Defense Budget and Accountability

[Leatherneck]

Christie, Sprey and Spinney are old friends and mentors I've had the pleasure of knowing and working with for decades. They are true patriots who are frustrated by the tremendous and growing costs in the annual defense budgets.

TC

-----Original Message-----
From: Tom Christie [mailto:tchristie34@verizon.net]
Sent: Friday, November 19, 2010 12:19 PM
To: Tom Christie
Subject: An Open Letter to Erskine Bowles - How to Cut the Defense Budget

Counterpunch
Weekend Edition
November 19 - 21, 2010


An Open Letter to Erskine Bowles

How to Cut the Defense Budget

By THOMAS CHRISTIE, PIERRE SPREY, FRANKLIN SPINNEY et al.


The Honorable Erskine Bowles
National Commission on Fiscal Responsibility and Reform 1650 Pennsylvania Avenue, N.W.
Washington, DC 20504

Dear Mr. Bowles:

We are writing to you and other members of the President's National Commission on Fiscal Responsibility and Reform as individuals who have worked in national security affairs for decades for the Department of Defense, in the Armed Forces and for Democrats and Republicans in Congress. Our concern is the defense budget.

Similar to what your "Co-Chairs' Proposal" said last week regarding Social Security and other issues, we do not believe that defense spending should be reduced to a bargaining chip in budget negotiations at the Deficit Commission. On the other hand, we do believe that the defense budget is dangerously bloated, giving rise to serious decay in our armed forces.

Weaker forces at higher costs (discussed below) are the result of many years of exploitation of defense spending for political purposes, dereliction of oversight duties, and gross mismanagement by the Pentagon, the White House and the Congress. There has been a fundamental absence of accountability, both that required by the Constitution and that which accompanies sound management.

With or without the work of the Deficit Commission, the central problems in our defenses need to be addressed as a matter of high priority. The Commission provides a historic opportunity to build the consensus to do so now. We urge you to consider the proposition that the decay of our forces cannot be reversed under growing defense budgets. Instead, it can, and should, be achieved at levels of defense spending even somewhat lower than those the Co-Chairs' Proposal recommends.

To understand what is needed in the future, consider the mistakes of the past.

For example, over the last decade, the Navy budget received $293 billion more than the baseline of spending in 2000 anticipated (adjusted for inflation). Seen another way, the 2011 Navy's "base" budget, which does not include spending for the wars in Iraq and Afghanistan, is 44 percent higher than it was in 2000. Yet the size of the Navy's combat fleet went down in this period, from 318 ships and submarines to 287 - a decline of 10 percent. This is not a smaller, newer fleet; it is a smaller, older fleet - about four years older, on average, according to the Congressional Budget Office (CBO). It is also less ready to fight: for the past year the press has repeatedly reported on severe maintenance problems throughout the fleet, and Navy combat pilot training in the air has remained at historic lows.

The situation in the Air Force is worse. It received $320 billion more than the base budget levels anticipated in 2000 and increased by 2011 by 43 percent. During the same 2000-2011 period, the number of active and reserve fighter and bomber squadrons went from 146 to 72, a decline of 51 percent. According to CBO, our combat air fleet is now about nine years older than in 2000 - an historic high average age of about 23 years. Fighter pilot in-air training hours today are one-half to one-third of what they were in the 1970s, an era not noted for high readiness.

The Army received a $297 billion budget plus-up, a 53 percent increase. In this case, the combat forces did increase; the number of brigade combat teams grew from 44 to 46, an increase of 5 percent. A 53 percent budget increase bought a 5 percent increase in combat forces. But CBO tells us that major Army equipment inventories are mostly older, and in 2006, the House Armed Services Committee held hearings and leaked a memo documenting historic lows in the readiness of active Army units. The analysis has not been publicly updated, but we should worry that it has gotten worse.

