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Waste, Fraud, and Abuse: How the Debt Negotiators are Fudging on the Defense Budget

22 Jul 2011
Posted by Gordon Adams

Rumor has it that the current deficit/debt discussions between the White House and the Republican House leadership may include $1 trillion in defense savings over the next ten years.  If this were true, it would be both good news and a manageable savings, since it constitutes roughly 15% of the total resources DOD currently projects for defense over the next ten budgets.

But it is not true.  Turns out to be a case of wasting the Congress' time with phoney cuts, abusing budget baselines, and a political fraud on the American people.  The trillion dollars, it turns out, is all based on the assumption that we will spend significantly less on the wars or any other combat deployments than the more than $1 trillion we have already invested.

That's right.  The savings are not real.  Instead of touching sacred cows in DOD, the negotiators have gone for a misleading ploy.  Right now, the adminstration's budgets assume that war costs will be $50 billion a year over the next ten years.  That is not a real number; it is what budget folks (like me) call a "plug" - we know something will go there, but we don't know what it is.

By contrast, the Congressional Budget Office uses its own "plug" in forecasting future war costs.  Theirs is based on what was the last appropriation for the war, or $159 billion in fiscal year 2011.  Then CBO just mechanically projects that number out over ten years, regardless of what policy might be.

Apparently the budget negotiators have decided to scoop up at least some of these mechanical projection of war costs and call them "cuts" from the defense budget.  It's a waste of time, in spending terms, because the war costs will come and will have to be paid, on top of the defense budget, so the savings will not be there when we get there.  It abuses the budget process because the savings are mythological, not real, so they enforce no discipline on the Defense Department.  And they are a fraud on the public, who will think a budget deal has cut the defense budget, when it has done no such thing.

This kind of gimmick might get you through the current budgetary nightmare, but it doesn't save money and it doesn't really put defense on the table, along with the other parts of federal spending and revenues.

 



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