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Security or subsidies: Mr. McDonnell and the Virginia delegation go to Washington September 28, 2010

Posted by Matthew Leatherman in Analysis.
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by Mariah Quinn and Matt Leatherman

Elected officials across the country know how closely their constituents’ job security affects their own.  Virginia’s congressional delegation and the administration in Richmond have lived richly, though, relishing an unemployment rate more than a quarter better than the national average (7% relative to 9.6%).  Indeed, certain parts of Virginia have unemployment rates harkening back to the pre-recession glory days – Arlington and Fairfax counties come in at an enviable 4.2% and 5.0%, for instance, while York County in the Hampton Roads metropolitan area looks similar, at 5.7%.

Fortune is running short even in these areas, though, after Secretary of Defense Robert Gates detailed the “Defense Efficiency Initiative” on August 9. With the stated aim of reducing the number of contractors by 10 percent per year for the next three years, more than 30,000 defense contracting jobs are on the chopping block, undercutting the boom towns just outside Washington where many of these jobs are located.  Gates’ decision to close the Norfolk-based Joint Forces Command, home to 2,800 military and civilian personnel and 3,300 contractors, means that similar pain is in store for Virginia’s coastal money makers as well.

Small wonder then that a rhetorical storm erupted in the state after Gates’ announcement.  Efficiency, it seems, might not be in Virginia’s best interest.



Deficits, Debt, and U.S. Global Engagement: Maintaining National Security While Lowering the Debt July 22, 2010

Posted by Gordon Adams in Analysis, Briefing.
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Stimson Brief: Deficits, Debt, and U.S. Global Engagement

Budget Insight features briefing papers and analyses that go well beyond that of a typical blog post.

This Stimson Brief is written by Gordon Adams and is available in its entirety here.

Other Budget Insight analyses on the impact of deficits and debt on foreign affairs and defense spending include:

In an op-ed published in Politico, Gordon Adams and Matthew Leatherman argue that the FY2011 defense appropriations markups and the pending war supplemental request offer an important opportunity for Congress to begin the process of disciplining defense missions and budgets.

Gordon Adams testified before the Subcommittee on National Security and Foreign Affairs of the House Committee on Oversight and Government Reform.  In his testimony, Dr. Adams warns of the looming tidal wave of deficit reduction, debt control, and changes in our international role which makes it increasingly urgent for the Congress to reexamine our defense budgets and defense priorities.

Secretary Gates and Disciple at DOD– Dr. Gordon Adams warns  that historic levels of deficits and US debt and the departure of the US military from Iraq and Afghanistan will pull the rug out from under public support for what has been an undisciplined military budget.

Disciplining defense while supporting the troops– Dr. Gordon Adams and Matt Leatherman explain that lower defense spending does not mean reducing support for the troops and can in fact increase national security.

The Long Term Debt Threat: Virginia Woolf Syndrome– Rebecca Williams and Matt Leatherman describe the long-term, unsustainable path of U.S. federal spending and its affects on the defense and international affairs budgets.

Adams weighs in on the QDR– Dr. Gordon Adams offers his critiques of the 2010 Quadrennial Defense Review (QDR), arguing that the QDR layers new missions on top of preexisting ones, does not prioritize missions and objectives, and as a result, does not provide a true defense strategy.

Time to discipline defense spending July 19, 2010

Posted by Matthew Leatherman in Analysis.
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Three weeks remain before Congress’ month-long recess, and that short time will be filled heavily by the FY2011 defense appropriations markups and the pending war supplemental request.  This focus offers an important opportunity for Congress to begin the process of disciplining defense missions and budgets, an inevitable outcome of historically high costs and waning political support.  In an op-ed published in today’s edition of Politico, Gordon Adams and Matthew Leatherman explain this inevitability and how best to adjust to it.

by Dr. Gordon Adams and Matthew Leatherman

An absence of restraint and a failure to set priorities, as revealed in the Quadrennial Defense Review, has put the Pentagon on a collision course with fiscal realities and a changing political environment.

