StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



ThIs Is Why The Military Community Has So Little Credibility On The Budget

18 Sep 2012
Posted by Stan Collender

Take a look at this story by Jeremy Herb from The Hill yesterday and be prepared to stifle a huge scream.

As Herb wrote, former Secretary of Defense Robert Gates and former Joint Chiefs Chairman Admiral Mike Mullen complained at a program hosted by the Center for Strategic and International Studies about "Washington's inability to grapple with the budget and debt problems facing the country."

But shortly thereafter, Gates and Mullen make it clear that something that would do what they said they wanted by reducing the deficit and resulting in less federal debt -- the sequester -- is unacceptable because the sequestration Pentagon cuts "would be devastating (to the Pentagon) and lead to a hollow force."

The logical next step for someone interested in reducing the deficit and debt but cutting military spending the right way should be to provide an outline, a guide path or even just a subtle indication of what that should look like. But like everyone else involved in the stop-the-military-sequester campaign, Gates and Mullen are completely silent on how it should be done if a sequester is the wrong way to do it. They want the deficit reduced but they don't want military spending to suffer in the process.

I'm on the record with the notion that the sequester spending cuts for both domestic and military appropriations scheduled to happen in January are (1) the wrong fiscal policy, (2) the wrong way to cut appropriations and (3) the wrong programs to be cutting. (See below for what I'm suggesting as an alternative.)

But my problem with what Gates and Mullen said, and what many of the Pentagon contractors keep saying is that their position is significantly less credible because they so far have refused to provide an alternative that in their view would be the right way. Should it be done over a longer period of time? Involve different parts of the budget? Include a reduction in personnel?

That refusal makes Gates, Mullen and the rest of the military spending community no different from those who say that the budget can be reduced by cutting waste, fraud, and abuse without being willing to identify anything in the  budget that is wasteful, fraudulent, or abusive. Or it makes them part of the make-someone-else-suffer-because-my-spending-can't-be-touched-ever wing of American politics.

In other words, by saying that the sequester is the worst way to cut the budget without providing even a hint of an alternative, Gates and Mullen et al have to be seen for what they really are -- defenders of the status quo who are as much a part of the problem as the politicians about which they're complaining.

(Note...For those of you asking to hear my alternative to this January's sequester...as I said here, along with the rest of the fiscal cliff policies, the sequester spending cuts are the wrong fiscal policy at the wrong time and my preference is that they just be canceled. The spending caps for fiscal 2014 and beyond should be kept in place until we get a clearer picture of how the economy will be performing at that time.)

 

Military Budget

If there are no appropriate cuts now in the military budget--where the deadweight loss runs 30-40%--then there never will be.

Since the other areas all have multipliers of 1.00 or more--more for the support programs, since that money gets spent--cutting the defense budget in a deficit-neutral move (which should be relatively simple if the plans for troop drawdown remain on schedule--the troops are a minor cost, the logistics is killing in a way to shame Larry Lindsey) would boost the economy.

Subsidizing military contractors (Hessian troops) while you have able-bodied silversmiths (think P. Revere) sitting idle has always been a recipe for disaster.




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