Tooth Fairy Defense Budgets

September 25, 1996

One probably can’t expect Presidential candidates to debate what they agree on, which, for President Clinton and Bob Dole, seems to be a lot. Still, someone should tell the voters what’s going on in the vital area where the nation’s defense and finances intersect. Both candidates are balancing the budget on the back of the Pentagon, and neither is owning up to the implications.

This may seem a surprising observation in a week when the President made a show of his support of the military by signing a $256.6 billion armed services spending bill that was $11.2 billion more than he asked for. But look at the numbers.

In 1986, at the peak of the Reagan defense buildup, the United States spent 6.3 percent of its gross domestic product on the military. This year it will spend about 3.6 percent, a lower share than at any time since before Pearl Harbor. Since 1990, the number of personnel in uniform has dropped by 25 percent. The Army pared down to 12 active divisions from 18. The Air Force has 13 tactical wings, down from 24, and the Navy has 373 battle-force ships, down from 546.

For all their campaign oratory, both Mr. Clinton and Mr. Dole would continue to squeeze the Pentagon. The Administration’s latest budget would cut inflation-adjusted defense spending in 2002 by 10 percent from this year’s levels; the Dole plan would cut it by 13 percent. Both candidates claim they would not touch defense spending, but what they mean is that they would not reverse its decline.

Moreover, both men are basing their budget projections on fishy assumptions. “The dollar values for defense in the President’s budget and the Dole plan are insufficient to support the force structure that is planned,” says Robert D. Reischauer, a former director of the Congressional Budget Office.

John Steinbruner, an analyst at the Brookings Institution, estimates that equipping the forces now planned would cost $70 billion more between now and 2002 than the Administration has budgeted. Under the Dole numbers, the shortfall would be slightly larger.

In a few years, either the deficit will be larger or the armed forces will be smaller than either man is admitting.

The point here is not necessarily that the United States is spending too little on defense. Of all the ways to think about national security, the worst is probably to look at budget numbers and G.D.P. shares. “More” and “less” are arithmetic, not strategy. Maybe we need more defense spending, maybe less. Yet with their rosy projections, both candidates are ducking the issue. They are also ignoring history.

Critics of Mr. Dole’s 15 percent tax cut say that he risks repeating Ronald Reagan’s budget-busting fiscal mistake of the 1980’s. The charge is fair, but it should not obscure another: Both Mr. Dole and Mr. Clinton threaten to repeat the big fiscal mistake of the 1970’s, when the roots of the deficit crisis were put down by Presidents Nixon, Ford and Carter.

Their Administrations cut defense sharply—from 9.4 percent of the gross domestic product in 1968, at the height of the Vietnam War, to less than 5 percent a decade later. They spent the savings on entitlement programs, primarily for the elderly. By the time the country decided it had become dangerously weak, the money had been sopped up by programs that were very hard to cut politically. That was what made the deficit so intractable.

In the last decade, defense has accounted for basically all the net reductions in Federal spending. Taxes have gone up a bit, but so have entitlements. In effect, the military has brought down the deficit.

If America decides in a few years that disarmament has gone too far, what happens? Then we will look around and discover, as we did in the 1980’s, that the money has already been promised away. Increasing the Pentagon budget at that point would mean throwing gasoline on a fiscal fire just starting to smolder as baby boomers begin to claim their retirement benefits.

Perhaps this latest gamble will pay off. Perhaps the decision to protect Social Security by chopping defense will prove sound. But it should be just that—a decision, not a given. Bill Clinton and Bob Dole should tell the voters what’s really at stake.

Jonathan Rauch, a guest scholar at the Brookings Institution, is the author of “Demosclerosis: The Silent Killer of American Government.”