President Biden is in the process of releasing the broad outlines of his first budget proposal, a move that will kick off months of fierce debate among lawmakers and talking heads in Washington over the funding levels for the federal government. As the President reportedly looks to propose a major boost in non-defense discretionary spending for the upcoming 2022 fiscal year, policymakers should be wary of defense hawks who are already calling for dollar-for-dollar increases in the defense budget to match President Biden’s proposed spending increases.
Bloomberg reported on this dynamic recently, writing that the most powerful appropriator in the Republican Party — Senate Appropriations Committee Ranking Member Richard Shelby (R-Ala.) — is calling “for equal treatment (of defense outlays) with non-defense outlays if Biden moves to boost those.”
This principle went by another name — “parity” — during the Budget Control Act (BCA) era of 2012-2021. The law, forged through bipartisan compromise by President Obama and Congressional Republicans, was supposed to introduce a modicum of budget discipline after a group of lawmakers failed to reach a deal on deficit reduction in 2011. To spread the pain evenly among Republican and Democratic spending priorities, the BCA established separate, decade-long spending caps on defense and non-defense parts of the budget, building on decades of Congressional distinction between these two types of discretionary spending.
Also called “security” and “non-security” spending, the former typically consists of the Departments of Defense, Homeland Security, and Veterans Affairs, as well as the National Nuclear Security Administration within the Department of Energy, the intelligence community, and international affairs spending. The Department of Defense, or DoD, comprises the vast majority of the security part of the budget.
In theory, “parity” in the BCA was supposed to motivate both Republicans and Democrats to reach a deal on deficit reduction before automatic spending caps kicked in. Republicans would not want to see defense spending reduced, the theory went, and Democrats would blanch at cuts to domestic priorities like government support for education, health care, and housing.
In practice, “parity” led to around $1.7 trillion in new spending over the BCA’s 10-year window, which is closing in a few months. A majority of these cap violations over the decade occurred on the “defense” side of the ledger, with hundreds of billions of dollars devoted to the Overseas Contingency Operations (OCO) slush fund — outside the budget caps — and with Republicans insisting on defense spending caps that rose in “parity” with non-defense spending caps that Democrats regularly asked to raise (and vice versa).
A central irony of the BCA era was that the initial mission for Congress was to find $1.5 trillion in deficit reduction over 10 years, and instead they found nearly $1.7 trillion in new spending above BCA levels. Again, much of this glut got stuffed into the Pentagon budget, despite dubious claims that President Obama “depleted” or “gutted” the military during his time in office.
As we look to FY 2022, which begins October 1 of this year, many Republicans and some Democrats are talking about deficit reduction again. It’s a welcome change. Some policymakers inside and outside the government are starting to believe that, although federal support through the COVID-19 crisis was necessary, Congress has appropriated far too many deficit-financed dollars in the past year. New spending, on top of the nation’s $28 trillion in existing debt, could put the U.S. on a path to fiscal ruin in the near future.
This is why it’s ironic that some lawmakers and think tank experts who are asking for budget discipline, and criticizing the Biden administration’s spending plans, are nonetheless calling for 3 to 5 percent annual increases in the DoD budget — or parity, if you’re Senator Shelby.
Even though the defense budget is chock full of tens of billions of dollars of waste, slush, and failing legacy programs (more on that below), some lawmakers are arguing we should keep all of the fat in the Pentagon budget and add tens of billions of dollars more per year.
Taxpayers should be skeptical of calls to increase the DoD budget — or even to keep it flat, as the Biden administration proposes doing — just as they should be skeptical of the Biden administration’s plans to increase non-defense spending. Sadly, what parity means in modern-day Washington is often not dollar-for-dollar sacrifices from Democrats and Republicans in an era of high spending and high debt, but dollar-for-dollar increases in deficit-financed spending that our children, grandchildren, and great-grandchildren will pay for.
