By Veronique de Rugy, Mercatus Center
There is a lot of defense spending in your future.
The proposed defense budget is $554.2 billion, including $64 billion in war spending. The important number is the $490.1 billion “base budget.” It is $3.3 billion larger than the amount allocated for fiscal 2014 and $3 billion higher than the Pentagon itself requested. Yes, that’s right: Congressional leaders are forcing money on the Pentagon.
According to Politico Pro, that extra $3 billion is not only packed with “goodies for the military’s top defense contractors, including aerospace giants Lockheed Martin and Boeing,” it’s a sign that the commander-in-chief is already a lame duck.
President Barack Obama is losing some of the control over the defense budget that his administration clawed away from top military commanders early in his presidency, with the service chiefs and Congress once again openly conspiring to undo tough spending decisions made by the White House and the Pentagon.
The result: an omnibus spending package for this fiscal year that includes money to buy lots of weapons the Pentagon didn’t request but top commanders signaled they wanted anyway.
Here are some examples of the stuff Congress added above the Pentagon’s requested:
The bill would reject some of the Pentagon’s major cost-cutting efforts and shift money to congressionally popular programs such as the A-10 close air support aircraft, called the “Warthog;” Boeing’s radar-jamming EA-18G Growlers; and Raytheon Co.’s Tomahawk missiles and ships, including the preservation of the aircraft carrier USS George Washington.
The bill also includes four more F-35 planes than the Pentagon requested, for a total of 38 planes. The F-35 is already more than a decade overdue, more than 100 percent over budget, and it currently can’t fly at night, in clouds, or near lightning.
This sort of profligate spending is consistent with what we saw during the Bush years. A recent report from the Congressional Budget Office (CBO) found that inflation-adjusted base funding jumped from $384 billion in fiscal year 2000 to $502 billion in fiscal year 2014. That’s an increase of 31 percent.
However, even that fat increase doesn’t do full justice to the tremendous splurge in defense spending during the Bush years. There was a 52 percent increase between 2001’s base budget (the lowest of the decade) and 2010 (its peak level). These numbers exclude the trillions of dollars spent on wars since 2003. Nor do they account for all the defense-related spending that goes through other departments such as the Department of Homeland Security and the Department of Energy.
Defense contractors have benefited handsomely over the past 15 years. They were somewhat frustrated by the minimal caps placed on defense spending via sequestration, but they shouldn’t have worried. Spending caps, especially when they are tied to defense, are meant to be broken. Contractors are poised to keep doing well, despite the ending of most operations in Iraq and Afghanistan.
The fastest growing share of the Defense budget is pay and benefits for military and civilian Defense Department employees, which has increased 46 percent in real dollars. And of course, it is worse than it looks since there are also substantial personnel costs contained within the operations and maintenance component (O&M) of the budget. That jumped 34 percent in real dollars between 2000 and 2014.
As with other parts of the federal government, health care and pension costs for Defense workers are well on their way to bankrupting us all. As we explained over at Mercatus:
About one-third of this increase was driven by increases in federal civilian employee pay and benefits, excluding health insurance. The cost of the Defense Health Benefits program doubled, which accounted for another third of the increase in O&M. As the CBO notes, “primary reasons for that growth are the new and expanded TRICARE benefits that lawmakers authorized, including expanded benefits for reservists and their families, and the very low out-of-pocket costs of TRICARE relative to other health care plans.” The rest of the increase in the O&M component can be attributed to rising fuel costs, operations support, and “other.”
Congress clearly has no intention of refomring these bloated programs. What’s make it even worse, Pentagon officials—who understand that more health care spending means fewer tanks and bombs—tried to include changes that would slow the rate of growth in benefits in the 2015 National Defense Authorization Act. It turns out that the military can get anything it wants. As long as it’s not less money.