Bending to Military Contractors

Regarding the “fiscal cliff,” a consensus is forming in Official Washington that a top priority must be elimination of automatic Pentagon “cuts,” with the word “draconian” much tossed around. But the planned reductions are really quite modest, as the Independent Institute’s Ivan Eland explains.

By Ivan Eland

The strength of the military-industrial complex (MIC) was made readily apparent by President Barack Obama’s latest proposal to House Speaker John Boehner to avoid the fiscal cliff. Other than raising taxes on rich Americans, Republicans have been most horrified by the fiscal cliff’s cuts in defense spending. With Obama’s most recent proposal, Republicans can relax because even those vastly overstated cuts will be eviscerated.

Obama is only proposing $100 billion in defense reductions over a 10-year period from 2013 to 2022, a miniscule $10 billion per year, and that will thus be the ceiling on any austerity in defense. Obama’s capitulation on defense cuts merely illustrates the dirty little secret: Democrats, in addition to Republicans, have been long co-opted by the MIC.

An EA-18G Growler taxis off the flightline at Naval Air Facility Misawa, Japan, on Dec. 28, 2012. (Defense Department photo by Petty Officer 1st Class Kenneth G. TakadaClose)

Going over the fiscal cliff would have cut defense $550 billion over 10 years, or $55 billion per year. So in the President’s latest proposal, defense cuts are only about 18 percent of what they would have been under the cliff’s automatic cuts.

But of course, even such “draconian” cuts, as the media has hyped them, were something of an illusion. In Washington speak, a budget reduction is usually not what the average person would call a cut. The average $55 billion cut was not from the level of the base defense budget of $552 billion in 2011 (the base budget does not include “emergency” supplemental spending for overseas military operations that have been going on for years); it was from the defense budget increased every year for inflation.

Thus, the defense budget would have initially decreased but then actually would have begun rising again before the end of the 10-year period. Although in inflation-adjusted terms, the fiscal cliff would have made real cuts in the defense budget, they would not have been unprecedented.

From 1990 to 1999, during the George H. W. Bush and Clinton administrations, after the Cold War ended, defense spending declined an average of 1 percent annually. Under the Obama proposal, however, even manageable fiscal cliff cuts would be reduced to less than a fifth of their previous level.

But after all, aren’t we still involved in a “war on terror,” even though Obama has discontinued his use of George W. Bush’s label for it? Since 2000, the inflation-adjusted defense budget has increased more than 50 percent. The United States now spends more on defense than it did at the height of the Cold War and what the next 14 or 15 countries (most of which are U.S. friends and allies) spend on defense combined.

Most of the defense increases since 2000 have had nothing to do with fighting terrorists. As both George W. Bush and Obama have shown, fighting terrorism can be done using relatively cheap human intelligence, unpiloted drones, and small teams of Special Forces.

As Bush and Obama have also shown, hundreds of billions of dollars can be wasted conducting nation-building wars, which only make the anti-U.S. terrorism problem worse by inflaming Islamists’ hatred from non-Muslim military forces occupying Islamic nations.

And then there are all of the high-tech weapons the Pentagon is still buying, which have little to do with even the low-tech nation-building wars. Some of these weapons, such as the Marines’ V-22 Osprey aircraft, were designed during the Cold War and have been in development and production ever since.

Instead of defending against the threat of a hegemonic great-power opponent, of which there is currently none, most of these high-tech weapons are designed to project power to police the American Empire. America can no longer afford this empire.

What is truly scary is that even if the United States went over the fiscal cliff, and thus got the maximum deficit- and debt-reduction likely, U.S. public debt still would rise from 69 percent of GDP in 2011 to 84 percent by 2035. The Obama proposal and the incipient budget deal will be much worse in these terms.

Other budget items, such as Social Security, Medicare, Medicaid and farm price supports, need to be significantly cut, but so does defense. A pathetic $10 billion a year just doesn’t cut it (enough). Here is a menu of seven possible ways to cut more from defense.

–Cut the number aircraft carriers in the fleet from 11 to 6 and reduce carrier air wings appropriately, which would save operations and support (O&S) costs and long delay the need to buy expensive new ships and aircraft.

–Cut Army division-equivalents from 10 to 5 (similar savings in O&S and new equipment).

–Cut Marine divisions from 3 to 1 (similar O&S and procurement savings).

–Cancel the F-35 for the Navy, Marines, and Air Force and instead upgrade current model fighters with new electronics.

–Cancel purchases of Virginia-class submarines, but provide some modest funding to keep the submarine industrial base warm.

–Eliminate costly dedicated military housing, health care and commissary systems and buy such items from the existing civilian market.

–Abandon the unnecessary American Empire, eliminate all U.S. military bases overseas, and decommission the forces stationed there.

