Paste This in Your Hat

April 1, 1988

This is a year of momentous change for national defense. In the name of relieving the federal deficit, the armed forces are deactivating combat units, canceling programs, and reducing their strength by 69,000 military and civilian personnel. Even before they began implementing a $20.5 billion cut to the FY’88 budget — which dropped on them late, nearly three months after which dropped on them late, nearly three months after the fiscal year had begun — they were told to “reshape” their spending plans downward by ten to twelve percent in each of the next five years.

New Secretary of Defense Frank C. Carlucci said he was bowing to reality with the budget he submitted. He warns that radical reductions are “not in the best interest of our national security posture.” Mr. Carlucci has been congratulated for his reasonableness. Early reaction from Congress to his austerity budget was favorable, but the game isn’t over yet.

The nation will soon discover that decimation of defense did not make our economic troubles go away. The deficit is still there. As pressure builds for the next wave of budget cuts, look for special interest pitchmen to step forward with seductive explanations of why the least painful solution is further cuts to defense. Here are some essential numbers and facts that defense-bashers often overlook or ignore. Paste them in your hat for easy reference as the budget season rolls along.

• The program that Mr. Carlucci presented provides $299 billion in budget authority (the amount that can be obligated against expenditures, including some in later years) and $294 billion in outlays (money paid out in the budget year). This includes $8.7 billion in budget authority and $8.5 billion in outlays for defense work in the Department of Energy and other agencies.

• The defense cuts had no relationship whatsoever to requirements. The numbers were picked for purely financial reasons with the impact to be figured out later. When the Defense Department computed its needs on the basis of mission requirements, it came up with $332 billion in budget authority for FY ’89.

• The Pentagon has said clearly that the armed forces will have to be smaller and less capable in the years ahead. Mr. Carlucci told Congress February 18 that the new budget does not cover all of the contingencies, commitments, and threats and that we will henceforth be living with more risk to our national security.

• Counting everything, federal outlays will rise by $38.3 billion in FY ’89. Defense outlays will be $8.6 billion in FY ’88 level, but that is not enough to cover the expected rate of inflation.

• Surveys consistently find that the tax dollar than it actually does. If the FY ’89 budget is approved without change, defense will take 5.7 percent of the Gross National Product and 26.1 percent of the federal budget. (In 1955, defense spending was 11.1 percent of GNP; in 1960, it was 9.5 percent; and in 1970, it was 8.3 percent.)

• A favorite trick for defense-bashers is to speak only of what has happened since 1980 and cite the increase in defense spending since then. This produces an impressive-sounding statistic because defense funding was severely depressed in 1980. It had declined, after inflation, by more than twenty percent in the 1970s, leaving huge shortfalls in military readiness, sustainability, and force structure.

• It is also popular to blame defense for the federal deficit. But in the 1950s and 1960s — when forty to fifty percent of the budget went to defense — the deficit was almost nonexistent. As the deficit grew in the 1970s, defense took about twenty-five percent of the budget. In the 1980s, when the budget deficit reached alarming levels, the defense share of the budget has never been higher than 27.3 percent.

• In 1969, the last year the budget was in balance, outlays for an aggregate of social and benefit programs called the “Human Resources Superfunction” were $17 billion less than defense outlays. By 1987 expenditures for this Superfunction had increased by 655 percent and are now equal to 180 percent of total defense outlays.

• President Reagan’s defense recovery program did not last as long as many people believe. Its high-water mark was in1985. Since then, defense budgets have declined by ten percent when inflation is factored out. The FY ’89 budget gives the Pentagon roughly the same spending power it had in 1983. After inflation, it is thirty-seven percent higher than the “hollow forces” budget was in 1980.

Circumstances might cut the defense budget again, even if Congress doesn’t. If the deficit is $146 billion or higher — and the Administration and Congress fail to take action — the Gramm-Rudman-Hollings deficit-reduction machinery will switch on automatically in October. The White House projects the deficit at $130 billion. Others believe it may be as high as $175 billion. If Gramm-Rudman-Hollings sequestration does occur, fully half of the automatic reductions must come from defense, although defense is allotted only a fourth of the outlays. This is because numerous social and entitlement programs are, by law, exempt from cuts.