America Grows Weary of War While our Enemies Amass Their Forces: Sequestration’s National Security Toll : Peter Huessy ****
As the U.S. cuts important military capabilities to meet arbitrary budget reduction targets, the Department of Defense and the nation’s security will continue to take a beating without some new long-term budget and strategy agreement.
The security of our friends and allies, such as the Republic of Korea, Germany, Columbia and Israel, will also suffer as we risk cuts to tactical air support for Seoul, NATO support for extended nuclear deterrence in Europe and counter insurgency assistance for Bogota against FARC, and missile defenses for Tel Aviv.
Why are we in this predicament? Sequestration — automatic defense budget cuts — are cutting $50 billion a year out of $350 billion in our defense spending this year, and every year, for the next eight years as part of the 2011 debt reduction agreement.
As military personnel costs and the overseas war contingency funding are exempt from such cuts, the remaining accounts — of research, development and acquisition of weapons systems –are being hammered. Moreover, these cuts come on top of the overall defense cuts of $300 billion in 2009; the $175 billion cut in 2010, and the $487 billion cut in 2011.
Added together, defense spending from 2009-2022 has, and will be, reduced by more than $1.5 trillion, not including a projected further near-trillion dollar reduction in 10-year costs of overseas contingency operations such as in Iraq, Somalia, Afghanistan and Yemen.
To avoid further sequestration, we need a new long-term budget agreement — including entitlement reform with spending restraints. Otherwise, as the October 2, 2013 Congressional Budget Office update warned, the U.S. economy will be hard pressed under such rising spending and a growing debt to have sufficient capital to invest in new business to employ the 24 million Americans not now employed or working only part-time.
Furthermore, unless real tax and regulatory reform also occur, the U.S. economy cannot grow fast enough–even with a debt reduction agreement–to achieve full employment.
Given projected spending, the U.S. must achieve full employment and robust growth to pay our bills and bring down the debt. Our tax system and regulatory burden is also harming economic growth and investment, both of which have to accelerate to achieve the full employment needed to restore fiscal balance.
This is the only way to grow worker’s incomes and restore middle class prosperity. Then, tax revenue will grow sufficient to provide what we need for defense.
Our current problem is that entitlement spending — Medicare, Medicaid, Social Security and welfare — continues automatically even in the absence of Congressional action.
Thus if Congress does nothing, entitlement spending just rolls along. This means that defense spending is in jeopardy. Why?
The only place to cut spending–by default–are what are called the discretionary budget accounts. They get approved every year. This include funding 11 cabinet level agencies including, for example, the Department of State, EPA, the Justice Department and Department of Defense.
Total spending for this “discretionary” part of the government is capped at $960 billion a year, compared to a total Federal budget of $3.7 trillion. Thus base defense spending at $525 billion a year, is the largest-60%– portion of discretionary spending. It gets the most cuts even though it is only 15% of the total Federal budget. In short, the budget cutters go where they are allowed to go and that is defense.
Given this dire situation, it is no wonder that Joint Chiefs Chairman General Martin Dempsey told the Senate Armed Services Committee “the longer sequestration in its current form persists,” our future military will be characterized as one with “Unready forces, misaligned global posture, inability to keep pace with emerging threats, reduced security cooperation, and failure to maintain a high quality All Volunteer Force” (Breaking Defense by Colin Clark, July 18, 2013).
He further testified that while “the military will run to the sound of the guns, we may not be ready to go.” And he warned that projected budgets may not sustain even scaled-down American security requirements, let alone a solid “Pacific pivot”, the administration’s call for moving U.S. military forces to that region of the world.
Many observers and analysts, on the other hand, have assumed these cumulative cuts in defense spending are not going to be altered. They have thus designed a force structure to fit the budget — so what we now have are budget cut scenarios masquerading as strategy assessments.
To further justify defense cuts, much of the commentary on defense strategy starts with the correct premise that most Americans are weary of war and therefore such cuts are consistent with the tenor of the times.
While it may be true that Americans are weary of foreign entanglements, turning toward isolationism may result in our neglect of America’s genuine security requirements just as our enemies continue to amass their forces.
Now this does not mean that the U.S. should jump into another protracted war just to prove it will not retreat. But irrespective of what defense and national security strategy the U.S. eventually adopts, currently none of its military commanders can implement a sound strategy without a known defense budget over the next 5-10 years. Presently, given the uncertainty over sequestration cuts and the absence of an agreed upon long term budget plan, the unknowns dwarf the knowns.
If Generals and Admirals are given a budget over the long term, at least they will know what they have to work with and can adopt the best strategy to get the maximum result.
However, such a task becomes very difficult when the budgets provided have almost no real relationship to the required cost of a sound security strategy. In other words, the new strategy cannot be implemented given the planned budgets. In short, the military is not being given enough money to carry out the tasks it is being asked to do by its leaders and is required to do by our security realities.
Why do we not have a sound long term defense strategy and accompanying budget? Largely because Washington refuses to get its fiscal house in order as the new October 2 CBO report explained. And why is that? That task would require looking at all government spending, especially entitlements and that is politically very difficult to do.
To avoid such a political minefield, critics often ridicule such debt concerns, calling them an “obsession” and not to be taken seriously (Jonathan Bernstein, The Washington Post, March 22, 2013, “Why the budget deficit obsession?”)
Our goal should be to re-open the government and raise the debt limit and as part of any deal remove defense spending as the central target of deficit reduction efforts as endorsed by House Armed Services Committee Chairmen Congressman Buck McKeon.
