Down Payment

Sept. 1, 2001

By last winter, a consensus had formed that the armed forces were in trouble. They had been cut repeatedly, yet they were deploying to conflicts and contingencies more often than before.

Readiness was down. Spare parts and munitions were depleted. Capital equipment was wearing out and not being replaced. Time and again, force modernization had been postponed.

By various estimates that crossed partisan lines, the services needed between $50 billion and $100 billion more a year just to avoid slipping further into decline. On its way out of town, the Clinton Administration proposed a modest defense increase.

Immediate relief was expected from the Bush Administration, which had made military decline a main theme of the election campaign, promising that help was on the way.

Thus, it came as a surprise in January when the White House announced that Bush would stick with the 2002 Clinton defense budget until Secretary of Defense Donald Rumsfeld had completed a sweeping review of force structure and requirements.

Bush said the Clinton budget he inherited was “only a start.” The “full investment” would be forthcoming after the Rumsfeld review. “We must put strategy first, then spending,” he said. “Our defense vision will drive our defense budget, not the other way around.”

Meanwhile, the Administration turned its energies toward a more urgent priority, pushing a tax cut through Congress.

To conduct the review, Rumsfeld brought in teams of outsiders, who labored behind closed doors. That gave rise to all sorts of rumors about changes and reductions.

In May, Rumsfeld launched a news media blitz to explain that the review had been misinterpreted. It was exploratory and informational, he said, and no big decisions had been made. The action shifted to the Pentagon’s regular Quadrennial Defense Review, which had been sidelined in deference to the outsider review.

Halfway through the year, the armed forces got a supplemental appropriation for 2001. The amount was about a third of what they actually needed, but they would not have to park their airplanes for lack of operating funds.

Because of the drawn-out review, however, the Pentagon was dead last among federal agencies in submitting its revised 2002 budget to Congress, which it did in late June. By then, the tax cut had consumed much of the budget surplus, and other claimants had gotten their bids in for the money that was left.

The 2002 defense budget proposal is $328.9 billion, an increase of $18.4 billion. Rumsfeld will not say how much he asked for, but according to press reports, he was cut off at the pass–and not for the first time–by the Office of Management and Budget.

Rumsfeld wanted a $35 billion increase for 2002. The OMB counterproposal was $15 billion. The settlement wasn’t far from OMB’s number.

Asked if the defense review had been budget-driven after all, Rumsfeld quipped that “life is budget-driven.” Perhaps so, but the Administration’s whole premise for staging the review and deferring a decision on defense had been to establish the requirement first and let that determine the budget.

Rumsfeld reminds us that the proposed increase is the biggest for defense in years, and he is correct. But as he also knows, it leaves a big gap, some of which Rumsfeld hopes to fill with the next budget.

He told Congress that it will take $347 billion in 2003 “to keep the department going next year on a straight-line basis with no substantial improvements” and “before addressing important transformation issues.”

That calls for another increase as big as the $18 billion proposed for 2002, which will undoubtedly meet resistance from OMB. Even if he gets the full amount, Rumsfeld will be hard-pressed to cover the existing problems with it.

He will still be looking for money to pay for two of the Administration’s declared objectives: ballistic missile defense and transforming the military to exploit the technological Revolution in Military Affairs.

A new cloud appeared on the horizon in late July, with reports that a revised estimate now projects the federal surplus to be lower than expected next year. The 2002 defense proposal may have to be scaled back.

The President properly described some of the early budget numbers as a “down payment.” Up to now, though, OMB has been allowed to prevail consistently in interdepartmental negotiations. That raises the question of what priority the Administration really puts on defense.

The promised defense recovery looks to be running out of gas.

The suggestion is made, both inside and outside of government, that most of the recovery, recapitalization, and transformation of the military can be funded by cost savings, cutbacks, and internal realignments.

No doubt some reductions can-and should-be made, but in situations like this, the most deserving candidates have a way of escaping the noose. Also, it is not realistic to believe that the services can come up with enough savings to pay for 10 years of neglect.

In 1995, for the first time in almost 50 years, the nation’s allocation for defense slipped below 4.0 percent of the Gross Domestic Product. Not coincidentally, it is since then that the worst of the military deterioration has occurred.

It all depends on where the priorities lie.