Commentary Magazine


Topic: budget cuts

Smarter Cuts Needed

Secretary of Defense Chuck Hagel has just announced that he is cutting major headquarters, including his own Office of the Secretary of Defense, by some 20 percent. This is a welcome development, for there is little doubt that headquarters are vastly bloated. But the cost savings that will be realized are minuscule in the context of a defense budget of more than $500 billion a year; the immediate reductions that Hagel announced to his own front office will save only $1 billion over five years–i.e., $200 million a year. The pressure is on to cut more because Congress is unlikely to turn off sequestration, at least not in full, which could result, when combined with previous cuts, in a defense budget $1 trillion smaller than projected over the next decade.

There is no way to responsibly cut that amount from the Defense Department without hampering our power-projection capability–and hence the entire underpinning of our domestic security and of the international security system. But if we are going to have to make nearly impossible choices, then the least-bad alternative is to cut back personnel costs which have soared in the past decade–and, one hopes, plow some of the savings into training, readiness, and procurement to rejuvenate our sagging military capabilities. (Ha! Dream on! The savings are likely to wind up financing civilian entitlement programs.)

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Secretary of Defense Chuck Hagel has just announced that he is cutting major headquarters, including his own Office of the Secretary of Defense, by some 20 percent. This is a welcome development, for there is little doubt that headquarters are vastly bloated. But the cost savings that will be realized are minuscule in the context of a defense budget of more than $500 billion a year; the immediate reductions that Hagel announced to his own front office will save only $1 billion over five years–i.e., $200 million a year. The pressure is on to cut more because Congress is unlikely to turn off sequestration, at least not in full, which could result, when combined with previous cuts, in a defense budget $1 trillion smaller than projected over the next decade.

There is no way to responsibly cut that amount from the Defense Department without hampering our power-projection capability–and hence the entire underpinning of our domestic security and of the international security system. But if we are going to have to make nearly impossible choices, then the least-bad alternative is to cut back personnel costs which have soared in the past decade–and, one hopes, plow some of the savings into training, readiness, and procurement to rejuvenate our sagging military capabilities. (Ha! Dream on! The savings are likely to wind up financing civilian entitlement programs.)

As the last several defense secretaries have warned, the Defense Department faces soaring costs for pay and benefits legislated by a Congress understandably eager to reward current service personnel and veterans for their contributions. The Washington Post succinctly summarizes the problem:

Putting veterans’ care aside, the military’s health care costs have grown annually by 6.3 percent for the past decade, rising to $52.2 billion in the department’s most recent budget proposal. Health care spending now accounts for about half the military spending on personnel costs, and 9.5 percent of the defense budget. The military now spends just as much on salaries as it does providing health care benefits.

And that total is expected to grow. Todd Harrison, a policy analyst at the Center for Strategic and Budgetary Assessments, recently crunched the numbers on what would happen if personnel costs kept growing at the same rate they have for the past decade, and the overall defense budget only kept pace with inflation. Under that scenario, the entire defense budget would be consumed by paying benefits, both for health care and other services, in 2039.

Put another way, if we stay on the current trajectory, the Defense Department will become a giant HMO that occasionally blows up a terrorist or two.

This is obviously an unsustainable trajectory, but to do anything about it, the Defense Department will have to enlist Congress’s help, which so far has not been forthcoming. Congress prefers to cut defense, and other discretionary programs, across the board, thereby hurting readiness. Lawmakers are too scared to support targeted cuts to benefits and pay that will bring a backlash from the powerful veterans’ lobby.

It is well past time for legislators of both parties to step up to this difficult task. If they want reductions in military spending, this is where they should pursue them–while keeping in mind that it is still irresponsible to cut the “top line” (i.e., total defense outlays) in a world where the demands on the U.S. military only continue to grow.

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Budget Deal Would Still Cut Defense

It is already too late to reverse sequestration—the devastating hit of more than $500 billion in cuts that could afflict the Defense Department starting in January—before it has some impact on budgeting decisions being made by the government and its contractors. But it is not too late to engineer a deal that can stop the worst before it hits.

