Pentagon commission ignores greatest security threat: the debt

The new report, “Providing for the Common Defense” is the final assessment and set of recommendations by the National Defense Strategy Commission. This commission was established by the National Defense Authorization Act of Fiscal Year 2017 and the big takeaway is laid out in the first paragraph of the executive summary:

“The security and wellbeing of the United States are at greater risk than at any time in decades … If the nation does not act promptly to remedy these circumstances, the consequences will be grave and lasting.”

{mosads}Against that dire prediction, the commission makes numerous recommendations on how to counter these potential consequences. Here’s what the commission recommended regarding the resources and funding policy changes necessary to meet the mission.

What you’ll see is that, with one passing exception, all add up to more Pentagon cash and ignore what has been called one of the greatest national security threats — the national debt:

• Increase Department of Defense (DoD) funding 3-5 percent above inflation at least through the Future Years Defense Program.
• Eliminate the final two years of spending caps under the Budget Control Act (BCA).
• Fund DoD at a high enough level to modernize conventional and nuclear weapons. Give DoD the authority to spend Operations & Maintenance (O&M) dollars over two years. Currently O&M dollars must be spent in the year for which they were appropriated.
• Create a five-year budget agreement for defense spending.
• The costs of operations and programs currently being paid for Overseas Contingency Operations (OCO) should go back into the Pentagon’s “base budget.” 
• To return OCO costs to base budget, increase BCA spending caps dollar-for-dollar (if they are not eliminated as recommended above).
• Congress should look at the entire federal budget, not just DoD to “set the nation on a more stable financial footing.” This review should “especially” look at entitlements and taxes.

The Budget Control Act of 2011 focused attention on runaway deficit spending. But Congress has adjusted upward the spending limits the BCA placed on discretionary spending four times.

Unlike past adjustments, the Bipartisan Budget Act of 2018, which boosted the fiscal year (FY) 2018 and 2019 caps, made no effort to offset any spending increases, no effort to set priorities or make hard choices and increased spending by more than $300 billion, thereby increasing the budget deficit by the same amount. 

It’s safe to say the BCA hasn’t exactly been the severe hindrance to Pentagon spending that this commission and others would have us believe. The BCA has also proved that we can’t balance the budget simply by cutting discretionary spending — nor should we try. We have eight years of experience of seeing how politically difficult that can be.

Of course, Congress should look at entitlements and taxes to put the “nation on a more stable financial footing.” Taxes are necessary to generate the revenue to fund government, including defense. And entitlements make up two-thirds of federal spending.

Entitlement reform and tax reform (actual reform, not just the cuts passed in 2017) are necessary, but also represent politically and substantively challenging problems that aren’t being solved by the National Defense Strategy Commission. 

This is not to say we should do nothing — to the contrary, Congress must look at everything to make sure we are spending our dollars wisely, and we need to bring revenues and spending closer together. But looking at everything includes looking at the Pentagon.

What would the commission’s recommendation of increasing Pentagon spending by 3-5 percent above inflation mean over the next five years of the Future Years Defense Program (FYDP)?

Using the Congressional Budget Office’s projection for growth in the Consumer Price Index between now and 2024, and the FY2019 Defense Appropriations level of $674.4, here’s what we found:

Three percent real growth over inflation (which compounds over time) would result in Defense spending of $712 billion in FY20, $751.7 billion in FY21, $793.6 billion in FY22, $837 billion in FY23 and $882.8 billion in FY24.

Five percent real growth over inflation (compounded) would result in Defense spending of $725.8 billion in FY20, $781.2 billion in FY21, $840.7 billion in FY22, $904 billion in FY23 and $917.9 billion in FY24. 

Total spending over the FYDP at 3 percent over inflation would be $3.9 trillion. Change the calculation to 5 percent over inflation and the total is $4.1 trillion.

Yes, we face serious security threats — one of which is our growing $21 trillion debt. Pentagon spending cannot be simply unrestrained. It needs to be threat- and resource-informed.

Recommendations to spend as much as $4 trillion at the Pentagon over the next five years are reckless and unsustainable. No one who calls himself or herself a fiscal conservative can seriously support such a plan.

Ryan Alexander is president of Taxpayers for Common Sense, a budget watchdog in Washington, D.C.