By MANDY SMITHBERGER
One of the Pentagon's think tanks just came out with a report finding that defense spending made up 18 percent of Hawaii's 2009 GDP and was associated with 101,000 jobs. The report was produced by RAND's National Defense Research Institute, a Federally Funded Research and Development Center (FFRDC), in cooperation with the Hawaii Institute of Public Affairs and the Chamber of Commerce of Hawaii, and was sponsored by the Office of the Secretary of Defense at the Pentagon--which is to say, taxpayers foot the bill.
The Chamber of Commerce of Hawaii Military Affairs Council and The Hawaii Institute For Public Affairs hosted a $35-a-ticket-event for the report co-sponsored by defense contractor BAE Systems yesterday. The question is, should taxpayers around the country be paying for research for the Hawaii Chamber of Commerce?
FFRDCs like RAND typically produce research on larger strategic questions and issues, with the idea of producing high quality, unbiased analysis for Pentagon decision-makers. There have been conflict of interest problems in the past (some quite notable), but generally speaking, the Pentagon loves them, and the Pentagon's head of Acquisition has encouraged using them more to increase efficiencies. RAND specifically has produced numerous reports on military budgets and defense spending, including a report on the impacts of defense spending on the civilian economy. But it appears that a report that is specific to the economy of one state is rare, if not unprecedented.
But did it take a RAND study to figure out that defense spending played a significant role in the state's economy? The study confirms what many economists already suspected. Hawaii received $195.8 million in earmarks in the FY2010 Defense bill, according to Taxpayers for Common Sense's earmark database--and wins more earmark dollars per capita than any other state (no doubt due in part to Hawaii Senator Daniel Inouye sitting on the Senate Appropriations Committee). Moreover, it's not clear how this report serves national security interests, or why it had to be performed by RAND.
As the Pentagon and Congress continue to consider cost-cutting measures, it may be worth further scrutiny of how FFRDCs use taxpayer resources. The House's version of the Defense Appropriations bill reduced FFRDC spending by $125 million and has prohibited creating new defense FFRDCs.
Mandy Smithberger is a POGO Investigator.
Image credit: Martha Hernandez and The Honolulu Star-Advertiser