Alas, however, the MIC would probably have success in nixing such much-needed reductions, as they have in beating back automatic defense cuts. To avoid the fiscal cliff, it looks like Obama and Boehner will instead slam straight into the mountain of rising debt.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute. Dr. Eland has spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office. His books include Partitioning for Peace: An Exit Strategy for Iraq The Empire Has No Clothes: U.S. Foreign Policy Exposed, and Putting “Defense” Back into U.S. Defense Policy.

4 comments for “Bending to Military Contractors

  1. Paul G.
    December 31, 2012 at 04:43

    “Other budget items — such as Social Security, Medicare, Medicaid and farm price supports — need to be significantly cut,” what is someone who is so ignorant as to believe this Republican myth- although I would go with cutting some farm price supports-doing on this web site. Social Security according to the CBO is solvent for about 21 more years, simply raising the pay in ceiling would fix the declining balance; if not the rate can be raised slightly. Social Security payments are marginal at best, no one is getting rich off it; cutting it is cheating us seniors of what we were promised and paid in to and would make for extreme hardship for many. Medicare has a problem; but the problem is not Medicare itself, it is the exorbitant health care costs in the US. Since Obama scuttled the public option in his “universal” program there is little cost containment in general. Cut medicaid and the net costs go up as poor people turn to expensive emergency rooms where they by law have to be treated if the hospital received public funding. If I had known 30 years ago this shit was going to come down , I would have found myself another country.
    A much more informative and accurate account than the article is F.G. Sanford’s comment, which I agree with whole heartedly.

  2. F. G. Sanford
    December 30, 2012 at 04:33

    “Other budget items — such as Social Security, Medicare, Medicaid and farm price supports — need to be significantly cut, but so does defense. A pathetic $10 billion a year just doesn’t cut it (enough).”

    WRONG! There is absolutely no need to cut Medicare, Medicaid or Social Security. The “fiscal cliff” is a contrived fraud which serves to paint a scenario in which no other alternatives can be considered. It pretends that a negotiated settlement in which the economic civil rights of Americans are gutted is the only solution. It is a setup for what will be billed as a reasonable “compromise” instead of the betrayal it really is. Wall Street pays NO sales tax, and it pays NO corporate income tax. At the same time, irresponsible investment banks, Wall Street gambling and “casino capitalism” have raped our economy. A 1% sales tax on Wall Street transactions: stocks, bonds, derivatives, high frequency “flash” trading, etc. should be implemented. This would immediately improve solvency and discourage profligate financial practices. Restore Corporate income tax and close the loopholes. Social Security has already been exploited by expropriation of funds. The Social Security Payroll Tax Cut was a devious strategy to enhance the appearance of future insolvency. An instantaneous solution would be removal of the $105K cap on Social Security payroll deductions: the rich are NOT paying their fair share. About a trillion dollars has already been gouged out of Medicaid under the present administration. Now, we’re considering more cuts?

    When President Obama met with members of the Washington Post editorial board prior to his inauguration in 2004, he is reported to have said, “It’s time to cut Social Security. That’s the easy part. And it’s time to cut Medicare, that’s the hard part”. Selling out middle-class Americans in order to force them to invest in private sector pension funds and health insurance companies is exactly what Wall Street would like. This is a strategy the “One Percent” has pursued since the first Bush administration. It would result in more money at the gaming tables of Wall Street Casino Capitalists. Remember the “Fix Social Security” and “Social Security Lock-box” debates from years ago? The financier oligarchs are finally getting their way. They’ve done it by artificially engineering the appearance of insolvency. And, the money’s been wasted on foolish imperialistic exploits like “nation building”.

    Hack: “One who holds political office through patronage and serving devotedly and unquestioningly”.

    Any cuts to these programs as long as we have 700 overseas military bases which pump trillions of American taxpayer dollars into foreign economies is a fraud. This is a manufactured crisis which omits discussion of rational alternatives for the purpose of shoving economic betrayal down the throats of American middle class families. This clandestine loyalty to the Wall Street vultures, corporate cronies, bailout bankers, cannibal capitalists and the MIC at the expense of the American standard of living is nothing but political hackery. Our representatives have sold us on the idea that the real good screwing we’re about to get is to avoid a manufactured crisis that doesn’t exist. Wall Street will have a Happy New Year if the present administration caves in. I hope all you dear readers and writers have one too! Good Luck!

    • charles sereno
      December 30, 2012 at 12:23

      Even if the $105 SS cap were removed, we’d still only have a non-progressive “flat” tax!

  3. charles sereno
    December 29, 2012 at 11:58

    I’m an ignoramus on military budgets but I think I see a significant change in strategic direction. Major money and resources have become available for new uses as Iraq and Afghanistan are being wound down without need for additional budget requests. The new directions for this bonus are obvious in 3 areas. First, the “pivot” to East Asia, now that the Mid East is under control without boots on the ground. Second, the “rumsfeldification” of advanced military outposts guarding the Empire, that is, making them leaner and cheaper, yet more effective. Third, the expansion of R&D to maintain a lead in offensive and defensive capabilities including weapons, intelligence, and cyber skills. All of this can easily be accomplished simply by not cutting the present budget.

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