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Defense Spending

A guide to the politics of defense spending requires a guide to defense numbers; that is not easy to assemble. Edwin Dale, associate director of OMB for Public Affairs in the Reagan administration, comments that at one point the New York Times ran four stories in ten days, each with different figures—"and all were correct!"

Budget resolutions provide totals for the national defense budget function. Within that function most activities are funded through the Defense Department appropriation. Yet spending also shows up in other bills: a few billions for research and construction of some nuclear weapons are included in the Energy and Water appropriation because the Department of Energy does the work; another few billions go into the separate military construction appropriation; and a few more billions, the amount of the annual pay increase, is included each year in a supplemental appropriation. Because the budget resolutions' target for defense budget authority includes all these appropriations, "defense" authority amounts in the resolution will exceed funding as shown in the annual defense appropriation act.

The budget resolution, however—to further confuse—includes separate figures for outlays and authority. Outlays are the focus of attempts to cut this year's deficit. Authority, the legal right to buy things over time, is the amount appropriated; it matters most to the military. The relationship between outlays and budget authority (BA) is particularly


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tenuous in defense because contracts for development and purchase of large weapons systems spend very slowly.

The difference between BA and outlays encourages a game that favors slow-spending forms of defense: Congress and the president can vote for both a "strong defense" and "fiscal responsibility" by spending less for personnel and maintenance, which outlay immediately, while they increase weapons purchases. This game has the added dividend of delighting defense contractors. Unfortunately, buying new equipment without training people to run it is not the best defense policy; budgetary games can have perverse operational consequences.

Some defense budget disputes focused on actual operations. Raises for military personnel, creation of a system of MX nuclear missiles, or a "Rapid Deployment Force" to be used in third world crises—all could be discussed in terms of specific applications. But much of the dispute concerned the symbolism of defense spending totals as indicative of either the nation's will to resist the Soviets or the misplaced emphasis on military rather than social spending. Thus, comparisons were made between American and Soviet defense spending, between present and past American defense spending, and between defense and domestic spending, apart from what the money would actually buy.

The Vietnam war destroyed the policy consensus of the late 1950s and early 1960s, in which the two parties competed to show their dedication to the vision of the United States as deterring communist aggression. Much of the Democratic party came to see Vietnam as a hopeless effort, brutal in execution and brutalizing in effect (a description that fit the dispatches on the nightly news). Citizens protested in the streets, and issues about protest itself and national authority became tangled with controversy over foreign policy. The war was not only a bad idea, many felt, but also expensive, soaking up funds needed for Great Society social programs. Therefore controversy spilled over into budgeting. Ultimately, through ceasing appropriations Congress ended America's vestigial military assistance to South Vietnam.

The Republican right, and some segments of Democrats, insisted that intervention in Vietnam was proper. The lesson, they insisted, was only that we did not try hard enough—for which liberals were to blame.

At least temporarily, Vietnam increased congressional skepticism of both military involvements and expenditures. This antimilitary mood meant that military spending, as a proportion of federal spending or GNP, dropped steadily. Meanwhile, basic expenses increased. A volunteer army, requiring higher pay, replaced the draft. The Army had left much equipment in the jungles of Southeast Asia. Military equipment became steadily more expensive (we will return to this later). Restraint on defense spending meant a real decrease in military capacity. In the


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1980s, when sentiment turned around, there was a long list of unmet defense needs.

Part of the change was due to a continuing Soviet military expansion, the size of which was widely disputed. It was not something the USSR was about to divulge, and American estimates heavily depended on the point the analyst wanted to support. But there was no doubt that the Soviets had deployed a new generation of nuclear missiles; these, it was argued, had the power and accuracy necessary to destroy the American Minuteman force. Whether such capability was important, even if true, was a matter of heated contention. But NATO allies' opinions mattered most. A new version of Soviet missiles aimed at Europe left NATO governments particularly nervous about whether Americans were willing to defend them against conventional attack and thus risk nuclear attack on the United States itself.

These (possible) changes in the nuclear balance ironically increased pressure for spending on conventional (nonnuclear, for example, tanks) weapons. No longer might we defend Europe cheaply by threatening to escalate to nuclear weapons; instead a conventional attack might require conventional response. But the Warsaw Pact had more of that stuff than did NATO. Therefore, the Carter administration in May 1978 joined with the other NATO nations in pledging a 3 percent annual increase in real (that is, inflation adjusted) defense spending. The administration also planned deployment within Europe of weapons, the Pershing II and Cruise missiles, that might balance the midrange Soviet missiles aimed at Europe. U.S. defense hawks thought 3 percent pitiably little.

Both the United States and the NATO nations had reasons beyond European defense for worrying about conventional forces; the main reason was oil. Europeans depended far more than Americans on oil supplies from the Persian Gulf. But Americans also—as we had discovered to our surprise during OPEC's 1973 embargo—could suffer from an interruption of Persian Gulf supplies. Fears about the Persian Gulf were, of course, greatly heightened by the 1978 revolution in Iran. Imprisonment of fifty-three hostages in the American embassy in Tehran (October 1979) further dramatized America's inability to intervene. Nobody knew what the United States could do if it had greater force available, but the dominant concern was defending Saudi Arabia against some sort of Iranian invasion. Carter, therefore, proposed creating a Rapid Deployment Force (RDF) of 100,000 men, with the airlift and sealift capability to move them into action quickly anywhere in the world. Although mostly a reorganization, it required more money for equipment and readiness.