There is no mystery why the increased spending has led to shrinking, aging hardware inventories. New weapons systems cost three to ten times more to buy and operate than the weapons they are replacing. Even if their budgets could grow steadily at five percent per year (over and above inflation), the cost explosion in new weapons dooms the military services to being unable to buy as many weapons as they had - hence the shrinking hardware inventories. Because they can buy so few new planes, tanks or ships, they extend the life of the old ones - hence the aging.

At $707 billion, the defense budget is today higher in than it has ever been since the end of World War II, even when the effects of 65 years of inflation are removed. This spending level is unrelated to the military threat. During the Cold War, from 1948 to 1990, when we faced the sizeable forces of the Soviet Union and the Warsaw Pact, annual Pentagon spending averaged $440 billion in inflation-adjusted dollars, (and that includes the effects of the Korean and Vietnam wars). Today, big spending advocates point to China, with a defense budget variously estimated at from $80 to $180 billion per year, as the future threat we must prepare against. But, if we add the highest available defense budget estimates for China, Russia, Iran, North Korea, and Cuba and then double that sum, the Pentagon still spends more. As to the threat of terrorism, we almost certainly spend more in one day than al Qaeda, the Taliban and all their affiliates spend in an entire year.

Despite Secretary of Defense Robert Gates' efforts to cancel or redo several weapon programs that were over cost and under-performing, the number of major defense acquisition programs has changed from 91 programs costing $1.6 trillion to 87 programs costing $1.6 trillion. As you know, Secretary Gates has also imposed a plan on the DOD bureaucracy to transfer internally $102 billion dollars over 5 years, but there is no net savings to help the deficit.

Instead, Secretary Gates wants the DOD budget to grow one percent per year plus inflation for the next 10 years. That would increase the base DOD budget from $554 in 2010 to $735 billion in 2020 - a 33 percent increase, not including any spending for the wars against terrorism. While the Co-Chairs' Proposal seeks a number of terminations, reductions, and efficiencies beyond the Gates' plan (many of them welcome and overdue, but some that we believe require major modification), both the Co-Chairs Proposal and the Gates' plan project into the future a defense program that is essentially the same as that we have today, simply at different spending levels. Under either plan, the size and modernity of our forces will continue to shrink and age, even if all remaining programs are implemented without any cost increases or schedule delays.

We believe there is a path that meets the goals of deficit reduction and strengthens real national defense. That path needs to start with the acknowledgement of a need for fundamental reform.

Right now, the Pentagon does not know how or where it spends its money. As the Government Accountability Office and DOD's own Office of the Inspector General have reported for decades, the Pentagon cannot track the money it spends. Routinely, DOD does not know if it has paid contactors once, twice, or not at all. We recently learned it does not even know how many contractors it has, how many they employ, and what they are doing. Google the terms "audit" and "Pentagon" and read the horror stories.

The Chief Financial Officers (CFO) Act of 1990 sought to solve this problem by requiring the Pentagon, and all other federal agencies, to pass annual audits of the links between their expenditures and legally enacted appropriations authorizing those expenditures. This requirement was intended as a first step to give meaning to the Appropriations and Accountability Clauses in the Constitution, namely -

"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

In sharp contrast to almost every other federal agency, the Pentagon has failed to comply with the CFO Act, let alone with the Constitution's much more sweeping and absolute requirement for accountability. We are sure you will agree this puts at risk not just fiscal responsibility - the task of your Commission - but also fundamental checks and balances in our system of government. As federal officials and members of the Armed Forces, we all took an oath, freely and without reservation, to uphold, protect and defend that principle, among others. The Pentagon, in effect, claims an exemption.

Since the CFO Act was enacted in 1990 to start the journey toward the Constitution's requirement for an uncompromised accounting of Pentagon spending, DOD's managers have made promise after promise to perform. A very modest level of "audit readiness" was promised for 1997; that slid to 2006, then 2007, 2016, and finally 2017- twenty seven years after the passage of the CFO Act. The sitting DOD CFO recently said the Pentagon will need yet another extension: that is, more than twenty seven years. With every promise broken, it is clear that if you ask what a DOD program or policy has cost, is costing, and might cost in the future, the current DOD system will provide you any dollar amount it wants you to hear. Ask for an audit of those numbers, or just an independent review, and listen to the excuses.