Accordingly, senators have been talking about what kind of deal they could come up with. Sen. Carl Levin, chairman of the Senate Armed Services Committee, told Politico: “I predict there will not be a sequester. One way or the other, since 90 percent of us don’t want it, it won’t happen. And my hope is that it won’t happen early enough to avoid any instability. What I am confident in is that it’s not going to happen because nobody around here wants it to happen except for some tea party folks.”

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It is already too late to reverse sequestration—the devastating hit of more than $500 billion in cuts that could afflict the Defense Department starting in January—before it has some impact on budgeting decisions being made by the government and its contractors. But it is not too late to engineer a deal that can stop the worst before it hits.

Accordingly, senators have been talking about what kind of deal they could come up with. Sen. Carl Levin, chairman of the Senate Armed Services Committee, told Politico: “I predict there will not be a sequester. One way or the other, since 90 percent of us don’t want it, it won’t happen. And my hope is that it won’t happen early enough to avoid any instability. What I am confident in is that it’s not going to happen because nobody around here wants it to happen except for some tea party folks.”

But the price of stopping sequestration could be substantial. Levin, for one, is demanding an extra $100 billion in defense cuts. That’s certainly better than the $500 billion hit that defense could take if sequestration occurs, but remember: Defense already suffered $486 billion in cuts last summer. The Air Force and Navy are already at their lowest levels, in terms of number of ships and number of aircraft, in many decades. The army and Marine Corps are already in the process of cutting 100,000 positions for soldiers and marines. All this is going on while the Middle East appears to be on the verge of exploding and while China is testing worrisome new weapons systems, such as yet another stealth-fighter prototype.

We need to be building up our defense—not debating how much more to cut. Yet the likelihood is that Congress will inflict yet more painful cuts on our military as the price of avoiding even more excruciating cuts. Only in Washington is this heralded as wisdom.

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Will Congress Take Military into the 1970s?

Sequestration—the $500 billion automatic budget cuts to Defense, which will be triggered if Congress cannot reduce the budget by $1.2 trillion as per the Budget Control Act of 2011—is a looming disaster. The sequestration cuts would be in addition to already scheduled budget cutbacks.

Owen Graham, a brilliant young scholar at the Heritage Foundation, has penned an important article in the Charlotte Observer outlining just what is at stake:

According to Defense Secretary Leon Panetta, sequestration would also eliminate a leg of the nuclear Triad, deliver a heavy blow to U.S. missile defenses, and eliminate next-generation fighter and bomber programs. The findings of the House Armed Services Committee were just as bleak: the smallest Air Force in its history; the smallest Navy since before World War I; and the smallest ground force since before World War II…

The reality is it is far from balanced. Military is less than one-fifth of the federal budget and absorbs fully 50 percent of the sequester. Meanwhile, 70 percent of entitlement spending, the key driver of the debt crisis, is exempt from the impact of the cuts.

Sequestration—the $500 billion automatic budget cuts to Defense, which will be triggered if Congress cannot reduce the budget by $1.2 trillion as per the Budget Control Act of 2011—is a looming disaster. The sequestration cuts would be in addition to already scheduled budget cutbacks.

Owen Graham, a brilliant young scholar at the Heritage Foundation, has penned an important article in the Charlotte Observer outlining just what is at stake:

According to Defense Secretary Leon Panetta, sequestration would also eliminate a leg of the nuclear Triad, deliver a heavy blow to U.S. missile defenses, and eliminate next-generation fighter and bomber programs. The findings of the House Armed Services Committee were just as bleak: the smallest Air Force in its history; the smallest Navy since before World War I; and the smallest ground force since before World War II…

The reality is it is far from balanced. Military is less than one-fifth of the federal budget and absorbs fully 50 percent of the sequester. Meanwhile, 70 percent of entitlement spending, the key driver of the debt crisis, is exempt from the impact of the cuts.