Now is the time for Congress and the Pentagon to take a closer look at the military’s missions, make a realistic risk calculation and reshape a smaller and better tailored force.

House defense appropriators are poised to take an important step in this direction with their coming markup of the Pentagon’s budget request. Indications are that Rep. Norm Dicks (D-Wash.), chairman of the House Appropriations Defense Subcommittee, may cut the defense budget — though President Barack Obama and the Senate Budget Committee had exempted it from the larger freeze on discretionary accounts.

However, this would be only the first step in dealing with the two tidal waves bearing down on the defense budget. The Pentagon’s Quadrennial Defense Review ignored both. It did nothing to acknowledge the nation’s grave budget woes or the timeline for U.S. withdrawal in Iraq and Afghanistan.

The Independent Review Panel, charged with assessing the QDR, is expected to put the Pentagon’s failure to prioritize missions atop the list of critiques in its report, which is expected to be released in two weeks. Indeed, it must.

The Pentagon, rather than properly constraining missions, simply layered new missions on top of old and gave everything equal priority.

The mission, as laid out in the QDR, seems boundless. On one end, it includes deterrence, conventional wars, patrolling the world’s oceans and defending the United States. On the other end are counterinsurgency, stabilization (nation-building), fighting a terrorist organization and aiding security forces worldwide.

Complicating all this is an assertion that the military should accept no risk in executing any of these missions. This means an enormous demand for standing, active-duty forces stationed worldwide — and soaring defense budgets follow.

The lack of planning and budgetary discipline ignores the country’s economic problems and flagging political support for high defense budgets. Congressional appropriators must face down these fiscal and political tidal waves and impose constraints now.

The first wave is the growing concern with deficits and debt. Debt as a share of gross domestic product, estimated at 64 percent by the Office of Management and Budget, is higher than any since 1951. Left unaddressed, it could equal GDP by the end of the decade.

Our gradual withdrawal from Iraq and Afghanistan is creating the other wave. Unrestricted war spending drives the defense budget indiscipline that we see today.

A disappointing outcome, combined with our withdrawal, could further reduce support for these unprecedented budgets.

Defense Secretary Robert Gates is confronting this situation with talk of restraint. But he actually plans for real budget growth. It falls to Congress, therefore, to manage these tidal waves.

A good model would be the last big cut in defense spending from 1989 to 1998. Then, as now, the United States confronted serious political change and a need for debt reduction. (more…)

What Is a “Strong” Defense? July 13, 2010

Posted by Guest Blogger in Analysis.
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Dr. Christopher A. Preble is the Director of Foreign Policy Studies at the Cato Institute and a member of the Sustainable Defense Task Force.  He and Benjamin Friedman authored the “Strategy of Restraint” chapter of SDTF’s report.

by Christopher A. Preble

It has been one month since the Sustainable Defense Task Force released its report, Debt, Deficits, & Defense: A Way Forward. My fellow task force member Laura Peterson posted an excellent discussion of the substance of the report here last month, so there is no need to repeat that here.

Of more interest is the reaction that the report has elicited. There have been a number of interesting analyses in the media and the blogosphere, including Foreign Policy’s “Reality Check” and on the op-ed pages of the Boston Globe and the Washington Post. There have also been some ridiculous commentaries that have mischaracterized the report or otherwise misread its core arguments.

The most common response has been some sympathy for our argument that military spending should be subjected to the same scrutiny that should be applied to other government spending. There are still a fair number of people, however, who share our concern about the deficit, but who counter “But I want a strong defense.”

Who doesn’t?

The task force report was written with a single consideration in mind: in what ways, and where, could we make cuts in military spending that would not undermine U.S. security? It is our contention that much of what we call “defense” spending isn’t really essential to U.S. defense, and that unnecessary or wasteful spending is also harmful to U.S. security.

This is hardly a new concept. Dwight David Eisenhower warned about the burdens of excessive military spending on the wider economy. Robert Gates, channeling Ike, has said “The United States should spend as much as necessary on national defense, but not one penny more.”

