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Three Ploys the Department of Defense Uses When Their Budget Is at Risk

Thursday, 19 July 2012 10:42 By Dina Rasor, Truthout | Solutions

Crybaby contractors(Image: Jared Rodriguez / Truthout)I have been at this for too long. Since I first started looking at the Department of Defense (DoD) and its budget in 1979, I have seen the Pentagon, its largest contractors and its fellow travelers in the Congress predict economic crash and the end of the world as we know it when faced with large or even small budget cuts. With the possibility of the DoD cutting near $500 billion in ten years with the new budget, and near $500 billion in nine years if Congressional "sequestration" happens by the end of this year, the Pentagon is swooning and predicting doom. However, even with the sequestration cuts, the Pentagon would be going back to 2006 levels, where George Bush and Dick Cheney were fighting two wars and threatening other parts of the world while buying giant overrun weapons like the F-22 and the F-35. After all these years monitoring and exposing fraud and waste in the DoD, I am used to promises of doom whenever the DoD bureaucracy does not get exactly what it wants. However, with the unlikely sequestration cuts looming, the Pentagon and its contractors are acting apocalyptic.

Solutions - Making Government Work

Last year, after the so-called Super Committee created by Congress was unable to come up with a bipartisan compromise on cutting the government and raising revenues, the Congress decided to come up with a poison pill blend of cuts that would force both sides, Democrats and Republicans, to come up with a solution or face unpleasant cuts. Called sequestration, this exercise would have around $500 billion taken from social programs and around $500 billion taken from defense, unless the Congress could be scared into a compromise. Few thought that either side of Congress would let this happen because the cuts would be from favorite programs on each side. Most of Washington really doesn't think it is going to happen, but the DoD and the contractors are raising a stink and making dire threats if it does materialize.

As soon as Leon Panetta became secretary of defense, he made it clear that he would not accept these levels of cuts in the DoD and go back to dangerous 2006 levels. I wasn't surprised at this because of all the pressure by the entrenched DoD bureaucracy that will not accept any cuts, but I was surprised when, earlier this year, President Obama startled Panetta and the DoD by claiming that he would not get rid of the defense side of the cuts. Despite the hysteria by the DoD and its contractors, the Congressional Budget Office showed that even this level of cuts is not unreasonable for the DoD to absorb:

Defense spending cuts slated to take effect automatically in January if the two parties cannot agree on a more balanced budget would still leave the Defense Department with more funding than it received six years ago, according to a report Wednesday from the Congressional Budget Office.

It projects that the so-called sequestration of military and other funds, ordered by a law enacted last year, would cut the Pentagon's requested FY 2013 budget of $526 billion to $469 billion, an amount it said was still "larger than it was in 2006 (in 2013 dollars) and larger than the average base budget during the 1980s."

Sequestration would cut spending for the Pentagon by about $1 trillion over the next decade. The pending cut has prompted panic from Defense Secretary Panetta, who said it would cause "an unacceptable risk in future combat operations." Lawmakers such as House Armed Services Committee Chairman Buck McKeon (R-California) have said they want to block any cuts to defense spending - whether through sequestration or through President Barack Obama's plan to keep the defense budget mostly level over the next ten years.

Gordon Adams, a former Office of Management and Budget associate director for national security and international affairs under President Bill Clinton who is now at the Stimson Center, a nonprofit think tank, said he doubts sequestration will happen at all but that "the fact is Defense would not really suffer under those automatic cuts. 2006 was a very healthy level for defense spending." 

Tell that to the defense drama queens in the Congress and the DoD. On Tuesday this week, former Vice President Dick Cheney, who at one time actually cut some defense spending when he was secretary of defense but also ironically said that deficits don't matter, came up to Capitol Hill to brief the Republicans on how it would be catastrophic to allow the cuts. Lockheed Martin, the world's largest defense contactor, has threatened to send out termination notices to its employees right before Election Day to scare the Democrats back into line. On Wednesday, the House Armed Services Committee, chaired by McKeon, had its defense contractors, including Lockheed, affirm to the committee the deadly consequences of cutting any defense money. There was a lot of partisan bickering with the Democrats claiming that the defense contractor CEOs only cared about their piece of the pie and were not looking out for the long-term view to help the country. You might remember my column on how McKeon's wife was running for California state legislator and Lockheed and other defense contractors contributed money for her election effort, while, as I was told, never expecting to receive any quid pro quo from Chairman McKeon.