Admiral James “Ace” Lyons observed wryly at a roundtable a few weeks ago that already the U.S. Navy has fewer ships under his command than he had at his disposal when he was in charge of the Pacific Command under Jimmy Carter. Obama’s talk of a pivot toward Asia is just empty talk; his priorities suggest a willingness to cede Asia.

If entitlements are cutback, we know what will happen: the economy will expand and charities and faith communities will pick up the slack; the government will still care for the most needy. If the U.S. ability to project its power is reduced to beneath even Carter administration standards, then the world in which we function will be far different. This may be the Obama administration’s goal. After all, as the Foundation for Defense of Democracy’s Cliff May notes, the scariest statement to which the mainstream media has given short shift was his promise to then-Russian President Medvedev to pursue even more devastating cutbacks once he no longer has to stand for election.

There will be no savings: When enemies perceive the United States as weak, they act. And—be they Russia, North Korea, China, or Iran—the United States has no shortage of adversaries.

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Oil Exploration Calls for Expanded Security

The New York Times has a lengthy report on Shell’s plans this summer to drill exploratory oil wells in the Arctic Ocean off the north coast of Alaska. Much of the article focuses on the politicking and lobbying behind President Obama’s decision to let the drilling go forward which holds the possibility of tapping a million barrels a day of crude, or close to Qatar’s entire production. One of the many oddities which goes unexplained is why drilling in the Arctic Ocean–an inherently risky undertaking given the existence of icebergs, storms, monster waves, and other dangers–is permitted while drilling in the Arctic National Wildlife Refuge a few miles away–which not only has more oil (upwards of six billion barrels in all) but also could be drilled in greater safety–is not. But let’s leave that aside. What I want to address here is another neglected dimension of this important issue–the security dimension.

I saw this for myself last week when I traveled to Alaska, along with a group from the Council on Foreign Relations, to meet with Coast Guard officials and to do an Arctic overflight that took me from Anchorage to Barrow–America’s northernmost city which remains, even now, frigid and snowy. The expansion of oil exploration calls for expanded security–to protect against terrorists and extreme environmentalists who might try to sabotage these operations (Greenpeace is said to be chartering a vessel to try to block Shell) and to guard against other Arctic nations such as Russia that might try to grab for themselves oil fields that rightfully belong to the U.S., Canada or other nations. There is also a need for expanded safety operations to ensure an adequate response in case of accidents or oil spills.

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The New York Times has a lengthy report on Shell’s plans this summer to drill exploratory oil wells in the Arctic Ocean off the north coast of Alaska. Much of the article focuses on the politicking and lobbying behind President Obama’s decision to let the drilling go forward which holds the possibility of tapping a million barrels a day of crude, or close to Qatar’s entire production. One of the many oddities which goes unexplained is why drilling in the Arctic Ocean–an inherently risky undertaking given the existence of icebergs, storms, monster waves, and other dangers–is permitted while drilling in the Arctic National Wildlife Refuge a few miles away–which not only has more oil (upwards of six billion barrels in all) but also could be drilled in greater safety–is not. But let’s leave that aside. What I want to address here is another neglected dimension of this important issue–the security dimension.

I saw this for myself last week when I traveled to Alaska, along with a group from the Council on Foreign Relations, to meet with Coast Guard officials and to do an Arctic overflight that took me from Anchorage to Barrow–America’s northernmost city which remains, even now, frigid and snowy. The expansion of oil exploration calls for expanded security–to protect against terrorists and extreme environmentalists who might try to sabotage these operations (Greenpeace is said to be chartering a vessel to try to block Shell) and to guard against other Arctic nations such as Russia that might try to grab for themselves oil fields that rightfully belong to the U.S., Canada or other nations. There is also a need for expanded safety operations to ensure an adequate response in case of accidents or oil spills.

All of this calls for a greater Coast Guard presence, yet this perennially underfunded service is hard put simply to base two helicopters in Barrow for a few months–an operation which will require renting scarce hanger space. The entire Coast Guard has but one modern icebreaker, the Healy, commissioned in 1999; there is an urgent need for more icebreakers but despite years of talk, Congress has never budgeted the funds. (A new icrebreaker would cost $1 billion if built in America–considerably less if in South Korea.) The money coud be assessed directly as a user fee on oil companies, but that would require a change in current laws which send all oil taxes straight to the the general funds of the U.S. Treasury and the state of Alaska where they are used for myriad other purposes.