A leading conservative in the Senate, Tom Coburn (R-OK) wrote that deficit reduction commission “affords us an opportunity to start some very late due diligence on national defense spending… [as well as] reduce wasteful, unnecessary, and duplicative defense spending that does nothing to make our nation safe.”

The subjective matter is what constitutes “excessive.” “Unnecessary” is a similarly elusive concept. Entire books are written on such questions (shameless plug). I’m not going to resolve them in a blog post.


Spending smarter by sharing the burden with NATO June 28, 2010

Posted by Matthew Leatherman in Analysis.
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All the world’s strategies for saving money boil down to two ideas: spend less by doing less, or spend less by doing smarter.  “Doing smarter,” of course, is far less painful than doing less, but finding the efficiencies that make this possible is a much bigger creative challenge.  One of the few clear ways to do this in the world of national security is through alliance-based burden sharing.  (Graphical data from CRS.)

NATO Secretary-General Anders Fogh Rasmussen drove this home last week in a speech dedicated to the implications of budget constraint on NATO policy.  Acknowledging that “all Allies are having to cope with the serious effects of the economic crisis,” Rasmussen concluded that “by sharing the burden within NATO, individual Allies can achieve a far greater level of security than they could achieve through any national approach – and at far lower cost.”

Secretary-General Rasmussen’s conclusion is spot on.  Sharing the burden in Afghanistan under the auspices of NATO’s International Security Force Assistance (ISAF) mission, for instance, nearly halves the troop requirement for the U.S.  102,554 NATO troops were in Afghanistan in April, but only 62,415 (61%) of those are American.

ISAF, of course, is just the most visible example of effective burden sharing.  NATO’s Partnership for Peace and Mediterranean Dialogue programs influence North African states and former Warsaw Pact members toward internal and regional stability, democratic development, and civilian control of the military.  And, looking forward, the recently-concluded Albright-van der Veer Commission suggested even broader burden sharing, including in the costly areas of missile defense and maritime security (see pg. 10).

These burden sharing opportunities, and the spending efficiencies they generate, have not escaped the Defense Department’s attention.  Secretary Gates recently urged NATO allies to maintain their resolve, and their spending, for near-term challenges.  (See Gates’ June comments in London and Brussels.)  Unstated in this push is the reality that each dollar spent on NATO by the Europeans is a dollar the Pentagon doesn’t have to find itself.


Skelton offers DOD modest nudge away from budget discipline tsunami June 21, 2010

Posted by Matthew Leatherman in Analysis.
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Two movements of tsunami-like size are bearing down on the Defense Department and the all-inclusive, un-prioritized mission set that it laid out in the Quadrennial Defense Review (QDR).  As the drawdown dates for U.S. forces in Iraq and Afghanistan approach, those missions will be seen more and more as outlier cases rather than models of the new normal.  Budget discipline is the second movement, and that tsunami is peaking.

Congressman Ike Skelton (D-MO), chairman of the House Armed Services Committee (HASC), recently took a tentative step in recognition of the oncoming budget discipline tsunami.  Specifically, Rep. Skelton publicized his intent to create a special body or process charged with identifying opportune cuts in the defense budget.  Like the Defense Department’s own plan, however, Rep. Skelton intends for this money to be reallocated within the Defense Department rather than to generate true savings for the country.  It also seems that Rep. Skelton presently plans to consider only efficiency increases rather than accepting the far more difficult, but important, task of disciplining missions.

This tentative step is insufficient for the problems we face.  Defense spending is at heights unreached since World War II while our economy is at depths unseen since the Great Depression.  The Defense Department’s mission set needs discipline, and that discipline needs to generate real and meaningful savings for the country.

