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Hidden Costs

If taxpayers fund an annual budget of a federal department with a particular function, shouldn’t they wonder why that department needs billions of additional dollars when it is asked to perform the function? Such is the case with the Department of Defense.

Each year, Congress gives the Pentagon by far the world’s largest military budget—in fiscal year 2007 a whopping $447 billion—as large as the combined defense expenditures of the next highest dozen or so nations. Yet in FY 2007, the Bush administration is likely to request an additional $100-$128 billion in “emergency” supplemental spending to fight the war on terror. Last fiscal year, the Pentagon requested $66 billion in emergency funding; in 2005, the request was $82 billion; and in 2004 and 2003, respectively, the requests were $72 billion and $74 billion. The Department of Defense’s job is to fight the nation’s battles, but when a war actually arises, it seems to need added largesse to carry out its mission.

Many conservatives, who regularly gripe about the federal government’s ineffective and inefficient use of taxpayer dollars, give the Pentagon a free ride on its profligate spending habits. And when troops are engaged in combat overseas, the general public is wary of questioning massive military expenditures. That chariness should cease.

The first question any informed taxpayer should ask is how the same emergency can be unanticipated for five consecutive years of budgeting. The Iraq War has now lasted longer than World War II, and the war on terror has a longer duration than that. During the Korean War, about 77 percent of the expenses were funded through regular Department of Defense appropriations; in Vietnam, about 72 percent. In contrast, at least 70 percent of the cost of the war on terror has been financed by emergency funding.

To military budget bureaucrats and members of Congress and their staffs —always keen to game the system for advantage—the emergency-funding route offers several advantages over the standard appropriations process. The military services provide much less detail in a supplemental request than in a regular application for funding about how they will spend the money. In one recent supplemental request, the Pentagon distributed its rationale to only a few lawmakers, and justification for the funding was not made public, raising suspicions that the Pentagon had something to hide. Of course, fewer details mean less constitutionally mandated congressional oversight and media coverage.

In contrast to the congressional oversight of the executive branch envisioned by the founders, the modern military-industrial complex fosters collusion by the two branches to finance items through the more opaque emergency-funding process that should be funded through the more open regular appropriation procedure.

Even if the average taxpayer agreed that defense expenditures for the five-year war in Afghanistan or the three-and-a-half-year war in Iraq continue to be unexpected—a dubious concession —some of the things funded in the supplemental bills are only tangentially, if at all, related to fighting the war on terror. On Oct. 25, 2006, Deputy Secretary of Defense Gordon England wrote a memo to the services encouraging them to widen what they consider to be items required to fight the war on terror. This wink and nod apparently accounts for the huge jump in the request for emergency funding from $66 billion in FY 2006 to a likely $100-$128 billion in FY 2007. Congress has also added items to the supplemental request that were not unforeseen, for example, part of the funding for the futuristic but accident-prone V-22 tilt-rotor transport aircraft.

Another reason that Congress likes to fund non-emergency items in supplemental bills is that they do not count toward the congressional budgetary spending limits. If some non-emergency items can be shifted to the supplemental bills, more military spending can be funded in the regular budget while still staying at or under the caps. Thus members of Congress get more pork for their districts, and the military gets more goodies too.

For instance, if the Army can offload some of its peacetime expenditures into the supplemental bills, it has more money for projects like the $160 billion Future Combat System—a family of robotic tanks only good for countering competent tank armies from a nonexistent competing great power. If the Pentagon would eliminate unnecessary weapons or those originally designed to fight the defunct Soviet Union, expenses to fight the war on terror could be funded within existing defense budgets.

The Air Force’s stealthy F-22 fighter was originally designed to face the next generation of Soviet fighters that was never built. The U.S. Air Force is so superior to any other air force on the planet—even using the F-15—that F-22 production could be truncated. The V-22 aircraft, designed to transport Marines rapidly from ship to shore, is costly and has been plagued with crashes. Helicopters could do the same job for far less cost. The Navy’s DDG-1000 destroyer is exorbitantly expensive as a platform to provide land attack capabilities and protective fire for Marine amphibious assaults that may have been rendered obsolete by technology. With the Cold War over and the Russian submarine fleet rusting at the docks, the relatively incapable Chinese submarine fleet does not warrant a new U.S. submarine class to counter it. The U.S. Los Angeles and Seawolf classes are already the best in the world. No other nation has any capable big-deck aircraft carriers. But the United States has an excessively large fleet of 12 such ships, which could be reduced without eroding security by forgoing the building of new vessels for a time. In a war, carrier aircraft can carry far fewer bombs than Air Force planes taking off from longer runways—thus rendering the carrier an expensive and inefficient way to provide firepower.

The services—especially the Army, Marines, and Air Force—claim that they are being strapped by the expenses to operate, maintain, and repair equipment worn down or damaged by the fighting in Iraq and Afghanistan, but they are still buying expensive unneeded weapons. To keep defense contractors—and thus members of Congress—happy, the services choose to fund this pork instead of securing vital items for troops in the field. The military bureaucracies then demand more money for combat operations, and Congress gives it to them.

To date, the war on terror has cost more than $500 billion, is escalating in expense, and is rapidly surpassing the Vietnam War as the second most costly conflict in American history. The cost of the Iraq War alone now exceeds $300 billion. Some economists estimate that when all related expenditures are totaled up, it could cost between $1 and $2 trillion. Absurd as it may seem now, the Bush administration’s official position before the war was that it would cost $50 million or less. Even Larry Lindsey, the top White House economic adviser, estimated before the war that it would cost $100-$200 billion. He was sacked for it.

The U.S. has lost the war in Iraq, and that futile quagmire could cost taxpayers hundreds of billions of dollars more —not to mention the more important cost in unnecessary casualties. Even if American forces completely withdraw from Iraq by the end of calendar year 2009, the Congressional Budget Office estimates that U.S. taxpayers would still incur an additional $166 billion in expenses. In a less optimistic scenario—troop levels would decline less rapidly and remain at 40,000 until 2016—the budget office projects that another $368 billion would be needed.

In contrast, a rapid withdrawal from the morass and the elimination of costly weapons that have little role in fighting al-Qaeda would allow the U.S. to reduce its defense budget—and the federal deficit—while continuing a robust military effort against that terrorist group. The war against al-Qaeda requires law enforcement, human intelligence, unmanned aerial vehicles, and Special Forces troops—all relatively inexpensive—not gold-plated weapons systems that would have been more at home in a bygone era. Also, the U.S. intelligence community has concluded, and data confirm, that the war in Iraq has made the terrorism problem worse. The costs of fighting al-Qaeda could be lowered by reducing the number of radical Islamists motivated to attack the United States in the first place. A rapid withdrawal from Iraq could thus achieve a double bonus in cost reduction—in Iraq itself and in the war against al-Qaeda. 


Ivan Eland is a Senior Fellow at the Independent Institute and author of The Empire Has No Clothes: U.S. Foreign Policy Exposed and Putting “Defense” Back into U.S. Defense Policy.

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