Defense spending and the Obama adminstration

I have been reading about Robert Gates, our Secretary of Defense, who will be stepping down this month after four-plus years at the Pentagon. He has been warning about our reckless plans to cut defense severely, considering what a dangerous world we are in.


Back in the 90s, we thought threats were disappearing to our national interests. As a result, the Clinton administration decided to cash in the Cold War peace dividend. Of course, we soon found out that bad ideas and dictators didn't end in 1989.


Many Americans assume we spend way too much on defense. It usual is the first target of budget cutbacks. But in historical terms, the U.S. spends relatively little on defense today, even after the post-9/11 buildup. This year's $530 billion budget accounts for 3.5% of GDP, 4.5% when the costs of the Afghan and Iraq wars are included. That seems like a lot to us, but we have to know what the spending was like in other times as a percent of GDP. The U.S. spent, on average, 7.5% of GDP on defense throughout the Cold War, and 6.2% at the height of the Reagan buildup in 1986.


But on coming into office, the Obama Administration decided on new priorities. And defense wasn't one of them. The money went instead to new European-sized entitlements, starting with $2.6 trillion for ObamaCare. The White House proposed a $553 billion defense budget for 2012, $13 billion below what it projected last year. Through 2016, the Pentagon will see virtually zero growth in spending and will have to whittle down the Army and Marine Corps by 47,000 troops. The White House originally wanted deeper savings of up to $150 billion.


It was a good thing that Gates helped fight off some of these ideas. But he was unable to get any share of the stimulus. Instead, he has cut or killed some $350 billion worth of weapon programs. He told his four service chiefs last August to find $100 billion in savings. The White House came back and asked for another $78 billion. Last year, Mr. Gates said that the Pentagon needs 2%-3% real budget growth merely to sustain what it's doing now, but it could make do with 1%. The White House gave him 0%.


Defense money has focused on the demands of today's wars over hypothetical conflicts of tomorrow. This has distracted from budgeting to address the rise of China and perhaps of regional powers like a nuclear Iran that will shape the security future. I'm especially concerned about Iran and its capacity to stir up trouble in the Middle East. The decision to stop producing the F-22 fighter and to kill several promising missile defense programs may come back to haunt the U.S.


Liberals always think you can balance the budget by cutting defense way back. Not true. Gates noted that if the defense budget was cut by 10%, "which would be catastrophic in terms of force structure, that's $55 billion out of a $1.4 trillion deficit. We are not the problem." Good point.


Thanks to FDR and the New Deal, entitlements got their start, and Obama is happily increasing their weight in the budget. Under current projections, entitlements will eat up 10.8% of GDP by 2020, while defense spending goes down to 2.7%. The Wall Street Journal reports that if current trends continue, those entitlements (Medicare, Social Security, etc.) will consume all tax revenues by 2052.


Take a look at Europe, which headed down this same path years ago. Today it spends just 1.7% of GDP on defense. They can get away with this since the nations there can relax and depend on us to protect them. But what happens when we weaken our defense? Who do we look to for protection? China? I don't think so. It all comes down to the need for a strong economy, one that is able to generate enough money for defense and internal improvements. Here's where Obama's administration is a disaster. His fiscal policies leave us with no money for either. He needs to find a new job in 2012.