Though insufficient, Rep. Skelton’s plan still is very useful.  His voice is authoritative, and adding it to Secretary Gates’ statements on spending constraints lends unique legitimacy to the issue.  Likewise, a number of steps are available within his parameters that would advance the issue significantly.  The Stimson Center’s Dr. Gordon Adams addressed many of these in recent testimony before HASC’s Oversight and Investigations subcommittee.  They include: (more…)

Secretary Gates and Discipline at DOD May 11, 2010

Posted by Gordon Adams in Analysis.
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Secretary of Defense Robert Gates gave a major speech last week about the future of US defense capabilities and the military budget.  It was generally greeted as a voice of realism, bringing the military services up short to realize that the fiscal “gusher,” that has doubled US defense spending over the past decade, “has been turned off and will stay off for a good period of time.”

It was nothing of the sort.  While he talked about saving more than $300 billion in hardware cuts over the past two budgets, he said nothing about the billions his budget decisions added to replace the systems he ostensibly cut – more current generation destroyers replacing the ‘cancelled’ new ones, and the extension of the vehicle program in the ostensibly cut Future Combat System, just to name two.

The key to understanding what Gates was really saying lies in the Secretary’s statement that the current state of the world justifies “sustaining the current military force structure.”   And in his assertion that the defense budget must grow roughly two-to-three percent above inflation to sustain that force structure.  And in his argument that any savings that result from his plan should be retained at DOD to provide that rich budget the current force requires.

Rather than playing on the margins of fiscal restraint, the Secretary and the Department would do well to prepare for two tsunamis that are bearing down on them, not just the one that the Secretary noted.  Gates acknowledged that historic levels of deficits and US debt were putting the nation at fiscal risk, which would lead to slower federal spending in the coming years.  The European fiscal crisis of the past month is a warning of the risks we face in not dealing with this looming crisis.  US debt is projected to reach 80-100% of US Gross Domestic Product in the coming decade; continued borrowing to fund that debt will raise interest costs and put in jeopardy the stellar rating US Treasury notes have had historically.

Secretary Gates is less prepared for the second tsunami, however:  the departure of the US military from Iraq and Afghanistan.  The US is certain to be largely withdrawn from Iraq over the next year, and equally likely to be largely withdrawn from Afghanistan in the next three years.  Coupled with concerns about deficits and debt, a shrinking presence in Iraq and Afghanistan will pull the rug out from under public support for what has been an undisciplined military budget.


Gates confronts Ike’s wisdom about the clearly necessary and the comfortably desirable May 7, 2010

Posted by Matthew Leatherman in Analysis.
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By Dr. Gordon Adams and Matthew Leatherman

The United States today finds itself spending more on defense than it has since General Dwight D. Eisenhower left occupied Germany, even after adjusting for inflation.  The $693 billion we will spend on the Pentagon this year more than doubles what we spent in 2002.  Neither the threat of Korean dominoes falling to Red China, of humbling loss of credibility in Vietnam, or of arms racing toward the Cold War finish line has pushed us to spend more than we have fighting Osama bin Laden and his network of ideologically and financially bankrupt cronies.

Tomorrow Secretary of Defense Robert Gates will speak in the Eisenhower Presidential Library in Kansas to address issues of political will and the defense budget. His choice of location invokes Eisenhower’s farewell address, including his pointed warning to the country against relentless spending in pursuit of unattainable, perfect security.

Gates’ decision to step into Eisenhower’s shadow represents a glimmer of hope that our country will submit to this counsel.  Regrettably, however, present circumstances far overshadow that hope.

In the past we had a clearer view of our priorities. Nuclear-tipped ICBMs had a way of imposing priorities during the Cold War.  Today, the Pentagon is all over the map, literally and figuratively.

The Quadrennial Defense Review released in February says the Department has given priority to current operations in Iraq and Afghanistan.  In reality, it does no such thing. Instead, the QDR priorities can accurately be summarized as ‘everything:’ “prevail in today’s wars; prevent and deter conflict; prepare to succeed in a wide range of contingencies, both near- and long- term; and preserve and enhance the force.”  By trying to be all things to all people, the document ultimately makes everything a priority.

