When elephants fly: A good idea on defense spending from the U.S. Congress

With all of the recent upsets to international security, the enduring strength of the U.S. military is an ever more important pillar of stability and deterrence. To be sure, U.S. armed forces remain very strong. But they have been challenged by almost 15 years of war, five years of budget reductions (including one year of highly disruptive sequestration cuts in 2013), and a slew of tasks around the world that are not easy for a military downsized by 40 percent since 1990 to handle. Now, possible sequestration looms again.

For these reasons, whatever else one thinks of the House Budget Committee’s proposal for federal spending in 2016—and I don’t like much of the rest of it, personally—it has come up with a good idea in regard to military spending. It can constitute a bipartisan compromise that may not win any awards for good governance overall, but can nonetheless help us limp through this year and the next before the 2016 elections hopefully create a mandate for more comprehensive fiscal change.  

In essence, the House plan would provide the same amount of money for the Department of Defense next year as would President Obama ($585 billion). But the White House budget assumes a more sweeping modification to the Budget Control Act than is politically realistic. Without such a comprehensive agreement passed by Congress and signed into law by the president before October, Obama’s defense budget proposals would likely fall prey to the sequestration axe come 2016. 

By contrast, the House has found a way around the budget rules, at least for the Department of Defense. And its plan can work even if all other elements of the House Budget Committee plan, such as the wholesale return of the Medicaid program to the states in the form of block grants, fail to survive the legislative process or Obama’s veto pen.

The essence of the House idea is to broaden the definition of war spending well beyond what the Obama administration—or, for that matter, the Oxford English Dictionary, might allow. It assumes that the cap on the regular, or base, defense budget will not exceed the sequestration levels that the Budget Control Act will impose come October 1.  

Instead, the House would fund higher defense spending by allowing a wider range of defense activities to be funded within the Overseas Contingency Operations (OCO) accounts. With Europe in crisis and Asia undergoing tectonic shifts, the case for doing so temporarily is not unreasonable—even if U.S. military operations in these theaters would not be wartime activities per se.

Here are the actual numbers: President Obama proposed $534 billion in base budget for the Pentagon, and $51 billion in Department of Defense war costs through the OCO fund. That makes for a grand total of $585 billion for the Department of Defense. The House would accept the $496 billion cap on the base budget that is written into the Budget Control Act, but compensate by beefing up the OCO account, winding up around $585 billion as well.

Let’s put these numbers in perspective. $585 billion is still a lot of money—more than three times China’s military budget, nearly 40 percent of total global military spending, and nearly $100 billion above the Cold War average for the United States after adjusting for inflation.  

But that defense budget total is down by nearly $200 billion from the late Bush/early Obama period. Half of that decline, roughly, has occurred in the war budget and the other half in the base budget. The resulting total represents 3.1 percent of projected gross domestic product—similar by that measure to the Clinton years, less than half the Cold War average, and considerably less than funding levels during the “hollow force” years of the post-Vietnam 1970s. And that’s with the higher numbers. By contrast, if the House proposal is rejected, and no grand budget compromise proves possible this year, we would return to sequester-like levels of military spending come 2016. Consider some likely implications of further cuts:

• The army, already on a path to its smallest active-duty size since before World War II, would be cut to about 420,000 soldiers—75,000 less than in the Clinton years. With North Korea still a threat, Russian President Vladimir Putin mucking about near NATO allies in Eastern Europe, the U.S. Army busy of late from Afghanistan to Liberia to Iraq, and the Middle East in systemic crisis, this is not a gamble we should want to run.
• Whatever the right ultimate size for the army, the pace of downsizing is already fast, meaning that we are, in effect, sometimes already pushing out good people (by denying promotions to many who would have received them before). This risks a breach of faith with the all-volunteer force and a crisis of morale within the U.S. Army.
• The U.S. Navy’s effort to increase the fraction of its fleet devoted to the Asia-Pacific from 50 percent of the total to 60 percent—the military linchpin of President Obama’s rebalance to that region—will lose its punch. If we deploy 60 percent of a smaller fleet there, that will be no improvement on the old approach of 50 percent of a larger fleet. Relative to the 1990s, the fleet is already down from about 350 ships to 285, and under sequestration-level spending, it could decline further to perhaps 260. 

Buying into the House approach is hardly optimal. It leaves us with an overly complex tax code, unsustainable entitlements, and inadequate domestic investments. All of those problems need to be fixed. But realistically, they are not likely to be addressed between now and our nation’s next election. So in a time of international turbulence and crisis, let’s not compound the problem by dragging the nation’s armed forces down too.