The Trickery of the Military Budget

A key federal budget trick is using words to confuse citizens, such as labeling U.S. military spending as “defense” though much is for “offense” and sliding costs for wounded soldiers under “veterans affairs” and nuclear bombs under “energy,” as ex-CIA analyst Paul R. Pillar explains.

By Paul R. Pillar

As budgetary battles proceed with competing rhetorical salvos about what parts of government spending are unreasonably large, or are most out of control, or are the “real” reason for burgeoning deficits (actually, every part of the budgetary equation, on both the expenditure and the revenue sides, is just as real as every other part), one welcomes the occasional breath of fresh semantic air on the subject.

Veronique de Rugy of the Mercatus Center at George Mason University, using data compiled by Winslow Wheeler of the Project on Government Oversight, observesthat the figures usually adduced to present spending on “defense” or “national security” understate by a long shot actual federal spending that is appropriately put under such labels.

A U.S. military rescue team secures a landing site in Afghanistan after being being lowered from an HH-60 Pave Hawk during a mission Nov. 7, 2012. (U.S. Air Force photo/Staff Sgt. Jonathan Snyder)

The figure most often cited is the “base” budget of the Department of Defense, which was $535 billion for FY2012. But military and defense expenditures go well beyond that, including such things as the development of nuclear weapons, which is done in the Department of Energy, or training of foreign military forces, which come under the international affairs section of the federal budget.

Add in all those other things and the total is more like $930 billion rather than $535 billion. And that’s just current expenditures, not taking into account follow-on effects such as additional interest to be paid on the national debt.

Probably the most egregious bit of military-related budgetary legerdemain has been the practice of keeping the operational costs of the wars in Iraq and Afghanistan separate from the main Pentagon budget, as if those costs should not count as much because they are, well, sort of temporary. And so the base budget figure continues to get cited as “defense spending” even though it excludes the main, and costliest, activities in recent years of the U.S. military.

This practice makes as much sense as if I were to calculate my health care costs and to exclude stays in the hospital, instead only including recurring expenditures such as dental check-ups.

There is, admittedly, a sense in which the Iraq War should not be counted as “defense” spending. The war was not an act of defense; it was offense. But that, of course, is not the reason for the practice (begun by the administration that launched the Iraq War) of separating costs of the war from the main defense budget. The reason had much more to do with wanting to understate the actual amount the United States spends on its military.

Joseph Stiglitz and Linda Bilmes have shown how the true total cost of an endeavor such as the Iraq War goes far beyond what shows up in the federal budget and includes various secondary economic effects. Even just sticking to the federal budget, there are very large costs that do not show up in any one year’s current budget.

A big part of the follow-on cost of recent wars is the long-term care of military veterans, especially grievously wounded ones. Such costs are proportionately greater than for previous wars. Thanks to body armor and a splendid military medical system, many who would have died in earlier conflicts instead survive, but they are still maimed.

Misleading budgetary labeling is by no means confined to military spending. Grouping some government programs under the label “entitlements”, which are programs or obligations where expenditures do not reflect specific congressional appropriations but instead are determined automatically by such things as how many people happen to qualify for a statutorily defined benefit, can be justly criticized on several grounds.

One is that there is wide variation among such obligations or programs, and no reason that a single standard with a single label should apply to all of them. Another is that “entitlement” is a loaded term that implies an agreed moral obligation even when there might not be one. The term also implies, especially when contrasted with other parts of federal spending, which bear the label “discretionary”, that Congress’s hands are tied in changing this even if they really aren’t.

George Will has said that all federal spending is discretionary other than interest on the national debt. In one legalistic sense he may be right, although if one accepts that position then the extortion-facilitating device known as the debt ceiling, which treats as an option non-payment of interest on debt already incurred, looks all the more foolish and unwarranted.

Applying a common moral sense of “entitlement” to federal expenditures does not produce a classification that corresponds to the budgetary categories of entitlements and discretionary spending. Wouldn’t we all agree, for example, that wounded veterans are entitled to government-paid long-term care? And yet medical programs of the Veterans Administration come under the “discretionary” label. (And that care constitutes a big chunk of the military-related expenditure that usually does not get included as “defense spending.”)

There also is wide variation in the amount of discretion entailed in different government activities that are on the “discretionary” side of the ledger, even without getting into the questions of political feasibility that inhibit changes to many of the “entitlement” programs. Much that is labeled “discretionary” is necessary for what has come to be widely expected as a function of government.

Elimination of some of these activities would immediately be seen as a crisis, e.g., the air traffic control system operated by the Federal Aviation Administration (which gets much of its funding from a trust fund based on taxing tickets for air travel but also draws money from the general treasury). And turning back to military matters, some of these civilian activities are far less discretionary than was that very expensive war of choice in Iraq.