Budgeting is policy, moreover, and the Pentagon’s budget request for next year ticks every mark the QDR set down, with no tough choices and at great expense.  Near term spending ostensibly for the requirements of the war continues to grow.  Layered in on top is long-term spending on new attack submarines, as well as on new Army vehicles that consume the savings reaped by cancelling the old version last year.  Most richly, the Pentagon continues to buy an amphibious assault vehicle suited only to Eisenhower’s D-Day planning while also preparing to buy next-generation bombers inspired by the Eisenhower-era strategy of mutually assured destruction.

Faced with extraordinary deficits, debt and financial turmoil, we simply cannot afford the nearly three-quarter trillion dollar defense budget requested for next year.  Defense spending must contribute – just as every other part of government spending must – to a new-found fiscal discipline so that, in Eisenhower’s words, democracy can “survive for all generations to come, not to become the insolvent phantom of tomorrow.”

Step one is for Congress to stop treating Pentagon statements as received wisdom and start setting the parameters of fiscal discipline.  Subjecting defense spending to the same three-year budget freeze imposed by President Obama and the Senate budget resolution on the rest of the discretionary budget would be a valuable and equitable start.


Defense Contractors Get a Second Bite, Congress Takes a Second Whack May 4, 2010

Posted by Guest Blogger in Analysis.
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Dan Madden is a former Marine Corps artillery officer and has served on Congressional staff.

By Dan Madden

We could save hundreds of millions in the defense budget every year while still providing our military with the finest weapons and protection in the world.  All it takes is holding defense contractors accountable for their performance.  Unfortunately that’s tougher than it sounds.

The House of Representatives recently passed a bill aimed at reforming the Pentagon’s much abused acquisition system – their second major attempt at reform in under a year.  The procurement system is complex enough to shame a Rube Goldberg machine, leaving most acquisition reform efforts ineffective.

Meanwhile, the defense industry continues to receive billions in bonuses each year from the Pentagon, often regardless of performance.  When discipline is imposed and a performance bonus withheld, they frequently get a second bite at the apple.  That’s a pretty good deal even by Wall Street standards.

Most of us cheered in February when Secretary Gates responded to the F-35’s 89% cost increase and two-year schedule slip by cracking the whip and denying Lockheed Martin $614 million in performance bonuses. Few of us realized that the $614 million was being “rolled over” into the next bonus evaluation period.

Lockheed Martin executives may sigh to themselves – profits delayed are profits denied – but Lockheed Chief Executive Robert Stevens was still able to reassure investors. Once this political season’s populist furor over predatory contracting dies down, the Department of Defense (DOD) will be free to fall back into its standard operating procedures, rewarding big contractors with big bonuses as a matter of course.


Opening up the C-17 Globemaster Piñata April 23, 2010

Posted by Matthew Leatherman in Analysis.
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C-17 subcontractor data in this post is the product of original research by Robert Miller at the Institute for Policy Studies.

Parents, worn out by the chaos of their child’s carnival-esque birthday party, dread concluding with a piñata.  It’s that much more mess to clean, and that much more intense of a sugar high for the kid.

Peering inside military hardware procurements is a similar experience for the American taxpayer.  Sub-contractors distributed across the country, each a delicious ‘economic development’ nugget for some member of Congress, spill out seemingly without end.  This stuffing is the root of our military-industrial complex – votes that Congress members can win and business that contracting firms can corner.

Map: Geographic Distribution of C-17 Subcontractors

One such example is the C-17 Globemaster.  Unlike many other programs, taxpayers have a detailed glimpse into its supply chain, which now includes 268 firms spread across 219 cities in 36 states.  The 10 aircraft included in the Pentagon’s FY10 budget will distribute $2.5 billion among these firms (pg. 16).  Each is a valued part of some Congress member’s district and, seemingly not by coincidence, they are located our country’s most populous areas.  Only 8% of Americans live in the 28% of states (14 out of 50) unrepresented in the C-17 supply chain (est. 07/2009).