May 30, 2020
The other day an aerospace industry analyst asked me whether I thought the defense budget would start to go down, courtesy of the huge cost of dealing with the pandemic and the massive deficits the nation faces. I said it was unlikely and he agreed.
This is not the conventional wisdom in DC. Some national security analysts and advocates for higher defense budgets have warned that the defense budget is now under siege. Critics of the Pentagon and its spending are equally convinced that the pandemic opens the door to necessary, deep, sensible cuts in defense in order to fund the mountain of debt and take care of pressing needs for income, employment, health care, global warming, and other major threats to the well-being of Americans.
Whatever the nation’s strategy, critics argue, the pandemic has changed the face of the threat to America. COVID-19 is an invisible, lethal threat to human security, a viral neutron bomb that spares buildings but kills their occupants.
Congress has appropriated more than 20 percent of the nation’s gross domestic product, so far, to cope with this threat. Additional funds for the military, ironically, have become a “rounding error” in this spending — little more than $10 billion of the more than $4 trillion appropriated to date. Secretary of Defense Mark Esper warned about the likelihood of defense cuts and wanted more funds for the Pentagon, but Rep. Adam Smith, Chair of the House Armed Services Committee said there was no way defense would get more funds through the pandemic bills.
So it looks bad for defense, and good for the advocates of cuts. But not so fast. Yes, it is true; history shows that defense budgets do decline. It happens, predictably, when we get out of a war – World War II, Korea, Vietnam, the Cold War. Even when we left Iraq in 2011, the budget went down.
There is a secret ingredient in defense budget reductions: they seem to happen, as well, when the politics of deficit reduction appear. Defense also declined after Korea because a fiscal conservative, Eisenhower, was in office, with five virtual stars on his shoulders, making it possible to put a lid on the budgetary appetites of the services.
In fact, in 1985, well before the end of the Cold War, Congress, focused on the deficit, passed the Gramm-Rudman-Hollings Act, which was then was reinforced in the 1990 Budget Enforcement Act that set hard spending limits on domestic and defense spending. It had to cover both parts of discretionary spending or Congress could not agree. It was 17 years before the defense budget began to rise.
Put the end of war together with a dollop of deficit reduction and defense budgets will go down. They become the caboose, rather than the engine, of the budgetary train. But beware of what you ask for. The price of constraints on defense has been constraints on domestic spending, as the nation has learned over the past three decades. In fact, the Budget Control Act of 2011 constrained domestic spending, while allowing defense to escape almost unscathed, thanks to war supplementals.
When attention shifts to debates over priorities and deficits, it opens the door to a real discussion about defense. But they do not ensure cuts. While the military services may not see their appetite for real growth of 3-5 percent fulfilled, it is unlikely to decline very much.
There is a floor under the defense budget. But you need to change the level of analysis to see it and look at who actually makes defense budget decisions and why they make the decisions they do. It’s about something I called the “Iron Triangle.”
We all like to think that strategy drives defense budgets. For the most part, however, defense decisions are made inside a political system involving constant, relatively closed interaction between the military services, the Congress, and the community and industry beneficiaries of defense spending.
In outline, budget planners in the military services start with last year’s budget and graft on new funds, rarely giving up a program, a mission, or part of the force. This dynamic points the budgets upwards over time. Secretaries and under-secretaries work to add preferences and projects, like national missile defense, to the services’ budget plans. On top of that, presidents have made promises, adding such things as bomber funds (Reagan) and space forces (Trump) the services do not want.
Then there is the second leg of the triangle: Congress. For all their efforts to cut Pentagon waste, progressive members do not drive defense decisions in the Congress. The defense authorizers and appropriators do. The associated committees are dominated by defense spending advocates, deeply interested in the outcomes, encouraged by industry campaign contributions and community lobbying. These outside interests are the third leg of the triangle. Contracts and community-based impacts give them a deep stake in the outcomes.
This system is not a conspiracy; it is a visible part of American politics, similar in shape to the players in farm price supports or health care policy. But it is a system that operates somewhat separately from and parallel to the politics of deficit reduction and has a major impact on the content and levels of the defense budget. And its work bakes a kind of sclerosis into efforts to have a broader debate over spending priorities.
The politics of the Iron Triangle will set limits on the defense budget debate making deep cuts unlikely. So what might be the options to end-run this system? Politics, of course. If the advocates of deeper defense reductions want to change America’s spending and budgeting priorities, they will need to join forces with advocates of a “new, new deal” in America — one that would put priority on the national health system, infrastructure investment, climate change, immigration, and educational reform. Only a very large, very deep coalition has a chance of overcoming the inertia imposed by the Iron Triangle.
And that coalition will need to focus on Joe Biden. The president is the key actor here, particularly at the start of an administration. As Bill Clinton learned, the first months are critical to changing overall budget priorities, before the departments, including Defense, can begin the Iron Triangle dance.
Even then, major cuts in defense budgets are an uphill fight. The opening for a broader priorities debate has been provided by the COVID-19 pandemic. The outcome depends significantly on bringing this kind of focus to actions over the next seven months.
