The Project On Government Oversight (POGO) Blog

CATO Study: Reshaping the Pentagon Budget Won't Negatively Impact on the Economy

A recent study by Benjamin Zycher from the libertarian think tank the CATO Institute reaffirms what we’ve been saying all along: Cutting Pentagon spending will not cause the economic nightmare or job loss catastrophe the defense industry wants us to fear.

In addition to CATO, other right-leaning analysts, advocates, and politicians have also been vocally challenging the narrative that defense spending must not be decreased. Grover Norquist, president of Americans for Tax Reform, recently pledged to fight any efforts to divert tax reform revenues toward an increase in Pentagon spending or avoiding across-the-board budget cuts, known as sequestration. Rep. Roscoe Bartlett (R-Md.), a senior Republican on the House Armed Services Committee, has called for a national dialogue on sequestration, recognizing that “the average American out there, by big percentages, wants to cut defense by twice the sequester amount.”

This debate isn’t about which side of the aisle you are on—we can all recognize that national security is rooted in economic security. And in fact, Zycher finds that a reduction in defense outlays could actually result in significant economic gains down the road.

Defense Contractor Time Machine: Less Spending, More Jobs, Analysis Reveals

By BEN FREEMAN, Ph.D

For nearly a year, defense contractors have been arguing that potential cuts in Pentagon spending could have a devastating effect on jobs. If military spending is cut via the sequestration mechanism outlined in last year’s Budget Control Act, more than 1 million jobs could be lost, an industry group has argued. The North Carolina News and Observer reported that Sen. Lindsey Graham (R-S.C.) told a Fayetteville, N.C. audience on July 30 that the impact of sequestration on employment would be so severe that it “would be like every major employer in my home state closing down at one time or cutting their business in half.”

Or would it?

According to the Congressional Budget Office, if the sequestration axe falls, the Department of Defense's base budget would still be larger than it was in 2006 (adjusting for inflation).

And, at the end of 2006, according to an analysis by the Project On Government Oversight, the nation’s five top defense contractors employed more people than they did at the end of 2011.

At the end of 2006, the five companies employed a total of 577,200 people, according to reports they filed with the Securities and Exchange Commission. That was slightly more than the 520,900 they reported at the end of 2011.

Audit the Pentagon: POGO Applauds New Bipartisan Initiative

By ANGELA CANTERBURY and SUZANNE DERSHOWITZ

Although the Pentagon budget has ballooned by billions in the past decade, it can’t even produce a basic financial statement. But last week, Sen. Tom Coburn (R-Okla.) and a bipartisan band of senators introduced a bill to fix this outrage and increase accountability at the Pentagon.

The “Audit the Pentagon Act” (S. 3487) would create critical new enforcement mechanisms coupled with new incentives for the Pentagon to meet its audit schedule (full audit readiness is targeted for all Department of Defense financial statements by 2017). The Project On Government Oversight applauds this crucial step towards more accountability and oversight.

Explaining why this bill matters, Sen. Coburn said, “By failing to pass an audit, the Pentagon has undermined our national security. This bill ends the culture of ‘don’t ask, don’t tell’ budgeting within the Pentagon that says, ‘don’t ask us how we’re spending money because we can’t tell you.’”

House Takes Action on America's Call for Smarter Defense Spending

Good news from the Hill! Thursday, the U.S. House of Representatives finally listened to growing bipartisan support for putting a stop to runaway Pentagon spending.

In a 247-167 vote, members passed an amendment that freezes Pentagon spending at current levels, except for military personnel, the Defense Health Program, and the overseas contingency operations. It cuts $1.1 billion from the defense budget authorized by the House Armed Services Committee.

The passage of this amendment comes on the heels of a letter the Project On Government Oversight sent on Wednesday supporting the bill. The letter was signed by groups as ideologically diverse as the Tea Party and CODEPINK.

“The vote represents a critical turning point in Congressional spending trends and a show of unified support for reform not seen in many years,” POGO Executive Director Danielle Brian said. “The American people expect better. The message was delivered loud and clear.” 

Spending Measure with Support from the Left and Right: Freeze the Pentagon Budget

By SUZANNE DERSHOWITZ and ANGELA CANTERBURY

The financial crisis has forced many Americans to tighten their belts, but the Pentagon budget continues to grow unchecked. This week, the House is considering a defense appropriations bill (H.R. 5856) that proposes spending $3.1 billion more than the military requested, which is between $6 and $8 billion more than the current spending caps. But Representatives Mick Mulvaney (R-S.C.) and Barney Frank, (D-Mass.) are offering an amendment to freeze base Pentagon spending at current levels (Fiscal Year 2012 level of $518 billion).

