David Stockman Pours It On The Cockroaches and The Pentagon.

The Pentagon’s Swampland Of Waste And Budget Lies

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About three decades ago I called the Pentagon a “swamp of waste” during an off-the-record interview that ended-up on the evening news. Presently I ended-up in President Reagan’s woodshed—explaining that, well, yes, I did say that because it was in fact true.

The Gipper was the scourge of Big Government, but he was also fiscally near-sighted: He could not see any sign of Big Government beyond the Potomac River! And at that particular moment the Warfare State branch of Big Government was erupting from the fiscal swamplands around the Pentagon in nearly parabolic fashion. The 1980 GOP campaign had lambasted Jimmy Carter for his allegedly wimpy DOD budget of $140 billion that year, but within two weeks of the Reagan inauguration I was suddenly staring at a Pentagon plan to spend 2.5X that amount or $350 billion annually a few years down the road.

The fiscal insanity embedded in that spending surge was based on a neo-con lie that was refutable then and laughable now—namely, that the Soviet Union was on the verge of a nuclear first strike capability that could annihilate American civilization, and that its leaders were madmen bent on world domination. In fact, they were paranoid Russian nationalists from beginning to end—–Stalin, Khrushchev, Brezhnev, Andropov, Chernenko. And now Putin, too. Having been invaded and devastated from the west twice in the 20th century at the loss of 40 million lives they had become extremely touchy about their borders and neighbors, to say the least.

Accordingly, they had buried their sclerotic socialist command economy under the burden of a vast, lumbering conventional land-war machine that was a testament to “never again”. Indeed, by 1981 it would have been strikingly clear to observers acquainted with the essentials of free markets and political liberty that the Soviet system would collapse under the dead weight of its own statist regime— and long before its vast, parasitic conventional military forces would be called upon to repel yet another (presumptive) German invasion.

The neo-cons are thorough-going statists, however, and did not see the truth that the laws of a free society would bring down the decrepit Soviet Empire. Nor could they acknowledge that the bumbling Soviet dictatorship would be held at bay by the triad nuclear deterrent put in place by the great Dwight Eisenhower; and that the triad’s 10,000 plus warheads had already been bought, paid for, tested and stood to the ready by 1980—meaning that there was no need for a Reagan defense buildup at all. It was just a matter of waiting out the eventual meltdown of the iron curtain and the societal penitentiary inside.

Ronald Reagan never saw that either because he had come from the New Deal by transit through the fetid waters of late 1940s California/Nixonian anti-communism, and was ever a sucker for the latest Red Scare thereafter. The neo-cons were pleased to supply the big one—the First Strike myth—as Reagan lumbered toward the White House in the late 1970s.

Moreover, while the founders of the neo-con movement did eventually shed their Trotskyite blinders, they never really got over their fondness for Big government and the acquisition of political power. It was just redirected to the national security branches of the state, and to the Manichean proposition that our state was Good and theirs was the host of an Evil Empire. In embracing the neo-con coda to his stock anti-communism, Ronald Reagan thus became a one-armed statist as he entered the White House.

The neo-con coda—-that the Soviets had a nuclear war-winning strategy—is one of history’s Big Lies. As I have laid out in detail in a chapter of the Great Deformation called “Triumph of The Warfare State”, the Soviets never had a massive civil defense system (to absorb a US retaliation) or massive phalanx of first strike missiles and bombers. And that was no secret at the time: The pre-Reagan CIA intelligence estimates denied it, as did most non neo-con Soviet experts.

But the history-warping impact of the neo-con lie went beyond policy error or a few needlessly tense moments with the Soviets in the 1980s. Once Reagan signed on to what became a five-year $1.5 trillion defense plan, the Pentagon was able to come up with less than $150 billion of programs that were even ostensibly related to countering the threat of the mythical First Strike. Instead, this huge “top-line” gift to the military-industrial complex was back-filled with a massive armada of tanks, ships, aircraft, munitions and electronics designed for conventional warfare—that is, for what was known then as “power projection” and is evident now as the American Imperium’s wars of invasion and occupation.