A broader struggle for control of the Arctic looms as age-old ice melts, uncovering not only oil but other valuable resources from minerals to fish stocks and creating new shipping lanes, at least in the summertime, which cut the time of travel between the Pacific and Atlantic. Other nations, such as China and Russia, are investing in icebreakers and ice-strengthened ships to take advantage of these new opportunities; as my Council on Foreign Relations colleague, Coast Guard Captain Melissa Bert points out, the U.S. lags behind. That is only one of many national security challenges that need to be addressed, but it is hard to imagine dealing with this issue, or others, if military spending is subjected to an indiscriminate sequester come January 1.

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To Save Aid, Cut Aides

Max Boot last month argued that the State Department and USAID should largely be spared budget cuts. That may be true of the State Department, although (like the Pentagon), the Department has layers of bureaucratic fat and unnecessary positions. Various undersecretaries, for example, have their own press advisers, a wholly unnecessary position that not only might come with a six-figure salary, but also can run up hundreds of thousands of dollars each in flight, hotel, and benefit cost. Simply put, if a Foreign Service officer or a political appointee is smart enough to become an undersecretary, then they should be smart enough to handle their own press. And if they are not up to the task, there are dozens of ambitious diplomats or politicos who probably are. This might, indeed, make for more skilled diplomats because it would benefit those who have a broader array of experiences than simply passing a “trivial pursuit”-like written exam and then a contrived oral exam upon leaving college and entering the State Department’s bubble. It would enable those who have backgrounds in business or law, for example, to apply a skill set to their careers which would benefit everybody.

To be fair, the same is true for the Pentagon. Last month, I attended a conference in Europe in which a senior U.S. general spoke. The general was worth his stars, but came to Europe from Washington with a delegation of aides and assistants whose sole mission was to ensure that the general hewed close to a script which they developed. “We don’t want him to make any comment which the press might pick up on,” one explained. Now, these aides duplicated the work of the defense attaché and American embassy which was also working overtime to babysit the three-star. Surely, there are better uses for taxpayer money than hiring press aides and minders whose sole job is to obfuscate and do damage control. If a general is able to navigate the politics of the Pentagon, then he can understand the minefield of the fourth estate without spending millions of dollars to ensure that he says nothing.

Max Boot last month argued that the State Department and USAID should largely be spared budget cuts. That may be true of the State Department, although (like the Pentagon), the Department has layers of bureaucratic fat and unnecessary positions. Various undersecretaries, for example, have their own press advisers, a wholly unnecessary position that not only might come with a six-figure salary, but also can run up hundreds of thousands of dollars each in flight, hotel, and benefit cost. Simply put, if a Foreign Service officer or a political appointee is smart enough to become an undersecretary, then they should be smart enough to handle their own press. And if they are not up to the task, there are dozens of ambitious diplomats or politicos who probably are. This might, indeed, make for more skilled diplomats because it would benefit those who have a broader array of experiences than simply passing a “trivial pursuit”-like written exam and then a contrived oral exam upon leaving college and entering the State Department’s bubble. It would enable those who have backgrounds in business or law, for example, to apply a skill set to their careers which would benefit everybody.

To be fair, the same is true for the Pentagon. Last month, I attended a conference in Europe in which a senior U.S. general spoke. The general was worth his stars, but came to Europe from Washington with a delegation of aides and assistants whose sole mission was to ensure that the general hewed close to a script which they developed. “We don’t want him to make any comment which the press might pick up on,” one explained. Now, these aides duplicated the work of the defense attaché and American embassy which was also working overtime to babysit the three-star. Surely, there are better uses for taxpayer money than hiring press aides and minders whose sole job is to obfuscate and do damage control. If a general is able to navigate the politics of the Pentagon, then he can understand the minefield of the fourth estate without spending millions of dollars to ensure that he says nothing.

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