Fully half – $100 billion – of Deficit Commission Chairmen Erskine Bowles’ and Alan Simpson’s reduction proposals target that infamous five-sided building on the Potomac. In a paper containing at least something for everyone to hate, you can almost hear the battle lines being drawn from parochial quarters: weapons makers, veterans groups, and personnel contractors will all howl as their respective cash cows linger in the cross hairs for uncomfortably long periods.
When parsing Bowles’ and Simpson’s suggestions, it’s worth bearing in mind the authors’ guiding principle: “America cannot be great if we go broke.” In essence, the proposal channels the White House’s own National Security Strategy, “Our economy… serves as the wellspring of American power.”
That’s the bad news: both the Deficit Commission and administration are right, and the country is in a bad spot. Here’s the worse news, as told in the introduction of the Deficit Commission’s Report: The Problem Is Real; the Solution Is Painful; There’s No Easy Way Out; Everything Must Be On the Table, and Washington Must Lead.
The Bowles/Simpson proposals do deserve serious consideration. They also must be placed in context — first, they are “illustrative” cuts, ones that are on the table and illustrate how the Commission might save $100 million in defense over five years. These cuts are on top of Secretary of Defense Bob Gates plan, announced over the summer, to wring $100 billion out of the Pentagon’s $700+ billion budget over five years, by reducing contractors, saving on personnel costs, and riding herd on and/or canceling over-budget and delayed programs. While many of Gates’ plans coincide with Bowles/Simpson (contractors and V-22 Osprey, for example), reconciling what to do with the savings is sure to cause a fight. More on that below…
It’s most useful to evaluate the Bowles/Simpson illustrative cuts against three core criteria:
- Does a proposal fundamentally weaken the country’s ability to defend itself?
- If not, does a proposal fundamentally weaken the country’s core non-military national interests?
- If not, does the savings benefit to the country outweigh the parochial interest of the proposed cut?
With that in mind, on balance, most of the Commission’s proposals on Defense spending are quite sensible. For readability’s sake, I’ll lump several of the proposals into larger categories.
First, a starting point:
A simple way to enforce budgetary discipline at the Pentagon starts with one basic policy adjustment: end the practice of supplemental budgeting. DoD has three budgets, not one: a baseline appropriation, plus two “supplemental” appropriations that are supposed to pay for the war, but do oh-so-much-more. I’ve written about the problem for Forbes.com, and you can see an excerpt here:
Having three budgets is like having three strikes in a baseball at-bat — you have the luxury to swing and miss twice. Projects that don’t make the baseline DoD budget (strike one!) can be considered in either of the additional supplementals (strike two! strike three!) before they’re “out.” Ending the supplementals would be like giving the batter just one strike. By combining all defense spending into one (larger) appropriation each year, the batter has just one swing — miss the first time, that’s it. The practice would force Congress to make hard choices that prioritize the war-fighter.
If we have just one budget, it would be much easier to implement many practices recommended in the Bowles/Simpson plan, such as “reducing procurement by 15 percent” and “reduce ‘other procurement’”. Procurement is bloated with multiple, supplemental budgets. Having just one a year forces appropriators to make hard choices.
Savings over five years: $28.5 billion, per Commission estimates.
Next, the low hanging fruit amongst the “illustrative” cuts:
Salary freezes for civilians and military, doubling cuts to contracting personnel and replacing some with civilians. These check all categories without question. The commission could perhaps go even further by advocating a freeze in combat pay as well — Yes, our military has performed heroically in difficult circumstances, but we’re talking about not increasing warzone pay, we’re not talking about eliminating it. Reducing contractors is a no-brainer.
