 3 percent of the planned five-year total, or $3.1 trillion.
The House and Senate Appropriations Committees have added their own eyewash by recommending "cuts" of $7 billion and $8 billion, respectively, in the 2011 DOD budget. But looking at the details, it is clear that much of these "savings" are just shifts from one year to the next. There are also some delays in programs -- which actually make them more expensive later -- and there are canceled "unobligated expenditures" -- which merely moves money from past years to future years. After these "cuts," 2011 is an $11-billion increase over 2010.
Real reform must start with fundamentals.
Right now, the Pentagon does not know how it spends its money, as the Government Accountability Office has reported for decades. It is literally "unauditable."
Routinely, DOD does not know if it has paid contactors once, twice or not at all. We recently learned it does not even know how many contractors it has, whom they employ and what they are doing. Google "audit" and "Pentagon" and read the horror stories.
Just look at a recent report from Sen. Charles Grassley (R-Iowa). It is long, hard reading, but it details how deep the accountability problems go. Not only are the Pentagon's books a gigantic mess, it reports, but the office charged with fixing it is broken. (Find Grassley's report here.)
Since the Chief Financial Officers Act of 1990 demanded that the Pentagon learn to track its money, DOD's managers have made promise after promise to reform. Each has been broken.
It is clear that if you ask what a weapon program has cost, or might cost in future, the DOD system will provide you any dollar amount it wants you to hear. The F-35 "Joint Strike Fighter" is a classic case; for the last two years, the acquisition bureaucracy had to re-cook the cost numbers - upward, of course - to chase new revelations, and we are about to get yet another update, which will only be another way station on the cost escalator. Ask for an audit of those or any other numbers, and listen to the excuses.
The only jolt that could shock this broken system into reform is less money. That is the approach taken by a member of President Barack Obama's Commission on Fiscal Responsibility and Reform. Sen. Tom Coburn (R-Okla.) has written each commission member recommending that the DOD budget be frozen until it can pass comprehensive audits of all programs, agencies and contractors. (Find a copy of Coburn's letter here.)
You can't reform spending if you don't know what you spend.
Freezing the DOD budget at the 2010 level would mean spending $5.5 trillion for defense in the next 10 years -- $1 trillion less than the $6.5 trillion that Gates wants. It would impose the strong discipline on the Pentagon missing for a long time.
The advocates of big DOD spending are likely to howl. But holding the DOD budget at the 2010 level for 10 years is a $900 billion increase over the pre-war, 2000 spending level (adjusted for inflation). And it still remains a multiple of the defense budgets of China, Russia, North Korea and Iran combined.
Those making today's defense budget decisions are locked in a mindset where more empty spending is never enough. That, more than anything, needs to change.
Essentially this same piece appeared in the October 25 edition of Politico at http://www.politico.com/news/stories/1010/44100.html.
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