On June 3rd, President Joe Biden signed a bill into law that lifted the government’s debt ceiling and capped some categories of government spending. The big winner was — surprise, surprise! — the Pentagon.
Congress spared military-related programs any cuts while freezing all other categories of discretionary spending at the fiscal year 2023 level (except support for veterans). Indeed, lawmakers set the budget for the Pentagon and for other national security programs like nuclear-related work developing nuclear warheads at the Department of Energy at the level requested in the administration’s Fiscal Year 2024 budget proposal — a 3.3% increase in military spending to a whopping total of $886 billion. Consider that preferential treatment of the first order and, mind you, for the only government agency that’s failed to pass a single financial audit!
Even so, that $886 billion hike in Pentagon and related spending is likely to prove just a floor, not a ceiling, on what will be allocated for “national defense” next year. An analysis of the deal by the Wall Street Journal found that spending on the Pentagon and veterans’ care — neither of which is frozen in the agreement — is likely to pass $1 trillion next year.
Compare that to the $637 billion left for the rest of the government’s discretionary budget. In other words, public health, environmental protection, housing, transportation, and almost everything else the government undertakes will have to make do with not even 45% of the federal government’s discretionary budget, less than what would be needed to keep up with inflation. (Forget addressing unmet needs in this country.)
And count on one thing: national security spending is likely to increase even more, thanks to a huge (if little-noticed) loophole in that budget deal, one that hawks in Congress are already salivating over how best to exploit. Yes, that loophole is easy to miss, given the bureaucratese used to explain it, but its potential impact on soaring military budgets couldn’t be clearer. In its analysis of the budget deal, the Congressional Budget Office noted that “funding designated as an emergency requirement or for overseas contingency operations would not be constrained” by anything the senators and House congressional representatives had agreed to.
As we should have learned from the 20 years of all-American wars in Afghanistan and Iraq, the term “overseas contingency” can be stretched to cover almost anything the Pentagon wants to spend your tax dollars on. In fact, there was even an “Overseas Contingency Operations” (OCO) account supposedly reserved for funding this country’s seemingly never-ending post-9/11 wars. And it certainly was used to fund them, but hundreds of billions of dollars of Pentagon projects that had nothing to do with the conflicts in Iraq or Afghanistan were funded that way as well. The critics of Pentagon overspending quickly dubbed it that department’s “slush fund.”
So, prepare yourself for “Slush Fund II” (coming soon to a theater near you). This time the vehicle for padding the Pentagon budget is likely to be the next military aid package for Ukraine, which will likely be put forward as an emergency bill later this year. Expect that package to include not only aid to help Ukraine fend off Russia’s ongoing brutal invasion but tens of billions of dollars more to — yes, of course! — pump up the Pentagon’s already bloated budget.
Senator Lindsey Graham (R-SC) made just such a point in talking with reporters shortly after the debt-ceiling deal was passed by Congress. “There will be a day before too long,” he told them, “where we’ll have to deal with the Ukrainian situation. And that will create an opportunity for me and others to fill in the deficiencies that exist from this budget deal.”
Senate Majority Leader Chuck Schumer (D-NY) made a similar point in a statement on the Senate floor during the debate over that deal. “The debt ceiling deal,” he said, “does nothing to limit the Senate’s ability to appropriate emergency/supplemental funds to ensure our military capabilities are sufficient to deter China, Russia, and our other adversaries and respond to ongoing and growing national security threats.”
One potential (and surprising) snag in the future plans of those Pentagon budget boosters in both parties may be the position of House Speaker Kevin McCarthy (R-CA). He has, in fact, described efforts to increase Pentagon spending beyond the level set in the recent budget deal as “part of the problem.” For the moment at least, he openly opposes producing an emergency package to increase the Pentagon budget, saying:
“The last five audits the Department of Defense [have] failed. So there’s a lot of places for reform [where] we can have a lot of savings. We’ve plussed it up. This is the most money we’ve ever spent on defense — this is the most money anyone in the world has ever spent on defense. So I don’t think the first answer is to do a supplemental.”
The Massive Overfunding of the Pentagon
The Department of Defense is, of course, already massively overfunded. That $886 billion figure is among the highest ever — hundreds of billions of dollars more than at the peak of the Korean or Vietnam wars or during the most intensely combative years of the Cold War. It’s higher than the combined military budgets of the next 10 countries combined, most of whom are, in any case, U.S. allies. And it’s estimated to be three times what the Chinese military, the Pentagon’s “pacing threat,” receives annually. Consider it an irony that actually “keeping pace” with China would involve a massive cut in military spending, not an increase in the Pentagon’s bloated budget.