Today POGO and 25 allies as ideologically diverse as CODEPINK and Tea Party WDC sent a letter to House Representatives urging them to stand by their commitments to pare down the bloated military budget, by supporting the Mulvaney-Frank Amendment and proposals for even deeper cuts. It’s not every day these organizations agree on legislative proposals, but that gives you an idea of just how broad the support is for reining in runaway Pentagon spending. At a time when federal spending is being slashed across the board, this amendment would reduce the Pentagon budget by a modest $1.1 billion—which would, at the very least, halt unnecessary acceleration.

We also support the cuts proposed by Reps. Barbara Lee (D-Calif.) to bring the appropriations bill in line with the spending caps Congress already agreed to in last year’s Budget Control Act. The Lee Amendment #138, which has bipartisan support, would reduce the Pentagon budget by $7.6 billion..  But this isn’t even as far as most Americans would go. According to a recent Stimson Center study, the majority of Americans support much deeper cuts to the defense budget— by 18 percent or $103.5 billion.

Reining in Wasteful Defense Spending: End of the World as We Know It? Or Common Sense?

 

(Click image to see larger version.)

 

The Mayan calendar implies that the world is going to end this December—but the defense industry seems to be holding out for Jan. 2. That’s when the Department of Defense will start getting hit by about $500 billion in across-the-board cuts (also known as "sequestration"), spread out over the next decade (unless Congress manages to intervene.)

Listening to the big contractors, you’d think sequestration was the first sign of the apocalypse. Defense Secretary Leon Panetta has called the cuts a “doomsday scenario.” And collectively, the top five U.S. defense contractors have already ramped up their spending on lobbying by 11.5 percent compared to last year, according to NextGov.

Lockheed Martin, the largest U.S. defense contractor, is also threatening to lay off thousands upon thousands of workers, a move that experts—including Project On Government Oversight national security expert Ben Freeman—are calling a “political stunt” intended to push Congress to act.

Spending Even Less, Spending Even Smarter: Updated Recommendations for Nearly $700 Billion in National Security Savings

By SUZANNE DERSHOWITZ

Today the Project On Government Oversight (POGO) and Taxpayers for Common Sense (TCS) released updated recommendations for reducing wasteful national security spending. After analyzing the proposed national security budget, we crunched the latest numbers and this time our recs would reduce the deficit by nearly $700 billion from fiscal year (FY) 2013 to 2022—even more savings than before.

The House Armed Services Committee will mark up the National Defense Authorization Act (NDAA) for fiscal year (FY) 2013 tomorrow, and the Senate markup is scheduled for the week of May 21.

Now that U.S. military presence in Iraq and Afghanistan is drawing down, it is clear that any serious proposal to diminish the U.S. deficit must include cuts to the national security budget.  According to the White House Office of Management and Budget (OMB), current national security spending is higher than at any point during the Cold War and accounts for more than half of all discretionary spending. Military spending at the Department of Defense (DoD) has nearly doubled since the wars in Iraq and Afghanistan began.

Our recommendations for smarter spending center on cutting flawed, costly weapons systems, canceling or delaying nuclear programs we don’t need, and limiting out-of-control contract spending. We found cheaper yet equally effective alternatives that won’t risk U.S. security. Read on for a rundown of the highlights.

Paul Ryan's Profligate Pentagon Plan

By BEN FREEMAN

House Budget Committee Chairman Paul Ryan (R-WI) unveiled his fiscal year 2013 budget this morning, which, as The Hill writes, "would shield the Pentagon from nearly $500 billion in automatic cuts and roll back some of the $487 billion reduction approved in last year’s Budget Control Act." This budget ignores what many in Ryan’s own party have known for years: the Pentagon is wasting billions of taxpayer dollars.

Ryan’s argument that sequestration would be "devastating", or would lead to a "hollowing out of our military," as Buck McKeon (R-CA) claimed, simply aren't true.

The Congressional Research Service debunked McKeon’s myth earlier this year, noting that “the use of the term ‘hollow force’ is inappropriate under present circumstances,” and while McKeon and Ryan won’t admit it, many of their Republican colleagues are well aware of the egregious waste and inefficiencies in the Pentagon bureaucracy.

Members of Congress Oppose Using Budget Gimmicks to Fund the Pentagon

By BEN FREEMAN

Overseas contingency operations (OCO) funds, which have been used to pay for the wars in Iraq and Afghanistan, should only be used to fund emergency military operations, according to a recent letter from six Republican Representatives to the House Appropriations Committee.

“Any gimmicks that would shift regular, base budget functions into OCO accounts would distort any potential spending cuts and do nothing to address the debt crisis we are still facing,” write the letter’s signatories, which according to Inside Defense are Representatives Jeff Flake (R-AZ), Jim Jordan (R-OH), Tom McClintock (R-CA), Mick Mulvaney (R-SC), John Campbell (R-CA) and Scott Garrett (R-NJ).

