Testimony of Lawrence J. Korb Before the House Budget Committee - February 12, 2002

Mr. Chairman, Members of the House Budget Committee, I appreciate the opportunity to appear before you today to discuss the Bush administration’s proposed FY 2003 defense budget and the FY 2003-2007 defense program. It has been my privilege to appear before the Budget Committee of both houses of Congress at various times over the past 22 years, both as a government official and as a private citizen and at the request of both parties.

When looking at the proposed FY 2003 defense budget and the FY 2003-2007 defense program, the Congress and the American people should ask two simple questions:

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• First, can a budget of about $400 billion for national security in FY 2003 be justified?

• Second, is the proposed FY 2003-2007 defense program properly funded?

In my view the answer to both these questions is no.

The FY 2003 defense budget for national defense requests $396 billion -- which is an increase of $48 billion, or 14 percent, over the FY 2002 budget. By any reasonable standard, this is a huge budget and an enormous increase. If enacted it will mean that:

• Defense spending will have risen by $88.2 billion or 30 percent since FY 2001

• spending will be 15 percent higher in real terms than what we spent on average to win the Cold War

• this will be the largest real increase since the Vietnam War.

• it will mean that the U.S. alone will consume about 40 percent of the world’s total military expenditures

• the U.S. will spend more on defense the next 15 countries in the world combined.

• the proposed increase of $48 billion alone is more than the total military budgets of every nation in the world

• the proposed budget is more than the total GDP of 23 nations, including Saudi Arabia and Pakistan.

I recognize that the size of the U.S. defense budget cannot be compared directly to that of other nations, because the U.S. is a global power with worldwide interests. But surely, there is more of relationship between what the U.S. and its potential adversaries spend on defense than what percentage of our GDP the nation has allocated to defense over the past 50 years.

JUSTIFICATIONS

In justifying the size of this budget, Secretary Rumsfeld is fond of pointing out that when he came to Washington, the U.S. was spending about 10 percent of its GDP on defense, as opposed to the 3.3 percent he is requesting for FY 2003. However, he fails to mention that in constant dollars, his FY 2003 defense budget request is higher than any budget sent to Congress by the Presidents he served, Nixon and Ford. Nor does he point out how much our economy has grown since the mid-1970s, that is from $1.5 trillion in 1975 to $10.3 trillion in 2001. Finally, comparison to what was spent by previous administrations is meaningless since the Bush military will not be going to war with that of Kennedy, Johnson, Nixon, Ford, Carter, or Reagan.

Administration officials, including the President, offer two specific justifications for such a large increase: the nation is at war and they inherited a military that was, in Secretary Rumsfeld’s words, “overused and under funded.”

1. The War on Terror

There is no doubt that the U.S. military should have all the money it needs to fight the war on terrorism. But does the war against terrorism justify such an increase? Hardly.

The Pentagon has already received a $20 billion supplement to its 2002 budget to prosecute the war, far more than it will spend on that conflict. So far, the cost of the military campaign against Afghanistan has been about $6 billion, or $1.5 billion a month. Now that the military campaign is winding down, the monthly cost to the Pentagon will drop. Bush's proposed 2003 budget estimates that the cost of the war next year will be about $10 billion, or less than a billion a month. It is therefore clear that we’ve already budgeted for the military’s role in the war against terrorism.

The war against terrorism cannot be compared to the wars that the U.S. fought in the last half of the 20th Century. The Korean War, the Vietnam War, and the Persian Gulf War, were primarily military conflicts in which large numbers of American military forces were pitted against significant armed forces on the other side. In 1950, the U.S. sent more than 300,000 men and women to confront some two million North Korean and Chinese forces; the American military buildup in Vietnam peaked at 579,000 in 1968; and nearly 500,000 Americans were sent to battle Iraq’s million man Army in 1991.

In addition, during the Korean and Vietnam wars, the U.S. military significantly expanded the number of people in the armed forces. During the Korean War, the number of people on active duty grew from 1.5 million to 3.6 million. In the war in Vietnam, the force grew from 2.7 to 3.6 million.