Now, it may indeed be politically popular to short-change defense. And one can argue such efforts to stop defense sequester will run into serious political headwinds. But I think we can turn this argument around. Remember the oft-used phrase “Do not let a good crisis go to waste?”
Well let us use this “government shut-down crisis”, manufactured or not, to markedly change the nature of the debate in Washington.
Yes, debt is important and spending has to get under control. There is no argument about that.
But the new debate should be over restoring the American dream for Americans. And that starts with the tens of millions of folks out of work.
Cutting defense and almost nothing else as we are doing now will not put 24 million unemployed and under-employed Americans to work. It will not grow incomes. And it will not generate the Federal revenue needed to pay our bills even if defense spending continues to get the budget axe.
A smart path forward would adopt pro-growth tax and regulatory reforms to boost employment, middle class incomes and thus Federal revenue while also reforming and restraining future entitlement spending including and especially that related to health care.
As I already noted, the Congressional Budget Office (CBO) released a new budget report October 2, 2013 which tells us why we have to do this . They conclude annual deficits over $1 trillion will be the norm at the end of this decade. They further warn such debt is unsustainable and will markedly harm economic growth and risk crashing the U.S. economy[http://www.cbo.gov/sites/default/files/cbofiles/attachments/44521-LTBO2013.pdf]
So, who is the culprit or what needs to be fixed?
CBO explains government health care entitlement expenditures are chiefly to blame, including excess cost growth (40%), our aging population (26%) and expansion of benefits under the ACA or the Affordable Care Act (26%). Put another way, CBO says Medicare and Medicaid account for 42% of the future health entitlement problem while the Affordable Care Act expansion of health care coverage comes in at 38%. Welfare spending accounts for the remainder of the unsustainable spending.
But the administration has previously said do not worry. Future debt they say is “long term”. For example, a year ago the President said on the David Letterman show: “We do not have to worry about it [the deficit] short term” (Real Clear Politics, September 12, 2012).
But in Washington, “short term” is “short hand” for kicking decisions down the road and a “let’s not deal with that today” philosophy.
But we cannot afford such a “do little” strategy.
Thus, those who want a sound long term debt deal now that includes tax, welfare, entitlement and regulatory reform have tried to use the leverage of the government not being fully funded or the debt ceiling extended to get movement toward such a goal.
The ACA was chosen as the target as representative of out of control government entitlement spending although the issue of U.S. fiscal health goes far beyond this new health insurance law.
That is why the government is not fully funded and there is no agreement extending the debt limit.
The debt outlook is indeed staggering-but the problem is here and now, not out into the future. It will reach close to another $100 trillion in unfunded liabilities over the next 75 years. But just in ten years, debt could reach $25 trillion. Interest alone on such debt is projected to reach nearly $1 trillion a year compared to $225 billion now.
Even should the US economy perform well with full employment, economic growth averaging over 3.0% a year and with health care costs increasing at only 5-7% a year rather than at their historical average often in excess of 10%, we may have a shot at solving these problems but only if we simultaneously markedly reduce the cost of entitlements. But our economy is performing at only half of these standards.
The challenge is pretty clear: grow the economy similar to what was done during the Reagan and Clinton “boom years”. Or suffer continued recessions and economic hardship, and see our security suffer.
The task to restore the American dream is indeed formidable but that is no excuse to simply “kick the can down the road” and pretend our problems do not need attention today. The administration has had the entire year during which such a future roadmap could have been adopted.
Without such a future plan, those concerned with our lack of collective political will have sought to use the end of the fiscal year and debt ceiling funding requirement as a vehicle where leverage could be applied to get Congress and the administration to agree to such a plan.
Simply kicking the budget can further down the political road is a vast dereliction of duty by the Congress and administration. Requiring both to do their jobs should not earn members of the either of them the opprobrium so heaped upon them so easily by the media and the chattering political classes.
Though many may not wish to admit it, but the ACA roll-out has indeed been an unmitigated disaster as described by CBS television news and many other media outlets totally sympathetic to the legislation. The bill is not and never was intended to be an embrace of free-market principals as E.J. Dionne of the Washington Post claims. What free-market principal is involved in forcing families to buy insurance three times the current cost that ends up covering one parent but not the other, or which forces families to get a divorce to be able to afford health care insurance, or which treats classes of workers differently for no good reason.
A year-long pause in the business mandate as called for by the administration was directly related to the six-month drought in full-time job creation between January and June 2013, exactly the “look-back” period under the ACA law that would be used as the basis for determining a company’s full time worker numbers.
A parallel delay in the individual mandate would be an important pause during which a full oversight audit of the bill could be completed as part of an overall assessment of the future debt and spending challenges we face and whether in fact the ACA is providing America the benefits that were initially advertised. Given CBO’s assessment that the ACA will now cost in excess of $2.7 trillion over the next decade, with only $1 trillion of that paid for with new taxes, not including this new entitlement in future spending assessments makes no common sense.
This is not a question of giving people “health care” or not. It is about whether the American dream itself can be restored and whether the freedom and liberty we expect as our birthright will before we know it be fundamentally transformed into a socialist, government centric tyranny now a burden on so much of the rest of the world. [A longer version of this essay was first published by Gatestone Institute on October 15, 2013].
Peter Huessy is President of GeoStrategic Analysis of Potomac, Maryland , a defense and national security consulting firm.
Read more: Family Security Matters http://www.familysecuritymatters.org/publications/detail/america-grows-weary-of-war-while-our-enemies-amass-their-forces-sequestrations-national-security-toll#ixzz2i4rsCDkV
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