The President's FY2005 budget request boosts funding for the Department of Homeland Security by 10%. Most Americans welcome this news that more resources will be devoted to "National Defense" while limiting the growth in other government agencies to 0.5% in an attempt reign in the growing national debt. However, the President requests a 7% increase for the massive Department of Defense, which has little to do with National Defense; it was properly called the War Department until 1947. The USA now spends more money in real dollars (inflation adjusted) on its military than at the peak of the Vietnam war when some 500,000 GIs were combat, and more than during the Cold War when the powerful Soviet Union existed. For unknown reasons, the Bush Administration wants to spend a record $402 billion in FY2005, and this excludes the $50 billion needed to garrison Iraq and Afghanistan. In addition, the Pentagon's current plan expects annual funding to grow 30% over the next five years while record budget deficits threaten economic chaos.
Paul Kennedy's famous 1989 book "The Rise and Fall of the Great Powers" describes the fall of great empires in history and predicted the United States would follow the same downward path that destroyed all empires. Each empire's capital became increasing wasteful, arrogant, and corrupt. Leaders focused on foreign adventures rather than domestic issues while telling their citizens that sacrifices and high levels of military spending were needed to protect them from foreign demons. Each empire died after they as they ran up so much debt from foreign adventures that no one would loan them more money, causing a rapid collapse. The United States is following that exact pattern, as described last October, and is evidenced by this Pentagon plan for continual spending growth at three times the rate of inflation.
Fiscal 2005 DoD Budget by Title
($ in billions)
Fiscal 04 Fiscal 05 Fiscal 06 Fiscal 07 Fiscal 08 Fiscal 09
Military Personnel 97.9 104.8 109.4 113.1 116.8 120.4
Operation & Maintenance 127.6 140.6 146.1 151.2 156.3 163.9
Procurement 75.3 74.9 80.4 90.6 105.1 114.0
R&D 64.3 68.9 71.0 70.7 71.6 70.7
Military Construction 5.5 5.3 8.8 12.1 10.8 10.2
Family Housing 3.8 4.2 4.6 4.5 3.6 3.5
Other 0.8 3.0 2.3 1.6 1.4 4.9
Total 375.3 401.7 422.7 443.9 465.7 487.7
Note: These figures exclude money spent on overseas expeditions in Iraq and Afghanistan. They also exclude the cost of nuclear weapons development, testing and storage (in the Energy budget), the cost of veterans programs (in the Veteran's Administration budget), most military retiree costs (the Treasury budget), the cost of weapon grants for allies (State Department budget) and interest for money borrowed to fund military programs in past years (Treasury budget). It also excludes several billion dollars from exempting sales and property taxes at military bases (local government budgets), and the hidden cost of tax free food, housing, and combat pay allowances. Ironically, this "Defense Budget" even excludes the cost of defending the USA itself, with the Coast Guard and Border Patrol (Homeland Security Budget).
Robert Higgs at the Independent Institute calculates the real "National Defense" budget is around $754 billion, excluding the military retirement portion paid for by the Treasury Department since its costs are hidden with Enron type accounting, although they are estimated at $30 billion a year. Also excluded are the cost of providing property and sales tax exemptions for the military, a benefit unknowingly paid for by local governments, and the hidden cost of tax free pay in combat zones and tax free food and housing allowances for all military personnel.
Americans are told the world is a safer place since the threat from Iraq has been eliminated, so why not decrease military spending? One excuse is that the US military must be rebuilt after deep cuts during the Clinton administration. After the end of the Cold War, military spending was cut only 10% under a post Cold war balanced budget plan devised by George H. W. Bush, the fiscally conservative President Bush, and then began to rise toward the end of the Clinton administration. The myth of "Clinton Budget Cuts" was refuted last September by a former member of the Reagan administration, Larry Korb. Hopefully, conservatives in Congress will reject the President's plan to increase military spending 30% over the next five years and freeze Department of Defense spending at this year's level, which is already 29% higher than when President Bush entered office in 2001; a figure which excludes costs in Iraq and Afghanistan. Here is where cuts can be quickly and easily imposed:
Cut $13.0 billion from RDT&E The US military spends almost as much on Research, Development, Testing & Evaluation (RDT&E) as on procurement to buy new weaponry. There is no risk with cutting RDT&E for weapons which will not be purchased for years to come. There is no foreign nation investing tens of billions of dollars in weapons research to overtake the USA. If $13 billion were shaved from RDT&E programs, the remaining $56 billion will exceed the entire defense budget of any other nation on Earth. This is still 35% higher than the $41 billion spent in FY2001.
Cut $4.2 billion from new base housing On-base housing is a remnant of the old fort system which devolved into pork projects. It has produced wasteful government cities like those envisioned by Karl Marx. Contractors charge the US military twice as much to build on base as they charge for identical houses off-base. This then requires billions of dollars in infrastructure support costs in the form of roads, sewers, and utilities.
Eliminating this entire category will have zero impact since construction projects take years to complete. Since the 2005 base closing process will shutter one fourth of US military bases, all construction should be delayed. One may argue that military housing costs will rise in a couple years as less government housing will be available. This is debatable since the overall costs providing base housing are so much higher. However, billions of dollars can be saved each year if Congress phases out the marriage incentive for E-3s and below.
Cut $4.1 billion from new military construction Again, with the 2005 base closings on the horizon, new military construction can wait. Why begin projects on a base which will close? However, some construction is vital at bases unlikely to close, so allow $1.2 billion for urgent needs, but hold back the rest until Iraq costs have shrunk and base closings finalized.