For further explanation of the practical effect, we urge you to look at an important new report from Senator Charles Grassley, R-IO ("Oversight Review of Audit Reporting by the Department of Defense, Office of Inspector General"). It reveals just how deep the problems are: not only are the Pentagon's books a gigantic mess making it impossible to know how money is actually spent, but the office charged with fixing the mess is broken.

To expose and understand the massive misuse of the windfall in the base budget, the huge excesses in new weapon costs, and the extent of incompetence and even corruption in DOD contracting, the national security decision-making community in the Pentagon, Congress, and the White House must confront the painful truth of accurate, comprehensive, audited cost and spending figures. However, those data do not exist because no one has insisted on them, notwithstanding the legal requirements of the Accountability Clause of the Constitution and the Chief Financial Officers Act. Worse, while promising watered-down versions of such data in the vague future, the business-as-usual Pentagon protests that its spending must keep on growing in perpetuity - as our forces shrink and age. It is precisely this behavior that the Constitution and the CFO Act sought to preclude.

Without a jolt, without radically altered incentives, the bureaucratic system that thrives on corrupted, unaudited accounts cannot and will not change. A colleague of yours on the Deficit Commission, Senator Tom Coburn, R-OK, has written to you recommending the urgently required accounting changes, together with a new and strong incentive: the DOD budget should be frozen at current (2010) spending levels until it can pass comprehensive audits of all of its programs, agencies, and contractors.

Freezing the DOD budget at the 2010 level would mean spending $5.5 trillion for defense in the next ten years. That is $1 trillion less than the $6.5 trillion that Secretary Gates' plan would spend. It is not radically different from the slightly more modest $865 billion reduction we understand the Bowles-Simpson Co-Chairs' Proposal would extract. Either spending limit could impose a discipline on Pentagon spending that has been missing for a long time. And freezing spending until the Pentagon passes audits up to the standards we require of taxpayers and businesses - as specified in the Coburn plan - provides a truly powerful incentive for the Pentagon to conform to the letter of the Chief Financial Officer Act and to the original intent of the Accountability Clause of the Constitution.

These audits are, in fact, the minimal prerequisites for beginning the reforms that actually strengthen defense, but their enforcement would lay the foundation for the decision-making discipline we have long needed. This goes beyond the commendable goal of saving money by identifying waste, fraud and abuse. Trustworthy, audited cost figures allow shaping new, more effective procurement programs - and ensure that planned procurements and force levels fit actual budgets.

Advocates of continuing DOD budget growth are loath to point out that holding the Pentagon's base budget at the 2010 level is actually a $900 billion increase over the pre-war year 2000 spending level (adjusted for inflation). Nor are they likely to tell you that the frozen budget will remain multiples of what China, Russia, North Korea, and Iran - combined - spend. Nor will they tell you it will match the combined spending of almost every other nation on earth.

The historical record shows that the magnitude of reduction suggested here has precedent. In 1985, during Ronald Reagan's presidency, and in 1991 in George W. Bush's presidency, Department of Defense budget authority took sharp downward vectors. Today, the United Kingdom has set out a path of an eight percent reduction in defense spending to meet essential fiscal goals. Sadly, however, the British government has not adopted a meaningful reform agenda, so it is simply buying less of the same weapon systems and force units that were planned before. Given the clearer picture of Pentagon spending resulting from Senator Coburn's crucial audit/freeze proposal, our collective experience makes us confident that Pentagon spending can be reduced in better informed, more effective ways - ways that can actually strengthen national security while ending the shrinking and the aging of our forces at ever higher cost.

All this is inextricably interwoven with our present wars. If - after our withdrawal from Iraq, Afghanistan and similar adventures, an increasingly inevitable consequence of impending bankruptcy - we simply default to the Pentagon's military and civilian bureaucracies, allowing them to continue business as usual by just shrinking presently planned forces, it would be an enormous tragedy for the American people and for all those in uniform. Your support of constructive, thoughtful use of reduced budget levels and audited spending figures can make possible truly fundamental reform, reform that reorients our national military strategy to more prudently balance national ends against national means.