Even though most in Washington think that there will be a compromise before this sequestration will happen, the DoD has fallen back on three ruses that they always use when their budget is threatened; jobs will be lost and greatly affect the economy, our soldiers will not get the best weapons in the world and our enemies will take advantage of our weaknesses and kill us.

The jobs threat is usually the first threat that they use in bad economic times. Lockheed and the DoD have predicted that a million jobs will be killed over the ten years of these cuts and could plunge us back into the recession. I heard this a lot during the Reagan recession when the DoD budget was rocketing up. The DoD threatened this last fall when there was talk of budget cuts and suggested that DoD spending should be increased to stimulate the economy. I wrote a Solutions column in September 2011 on how that was a bad idea, especially since the DoD budget had doubled since the attack on the World Trade Centers.

Lockheed and other companies continue to make threats on jobs and affect the election by sending out pink slips right before the election. These companies claim that they have to send out these pink slips right before the election according to the law - a charge that has been called bogus and a scare tactic. This could affect the election because areas with high defense jobs could be thrown to vote for the Republican candidates. This is especially true in Northern Virginia, especially the defense-job-laden Fairfax county, which is seen as crucial to winning the state.

The next threat, that any budget cuts could hurt our troops, is being played out by the Aerospace Industries Association (AIA) with the help of New Hampshire Republican Sen. Kelly Ayotte. In the past, the DoD has spent billions on boondoggle weapons while shorting troops on things that they really need, especially during the Iraq and Afghanistan wars as I laid out in my book, "Betraying Our Troops." Troops in Iraq had to bolt on any metal they could find on their Humvees to protect themselves from IEDs (Improvised Explosive Devices), while some of their senior officers spent the war in Saddam's luxurious palaces and the Pentagon wasted billions of dollars on harebrained schemes to stop IEDs. But that is not how it is presented by the AIA and Ayotte according to Politico:

Sen. Kelly Ayotte (R-N.H.) has called a press conference with the Aerospace Industries Association on Tuesday to warn about massive job losses in the defense industry.

"Military leaders have been clear that defense sequestration will deprive our troops of the resources they need and undermine our national security for generations," Ayotte said in a statement. "I'm hopeful that this week's focus on sequestration will spur an increased sense of urgency for members of both parties to work together now to find an alternative solution." 

Maybe Ayotte is also talking about the F-35 fighter plane, built by Lockheed, that promises to have a life-cycle cost of one trillion dollars while not performing better than the plane that it replaced. Or maybe she was thinking of the F-22 fighter plane, which is creeping up to $500 million a copy and the DoD can't figure out why its oxygen system for the pilots is failing and making the pilots sick.

Either way, the DoD and the contractors always stick like glue to the troops, claiming that they only want the best for them while their record shows otherwise.

The final threat for any budget cuts is to make us feel that our enemies in the world would see any budget cuts as weakness and attack us for it. This was a much easier scare tactic during the cold war where we had the USSR as a permanent bogeyman and the DoD knew, because of the threat of nuclear annihilation, that we would never have to actually have a ground war with them, but we could act like it and buy a lot of weapons. When the communist system in the Soviet Union fell and Russia's military grew weak, we had to find another enemy to justify the large weapons budget, including the cold war fighter planes that were already in the pipeline.

That was a hard task made easier by 9/11, even though this terrible tragedy, done with little money and 19 men with box cutters, could not have been diverted by our gigantic and expensive cold war weapons. The Pentagon didn't blink an eye and kept on developing ineffective and grossly overpriced weapons even though we went to fight two desert guerilla-type wars. But they did use 9/11 as an excuse to double the defense budget. They are trying to keep us scared of the threats of several Middle Eastern countries despite the fact that we spend more each year on defense than most of the world's countries combined.

This chart below shows, in constant dollars, the large growth in the defense budget since Eisenhower, including the startling growth of the defense budget over the last two administrations. The numbers also show that the DoD and its contractors are blowing smoke with all these excuses of why they can't cut the budget at all and need larger and larger slices of our shrinking federal budget. They, for years, have been able to use fear of the enemy and fear of losing jobs to keep this budget bonanza going, and unlike other federal programs, the fear tactics usually work.

defense budgets2

If the DoD would drastically change its procurement practices, especially the way it prices weapons with historic fraud waste and fat built in, it could have more than enough money to buy the weapons it needs. For more information on this problem, see my past columns here and here. But the DoD, the Congress and the contractors don't want to give up the status quo and the easy money, so they fight any reasonable reform, even though it would be better for the country and the troops.