The U.S. military has been able to drive the Taliban from power with less than 5,000 people in Afghanistan and flying fewer sorties that it did in Kosovo. In the 76 days between October 7 and December 23, 2001, when the sustained bombing campaign ended, the U.S. flew about 6,500 sorties and dropped about 17,500 bombs against the Taliban and Al Qa’eda forces, 60 percent of which have been satellite guided JDAMS or laser guided. In Kosovo, in 70 days of bombing, the U.S. flew 8,500 sorties. Moreover, unlike Korea and Vietnam, where the U.S. military added millions to its active duty force, the only addition to the U.S. force for the war against terrorism has been the call up of 50,000 reservists.

This should not be surprising. Unlike the conflicts in Korea, Vietnam, and the Gulf, over the long run the military’s instrument in the war against terrorism will be less important than the financial diplomatic, intelligence, and law enforcement tools.

Paradoxically, as a result of the war against terrorism, the traditional military threats from such potential American foes as Russia and China have decreased markedly. The Russians have not only shared intelligence with us, they have also persuaded the former Soviet republics of Uzbekistan and Kyrgyzstan, which border Afghanistan, to allow U.S. troops to launch attacks against al-Qaida and the Taliban from their territory.

The Chinese have been especially cooperative. The rulers in Beijing have shared intelligence on al-Qaida and the Taliban, and have leaned on their long-time ally Pakistan to support the U.S. campaign in Afghanistan and clamp down on terrorists at home.

2. The State of Our Military

The war in Afghanistan has also shown that the claims that the President made in his campaign and his Secretary of Defense continues to make about the sad state of our military, allegedly because of eight years of overuse and under funding, are simply false. The military has performed magnificently in Afghanistan as it did in Kosovo in 1999 and as it continues to do in the Balkans.

The fact of the matter is that Bill Clinton spent more on the military than the elder Bush has projected upon leaving office and that during the decade of the 1990’s, the U.S. spent only 8 percent less than what it spent on average during the Cold War. Bill Clinton left Donald Rumsfeld with a defense budget that in real terms was $25 billion higher than the one President Ford bequeathed to him in his first term as Secretary of Defense in 1975.

Nor was the military overused in the last eight years. On average during the 1990s, only 15 percent of the active force was deployed outside the U.S. In the Reagan years, 25 percent of the force was deployed outside this country. Moreover, at the beginning of the Bush Administration only 35,000 people were deployed outside of the routine and long-standing deployments to Europe and Asia.

SO WHY THE MASSIVE INCREASE?

The real reason for the increase in this year’s budget is not the war against terrorism or the state of our military. This massive increase is necessary because the Bush administration failed to carry out its campaign promises to transform the military and the Secretary of Defense failed to make the hard choices that are necessary when formulating a defense budget. Rather, he simply layered his new programs on top of the Clinton programs he inherited. As retired Navy Captain Larry Seaquest told the Christian Science Monitor, “They [the Bush administration] plan to pour more fertilizer on the same old crops.” Nor did the Secretary follow through on his proposed reforms of the military compensation system.

Thus, the FY 2003 budget fully funds three new tactical aircraft, the technologically challenged V-22, the ponderous Crusader, the unneeded Virginia class submarines, and a robust national missile defense system. In the upcoming fiscal year, these programs alone will consume about $30 billion. And over the FY 2003-2007 period, they will consume well over $100 billion.