This great conventional war machine would not have changed the strategic balance, nor would it have been of much use on the Eurasian continent had the Soviets actually saved up enough fuel to move their tank columns west. But in any event, the Reagan Armada was not demobilized when the Cold War ended because by the early 1990s it already had taken on its own raison d’etre: it was now a massive national public jobs program and the center of a sweeping bi-partisan system of crony capitalist dirigisme. In effect, Ronald Reagan’s conventional war machine has become embedded in the very warp and woof of the nation’s economy and governance.

And that’s why the Pentagon can’t be cut, and remains a swampland of waste to this day. When the people took away Obama’s keys to the Tomahawk missile batteries last September, it was obvious that the American Imperium is (thankfully) over and that the $625 billion allocated to DOD this year amounts to a colossal destruction of economic resource for no benefit whatsoever to the safety and security of the American people. But as is documented in the excellent post by Mattea Kramer below, the military-industrial-beltway complex has enormous capacity to resist shrinkage—even when desperate politicians accidently try.

The 2014 budget was supposed to be hit with a $55 billion “sequester” reduction that came out of the 2011 Budget Super-Committee. They had always been intended as a fiscal bluff to keep the game going through a few more debt ceiling crises and fiscal showdowns. But when it inadvertently ended up as the default budget law for 2014, the system reversed the cuts faster than green grass passes through a goose. Owing to one device of budgetary legerdemain after another, the “cut” now stands at $3.4 billion—-a sum so preposterously small that it amounts to about 30 hours of annual spending by our massively corpulent Warfare State–including DOD, the spy agencies, foreign and security aid, homeland security and the VA.

And the phony cries that the military is being “hollowed-out” deserve a special place in the annals of Propaganda and Lies. Had every dime of the $55 billon sequester been implemented, this year’s DOD budget including the so-called war contingency would have been roughly $600 billion. By contrast, when the Gipper rode out of town saluting the military branch of Big Government in 1989, the DOD budget was about $475 billion in inflation-adjusted dollars.

So we would have been up 25 percent from nearly all that our one-armed statist President wanted for defense, yet his clueless disciples like Congressman Paul Ryan warned that this bloated level would have been tantamount to surrender. Lickety-split, the GOP first conspired with Senator Patty Murray and the liberals to add back $23 billion in return for a like amount of social spending, and then with the appropriators and green-eye shades maneuvered the accounts to sneak back the rest. A phony budget war, indeed, but also something even more disturbing: evidence that the Warfare State has morphed into an Orwellian derangement in which even vocabulary is so corrupted that bloated is hollow and increases are cuts.

The Pentagon’s Phony Budget War Or How the U.S. Military Avoided Budget Cuts, Lied About Doing So, Then Asked for Billions More

By Mattea Kramer

Washington is pushing the panic button, claiming austerity is hollowing out our armed forces and our national security is at risk. That was the message Secretary of Defense Chuck Hagel delivered last week when he announced that the Army would shrink to levels not seen since before World War II. Headlines about this crisis followed in papers like the New York Times and members of Congress issued statements swearing that they would never allow our security to be held hostage to the budget-cutting process.

Yet a careful look at budget figures for the U.S. military — a bureaucratic juggernaut accounting for 57% of the federal discretionary budget and nearly 40% of all military spending on this planet — shows that such claims have been largely fictional. Despite cries of doom since the across-the-board cuts known as sequestration surfaced in Washington in 2011, the Pentagon has seen few actual reductions, and there is no indication that will change any time soon.

This piece of potentially explosive news has, however, gone missing in action — and the “news” that replaced it could prove to be one of the great bait-and-switch stories of our time.

The Pentagon Cries Wolf, Round One

As sequestration first approached, the Pentagon issued deafening cries of despair. Looming cuts would “inflict lasting damage on our national defense and hurt the very men and women who protect this country,” said Secretary Hagel in December 2012.

Sequestration went into effect in March 2013 and was slated to slice $54.6 billion from the Pentagon’s $550 billion larger-than-the-economy-of-Sweden budget. But Congress didn’t have the stomach for it, so lawmakers knocked the cuts down to $37 billion. (Domestic programs like Head Start and cancer research received no such special dispensation.)

By law, the cuts were to be applied across the board. But that, too, didn’t go as planned. The Pentagon was able to do something hardly recognizable as a cut at all. Having the luxury of unspent funds from previous budgets — known obscurely as “prior year unobligated balances” — officials reallocated some of the cuts to those funds instead.