At my organization, National Taxpayers Union, we have a blueprint for Congress and the administration to achieve $3.6 trillion in deficit reduction over the next 10 years. Recognizing that none of those reductions will be easy and that both parties need to sacrifice spending priorities to achieve such gains, our proposal includes more than $1.2 trillion in savings from reductions to the Pentagon budget. This includes:
• Eliminating the OCO slush fund and resisting the temptation to fill the DoD base budget with whatever was in last year’s OCO account (around $800 billion in 10-year savings);
• Freezing DoD spending on operations and maintenance for five years, and then limiting growth to the rate of inflation ($195 billion in 10-year savings);
• Reducing funding for naval ship construction to its 30-year historical average ($49.7 billion); and more.
We released a more DoD-focused blueprint in February that honed in on $338 billion in four-year savings President Biden can achieve during his first term in office. The cuts include some favored programs for members in both parties, such as:
• Reducing the size of the nuclear triad ($3.7 billion in four-year savings);
• Canceling plans to purchase additional F-35 Joint Strike Fighter aircraft ($7.8 billion in four-year savings);
• Canceling the Ground-Based Midcourse Defense (GMD) system ($7.8 billion in four-year savings); and much more.
Some defense hawks blastedthesesuggestions, underscoring the difficult path lawmakers will face in achieving even modest reductions in the DoD budget. President Biden is proposing a flat Pentagon budget for FY 2022 — hardly a gutting decision for a $700-billion agency — and some of his Republican opponents are already claiming he is soft on China as a result. One thing the hawks regularly fail to do is explain how increases in the DoD topline make us safer, besides continuing to foster the illusion that more Pentagon spending means more security for the American people.
President Biden can do the responsible thing for taxpayers present and future by resisting the calls for a 3 to 5 percent boost in the Pentagon budget, and for “dollar-for-dollar parity” between defense and non-defense increases to the discretionary budget. He can go a step further by actually proposing meaningful cuts to the Pentagon budget, like those outlined above. And he can go even further by proposing some responsible spending cuts on both sides of the ledger, shunning the newly popular notion that extreme deficits are okay for the country. For now, though, we have rising talk of “parity” on Capitol Hill. Taxpayers should beware, for choppy waters lie ahead.
Andrew Lautz is Director of Federal Policy for the National Taxpayers Union, where he promotes pro-taxpayer health, tax, and regulatory policy. Andrew also helps lead NTU's work on Pentagon spending, government transparency, and Congressional reform. Before joining NTU, Andrew conducted research for a number of political and issue advocacy campaigns. Follow him on Twitter @Andrew_Lautz
The revolutionary violence that swept Kyiv’s Maidan Square on the night of February 21, 2014 unleashed the forces of Ukrainian nationalism and, ultimately, Russian revanchism, and resulted in, among other things, the first full-scale land war in Europe since 1945.
President Volodymyr Zelensky has called the Maidan the “first victory” in Ukraine’s fight for independence from Russia. Yet too often lost in the tributes to Ukraine’s ‘Revolution of Dignity’ are two simple, though ramifying, questions: What was the Maidan really about? And did things have to turn out this way?
Revisiting the events of that time may help us more fully understand how we arrived at this fateful moment in world affairs.
So, what precipitated the Maidan Revolution?
In November 2013, Ukrainian President Victor Yanukovych rejected the terms of the European Union Association Agreement in favor of a $15 billion credit agreement offered by the Russian Federation. Many in the western part of Ukraine had supported the EU deal, as it would have, in their view, secured Ukraine’s future within Europe.
But, as the Europeans, Americans, Ukrainians and Russians knew full well, the association agreement with Brussels wasn’t merely a trade deal. Section 2.3 of the EU-Ukraine association agenda would have required the signatories to:
"...take measures to foster military cooperation and cooperation of technical character between the EU and Ukraine [and] encourage and facilitate direct cooperation on concrete activities, jointly identified by both sides, between relevant Ukrainian institutions and CFSP/CSDP agencies and bodies such as the European Defence Agency, the European Union Institute for Security Studies, the European Union Satellite Centre and the European Security and Defence College."