Two groups, Taxpayers for Common Sense and the Project on Government Oversight (POGO) put out a list of things that could be cut that would satisfy the $500 billion sequestration cuts. (Full disclosure, I am the founder of POGO and still serve on their board of directors.) If you really want to get into the weeds on reforming the Pentagon, see my Truthout Reader electronic book, "Pentagon Solutions: How to Actually Get Control of Defense Spending."

Everyone who is trying to rein in the DoD is fighting years of cronyism and institutional fraud and waste. This sequestration process or the compromise reached by both parties could start the process of slowing the runaway growth of defense spending that has been fueled by fear and war since 9/11. But it will take a lot of political will to successfully roll back the money of an institution that has had its hand in the government till since the continental Congress.

If you really care about deficits, as many in the Congress claim, you are going to have to get very tough with the Pentagon. Based on their reactions and the reactions of their contractors these past several weeks, they will try to reiterate their usual ruses to prevent any budget cuts. We have to get past their threats and do what is really best for the troops and the taxpayers, the DoD and Lockheed be damned. Are we finally up to the task?

Dina Rasor

Dina Rasor is an investigator, journalist and author. Rasor has been fighting waste while working for transparency and accountability in government for three decades. In 1981, Rasor founded the Project on Military Procurement (now called the Project on Government Oversight, or POGO) to serve as a nonprofit, nonpartisan watchdog over military and related government spending. Rasor's most recent book, "Betraying Our Troops: The Destructive Results of Privatizing War," chronicles first-hand accounts of the devastating consequences of privatized war support for troops and the overall war effort in Iraq. She also founded the Bauman & Rasor Group that helps whistleblowers file lawsuits under the federal qui tam False Claims act and has been involved in cases which have returned over $100 million back to the US Treasury.


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Three Ploys the Department of Defense Uses When Their Budget Is at Risk

Thursday, 19 July 2012 10:42 By Dina Rasor, Truthout | Solutions

Crybaby contractors(Image: Jared Rodriguez / Truthout)I have been at this for too long. Since I first started looking at the Department of Defense (DoD) and its budget in 1979, I have seen the Pentagon, its largest contractors and its fellow travelers in the Congress predict economic crash and the end of the world as we know it when faced with large or even small budget cuts. With the possibility of the DoD cutting near $500 billion in ten years with the new budget, and near $500 billion in nine years if Congressional "sequestration" happens by the end of this year, the Pentagon is swooning and predicting doom. However, even with the sequestration cuts, the Pentagon would be going back to 2006 levels, where George Bush and Dick Cheney were fighting two wars and threatening other parts of the world while buying giant overrun weapons like the F-22 and the F-35. After all these years monitoring and exposing fraud and waste in the DoD, I am used to promises of doom whenever the DoD bureaucracy does not get exactly what it wants. However, with the unlikely sequestration cuts looming, the Pentagon and its contractors are acting apocalyptic.

Solutions - Making Government Work

Last year, after the so-called Super Committee created by Congress was unable to come up with a bipartisan compromise on cutting the government and raising revenues, the Congress decided to come up with a poison pill blend of cuts that would force both sides, Democrats and Republicans, to come up with a solution or face unpleasant cuts. Called sequestration, this exercise would have around $500 billion taken from social programs and around $500 billion taken from defense, unless the Congress could be scared into a compromise. Few thought that either side of Congress would let this happen because the cuts would be from favorite programs on each side. Most of Washington really doesn't think it is going to happen, but the DoD and the contractors are raising a stink and making dire threats if it does materialize.

As soon as Leon Panetta became secretary of defense, he made it clear that he would not accept these levels of cuts in the DoD and go back to dangerous 2006 levels. I wasn't surprised at this because of all the pressure by the entrenched DoD bureaucracy that will not accept any cuts, but I was surprised when, earlier this year, President Obama startled Panetta and the DoD by claiming that he would not get rid of the defense side of the cuts. Despite the hysteria by the DoD and its contractors, the Congressional Budget Office showed that even this level of cuts is not unreasonable for the DoD to absorb:

Defense spending cuts slated to take effect automatically in January if the two parties cannot agree on a more balanced budget would still leave the Defense Department with more funding than it received six years ago, according to a report Wednesday from the Congressional Budget Office.