Iran, and a preference for conventional over nuclear strategies of deterrence, led many fairly liberal Democrats, personified by Senator


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Gary Hart (D-Colo.), to advocate stronger conventional forces. Throughout the 1970s, meanwhile, Republican and Democratic proponents of greater preparedness, including Ronald Reagan, Senator Daniel Patrick Moynihan (D-N.Y.), and Senator Henry Jackson (D-Wash.), and a group of intellectuals calling themselves the Committee on the Present Danger had lobbied for greater attempts to counter Soviet "expansionism." Many of these hawks opposed the SALT II treaty with the Soviet Union; other senators were particularly worried about the details of the treaty. Led by Sam Nunn (D-Ga.), these senators bargained with the administration throughout 1979, insisting they would support SALT II only if concerns about American military strength outside SALT's purview were met. At last that added pressure pushed the administration by October 1979 into committing itself to a buildup greater than the 3 percent agreed with the NATO allies. Thus, when the Soviets moved into Afghanistan, Congress was already moving toward a big defense buildup, most likely emphasizing conventional capabilities. But how much was enough? One approach was looking at totals.

Defense advocates emphasized that between 1960 and 1980 national defense expenditures had shrunk from nearly 50 percent to less than 25 percent of federal spending and from 9.1 percent to 5.3 percent of GNP. The new buildup, they argued, would not come close to restoring even the defense share that existed in the mid-1960s. Therefore, it was really quite modest. Table 1 gives the data.

Percentages are misleading because they depend on the denominator,

 

Table 1. The Shrinking Defense Share of the National Economy and of Federal Activity, 1960–1980

 

Defense Outlays as % of GNP

Nondefense as % of GNP

Defense as % of Federal $

Human Resources as % of Federal $

1960

9.1

9.5

49.0

27.7

1965

7.2

10.8

40.1

29.9

1969

9.5

12.0

43.2

34.5

1972

6.8

13.7

33.2

44.8

1975

5.8

16.1

26.4

51.4

1976

5.5

16.8

24.5

53.8

1977

5.2

16.7

24.3

53.3

1978

5.0

16.4

23.5

51.9

1979

5.0

15.8

24.0

52.3

1980

5.3

17.1

23.6

52.1

Source: OMB, Federal Government Finances, 1984 Budget Data, February 1983; Historical tables, Tables 10 and 13. This is one of a set of background tables that OMB provided to those who asked but did not publish with the annual budget documents. It has been superseded by a published volume, Historical Statistics .


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the size of the economy. The percentage fell quickly in the early 1960s because the economy grew quickly and the Kennedy administration, despite expansions of both strategic and conventional capability, felt the actual need for defense spending was expanding less quickly than the economy. There is no particular reason an expanding population should require larger armed forces, but domestic spending will inevitably increase absolutely (though not necessarily relatively) with a greater number to be served. Because economic growth was used to finance a large increase in nondefense spending, the defense share of government fell along with its share of the economy.

Argument from proportions was impressive but misleading. Constant-dollar expenditure would have made a better measure of effort. Adjusted for inflation, defense expenditure—the numerator—held fairly steady (in 1960, $72.9 billion in 1972 dollars; and in 1980, $72.7 billion). Expenditures rose during the Vietnam War and fell to a low of $67.1 billion in 1976. But for many reasons—particularly ending the draft and incorporating more advanced technology into weapons—the same amount of dollars bought less defense in 1980 than in 1960. The military budget had been squeezed but not so much as the GNP arguments suggested.

Trying to keep up on weapons, Congress and the military skimped on quick-spending readiness: for example, ammunition for practice, maintenance of existing airplanes, and training of personnel (which, if it involves flying advanced airplanes, can get very expensive). Liberals like Senator Hart and one-time Carter speech-writer James Fallows—not ordinarily supportive of higher military spending—therefore argued that the military neglected readiness in favor of expensive, hightech weapons. The arguments, possibly true, allowed them to merge Vietnam era distrust of the military with a concern for national security. Yet publicity about readiness problems (soon heightened by a failed mission to rescue the hostages) added to the normal demands for new equipment, increasing the claim for more total spending.

There were further pressures for more pay. Jimmy Carter had held all spending down somewhat by giving federal employees—both civilian and military—smaller raises than those won by comparable workers in the private sector. When these elements were added to a comparatively tight private labor market, the military had problems getting and keeping soldiers.[3]

Senators Nunn and John Warner (R-Va.) sponsored a package of special benefits (in addition to Carter's budget) that garnered heavy support in the Senate. The Joint Chiefs were lobbying hard for a compensation increase. In early March, the commandant of the Marine Corps dramatized this argument by sending all Marines a bulletin advising them of their potential eligibility for food stamps. Neither the military nor its


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supporters, however, were willing to give up equipment in return for compensation.

The budget resolution had to give a total for defense; in no way could pressures for more equipment, maintenance, and personnel compensation be accommodated within the total the president had proposed. Republicans would demand more. So would southern Democrats, for the South is far more promilitary than other regions of the country. House Budget Committee Chairman Robert Giaimo (D-Conn.) knew he could get beaten on the floor by a coalition of Republicans and southerners if his resolution had too little for the military. Even if he won, he then would have to secure an agreement with the Senate, which, due to both bias created by equal state representation and happenstance, was substantially more prodefense than the House.


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