It also should go without saying that preparations to effectively defend the United States and its allies could be achieved for so much less than is currently lavished on the Pentagon. A new approach could easily save significantly more than $100 billion in fiscal year 2024, as proposed by Representatives Barbara Lee (D-CA) and Mark Pocan (D-WI) in the People Over Pentagon Act, the preeminent budget-cut proposal in Congress. An illustrative report released by the Congressional Budget Office (CBO) in late 2021 sketched out three scenarios, all involving a less interventionist, more restrained approach to defense that would include greater reliance on allies. Each option would reduce America’s 1.3-million-strong active military force (by up to one-fifth in one scenario). Total savings from the CBO’s proposed changes would, over a decade, be $1 trillion.
And a more comprehensive approach that shifted away from the current “cover the globe” strategy of being able to fight (though, as the history of this century shows, not always win) wars virtually anywhere on Earth on short notice — without allies, if necessary — could save hundreds of billions more over the next decade. Cutting bureaucracy and making other changes in defense policy could also yield yet more savings. To cite just two examples, reducing the Pentagon’s cohort of more than half-a-million private contract employees and scaling back its nuclear weapons “modernization” program would save significantly more than $300 billion extra over a decade.
But none of this is even remotely likely without concerted public pressure to, as a start, keep members of Congress from adding tens of billions of dollars in spending on parochial military projects that channel funding into their states or districts. And it would also mean pushing back against the propaganda of Pentagon contractors who claim they need ever more money to provide adequate tools to defend the country.
Contractors Crying Wolf
While demanding ever more of our tax dollars, the giant military-industrial corporations are spending all too much of their time simply stuffing the pockets of their shareholders rather than investing in the tools needed to actually defend this country. A recent Department of Defense report found that, from 2010-2019, such companies increased by 73% over the previous decade what they paid their shareholders. Meanwhile, their investment in research, development, and capital assets declined significantly. Still, such corporations claim that, without further Pentagon funding, they can’t afford to invest enough in their businesses to meet future national security challenges, which include ramping up weapons production to provide arms for Ukraine.
In reality, however, the financial data suggests that they simply chose to reward their shareholders over everything and everyone else, even as they experienced steadily improving profit margins and cash generation. In fact, the report pointed out that those companies “generate substantial amounts of cash beyond their needs for operations or capital investment.” So instead of investing further in their businesses, they choose to eat their “seed corn” by prioritizing short-term gains over long-term investments and by “investing” additional profits in their shareholders. And when you eat your seed corn, you have nothing left to plant next year.
Never fear, though, since Congress seems eternally prepared to bail them out. Their businesses, in fact, continue to thrive because Congress authorizes funding for the Pentagon to repeatedly grant them massive contracts, no matter their performance or lack of internal investment. No other industry could get away with such maximalist thinking.
Military contractors outperform similarly sized companies in non-defense industries in eight out of nine key financial metrics — including higher total returns to shareholders (a category where they leave much of the rest of the S&P 500 in the dust). They financially outshine their commercial counterparts for two obvious reasons: first, the government subsidizes so many of their costs; second, the weapons industry is so concentrated that its major firms have little or no competition.
Adding insult to injury, contractors are overcharging the government for the basic weaponry they produce while they rake in cash to enrich their shareholders. In the past 15 years, the Pentagon’s internal watchdog has exposed price gouging by contractors ranging from Boeing and Lockheed Martin to lesser-known companies like TransDigm Group. In 2011, Boeing made about $13 million in excess profits by overcharging the Army for 18 spare parts used in Apache and Chinook helicopters. To put that in perspective, the Army paid $1,678.61 each for a tiny helicopter part that the Pentagon already had in stock at its own warehouse for only $7.71.
The Pentagon found Lockheed Martin and Boeing price gouging together in 2015. They overcharged the military by “hundreds of millions of dollars” for missiles. TransDigm similarly made $16 million by overcharging for spare parts between 2015 and 2017 and even more in the following two years, generating nearly $21 million in excess profits. If you can believe it, there is no legal requirement for such companies to refund the government if they’re exposed for price gouging.
Of course, there’s nothing new about such corporate price gouging, nor is it unique to the arms industry. But it’s especially egregious there, given how heavily the major military contractors depend on the government’s business. Lockheed Martin, the biggest of them, got a staggering 73% of its $66 billion in net sales from the government in 2022. Boeing, which does far more commercial business, still generated 40% of its revenue from the government that year. (Down from 51% in 2020.)