We urge you to consider these ideas. If you would like to discuss any of the issues or data addressed above, we would be happy to meet with you.

Sincerely,

Thomas Christie
former Director, Operational Test and Evaluation Office of Secretary of Defense defense career started: 1955 tchristie34@verizon.net


Pierre M. Sprey
a key designer of the F-16 & A-10
defense career started: 1956
pierre@mapleshaderecords.com


David Evans
Lt. Col. USMC, ret.
defense career started: 1966
de@nolan-law.com


Franklin C. Spinney
former Analyst, Office of Secretary of Defense (Program Analysis and Evaluation) defense career started: 1967 chuck.spinney@gmail.com


GI Wilson
Col. USMC, ret.
defense career started: 1969
wilsongi@aol.com


Winslow T. Wheeler
Director, Straus Military Reform Project defense career started: 1971 winslowwheeler@msn.com


Douglas Macgregor, PhD
Col. US Army, ret.
defense career started: 1971
doug.macgregor@burke-macgregor.com


Donald Vandergriff
Maj. US Army, ret.
defense career started 1981
vandergriffdonald@usa.net

[longeyes]

Increasingly profligate, yes.  But what good is a trillion-dollar military you won't use when it matters?  When was the last time we applied maximum force in any war theater?  World War II?  Sure, we use high-tech drones and satellites and smart bombs, but most of what we're doing today is being done with M-4s.

[Leatherneck]

When was the last time we applied maximum force in any war theater?  World War II?

Well, we did have those dustups in Korea and Vietnam. And Desert Storm and Iraqi Freedom weren't exactly minor squabbles for the grunts.

The thing that's hard to calculate is "What would be the effect of the U.S. NOT having global power projection?" There are a lot of potential hot spots around the world that offer our adversaries openings to poke sticks in our eyes. And it's not like our bestest allies have much force to offer any more.

TC

[dm1333]

I'm all for increased oversight in our budget.  Deepwater and especially the 110 WPB to 123 WPB project are perfect examples of how the Coast Guard has mismanaged money.

http://www.washingtonpost.com/wp-dyn/content/article/2007/03/24/AR2007032400946.html

I was stationed on a 110 from 1992 to 1994 and even then we were having hull problems.  To think that years later we could lengthen those hulls and expect to get years of service out of them was ridiculous.

[seeker_two]

I've thought for years that we need to get away from large-scale battlefield weapons and occupation strategies and divide the miltary into three capabilities:

1. Small-scale surgical strike capabilities to take out localized threats (SOCOM, Stealth Bombers, etc.)

2. Annihilation of specific target areas (high-yield cruise missles, ICBM's, etc.)

3. Border patrol and interdiction (land and sea)

Let the world know that our response to a potential threat will be to put a bullet through a skull....or turn 100 square miles into glass....and let the threat decide....

[longeyes]

Well, we did have those dustups in Korea and Vietnam. And Desert Storm and Iraqi Freedom weren't exactly minor squabbles for the grunts.

Yes, we've had some "dust-ups," right.  But I said "maximum force."  And we didn't really end up winning in Korea and Vietnam either, according to a few.  Did we win Desert Storm or Iraqi Freedom? 

We've projected a lot of global force, no doubt about that, but at a rather stupendous cost and without a lot of help.  Maybe if we'd charged for that projection we wouldn't be where we are now.

[longeyes]

I've thought for years that we need to get away from large-scale battlefield weapons and occupation strategies and divide the miltary into three capabilities:

1. Small-scale surgical strike capabilities to take out localized threats (SOCOM, Stealth Bombers, etc.)

2. Annihilation of specific target areas (high-yield cruise missles, ICBM's, etc.)

3. Border patrol and interdiction (land and sea)

Let the world know that our response to a potential threat will be to put a bullet through a skull....or turn 100 square miles into glass....and let the threat decide....