In other words, the trade deal also included the encouragement of military interoperability with forces viewed, rightly or wrongly, by the Russian government as a threat to Russian national security.
In addition, the EU association agenda required Ukraine to put up barriers to trade with Russia. An alternative proposal put forward by Romano Prodi (former Italian Prime Minister and EU Commission president) would have allowed Ukraine to trade with both Russia and the EU but was rejected by Brussels.
Yanukovych’s rejection of the EU agreement brought thousands of protesters to Kyiv’s Independence (Maidan) Square. Yet policy disagreements over issues of trade and national security can and are routinely adjudicated via democratic procedures, as they are in the U.S. and Europe. And such an adjudication was eminently possible, even as late as the morning of February 21, 2014, when a deal brokered by Russia and the EU was struck between Yanukovych and the Ukrainian opposition that included a revision of Ukraine's constitution, the creation of a unity government, and an early presidential election to be held 10 months later in December 2014.
But on the night of February 21, Yanukovych fled, and a new government was installed by voluntarist rather than democratic means. The immediate post-Maidan government included the far-right Svoboda Party, whose members, according to a contemporaneous Reuters report, held “five senior roles in Ukraine's new government including the post of deputy prime minister.”
Edmund Wilson once wrote that “it is all too easy to idealize a social upheaval which takes place in some other country than one’s own.” And that was a trap into which the Obama administration — along with almost the entirety of the American media, intelligentsia and think tank world — fell in the immediate aftermath of the Maidan.
It would be fair of critics of this view (and there are many) to ask: What were their alternatives to the Obama administration’s support for the Maidan and Kyiv’s post-revolutionary government?
Mr. Obama might have said “A deal was struck. Stick to it.” This would have required a degree of statesmanship unusual to any American president. But, as Eurasia Group president Ian Bremmer observed only a month later,
"...there was a deal that was cut with the European foreign ministers. That deal was abrogated and the Americans were very happy to jump on that immediately in ways that would have been completely unacceptable to anyone in the U.S. administration if we had been on the other side.”
And so, the U.S. lent its support to the post-Maidan government (and the Anti-Terrorist Operation, or ATO, launched in April 2014) against the largely, but of course far from entirely, indigenous uprising in the Donbas. Thus began the first phase of the war, which lasted until the evening of February 24, 2022 and cost 14,000 dead and 1.5 million refugees.
In addition to the ATO, Kyiv also pursued a policy of decommunization in the east (later cited by Putin as among his many grievances with post-Maidan Kyiv) and repeatedly refused to implement the Minsk Accords. As a former U.S. Ambassador to the USSR, Jack F. Matlock, noted in Responsible Statecraft, “The war might have been prevented — probably would have been prevented — if Ukraine had been willing to abide by the Minsk agreement, recognize the Donbas as an autonomous entity within Ukraine, avoid NATO military advisors, and pledge not to enter NATO."
The second phase of the war opened on the evening of February 24, 2022, as some 190,000 Russian troops invaded Ukraine. The costs to Ukraine have been staggering.
The World Economic Forum recently estimated that the cost of Ukrainian reconstruction will reach $1 trillion. Still more, “Approximately 20% of the country’s farmland has been wrecked and 30% of land either littered with landmines or unexploded ordnance.” Casualty estimates are known to be among the most closely held state secrets during wartime, but some, like former Ukraine prosecutor general Yuriy Lutsenko, have estimated Ukraine suffered a combined 500,000 dead and wounded in its war with Russia. Meanwhile, the population of Ukraine has plummeted from 45.5 million in 2013 to an estimated 37 million today.
Looking back, the warnings issued by a small minority in the winter of 2014, including, but not limited to: the present authors; Professor Stephen F. Cohen; The Quincy Institute’s Anatol Lieven; Ambassador Jack Matlock; Professor John J. Mearsheimer; and others were dismissed by the Obama administration, policymakers, the media and the most influential think tanks in Washington. Yet the effort to wrest Ukraine into the West’s orbit via revolutionary violence, despite the objections of fully a third of that country, has been nothing short of catastrophic.