It projects that the so-called sequestration of military and other funds, ordered by a law enacted last year, would cut the Pentagon's requested FY 2013 budget of $526 billion to $469 billion, an amount it said was still "larger than it was in 2006 (in 2013 dollars) and larger than the average base budget during the 1980s."

Sequestration would cut spending for the Pentagon by about $1 trillion over the next decade. The pending cut has prompted panic from Defense Secretary Panetta, who said it would cause "an unacceptable risk in future combat operations." Lawmakers such as House Armed Services Committee Chairman Buck McKeon (R-California) have said they want to block any cuts to defense spending - whether through sequestration or through President Barack Obama's plan to keep the defense budget mostly level over the next ten years.

Gordon Adams, a former Office of Management and Budget associate director for national security and international affairs under President Bill Clinton who is now at the Stimson Center, a nonprofit think tank, said he doubts sequestration will happen at all but that "the fact is Defense would not really suffer under those automatic cuts. 2006 was a very healthy level for defense spending." 

Tell that to the defense drama queens in the Congress and the DoD. On Tuesday this week, former Vice President Dick Cheney, who at one time actually cut some defense spending when he was secretary of defense but also ironically said that deficits don't matter, came up to Capitol Hill to brief the Republicans on how it would be catastrophic to allow the cuts. Lockheed Martin, the world's largest defense contactor, has threatened to send out termination notices to its employees right before Election Day to scare the Democrats back into line. On Wednesday, the House Armed Services Committee, chaired by McKeon, had its defense contractors, including Lockheed, affirm to the committee the deadly consequences of cutting any defense money. There was a lot of partisan bickering with the Democrats claiming that the defense contractor CEOs only cared about their piece of the pie and were not looking out for the long-term view to help the country. You might remember my column on how McKeon's wife was running for California state legislator and Lockheed and other defense contractors contributed money for her election effort, while, as I was told, never expecting to receive any quid pro quo from Chairman McKeon.

Even though most in Washington think that there will be a compromise before this sequestration will happen, the DoD has fallen back on three ruses that they always use when their budget is threatened; jobs will be lost and greatly affect the economy, our soldiers will not get the best weapons in the world and our enemies will take advantage of our weaknesses and kill us.

The jobs threat is usually the first threat that they use in bad economic times. Lockheed and the DoD have predicted that a million jobs will be killed over the ten years of these cuts and could plunge us back into the recession. I heard this a lot during the Reagan recession when the DoD budget was rocketing up. The DoD threatened this last fall when there was talk of budget cuts and suggested that DoD spending should be increased to stimulate the economy. I wrote a Solutions column in September 2011 on how that was a bad idea, especially since the DoD budget had doubled since the attack on the World Trade Centers.

Lockheed and other companies continue to make threats on jobs and affect the election by sending out pink slips right before the election. These companies claim that they have to send out these pink slips right before the election according to the law - a charge that has been called bogus and a scare tactic. This could affect the election because areas with high defense jobs could be thrown to vote for the Republican candidates. This is especially true in Northern Virginia, especially the defense-job-laden Fairfax county, which is seen as crucial to winning the state.

The next threat, that any budget cuts could hurt our troops, is being played out by the Aerospace Industries Association (AIA) with the help of New Hampshire Republican Sen. Kelly Ayotte. In the past, the DoD has spent billions on boondoggle weapons while shorting troops on things that they really need, especially during the Iraq and Afghanistan wars as I laid out in my book, "Betraying Our Troops." Troops in Iraq had to bolt on any metal they could find on their Humvees to protect themselves from IEDs (Improvised Explosive Devices), while some of their senior officers spent the war in Saddam's luxurious palaces and the Pentagon wasted billions of dollars on harebrained schemes to stop IEDs. But that is not how it is presented by the AIA and Ayotte according to Politico:

Sen. Kelly Ayotte (R-N.H.) has called a press conference with the Aerospace Industries Association on Tuesday to warn about massive job losses in the defense industry.