In the end, the Pentagon shaved about 5.7%, or $31 billion, from its 2013 budget. And just how painful did that turn out to be? Frank Kendall, who serves as the Undersecretary of Defense for Acquisition, Technology, and Logistics, has acknowledged that the Pentagon “cried wolf.” Those cuts caused no substantial damage, he admitted.

And that’s not where the story ends — it’s where it begins.

Sequestration, the Phony Budget War, Round Two

A $54.6 billion slice was supposed to come out of the Pentagon budget in 2014. If that had actually happened, it would have amounted to around 10% of its budget. But after the hubbub over the supposedly devastating cuts of 2013, lawmakers set about softening the blow.

And this time they did a much better job.

In December 2013, a budget deal was brokered by Republican Congressman Paul Ryan and Democratic Senator Patty Murray. In it they agreed to reduce sequestration. Cuts for the Pentagon soon shrank to $34 billion for 2014.

And that was just a start.

All the cuts discussed so far pertain to what’s called the Pentagon’s “base” budget — its regular peacetime budget. That, however, doesn’t represent all of its funding. It gets a whole different budget for making war, and for the 13th year, the U.S. is making war in Afghanistan. For that part of the budget, which falls into the Washington category of “Overseas Contingency Operations” (OCO), the Pentagon is getting an additional $85 billion in 2014.

And this is where something funny happens.

That war funding isn’t subject to caps or cuts or any restrictions at all. So imagine for a moment that you’re an official at the Pentagon — or the White House — and you’re committed to sparing the military from downsizing. Your budget has two parts: one that’s subject to caps and cuts, and one that isn’t. What do you do? When you hit a ceiling in the former, you stuff extra cash into the latter.

It takes a fine-toothed comb to discover how this is done. Todd Harrison, senior fellow for defense studies at the Center for Strategic and Budgetary Assessments, found that the Pentagon was stashing an estimated extra $20 billion worth of non-war funding in the “operation and maintenance” accounts of its proposed 2014 war budget. And since all federal agencies work in concert with the White House to craft their budget proposals, it’s safe to say that the Obama administration was in on the game.

Add the December budget deal to this $20 billion switcheroo and the sequester cuts for 2014 were now down to $14 billion, hardly a devastating sum given the roughly $550 billion in previously projected funding.

And the story’s still not over.

When it was time to write the Pentagon budget into law, appropriators in Congress wanted in on the fun. As Winslow Wheeler of the Project on Government Oversight discovered, lawmakers added a $10.8 billion slush fund to the war budget.

All told, that leaves $3.4 billion — a cut of less than 1% from Pentagon funding this year. It’s hard to imagine that anyone in the sprawling bureaucracy of the Defense Department will even notice. Nonetheless, last week Secretary Hagel insisted that “[s]equestration requires cuts so deep, so abrupt, so quickly that… the only way to implement [them] is to sharply reduce spending on our readiness and modernization, which would almost certainly result in a hollow force.”

Yet this less than 1% cut comes from a budget that, at last count, was the size of the next 10 largest military budgets on the planet combined. If you can find a threat to our national security in this story, your sleuthing powers are greater than mine. Meanwhile, in the non-military part of the budget, sequestration has brought cuts that actually matter to everything from public education to the justice system.

Cashing in on the “Cuts,” Round Three and Beyond

headshotAfter two years of uproar over mostly phantom cuts, 2015 isn’t likely to bring austerity to the Pentagon either. Last December’s budget deal already reduced the cuts projected for 2015, and President Obama is now asking for something he’s calling the “Opportunity, Growth, and Security Initiative.” It would deliver an extra $26 billion to the Pentagon next year. And that still leaves the war budget for officials to use as a cash cow.

And the president is proposing significant growth in military spending further down the road. In his 2015 budget plan, he’s asking Congress to approve an additional $115 billion in extra Pentagon funds for the years 2016-2019.

My guess is he’ll claim that our national security requires it after the years of austerity.

Mattea Kramer is a TomDispatch regular and Research Director at National Priorities Project, which is a 2014 nominee for the Nobel Peace Prize. She is also the lead author of the book A People’s Guide to the Federal Budget.

Reprinted with permission from David Stockman.


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