Despite their reliance on government contracts, companies like Boeing seem to be doubling down on practices that often lead to price gouging. According to Bloomberg News, between 2020 and 2021, Boeing refused to provide the Pentagon with certified cost and pricing data for nearly 11,000 spare parts on a single Air Force contract. Senator Elizabeth Warren (D-MA) and Representative John Garamendi (D-CA) have demanded that the Pentagon investigate since, without such information, the department will continue to be hard-pressed to ensure that it’s paying anything like a fair price, whatever its purchases.
Curbing the Special Interest Politics of “Defense”
Reining in rip-offs and corruption on the part of weapons contractors large and small could save the American taxpayer untold billions of dollars. And curbing special-interest politics on the part of the denizens of the military-industrial-congressional complex (MICC) could help open the way towards the development of a truly defensive global military strategy rather than the current interventionist approach that has embroiled the United States in the devastating and counterproductive wars of this century.
One modest step towards reining in the power of the arms lobby would be to revamp the campaign finance system by providing federal matching funds, thereby diluting the influential nature of the tens of millions in campaign contributions the arms industry makes every election cycle. In addition, prohibiting retiring top military officers from going to work for arms-making companies — or, at least, extending the cooling off period to at least four years before they can do so, as proposed by Senator Warren — would also help reduce the undue influence exerted by the MICC.
Last but not least, steps could be taken to prevent the military services from giving Congress their annual wish lists — officially known as “unfunded priorities lists” — of items they want added to the Pentagon budget. After all, those are but another tool allowing members of Congress to add billions more than what the Pentagon has even asked for to that department’s budget.
Whether such reforms alone, if adopted, would be enough to truly roll back excess Pentagon spending remains to be seen. Without them, however, count on one thing: the department’s budget will almost certainly continue to soar, undoubtedly reaching $1 trillion or more annually within just the next few years. Americans can’t afford to let that happen.
This piece has been republished with permission from TomDispatch.
Julia Gledhill is an analyst in the Center for Defense Information at the Project on Government Oversight. Before joining POGO, she was a foreign policy associate at the Friends Committee on National Legislation.
MUNICH, GERMANY — If U.S. Vice President Kamala Harris dominated the first day of the Munich Security Conference with her remarks, today it was German Chancellor Olaf Scholz’s and Ukrainian President Volodymyr Zelensky’s turn.
It was not only Zelensky who understandably devoted his whole speech to the Ukraine War but also Scholz, too. The German Chancellor, while boasting that his country will devote 2% of its GDP to defense expenditures this year, remarked that “we Europeans need to do much more for our security now and in the future.”
In a brief but clear reference to Trump’s recent statements on NATO, Scholz said, "any relativization of NATO’s mutual defense guarantee will only benefit those who, just like Putin, want to weaken us.” On the guns and butter debate, which is particularly relevant in Germany due to negligible economic growth, Scholz acknowledged that critical voices are saying, “should not we be using the money for other things?” But he chose not to engage in this debate, noting instead that “Moscow is fanning the flames of such doubts with targeted disinformation campaigns and with propaganda on social media.”
The Russian capture of the city represents the most significant defeat for Ukraine since the failure of its counter-offensive last year. On the loss of Avdiivka, Zelensky said that Ukraine had lost one soldier for every seven soldiers who have died on the Russian side. This, however, is difficult to reconcile with the reports about the rushed Ukrainian retreat, with a Ukrainian soldier explaining that “the road to Avdiivka is littered with our corpses.”
Throughout his speech, Zelensky repeatedly referred to the importance of defending what he called the “rules-based world order” by defeating Russia. If there was one take-away that Zelensky wanted impressed on this audience: “Please do not ask Ukraine when the war will end. Ask yourself why is Putin still able to continue it.”
He also seemed to suggest that it was not a lack of available weapons and artillery but a willingness to give them over to Ukraine. “Dear friends, unfortunately keeping Ukraine in the artificial deficit of weapons, particularly in deficit of artillery and long-range capabilities, allows Putin to adapt to the current intensity of the war,” Zelenskyy said. “The self-weakening of democracy over time undermines our joint results.”
The future of NATO was one of the main topics of the day. European leaders were in agreement that Europe needs to spend more on defense, and occasionally appeared to compete with each other on who has spent the most on weapons delivered to Ukraine or in their national defense budgets.