"Military leaders have been clear that defense sequestration will deprive our troops of the resources they need and undermine our national security for generations," Ayotte said in a statement. "I'm hopeful that this week's focus on sequestration will spur an increased sense of urgency for members of both parties to work together now to find an alternative solution." 

Maybe Ayotte is also talking about the F-35 fighter plane, built by Lockheed, that promises to have a life-cycle cost of one trillion dollars while not performing better than the plane that it replaced. Or maybe she was thinking of the F-22 fighter plane, which is creeping up to $500 million a copy and the DoD can't figure out why its oxygen system for the pilots is failing and making the pilots sick.

Either way, the DoD and the contractors always stick like glue to the troops, claiming that they only want the best for them while their record shows otherwise.

The final threat for any budget cuts is to make us feel that our enemies in the world would see any budget cuts as weakness and attack us for it. This was a much easier scare tactic during the cold war where we had the USSR as a permanent bogeyman and the DoD knew, because of the threat of nuclear annihilation, that we would never have to actually have a ground war with them, but we could act like it and buy a lot of weapons. When the communist system in the Soviet Union fell and Russia's military grew weak, we had to find another enemy to justify the large weapons budget, including the cold war fighter planes that were already in the pipeline.

That was a hard task made easier by 9/11, even though this terrible tragedy, done with little money and 19 men with box cutters, could not have been diverted by our gigantic and expensive cold war weapons. The Pentagon didn't blink an eye and kept on developing ineffective and grossly overpriced weapons even though we went to fight two desert guerilla-type wars. But they did use 9/11 as an excuse to double the defense budget. They are trying to keep us scared of the threats of several Middle Eastern countries despite the fact that we spend more each year on defense than most of the world's countries combined.

This chart below shows, in constant dollars, the large growth in the defense budget since Eisenhower, including the startling growth of the defense budget over the last two administrations. The numbers also show that the DoD and its contractors are blowing smoke with all these excuses of why they can't cut the budget at all and need larger and larger slices of our shrinking federal budget. They, for years, have been able to use fear of the enemy and fear of losing jobs to keep this budget bonanza going, and unlike other federal programs, the fear tactics usually work.

defense budgets2

If the DoD would drastically change its procurement practices, especially the way it prices weapons with historic fraud waste and fat built in, it could have more than enough money to buy the weapons it needs. For more information on this problem, see my past columns here and here. But the DoD, the Congress and the contractors don't want to give up the status quo and the easy money, so they fight any reasonable reform, even though it would be better for the country and the troops.

Two groups, Taxpayers for Common Sense and the Project on Government Oversight (POGO) put out a list of things that could be cut that would satisfy the $500 billion sequestration cuts. (Full disclosure, I am the founder of POGO and still serve on their board of directors.) If you really want to get into the weeds on reforming the Pentagon, see my Truthout Reader electronic book, "Pentagon Solutions: How to Actually Get Control of Defense Spending."

Everyone who is trying to rein in the DoD is fighting years of cronyism and institutional fraud and waste. This sequestration process or the compromise reached by both parties could start the process of slowing the runaway growth of defense spending that has been fueled by fear and war since 9/11. But it will take a lot of political will to successfully roll back the money of an institution that has had its hand in the government till since the continental Congress.

If you really care about deficits, as many in the Congress claim, you are going to have to get very tough with the Pentagon. Based on their reactions and the reactions of their contractors these past several weeks, they will try to reiterate their usual ruses to prevent any budget cuts. We have to get past their threats and do what is really best for the troops and the taxpayers, the DoD and Lockheed be damned. Are we finally up to the task?

Dina Rasor

Dina Rasor is an investigator, journalist and author. Rasor has been fighting waste while working for transparency and accountability in government for three decades. In 1981, Rasor founded the Project on Military Procurement (now called the Project on Government Oversight, or POGO) to serve as a nonprofit, nonpartisan watchdog over military and related government spending. Rasor's most recent book, "Betraying Our Troops: The Destructive Results of Privatizing War," chronicles first-hand accounts of the devastating consequences of privatized war support for troops and the overall war effort in Iraq. She also founded the Bauman & Rasor Group that helps whistleblowers file lawsuits under the federal qui tam False Claims act and has been involved in cases which have returned over $100 million back to the US Treasury.


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