By 2016, Defense Will Increase by $50 Billion and Other Spending by $7 Trillion

It looks like the nation’s national security may soon take it in the shorts, a repeat of the 1990s but worse. Then, defense spending declined in real terms by a cumulative $300 billion from 1993-2000. At the same time, the major procurement accounts were under-funded by fully 40% according to a senior defense department official in a speech from December of 2000.

It is true, defense budgets increased in real terms about 60% since 2000. But the cost of keeping a soldier has dramatically increased as health care, operations, maintenance, and support costs have gone up. That is the cost of modern defense. And weapons systems have also increased, often in unit costs but also in maintenance, especially as total purchases have declined or when contracts are terminated early. But each modern plane, missile or satellite does far more now than what it is replacing.

So why, over the next decade, must the nation’s security get pummeled while welfare and “entitlement” recipients and government bureaucrats–at all levels–continue to get trillions?

For example, from FY09-16, the February 2011 budget of the administration calls for defense, veterans and Homeland Security–the so-called defense accounts to increase $50 billion collectively, compared to the FY09 baseline. That’s right–$50 billion, just a few billion more than some negotiators were pushing to increase just the Pell Grants.

But overall, spending from the fiscal year 09 baseline for everything else goes up $7 trillion cumulatively OVER the baseline of $3 trillion which this administration inherited.

By FY2016, the administration plans presented to Congress in early 2011 would have kept defense, homeland defense and veterans nearly flat, but overall government spending would go to $4.467 trillion. Why then, in deficit reduction, should defense account for at least 70-80% of the reduction in spending, even as deficits continue to soar? And this does not count any reductions in the spending related to Iraq or Afghanistan.

Remember, the Democrats proposed $500 billion in Medicare cuts to hospitals and doctors and $400 billion more from defense (this was the administration’s budget redo in April in 2011). This was over ten years. The doc-fix has eliminated the arbitrary reduction in Medicare payments and the defense cuts were adopted as part of the August 2011 debt deal.

In reality, what incentive did the administration have to avoid a sequestration? Doing nothing gets the cuts they had been seeking–defense and docs taking it in the shorts. Our security goes off a cliff and some doctors and hospitals go out of business.

One caveat is in order: the House has been able to construct a firewall between security and non-security spending for 2012-13. The only way to prevent a catastrophic attack on our security is to change policy in 2013. That is, of course, what the election in 2012 will be all about.

The debate is not over; it is actually just beginning. The Tea Party folks should be commended. They began this much needed conversation and debate. But we are going to have at least a few debates early in 2012 on the same issues: (1) when the budget is presented that avoids the realities of sequestration; (2) when the two month extension of the payroll tax holiday expires; and (3) when the administration requests another increase of $1.2 trillion in the debt limit. Chris Christie was right–is anybody leading around here?

Some will insist that we can afford to be romanced by the opponents of sound defense spending, including friends of Barney Frank and Ron Paul, who joined together to propose a $1 trillion hit on defense, including decimating missile defense and nuclear deterrence. As the debate unfolds, the drive-bys will tell us that “Yes, everything is on the table” but there has to be a “balanced” way out of this. Behind closed doors, they will put a gun to our heads and say, once again, we will kill the defense department if you do not agree to–guess what?–raise taxes, AND of course defense will be cut anyway (they might adopt Bowles-Simpson and the Commissions proposed defense cuts of $886 billion). And perhaps cuts to Medicare providers will be included. That will be called entitlement reform! But they will do nothing to reform the growth in health care, which the new Wyden-Ryan health care plan would do.

The debate in 2012 will be fierce. But we should understand what it is about. The deal being pushed by some could be disastrous for the country and our nation’s national security. And we will be asked to raise taxes so the welfare state stays intact. Remember, while spending hits $4.5 trillion in FY16 if the administration’s projected February budget numbers are not changed, that number goes to $5.7 trillion four years after that.

Now the August 2011 deal does limit defense cuts to no more than $450 billion out of the initial $900+ billion in cuts over ten years. Security spending such as homeland defense, veterans, and the nuclear portions of the energy department and foreign operation funding in the Department of State will take the rest of the cuts required but there is serious doubts such cuts will be done. Fiscal year 2012 and 2013 defense cuts may not be as severe as they could be. But that is just the pause before the crash.

If so, our adversaries get their wish. But we do the job on ourselves! We kill the “capitalist system” in the US, wipe out America’s defenses, cripple America’s power, and substitute for the “last best hope of mankind” a kind of modified leftist banana republic, in full retreat and broke, looking more and more like Greece.


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