With NATO Secretary General Jens Stoltenberg in attendance, one of the panels featured two of the most talked-about names to replace the Norwegian politician in the 75th-anniversary summit in Washington in July: EU Commission President Ursula von der Leyen and caretaker Dutch Prime Minister Mark Rutte. According to a report by the German newspaper Welt am Sonntag, President Joseph Biden and his Secretary of State Anthony Blinken favor the German leader, but in Paris, London, and Berlin, the Dutch politician is preferred.
The participation of the Netherlands in the initial U.S.-UK joint strikes against Houthi positions in Yemen on Jan. 11 was read in some quarters as a sign of Rutte’s ambitions. The Netherlands was the only EU country to join these initial attacks.
A G7 meeting of foreign ministers also took place Saturday on the sidelines of the conference. In a press briefing that followed, Italian Foreign Minister Antonio Tajani — who currently presides the G7 — reiterated the group’s support for Ukraine. The current situation in the Red Sea, as is often the case in the West, was presented by Tajani as a topic divorced from the Gaza Strip. The Houthis started their campaign against ships in the Red Sea after the beginning of the war in Gaza, claiming they want to force an end to the conflict.
There is no certainty that the end of the war in Gaza would put an end to Houthi attacks, but presenting the situation in the Red Sea as being nothing but a threat to freedom of trade is considered by experts to be a a myopic approach.
Nevertheless, Italy will be in command of the new EU naval mission ASPIDES, to be deployed soon in the Red Sea. The mission is expected to be approved by the next meeting of EU foreign affairs ministers on Monday. When asked whether he could ensure that ASPIDES would remain a defensive mission, the Italian Foreign Minister said ASPIDES aims at defending merchant ships and that if drones or missiles are launched, they will be shot down, but no attacks will be conducted.
Marc Martorell Junyent is in Munich, covering the conference for Responsible Statecraft this weekend. This story is developing and is being updated.
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Vice President Kamala Harris at the Munich Security Conference, Feb. 16, 2024. (Lukas Barth-Tuttas/MSC)
MUNICH, GERMANY – The 60th year of the Munich Security Conference opened today with much of the early energy surrounding remarks by Vice President Kamala Harris.
The vice president noted that it was nearly two years since the beginning of Russia’s invasion of Ukraine on Feb. 24, 2022. She said that when Putin unleashed his troops along different fronts in February 2022, “many thought Kyiv would fall within a day.” It is also true, as she pointed out, that “Ukraine has regained more than half the territory Russia occupied at the start of the conflict.” (Russia held about 7% before the invasion, 27% right after, and about 18% today.)
However, by choosing the first months of the war as the starting point of her speech, Harris sought to avoid the obvious. Namely, that in the year that has gone by since her last visit to Munich, the Ukrainian army has been losing ground. Yet, her remarks regarding Ukraine today did not differ much from her speech in 2023.
Harris seemed dedicated to keeping to the administration’s recent script, which is warning against heralding in a new era of “isolationism,” referring to President Biden's likely presidential election opponent, Donald Trump.
As president Biden and I have made clear over the past three years, we are committed to pursue global engagement, to uphold international rules and norms, to defend democratic values at home and abroad, and to work with our allies and partners in pursuit of shared goals.
As I travel throughout my country and the world, it is clear to me: this approach makes America strong. And it keeps Americans safe.
Interestingly, the U.S. has been accused of thwarting "international rules and norms" in its unconditional support of Israel’s war on Gaza, which has killed upwards of 29,000 Palestinians, mostly of them civilians, since Hamas’s Oct. 7 invasion of Israel and hostage-taking. Christoph Heusgen, the chairman of the Munich Security Conference, asked Harris whether a two-state solution for Israel and Palestine was achievable. Harris answered that “the short answer is yes… but we must then put the discussion in context, starting with October 7.” Not 1948, not 1967, but October 7, 2023.
Her prepared remarks on the situation were very brief, overall, saying:
In the Middle East, we are working to end the conflict that Hamas triggered on October 7th as soon as possible and ensure it ends in a way where Israel is secure, hostages are released, the humanitarian crisis is resolved, Hamas does not control Gaza, and Palestinians can enjoy their right to security, dignity, freedom, and self-determination.
This work — while we also work to counter aggression from Iran and its proxies, prevent regional escalation, and promote regional integration.