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The German Bundeswehr ship "Hessen" sets sail on Feb. 8, 2024 from Wilhelmshaven to help protect merchant ships in the Red Sea against attacks by the Iranian-backed Houthi militia. (Reuters)
With no ceasefire in the war between Israel and Hamas in sight and Houthi forces in Yemen still firing missiles and drones at commercial shipping in the Red Sea, the EU’s efforts at addressing conflict in Gaza and its broader regional ramifications keep flailing.
After weeks of discussions, the EU officially launched its naval operation in the Red Sea on February 19 to protect international commercial shipping from Houthi attacks. The Houthis claim they wantto force a ceasefire in Gaza. Yet, while the ceasefire remains elusive, the attacks impose real costs on EU members: the EU commissioner for economy Paolo Gentiloni recently estimated that the rerouting of shipping from the Red Sea has increased delivery times for shipments between Asia and the EU by 10 to 15 days and the consequent costs by around 400%.
Around 40% of the EU’s total trade with the Middle East and Asia passes through the Red Sea.
Protecting that shipping route thus is an important collective economic and security interest for the EU. Yet only four countries — France, Germany, Italy and Belgium — out of the 27 member states have agreed to provide warships for the new operation. Spain, which refrained from using its veto power to block the initiative, nonetheless declined to participate, having expressed concerns from the outset that any armed operation would reduce pressure on Israel to agree to a ceasefire in Gaza.
A bigger question is how effective this new EU operation will be in countering the Houthi threat given its purely defensive mandate to provide “situational awareness, accompany vessels and protect them against possible attacks at sea.” Accordingly, the participating EU warships will be authorized to fire on Houthi targets only if they themselves or commercial vessels they are to protect are attacked. That rules out pre-emptive action against Houthi missile batteries or related targets.
The defensive nature of the operation, however, may not be enough to convince the Houthis to refrain from attacking the European ships. In fact, Houthi leaders warned Italy, one of the new operation’s chief promoters, that it will become “a target if it participates in attacks on the Houthis.”
If this threat comes to fruition, will the EU authorize offensive action against the Houthis, potentially drawing itself into a wider conflict? Will it rely on U.S. hard power for protection given that Washington is already engaged against the Houthis through “Operation Prosperity Guardian,” in which a few EU nations – Denmark, Netherlands and Greece, as well as non-EU NATO members Britain and Norway -- are also participating?
Would such developments not lead to a de facto merging of the U.S. and EU-led operations under Washington’s lead — an outcome Europeans sought to avoid and which is the very reason why they launched their own mission in the first place?
That these are not abstract questions is underscored by the failure, so far, of scores of U.S.- and UK-led strikes to degrade the Houthis’ capabilities to the point where they would no longer pose a significant threat. Indeed, just as the EU announced its mission, the Houthis hit a British cargo ship which was at risk of sinking in the Gulf of Aden in what the Yemeni rebels claimed was their biggest attack yet. The United Kingdom Maritime Trade Operations confirmed the incident, though it did not name the ship.
Ironically, the safest way for the EU to avoid a direct military engagement with the Houthis, apart from testing their vow to stop attacking shipping if Israel ends its Gaza offensive, would be to reduce the number of targets in the Red Sea by encouraging ships to reroute. But such an outcome would, of course, vindicate the Houthi strategy to impose costs on the Western powers for the failure to stop the war in Gaza.
And that brings us back to the mother of all conflicts in the Middle East: the continuing war in Gaza. The EU’s approach so far has been to delink Gaza from the crisis in the Red Sea and the broader escalation in the region, including clashes between Israel and Lebanon’s Hezbollah. Yet mounting tensions on that front show that its approach is not working.
Some actors in the EU understand the urgent need for a ceasefire in Gaza as a necessary condition for regional de-escalation. The EU high representative on foreign policy Josep Borrell has been particularly vocal in his criticism of Israel. He suggested limiting arms sales to Tel Aviv on the grounds that such transfers violate EU guidelines that ban sales to countries accused of violations of the international humanitarian law.
