By Veronique de Rugy
During his 1961 farewell address, President Eisenhower warned the American people that one of the greatest threats to freedom came not from enemies abroad, but “the conjunction of an immense military establishment and a large arms industry,” which over time would lose sight of the goal of defending the United States and become devoted only to its own perpetuation.”
Yet any suggestion of reducing even the pace of defense spending growth inevitably results in dire threats about cybersecurity attacks, Chinese invasion or Americans soon speaking Chinese, Arabic or the mother tongue of whomever is deemed our most powerful adversary at the moment.
Consider the recent reaction to the potential implementation of defense cuts through sequestration. According to projections by the Congressional Budget Office, defense spending is scheduled to take a hit of about $55 billion in 2013 compared with the CBO’s current baseline. While it may sound like a lot of money, it effectively means that — with the exception of the first two years — defense spending will continue to increase over the next decade. It would rise at a slower rate than previously planned, but it would grow nonetheless. Considering that the U.S. is getting out of two wars, it is absolutely reasonable to cut back on defense spending, especially considering the tremendous growth of the past decade.
Moreover, even after sequestration, the current drawdown is not unique, and in fact, it is probably more modest than previous cutbacks.
You wouldn’t know this from listening to the rhetoric coming from the military-industrial complex. From the moment the cuts were announced, Defense Secretary Leon Panetta warned that if “maximum sequestration” goes into effect, “these cuts would be devastating for the department.” One of his deputies even called the cuts a form of “self-castration.” Following their examples, the defense contractors have complained that their industry would suffer a great deal — and so would the country.
In particular, they insist that cutting defense spending would jeopardize the country’s safety, kill a million jobs and shrink the economy significantly. Republicans have been more than happy to echo these threats. However, the evidence suggests that we should take these claims with a grain of salt. Data from the Office of Management and Budget show that over the years, increases and decreases in defense spending have had almost no effect on gross domestic product. That suggests that the economy isn’t going to tank if we spend less on defense than we have in the past 10 years.
There is little doubt that some defense jobs will be lost as a result of sequestration; but it is unlikely there will be as many as the industry claims. What’s more, over time, some of these job losses will be offset by economic growth in other sectors due to the shift in resources. More importantly, as many others have noted, the Department of Defense isn’t a job creation program; its only role should be to address the threats facing the nation. As such, private-sector profit margins or even private-contractor job losses shouldn’t prevent sensible reductions in federal spending.
Obviously, the process of sequestration is an inefficient method of resizing government. When it comes to military spending, the process doesn’t allow prioritization — cutting less important missions and programs to fully fund more critical ones.
Still, the Pentagon’s spending must be cut. Congress has shown an absolute lack of willingness to cut anything. So, at the least, sequestration will force Congress to take a first step. Today is the time to take Eisenhower’s fear to heart and start cutting.
Examiner Contributor Veronique de Rugy is a senior research fellow of the Mercatus Center at George Mason University.