October 7 was the topic of a conference side event hosted by Brigadier-General Gal Hirsch, Israel’s Coordinator for Hostages and Missing. In his opening speech, he called for a Global War on Kidnapping inspired by George Bush’s War on Terror. Hirsch was short on the specifics, and Israeli foreign minister Israel Katz did not develop the concept further when he followed Hirsch at the podium. During the event, several hostages released during the short ceasefire between Israel and Hamas in November 2023 described their harrowing experiences in captivity. Relatives of the remaining hostages accompanied them.
Meanwhile, in a morning event, German Finance Minister Christian Lindner and Greek Prime Minister Kyriakos Mitsotakis discussed how to increase defense spending in a time of economic stagnation. Mitsotakis, whose country has always spent significantly more than the expected 2% of the GDP required by NATO, stated that defense policy cannot be done on a budget. Lindner, meanwhile, remarked that Germany is on the way to spending 2% of its GDP on defense. Economic prosperity, the German Liberal minister noted, should avoid tradeoffs between social and defense policies. This is certainly a difficult equation to square since the German government just announced it was reviewing its forecast for GDP growth in 2024 from 1.3% down to 0.2%.
Marc Martorell Junyent is in Munich, covering the conference for Responsible Statecraft this weekend. This story is developing.
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Handout photo shows US President Joe Biden (C-R) and Ukraine's President Volodymyr Zelensky (C-L) take part in a bilateral meeting, on the final day of a three-day G-7 summit in Hiroshima, Japan, on May 21, 2023. The final day of the three-day of the Group of Seven leaders' summit is under way in the western Japan city of Hiroshima, with focus on Ukrainian President Volodymyr Zelensky and his talks with international leaders. Photo by Ukrainian Presidency via ABACAPRESS.COM
Roughly 70% of Americans want the Biden administration to push Ukraine toward a negotiated peace with Russia as soon as possible, according to a new survey from the Harris Poll and the Quincy Institute, which publishes Responsible Statecraft.
Support for negotiations remained high when respondents were told such a move would include compromises by all parties, with two out of three respondents saying the U.S. should still pursue talks despite potential downsides. The survey shows a nine-point jump from a poll in late 2022 that surveyed likely voters. In that poll, 57% of respondents said they backed talks that would involve compromises.
The new data suggests that U.S. government policy toward the Ukraine war is increasingly out of step with public opinion on the eve of the second anniversary of Russia’s full-scale invasion.
“Americans’ strong support for U.S. diplomatic efforts to end Russia’s invasion of Ukraine stands in stark contrast to Washington’s reluctance to use its considerable leverage to get Kyiv and Moscow to the negotiating table and end this war,” said George Beebe, the director of grand strategy at the Quincy Institute.
The Biden administration has publicly rejected the idea of negotiating an end to the war with Russia, with U.S. officials saying that they are prepared to back Ukraine “as long as it takes” to achieve the country’s goal of ejecting Russian troops from all of its territory, including Crimea.
Just this week, Russian sources told Reuters that the U.S. declined a Kremlin offer to pursue a ceasefire along the current frontlines in conversations held in late 2023 and early 2024, including a round of unofficial talks in Turkey.
U.S. officials denied the claim, saying there was no “official contact” between Moscow and Washington on the issue and that the U.S. would only agree to negotiations involving Ukraine. Reuters’ Russian sources claimed that American officials said they did not want to pressure Kyiv into talks.
The Harris/Quincy Institute poll involved an online survey of 2,090 American adults from Feb. 8 to 12. The results are weighted to ensure a representative sample of the U.S. population. The margin of error is 2.5% using a 95% confidence level.
As the House weighs whether to approve new aid for Ukraine, 48% of respondents said they support new funding as long as it is conditioned on progress toward a diplomatic solution to the war. Others disagreed over whether the U.S. should halt all aid (30%) or continue funding without specific conditions (22%).
This question revealed a sharp partisan divide on whether to continue Ukraine funding in any form. Fully 46% of Republicans favor an immediate shutoff of the aid spigot, as compared to 17% of Democrats.
Meanwhile, 54% of Democrats and 40% of Republicans favored conditioning aid on diplomatic talks. “The American people seem more clear-eyed than Washington in recognizing the urgent need to pair aid for Ukraine’s defense with a diplomatic offensive,” Beebe argued.
The poll also showed that most Americans expect the war to drag into at least 2025. Only 16% of respondents thought the war would end this year. Others were evenly split on how long the war might last, with 46% expecting it to be resolved before the end of 2026 and 38% saying there is no end in sight.