What, no funds for nation-building, extended social welfare, and refugee settlement in Minnesota and Maine?  How do you expect us to spread democracy in the 21st century...?

Obviously, I agree with you.

[S. Williamson]

"Although personally I am quite content with existing explosives, I feel we must not stand in the path of improvement." - Winston Churchill

[French G.]

We've projected a lot of global force, no doubt about that, but at a rather stupendous cost and without a lot of help.  Maybe if we'd charged for that projection we wouldn't be where we are now.

We thankfully will never know the stupendous cost of not projecting that power. Well, hopefully not. If the hippies and the Paulist libertarian utopia worshippers ever get their way we will slink back to our borders. We will gut our defense industry losing key facilities and generations of skilled employees. We will shrink our military, not adequately fund currently fielded men or equipment, revile the need for a standing army and then....

The next world power is not likely to be as crappy an imperialist as we are our be very munificent. And then, a day late and many dollars short we will remobilize.

I'm all for accountability and common sense in the military budget. I can't get on the bring 'em all home bandwagon. Not really a big piece of the pie compared to our entitlement spending. That is what will crash this empire.

An' Tommy ain't a bloomin' fool -- you bet that Tommy sees! ~Kipling

[grampster]

The greatest projection of worldwide military power aimed at protecting the interests of America is the projection of the will to use our power to the extent that we are not perceived to be soft or unwilling to use our power.

Spending billions and trillions on military hardware and software have little to do with convincing those who would bring America to it's knees to be wary of kicking the American hornet's nest.

Americans need to decide what actions are necessary to validate our will to remain a nation of free men and women.  

Making violent war is a last resort.  It's contemplation should be done with a cold, cold deliberation and then carried out with as much violence and destruction to not only destroy those who threaten us, but also suggest that others should rather be our friends than be our enemy.

Rudy Guiliani said it best one time when he said that America would rather trade and do business with you than fight with you.

Tools of war are necessary, but the will to use them is mandatory.  

[Leatherneck]

Making violent war is a last resort.  It's contemplation should be done with a cold, cold deliberation and then carried out with as much violence and destruction to not only destroy those who threaten us, but also suggest that others should rather be our friends than be our enemy.

I couldn't agree more, Gramps. Unfortunately, leadership in the last half-century has been more into "sending a message" and incrementalism than I'd like. I say negotiate the Hell out of adversaries until we no longer see a chance for a peaceful solution, and then kill them all.

But that doesn't get to the real problems of oversight and accountability in the spending of the defense budget.

TC

[seeker_two]

http://news.yahoo.com/s/ap/20101123/ap_on_re_as/as_koreas_clash


This is the kind of situation that calls out for my military suggestion...

1. Send a half-dozen cruise missles (maybe 1-2 with a kiloton yield) to wipe out the artillery positions...and everything within a mile radius...

2. Get intelligence on where Kim Jong-Il is...and send in the hunter-killer teams....or a few F-117's (a heck of a "sniper" platform)....

[longeyes]

Hard to imagine that scenario--though I agree with it--unless Obama is under heavy sedation.

[Leatherneck]

unless Obama is under heavy sedation.

It's far worse than that. He's delusional and ignorant. And in charge.

TC

[Waitone]

Accountability seems to be lost everywhere in fed.gov these days.  DoD is where the pundit class stares because its budget is in the bucket marked "Discretionary Spending".  Imagine the scale waste in the bucket marked "Entitlement Spending" where there is no legislative control.  We are only now beginning to see the size of the problem.

[longeyes]

I meant it wouldn't happen unless Obama were heavily sedated.  Don't worry, he's preparing a tough letter to send to the NoKos.

[MicroBalrog]

We thankfully will never know the stupendous cost of not projecting that power. Well, hopefully not. If the hippies and the Paulist libertarian utopia worshippers ever get their way we will slink back to our borders.

1. You keep using that word. I don't think it means what you think it means.

2. There are levels of survival we are prepared to accept. There are levels between "fifteen aircraft carriers" and "total isolationism."