This shifting of funds from base budgets to OCO is a way for lawmakers to avoid the caps on discretionary spending resulting from last August’s debt ceiling bill because the OCO budget, unlike base budgets, is not capped.

Markey Introduces Aptly Named SANE Act to Curtail Wasteful Nuke Spending

By MIA STEINLE

We've said it before: over 20 years after the fall of the Soviet Union, U.S. nuclear defense still smacks of Cold War-era thinking. We've seen promises to get rid of outdated defense systems, and Members of Congress are echoing this call. The latest is Representative Ed Markey (D-MA), who just introduced the Smarter Approach to Nuclear Expenditures Act (which goes by the apt acronym of SANE) to the House.

Markey’s bill calls for cancelling, freezing, or reducing over a dozen costly nuclear programs, totaling about $100 billion in savings over 10 years. As the bill notes, the current, oversized U.S. arsenal was “devised with the Cold War in mind,” and cutting it is commonsense for both national security and the U.S. budget. Markey is joined by 34 original cosponsors of the bill in the House.

POGO supports the bill, as we have long championed many of these cuts through our “Spending Less, Spending Smarter” recommendations, published last summer with Taxpayers for Common Sense. Among the proposed cuts we’re excited to see are the cancellation of expensive and unnecessary projects, such as the Life Extension Program for the B61 gravity bomb and the proposed Chemistry and Metallurgy Research Replacement-Nuclear Facility. Combined, the cancellation of these two projects could save taxpayers at least $9 billion without sacrificing national security.

Congressional Research Service Debunks Panetta's "Hollow Force" Threat

By DANA LIEBELSON

Secretary of Defense Leon Panetta has used some pretty hyperbolic language when describing the so-called "doomsday scenario" of additional defense cuts. He has said that slashing the Pentagon's budget would turn the U.S. military into a "ship without sailors, a brigade without bullets"--and my personal favorite--"a paper tiger." But there's one metaphor Panetta won’t be getting away with anymore: "hollow force."

Secrecy News recently reported that the Congressional Research Service (CRS), which provides policy and legal analysis to both the House and the Senate, has called Panetta’s use of the term hollow force “inappropriate” in a new report.

Panetta and senior Pentagon officials have used the term several times. For example, in a November statement on the Super Committee’s negotiations, Panetta said: “The half-trillion in additional cuts demanded by sequester would lead to a hollow force incapable of sustaining the missions it is assigned.”

Sequester, of course, refers to the automatic, across-the-board $1.2 trillion budget cuts over the next decade, which are supposed to kick in at the beginning of 2013 as a result of Congress’s failure to reach a deficit reduction deal last year (a group of Republican senators is working hard to avoid them).

But according to the CRS report, sequestration might not lead to a “hollow force” at all—because the term isn’t being used correctly. CRS said that it’s been used to describe U.S. armed forces only twice: post-Vietnam, and again in the 1990s. It refers to “forces that appear mission-ready but, upon examination, suffer from shortages of personnel and equipment, and from deficiencies in training.”

CRS pointed out that the surge of defense spending in recent times has led to modernization, and a force that appears “relatively robust”—making this term “inappropriate under the present circumstances.”

McCain Plan to Avoid Spending Cuts Is a Plan to Increase Spending

By BEN FREEMAN

Senator John McCain (R-AZ) and five other Senate Republicans introduced the "Down Payment to Protect National Security Act of 2012" today, which is nearly identical to a House bill championed by House Armed Services Committee Chairman Buck McKeon (R-CA), an ardent supporter of defense contractors whose wife, coincidentally, received tens of thousands of dollars from defense contractors and their lobbyists in her bid for election to the California Assembly.

According to McCain’s office, the bill will replace “draconian defense cuts scheduled to take effect in 2013 with more responsible reductions in federal spending.” Specifically, their draconian solution to this draconian problem is to replace the “across-the-board” federal spending cuts mandated by “sequestration” in the Budget Control Act of 2011, nearly half of which would come from the Pentagon, with a federal employee pay freeze and employee attrition.

The justification for this, according McCain’s office, is a Congressional Budget Office (CBO) report, which claims that “federal employees are compensated 16 percent higher than their private sector counterparts, and enjoy a 48 percent advantage in benefits.”

As POGO’s Scott Amey wrote earlier this week, the CBO report compares individuals with similar education not occupations, which “wrongly leads to the assumption that the private sector is cheaper and therefore government services should be outsourced. POGO busted that myth last year, finding that contractors for comparable occupations cost, on average, 83 percent more than federal employees.