Troop reductions in Europe and Asia. Europe is the easier sell: Twenty years after the Cold War and with staging needs for Iraq and Afghanistan winding down, the American military does not need as extensive a footprint on the European continent. The Commission proposes reducing American forces in Korea by 17,000 troops, which leave 11,500 by my math. That’s hardly a comforting thought, with an unstable and nuclear-minded North Korean regime in the midst of a power transition. We would continue to maintain 32,000 in Japan, and it perhaps makes more sense to split reductions between the two countries, even though removing troops from Japan has been a local political hot potato of late.
Modernize TriCare: Let’s be honest: this isn’t a move to “modernize” defense health care, it’s an effort to bring the military’s health system’s co-pays and deductables in line with cost-structures of private insurers. Does it seem like we’re giving our servicemembers the shaft? Yes. But are military health care costs, “are eating the Defense Department alive,” according to Secretary Gates. It’s unfortunate, but servicemembers’ premiums must rise to correct this problem.
Reduce base support, facilities maintenance, retail activities, and DoD schooling: With the exception of closing unused DoD schools, there’s no question these cuts will hurt. But is reducing the deficit more important? In these times, yes.
Savings over five years: $45.1 billion, per Commission estimates.
Slightly tougher to swallow:
Weapons Cuts: Not all platforms are created equal: certain are needed for modernization, others for replacement, and yet others to fill niche capabilities.
The Joint Strike Fighter (JSF) takes a beating from Bowles/Simpson, something followers of the program probably suspected. After all, when procurement of the F-22 was ended last year at 187 planes, DoD proclaimed itself ready to buy 2,443 F-35 JSFs instead. At the time, 2,443 JSFs seemed a preposterously and unrealistically large number. It still does, which is why a revised purchase plan, mixing in refurbishments of cheaper F-16s and F-18s while cancelling the USMC’s version of the JSF outright, falls within my comfort level.
We’ve already purchased 288 V-22 Osprey, which is two-thirds of the planned buy, and enough to meet the lion’s share of mission requirements. Along those lines, the Expeditionary Fighting Vehicle’s (EFV) capabilities are ably substituted by other technologies under development, allowing for EFV’s cancellation.
The Joint Light Tactical Vehicle, Ground Combat Vehicle, and Joint Tactical Radio would be delayed, not canceled, under the Bowles/Simpson plan, which seems reasonable as the Army’s tactical vehicle fleet received an unexpected influx of cash to procure IED-hardened MRAP vehicles for Iraq.
Reduce R&D: This might seem unwise (“Why do we want to cut R&D while we’re dropping weapons? Shouldn’t we invest in developing weapons even if we don’t end up producing them?”), but it’s not as big a deal as it originally seems. Fact is, by combining the defense budgets and reducing certain weapons buys, R&D organically decreases as a natural function of those actions.
Knowing how Congress works, it’s highly unlikely that these planned weapons buys will be fully endorsed. But they will likely be negotiated reductions, in order to maintain capability while sending a strong signal that there’s a changing culture of fiscal discipline.
Savings over five years: up to, but probably less than $30.45 billion, per Commission estimates.
Up in the Air:
Secretary of DefenseBob Gates came out with his own plan to trim $100billion from the Pentagon’s budget, which he intended to reinvest in DoD modernization plans. He was coyly getting out in front of Bowles-Simpson, who want to take Gates’ savings and apply them not to modernization, but rather to deficit reduction.
The trick is convincing the Secretary to follow through with these plans, knowing that the Pentagon won’t get to keep all the planned savings. The good news is this fight probably won’t happen, as Gates will likely leave his post before final decisions are made. Savings reinvestments is just one of the reasons the new Secretary’s views on deficit reduction will have to align with Obama’s.
You Can’t Touch This:
The only illustrative cut in the Bowles-Simpson plan that I whole-heartedly disagree with is the notion of canceling the Navy’s Future Maritime Prepositioning Force. These plans are currently under study, and if executed correctly, could end up saving money while allowing the Navy to project force more efficiently in an era of restrained budgets. There’s still work to be done here, and at $2.7 billion in potential savings, isn’t exactly a budget buster.