Cut $4.0 billion by limiting pay raises to inflation The President has proposed a 1.5% cost of living pay raise for federal civilian employees, but wants a 3.5% pay raise for military personnel. Several years of military pay raises at 2-3 times the inflation rate have boosted military pay 16% in real dollars these past five years. In contrast, a US Census report last year revealed that median household income declined 3.4 percent between 1999 and 2002.
New recruits now earn 30% more than full-time civilian workers their age. The most recent data reveals the average 40-year old full-time American worker earns $32,240 a year, while the typical 40-year old enlisted man (an E-7 with 22 years) earns nearly twice as much $59,956 in Regular Military Compensation, which excludes bonuses for deployments and reenlistments. A typical 40-year old officer (O-5 with 18 years) earns an amazing $106,992 a year, which is 113% more than Americans with bachelor's degrees, who average just $46,852, and even 81% more than Americans with advanced college degrees, who average $58,992. Therefore, it is no surprise that military morale is high when senior enlisted men make more than Americans with advanced degrees, enjoy 42 paid days of vacation/holidays each year (compared to 13 days for the average American), plus the option to retire after just 20 years without contributing a single penny to their retirement fund.
Most people are surprised to learn the Pentagon spends more in real (inflation adjusted) dollars on 1.4 million active duty troops today than when 2.1 million were in uniform in the early 1980s. Over 20 years of raises at up to three times the annual inflation rate has raised military pay far above American workers, which explains the high recruiting and retention rates despite frequent deployments and an unpopular war. It is true that some 130,000 GIs are overworked in Iraq, but they receive combat pay, separation pay, and tax-free basic pay. More than 90% of active troops are not in Iraq; so why another pay raise for them? Most will never go to Iraq, and many work less than 40 hours a week in beautiful places like Hawaii, London, Florida, and San Diego. If Congress wants to help those in Iraq, limiting the military pay raise to the rate of inflation will free funds for more body armor, armored Humvees, and better food and medical care in Iraq.
Recruiting and retention rates would be even higher if the Pentagon would advertise comparisons between military and civilian pay to eliminate the old myth of low military pay. Unfortunately, powerful lobbyists like those from the Association of the US Army continue to spread lies while greedy officers in the Pentagon produce bogus reports to justify even higher raises, despite occasional articles revealing the truth. This fraud is supported by government accountants and congressional staffers who benefit too. Each year, powerful federal employee unions push for military pay raises at 2-3 times the inflation rate, then successfully insist on "pay parity" because "they defend the nation too." As a result, the 700,000 civilian employees of the Department of Defense earn at least 50% more than comparable civilians, which is why all are alarmed at planned base closures. Meanwhile, Congressmen shower their office workers with big pay raises and enjoy political support with this form of vote buying.
Cut zero from procurement - There are dozens of wasteful and unneeded procurement programs which are too numerous to list here. While priorities must change, procurement funding remains small in the overall budget. Our military is facing serious shortfalls in weaponry and equipment as the post Cold war "procurement holiday" redirected resources to dubious RDT&E programs and unnecessary pay raises and new benefits which pushed the annual cost to $99,000 for each active duty serviceman. Most Congressmen believe the US Army must grow in size to garrison newly conquered territories in Kosovo, Afghanistan, and Iraq, yet the Pentagon is reluctant to expand the forced due to high manpower costs. They should realize that every billion dollars saved from unneeded pay raises allows for a permanent increase of 10,000 full-time troops.
While the leading Democratic presidential candidates are called "liberals", not one has addressed this issue of irrational increases in military spending. At a time when the nation is facing potential bankruptcy while borrowing tens of billions of dollars from communist China, the President cannot exempt any arm of government from budgetary discipline. Hopefully, fiscal conservatives in Congress will rally against this mindless spending like they did toward the end of the Reagan era. The cuts listed here can freeze military spending yet have no affect on readiness or operations overseas. If some believe a few box cutter armed Arabs pose more of a threat than the Soviet Union of the Cold war era, they should call for a major tax increase to fund a further expansion of our military. However, citizens would take an interest in military spending and reject more taxes for more government.
Carlton Meyer editorG2mil@Gmail.com
G2mil editorials may be freely distributed without permission
March 2004 Articles
have been returned to the Members Library
Letters - comments from G2mil readers
2005 BRAC update - new clues (members only)
RLV Water Landings - cheaper and safer
V-22 Costs Soar - now $115 million each
Homosexuals Must Stay in the Closet - a new policy is needed
Complete FY2005 Pentagon budget request - from the War Department
Official Iraq War Casualty Stats (pdf) - from the Pentagon
Army Cancels RAH-66 Comanche - great news
Army Tests New Rifle - may replace M-16 and M-4
Calling Major Ritter - an unheralded patriot
Combat Pay for Sailors in the Mediterranean - admirals cheat taxpayers
The Return of the Light Dragoons - defeating heavy armor on the cheap
The Dawn of the E-bomb - microwave weaponry
WMD - A Primer - many are Weapons of Minor Destruction
To Understand North Korea, Toss Out Old Assumptions - clear insight
Why Waziristan cannot be conquered - crafty Muslims
Military Acknowledges Massive Supply Problems in Iraq War - haste makes waste
Scientist Who Sold Atomic Secrets Can Keep his Money - ally or terror state?
America's Empire of Bases - cover the globe
Pentagon hiding reality of toll from war in Iraq - Senator's request denied
The Betrayal of Our Troops - a veteran British soldier speaks out
Eisenhower Was Right - imperial overreach
Pentagon Regularly Shortcuts Operational Testing of Weapons - contractors gain power
Previous G2mil - February 2004 issue
Past Editorials - by Carlton Meyer
2005 Base Closures - likely closures
Library Tour - visit G2mil's library
Library Entrance - members only
All material in G2mil Copyright 2004 G2mil, patents pending on some items. Links to www.G2mil.com are encouraged.