THE BLOG
04/06/2010 05:12 am ET Updated May 25, 2011

Two Views on the Pentagon's Budget and Strategy Review

Neither are favorable, but they both offer somewhat differing views of the latest output of the Gates/Flournoy Pentagon. One is a new commentary appearing at CounterPunch by former Pentagon insider Chuck Spinney. The other is a radio interview I had with NPR affiliate Chicago Public Radio. Find Chuck Spinney's commentary below; find my 30 minute radio interview at www.chicagopublicradio.org.


CounterPunch.com
February 3, 2010

The New QDR

The Pentagon Goes Intellectually AWOL

By FRANKLIN C. SPINNEY

Monday, February 1, 2010, was a day that should live in budgetary infamy. The Defense Department released its Quadrennial Defense Review (QDR) and its accompanying Fiscal Year 2011 budget request, which is the first year of the Fiscal Year 2011-2015 five year plan (2011-2015 FYDP). These documents are available on the internet and can be downloaded in PDF format here: QDR <http://www.defense.gov/qdr/QDR%20as%20of%2029JAN10%201600.pdf> and the FY 2011 budget <http://comptroller.defense.gov/budget.htm>.

Even by the dismal intellectual standards of Pentagon bureaucracy, the QDR and the FY 2011 budget, taken together, establish a new standard of analytical vacuity, psychological denial, and just plane meaningless drivel. I will keep this short by using just one important case to prove my allegation. Judge for yourself if it is necessary and sufficient to make the point.

First, I must bore you with a little background: The Pentagon has been producing FYDPs since 1962. But these FYDPs have been repeatedly criticized for producing defense budgets that were disconnected from the national military strategy -- and because the dollar allocations made in any budget determine what any government's policy really is, the critique was logically equivalent to saying there was no strategy. The congressional legislation in the mid 1990s that established the QDR was only the most recent attempt to deal with this long standing criticism. The aim of that legislation was to require the Pentagon to lay out an intellectual framework for matching its military strategy and ambitions to the resource constraints shaping those ambitions, especially budgetary constraints, but also constraints relating to people, the limitations imposed by available technologies, etc.

The new FY 2011 budget and its accompanying FYDP, therefore, are supposed to attach budgetary and programmatic meat to the strategic skeleton that is the QDR, both of which were completed at the same time and made public on 1 February -- itself a somewhat illogical sequence, given that one is supposed to precede the other. In theory, these documents should permit an analysis of the strengths and weaknesses implicit in the matchup between resources and strategy. Therefore, these documents should enable the Secretary of Defense to send the President and the Congress a comprehensive set of priorities, opportunity costs, and risks associated with his strategic plan. This information would then become the grist for a rational national debate by linking strategic considerations to the inevitable compromises made in the sausage making factory that is Congress. Moreover, as this is President Obama's first budget, and because it represents $700+ billion that Mr. Obama just put off limits in the coming national debate over whether or how to shrink the federal deficit, it was crucially important for the Pentagon to get the QDR and the accompanying FY 2011-2015 FYDP right in a logically consistent and transparent manner.

If we apply this standard to the Pentagon's recently completed handiwork, only one conclusion is possible: the Pentagon flunked the test by being intellectually absent without leave.

One example is sufficient to prove this point. For the past 20 years or so, mainstream and defense related press outlets have inundated the American public with horror stories about the Pentagon's aging force structure and with stories about the Pentagon's unauditable budget shambles -- the two are intertwined. And over the last 10 years or so the public has been inundated by stories describing how that force structure is being being worn out by the high operating tempos of our never ending wars and interventions, yet another dimension of the same problem. In fact, I first started documenting this aging trend in the early 1980s in a series of analytical studies, some classified, but most unclassified, and it has gotten worse and more intractable each year.

There is simply no question that the weapons in our force structure inventories have been getting older on average at an alarming rate. The fundamental reason for the aging trend is that the unit costs of buying and operating new weapons grow faster than defense budgets grow, even when budgets grow at unprecedented rates, as they have since the mid-1990s, and consequently, as weapons grow older over time, they become more expensive to operate, which exacerbates the growth in operating costs even further, and the rising eventually forces decision makers to retire the oldest weapons without replacement, thereby shrinking the size of the force structure. It is beyond dispute that today the Pentagon is fielding the smallest and, on average, the oldest force structure since the end of WWII, yet it is paying more for that force structure, even after adjusting for the effects of inflation, than at any time since the end of WWII.

Central to this pathological death spiral is the unquestionable fact that the Pentagon's financial management system can not keep track of its actual expenditures or how the predicted expenditures in its FYDP will unfold over over time. The chaos in the accounting system provides the intellectual "grease" to lubricate the engine driving narrow bureaucratic agendas that are causing the force structure meltdown. Senior decision makers can not possibly understand the trade offs they are really making when they put together a budget, assuming they wanted to, which is also in doubt. The accounting problem has been identified in tens, if not hundreds, of reports produced by the General Accounting Office (the auditing arm of Congress) and the Defense Department's own Inspector General. I described how the budget shambles impacted the strategic decision making problem in my last testimony to Congress in June 2002 <http://web.me.com/chaliventures/page1/files/june-4-statement-to-congress---color.pdf>.

The problem of unilateral disarmament at ever higher cost (i.e., the interaction of weapons cost growth greater than budget growth, aging and shrinking forces, and corrupt accounting system that makes it impossible to sort our corrective strategies) is well established, and thanks to the largess of Mad King George, should now be beyond dispute.

So, I have a test for you, dear reader: Download the QDR and the FY2011 budget from the links in the first paragraph. The are formated in searchable PDF file format. Do word and phrase searches on words like aging, age, "weapons aging," accounting, audit, bookkeeping, or anything else you can think of that might related to the problems described above, and determine for yourself the extent to which these problems are addressed. (eg., a search in the budget of "audit" will take you to page 7-34, among others, where you will find that DoD set a goal of reaching 100% auditability for its assets and liabilities in the year 2017, but the last column shows that the indicator of progress made toward that goal in FY 2010 was deleted at the request of the Comptroller, who happens to be the chief financial officer of DoD!)

Alternatively, you could make the same kind of determination by reading the entire text of each, but before you do so, I recommend you buy a couple of boxes of No Doz, so you can keep awake. Either way, you will end up with the same self evident conclusion.

Some farm defenders might say, we must go forward with this protected monstrosity, because we are at war.

That is a false choice -- President Obama could freeze the core budget at this year's level, just like he is doing for the rest of the government. He could tell the Pentagon to go back to the drawing board and come up with something more reasonable. If he chooses to do this, he should task the Pentagon with a massive crash program to clean up the bookkeeping shambles as job 1, rather than waiting until 2017. At the same time, Obama could then ask Congress to pay for his wars on a "pay as you go" basis, which Congress and the Pentagon have been doing for years, in any case, via supplemental appropriations.

Readers interested in a more details on one way we might go about cleaning out the Pentagon's Augean Stables can read my statement to Congress from the aforementioned link.

Franklin "Chuck" Spinney is a former military analyst for the Pentagon. He currently lives on a sailboat in the Mediterranean and can be reached at chuck_spinney@mac.com