A Dutch appeals court recently ordered a halt to exports of F-35 jet parts to Israel on the same grounds. However, it is highly unlikely that the EU as a whole would adopt such a position, given that a number of countries – especially Germany, Austria, Czech Republic, Hungary – strongly support Israel.
A stronger point of leverage could be to suspend fully or partially the association agreement between the EU and Israel. The EU is Israel’s largest trading partner. In 2023, that agreement enabled 46.8 billion euros worth of bilateral trade. The prime ministers of Spain and Ireland, Pedro Sanchez and Leo Varadkar, respectively, asked the president of the European Commission, Ursula von der Leyen, to “urgently review” whether Israel is violating the human rights clauses included in that agreement. On February 19, the Spanish foreign minister, Jose Manuel Albares, insisted that the review should be completed in time for the next EU foreign ministers meeting on March 18.
A full suspension of the agreement seems very unlikely even if the Commission finds Israel to have violated its human rights obligations because that would call for a unanimous decision by all member states. A partial suspension would require a qualified majority: 55% of member states (or 15 out of 27) representing 65% of the EU’s total population.
Notably, the only precedent for taking such an action came in 2011 when the EU suspended an association agreement with Syria in response to mass violations of human rights by the Bashar al-Assad regime.
Meanwhile, the EU proved unable last week to issue even an official appeal to Israel not to follow through with its plans to carry out a ground invasion of Rafah, the southernmost city in Gaza, which has become the last refuge of nearly a million refugees from elsewhere in the enclave. In the face of a veto threat by Hungary, the other 26 member states instead issued a joint statement warning of the catastrophic humanitarian consequences should Israel move ahead with such an invasion.
Notably, however, Hungary was isolated in its opposition to the appeal as Germany and other member states that have traditionally been reluctant to criticize Israel’s conduct of war were on board. That is a step forward, but it’s too little and it comes too late. As long as the EU keeps avoiding imposing real consequences on Israel for its conduct, it will keep losing influence in the Middle East.
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Mike Shoemaker VP F35 customer programs, FMS, Domestic and Partners talks during the inauguration ceremony of Sabca's new production hall for the horizontal tailplane of the F-35 fighter aircraft, in Lummen, Thursday 10 March 2022. T BELGA PHOTO JOHN THYS.
Instead of reevaluating its maximalist national security strategy, the Biden administration is doubling down. It is proposing a generation of investment to expand an arms industry that, overall, fails to meet cost, schedule, and performance standards. And if its strategy is any indication, the administration has no vision for how to eventually reduce U.S. military industrial capacity.
When the Cold War ended, the national security budget shrank. Then-Secretary of Defense Les Aspin and deputy William Perry convened industry leaders to encourage their consolidation in a meeting that later became known as the “Last Supper.” Arms makers were to join forces or go out of business. So they ended up downsizing from over 50 prime contractors to just five. And while contractors needed to pare down their industrial capacity, unchecked consolidation created the monopolistic defense sector we have now — one that depends heavily on government contracts and enjoys significant freedom to set prices.
In the decades since, contractors have leveraged their growing economic power to pave inroads on Capitol Hill. They have solidified their economic influence to stave off the political potential for future national security cuts, regardless of their performance or the geopolitical environment.
Growing the military industrial base over the course of a generation would only further empower arms makers in our economy, deepening the ditch the United States has dug itself into for decades by continually increasing national security spending — and by doling about half of it out to contractors. The U.S. spends more on national security than the next 10 countries combined, outpacing China alone by over 30%.
Ironically, the administration acknowledges in the strategy that “America’s economic security and national security are mutually reinforcing,” stating that “the nation’s military strength depends in part on our overall economic strength.” The strategy further states that optimizing the nation’s defense needs typically requires tradeoffs between “cost, speed, and scale.” It doesn’t mention quality of industrial output — arguably the biggest tradeoff the U.S. government has made in military procurement.