Also back on military matters, we should note that “entitlement” is not the only loaded term when discussing budgetary categories. “Defense” and “national security” are loaded as well. They are labels that presume a priority and importance that things not bearing those labels are presumed not to have.

But the labels are affixed to some activities, including some very expensive activities, that are more offensive than defensive and whose contribution to the security of the nation is at best a matter of conjecture or debate.

Paul R. Pillar, in his 28 years at the Central Intelligence Agency, rose to be one of the agency’s top analysts. He is now a visiting professor at Georgetown University for security studies. (This article first appeared as a blog post at The National Interest’s Web site. Reprinted with author’s permission.)

7 comments for “The Trickery of the Military Budget

  1. Concerned Citizen
    February 3, 2013 at 14:33

    It may be more “under-reported” than that. CIA does not come under Defense, nor does NSA (BTW – a much greater expenditure than CIA). However, the military “assists” these agencies every hour of the day. They do the work on a reimbursable basis – the CIA/NSA pay for borrowed Defense labor. If a soldier is working for CIA or NSA, he is an asset which Defense must make up for somewhere else – he isn’t doing soldier duties, he is doing spy work.

    Most of these “duties” are captured under a general title called “Black Box” programs. Only the Congressmen/Senators on their respective National Security Committees have an idea what these programs perform, and then in the broadest terms. Especially for programs which are about to be put into action but which the actual expenditures are not yet known but require funding and authorization to start. Budgets are 2 years out, so inflated costs are used to start the program and then increased as the programs activate. No contractor will complete a program and leave money on the table. That’s why Secretaries and Administrative people get charged out at $100/hour and more. This is true for all contracting but especially true for Black Box programs where oversight is minimal at best. In other words, the Pentagon marks up the reimbursements to essentially “make a profit” off the other budgets, especially the black budgets.

    One Trillion is a good start but not even close.

    • rosemerry
      February 4, 2013 at 02:59

      All this money and the USA, like Israel, never feels secure.Spending it on the real human population, with decent housing, education, health care, plus protecting instead of ruining the planet, would have the effect of improving lives all over the globe. what a difference!

  2. fulldisclosure
    February 3, 2013 at 02:18

    I wonder what budget this sadistic program falls under?

  3. rosemerry
    February 2, 2013 at 15:47

    Chalmers Johnson (seen “speaking freely” on youtube) made the remark that “the Dept of Defense has nothing to do with the defense of the country”, and after 9/11 Homeland Security had to be invented to do that.

  4. bobzz
    February 2, 2013 at 13:46

    I followed the link to Stiglitz and Bilmes’ book, The Trillion Dollar War at Amazon and lifted this from a ‘one-star’ reviewer: “What is the cost of the Iraq and Afghanistan wars? To many, the answer, at least from 2001 through 2007, is $473 billion — about a quarter of total defense expenditures over those years. It has averaged less than 1 percent of GDP. $473 billion is probably an underestimate simply because the fighting has already lasted past 2007 and some wounded veterans will require long-term care. But how much more is it?”

    Even if we doubled this reviewer’s number to update the estimate he quoted, how do we have a >$16 trillion deficit? Where did that deficit come from if the war itself and the innumerable ancillary costs have not made a great contribution toward it? Eliminate the senseless wars( Iraq, Afghanistan, drug), and banker theft, and we are in good shape.

  5. Hillary
    February 2, 2013 at 10:46

    Paul R. Pillar excellently points to how “OUR defense spending” budget is a monstrous accounting scandal.
    Supporters ( the only side represented in the MSM )of the Iraq war never mention resulting “medical” and “compensation” money paid to the contracted and regular military.
    In Orwellian speak “Defense = attack” but under the carpet perhaps “its all is the same”.
    We can be reminded of that great American who said —

    “Basically the USA is the stumbling giant who after a short history of skulduggery , piracy and violence is reduced to existing on funny money and finds itself staring hard into the abyss of its own imminent breakdown from all these “surprises” it fails to see coming “.
    Is it true that the majority of Americans are “government employees” who are desperate to maintain their “status quo” ?

  6. incontinent reader
    February 2, 2013 at 10:09

    Good article. Get the auditors in to identify and evaluate these programs and dissect their costs- and make it public.
    The $1000 toilet seat and trillion dollar F-35 fiasco, not to speak of the thousands of other bloated military welfare projects need a diet of the mind and the surgeon’s knife. Ernest Fitzgerald and Franklin Spinney are two who did the job in the 1970’s and later. Let Hagel put a tough minded and aggressive cadre of professionals in place and get the job done.

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