According to the Pentagon’s own figures, spending for the three tactical aircraft jumps 37 percent while funding for the unmanned aircraft that did so well in Afghanistan grew by only 13 percent; additions as a result of the war against terrorism will consume only $9.4 billion and the transformation effort only $6.5 billion. Thus, the new programs will consume less than half as much as the legacy systems that Rumsfeld and the President criticized in the early months of the Bush administration. For Example, in August of 2001, President Bush said:

"There is no question that we probably cannot afford every weapons system that is now being designed or thought about. And you should ask the Secretary [of Defense] this question, if you care to, because he is going to bring to my desk, in a reasonable period of time, what the Pentagon recommendations are as to what weapons systems should go forward and which should not. One of the things that happens inside the Pentagon is people are encouraged to think outside the box, so to speak, and help design systems that could or could not affect security in the long term. And there are many good ideas. But this administration is going to have to winnow them down. We can’t afford every single thing that has been contemplated. And when we make decisions, they will fit into a strategic plan. And we need one. And there is going to be one and it’s coming this fall.”

POTENTIAL CONSEQUENCES

The situation will get worse before it gets better. The administration is projecting that for FY 2004, the defense budget will rise by less than $9 billion or 2.2 percent, in nominal terms, to $405 billion. This is not enough even to keep pace with inflation! If the FY 2004 budget grows at the same rate as the budgets of the last five years, the FY 2004 budget should be about $440 billion and the FY 2007 budget about $580 billion rather than the projected $470 billion. General Richard Meyers, the Chairman of the Joint Chiefs of Staff, admitted as much in testimony before the Senate Armed Services Committee when he said the current program is under funded by about $30-40 billion a year.

By throwing all this money at the Pentagon and refusing to make choices, the Bush administration is removing any incentive for the Pentagon to become more efficient or for military leaders to focus their resources on innovative systems. According to the Bush administration’s own executive branch scorecards, which grade the performance of each Cabinet department, the Pentagon is unsatisfactory in all five areas that were measured. As Admiral William Owens, former Vice Chairman of the Joint Chiefs of Staff recently noted: “new money for the armed forces may well become an excuse to maintain inefficient old habits.”

RECCOMMENDATIONS

In order to prevent this, the Congress must make the choices the Pentagon was unable or unwilling to make. Specifically, it should:

• reduce the number of strategic offensive weapons to 1,000 immediately rather than waiting 10 years to cut them to 2,200;

• limit production of the F-22 to 100;

• retire 40 B-1’s;

• halt production of the Trident D-5 SLBM;

• keep the National Missile Defense program in development (and not rush toward deployment);

• limit production of the F/A-18 E/F to 200;

• terminate the V-22, the SSN-74, the Crusader, and the Comanche helicopter programs.

In addition, the U.S. should:

• reduce its troops in Europe by 75,000;

• change the military retirement system from a deferred benefit to a defined contribution plan (like that of Federal civilian servants);

• privatize the military housing system;

• and move the dependents of military people into the federal employees health benefits program.

These reductions will implement Bush’s campaign promise to skip a generation of technology and create a more agile, mobile, innovative military, will free up money for other areas of homeland security, and will not undermine the military’s role in the war against terrorism. The Special Forces who performed so magnificently in Afghanistan consume about one percent of the defense budget and the JDAM’s cost only $25,000 a piece. In the regular FY 2002 budget, the Congress authorized DoD to purchase 9,880 JDAMS, about the number that have been dropped in Afghanistan to date. The $20 billion supplemental will allow them to purchase even more in FY 2002.

CONCLUSION

Last fall, Harry Stonecipher, vice chairman of Boeing Co., one of the nation's largest defense contractors, captured the essence of the President's approach to this budget. Stonecipher said that before September 11, the military services had to make "some hard choices" about what to buy, but "the purse is now open" and any member of Congress who argues that "we don't have the resources to defend America ... won't be there after November of next year."

Lest anyone think that in opposing the Pentagon, a member would be considered unpatriotic or would be in danger of losing his or her job, I urge you to consider the example of then Senator Harry S. Truman: in March 1941, Senator Truman convinced the Senate and President Roosevelt to set up a Special Committee to Investigate the National Defense Program. The Truman Committee, which continued its work throughout the war, even after the attack on Pearl Harbor, issued 51 reports documenting waste, mismanagement, and fraud in the defense buildup. These reports not only saved the country hundreds of billions of dollars, they catapulted Truman to the Vice Presidency in 1944 and the White House a year later.