Consider, for instance, the B-2 bomber, the F-35 fighter jet, the Littoral Combat Ship, the V-22 Osprey, and many other examples of acquisition failures that have spanned decades. More recently, the Government Accountability Office has reported that while the number of major defense acquisition programs has fallen, both costs and average delivery time have risen.
So what is the military really getting from more and more national security spending? Less for more: Fewer weapons than it asked for, usually late and over budget, and, much of the time, dysfunctional. Acquisition failures are a major reason the Congressional Budget Office projects that operations and maintenance spending will significantly exceed the rate of inflation for the next decade — a considerable budgeting issue for a military that seemingly has no plans to reduce either its force structure or its industrial capacity. Quite the opposite, in fact.
Biden’s new National Defense Industrial Strategy specifically states there is a need for the U.S. to “move aggressively toward innovative, next-generation capabilities while continuing to upgrade and produce, in significant volumes, conventional weapons systems already in the force.” Ironically, the military has spent over two decades developing the F-35, next-generation technology that the Pentagon still hasn’t greenlit for full-rate production.
Throwing more money at an industrial base comprised of businesses too big to fail won’t increase the quantity or quality of its output. But that’s exactly what the strategy urges. One of the priorities is to “institutionalize supply chain resilience.” It’s an important goal, but one the administration proposes the Pentagon tackle, in part by investing in “spare production capacity,” what the strategy defines as “excess capacity a company or organization maintains beyond its current production needs.”
But building factories to sit empty is not supply chain resilience. It’s wasting money on unnecessary infrastructure, creating a profit motive for arms makers to make more weapons. And for an industry constantly sounding the alarm about the need for consistent “demand signals” from Congress, the Pentagon’s plans to invest a generation of U.S. taxpayer money in “spare production capacity” sounds a lot like throwing the demand-supply principle out the window. In that case, the U.S. might as well consider nationalizing the defense industry, which already lacks competition and relies almost entirely on the government. Why not eliminate the profit motive? It’s not like making money drives contractors to produce quality products on time or within budget.
Besides supply chain resilience, another priority laid out in this strategy is “flexible acquisition.” The stated goal is to reduce costs and development times while increasing scalability. In pursuit of that goal, the administration proposes “a flexible requirements process” for multiyear contracts, and the expansion of multiyear contracting writ large. It reasons that as priorities shift in an “evolving threat environment,” so too should contractors’ deliverables. But pairing flexible requirements with an increasing number of multiyear contracts is a recipe for disaster.
Before Russia attacked Ukraine, multiyear contracts were relatively rare — limited to major aircraft and ships. The Congressional Research Service notes that estimated savings on these programs have historically fallen within the range of 5% — 10%. But those are estimates, and they may not apply to other munitions now produced under multiyear contracts. The report also confirms that actual savings are “difficult to observe,” in part because the Pentagon does not track the cost performance of multiyear contracts.
Just because multiyear contracting is more common doesn’t mean it’s cheaper. And while the Pentagon argues that multiyear contracts give contractors the so-called demand signal they need to ramp up production, contractors don’t usually spend their extra money on identifying efficiencies or making capital investments to increase output at a lower cost — and the Pentagon isn’t checking.
The strategy also proposes “aggressive expansion of production capacity.” It notes that during peacetime, weapons acquisition tends to focus on “greater efficiency, cost effectiveness, transparency, and accountability.” Taking caution not to assert that the United States is in wartime, the strategy contrasts peacetime acquisition policy with “today’s threat environment,” calling for “crisis period acquisition policy” that revitalizes the industrial base and shifts focus from efficiency and effectiveness to ensuring that military contractors are “better resourced.” But contractors don’t have a resource problem, and “crisis acquisition policy” puts the United States on a “permanent war footing.”
Lawmakers must challenge the administration’s maximalist national security strategy by interrogating its push to expand military industrial capacity so drastically. It’s critical that they do, not only because the U.S. is limited in what it can produce and provide to other countries but also because arms industry greed is boundless — and without off-ramps or constraints, the U.S. government may find in 20 or 30 years that it’s in a ditch it can’t get out of.