Do you know how DoD will spend a trillion dollars this year?

Summary: America’s largest investment program is its military. Hundreds of bases around the world. Fighting dozens of small wars. Our advanced aerospace program is largely military. Much of America’s R&D is done by DARPA and other defense agencies. Meanwhile Congress quibbles about million-dollar programs while waving through multi-billion-dollar defense programs.

Today Winslow Wheeler explains how DoD will spend a trillion dollars in the next year.  It’s not what you think; it’s not what you’ve been told.
Origami Pentagon

America’s $1 Trillion National Security Budget

By Winslow Wheeler
The Straus Military Reform Project
13 March 2014
Reposted with their generous permission

The Pentagon’s current leadership and most on the House and Senate Armed Services Committees in Congress describe President Obama’s 2015 defense budget request as painfully austere, if not dangerously inadequate. The defense trade press is full of statements from generals, admirals and the other politicians from both political parties that there is not nearly enough money available to buy adequate amounts of new hardware, maintain current pay and benefits or provide even low amounts of training and equipment maintenance. As a result, they are looking for ways to relieve the Pentagon from its penury.

Scarcity of money is not their problem. Pentagon costs, taken together with other known national security expenses for 2015, will exceed $1 Trillion. How can that be? The trade press is full of statements about the Pentagon’s $495.6 billion budget and how low that is.

There is much more than $495.6 billion in the budget for the Pentagon, and there are piles of national security spending outside the Pentagon — all of it as elemental for national security as any new aircraft and ships and the morale and well-being of our troops.

The official version

The table below details what a careful observer will find in President Obama’s 2015 budget presentation materials. The amounts for the Pentagon are well above the advertised $495.6 billion, and there are several non-Pentagon accounts that are clearly relevant.

The relevant data for 2014 is also presented for comparison, and the notations in the “Comments” column help explain the data.

Total U.S. National Security Spending 2014-2015

All figures are $billions; Then-Year$
Sources: Table 28-1 from Analytical Perspectives and Homeland Security Appendix in 2015 OMB Budget

DoD Budget

 

DoD Budget

DoD Budget

Click here for pdf of this chart (easier to read).

Note the various ways the Pentagon augments its own budget well above the $495.6 billion that is frequently cited by the people seeking more money.

  1. There is the additional “placeholder” amount for the wars in Afghanistan and elsewhere ($79.4 billion), which may or may not turn out to be smaller once the formal request for this spending is compiled and Congress is finished fiddling with it: adding huge amounts of non-war (or “base”) spending to this account by both DOD and Congress is routine.
  2. There is also the $6.2 billion in “mandatory” (or entitlement) spending the Pentagon’s complete budget must include for military retirement and other DOD-only programs.
  3. There is the Pentagon’s $26 billion dollar portion of the “Opportunity, Growth and Security Initiative” (a slush fund if ever there were one) that OMB and Secretary of Defense Hagel have dreamed up — to the applause of the Joint Chiefs of Staff.
  4. While some in the press have caught most of the above additions, they virtually never spot the additional money the Treasury pays out for additional military retirement ($37.8 billion in 2015) and DOD healthcare (just $100 million in 2015 but more in other years).

In all, the Pentagon’s budget for all of its own expenses in 2015 is not $495.6 billion, it is $645.1 billion, or $149.5 billion (30%) more. (Don’t add the four score billions of dollars for intelligence and snooping; the budgets for CIA, NSA and all the rest are embedded in the DOD budget.)

Other defense spending, and the grand total

If one were to add the nuclear weapons’ costs borne by the Department of Energy, the amount would be $664.5 billion, or 34% more.

Consider also the substantial costs that are properly outside of the Pentagon’s budget but are central to US national security:

  1. $52.1 billion in non-DOD spending in the Department of Homeland Security,
  2. $161.2 billion for the human consequences of past and ongoing wars in the Department of Veterans Affairs, and
  3. $39 billion for the activities of the Department of State and related agencies-for international security and the exercise of US power abroad.

With the addition of an equitable share of the interest on the national debt that is attributable to this spending, it all adds up to $1.0095 trillion. It is that amount, not $495.6 billion, that US taxpayers are being asked to pay out in 2015 for “defense,” defined generically. However, you will not find that number in the talking points of the Joint Chiefs of Staff, Secretary Hagel, or most Republicans and Democrats on the House and Senate Armed Services Committees. They are arguing that times are tough and if still more money can be found, it should go to these accounts.

Historical Comparisons

There is another perspective to measure defense spending in 2015. We can compare just the amounts formally requested for the Pentagon (the “base” budget plus the “placeholder” amount for Overseas Contingency Operations) to what has been spent historically. By converting annual Pentagon spending to “constant” (inflation adjusted) dollars adjusted to their 2015 value, and by using the economy-wide GDP measure of inflation for doing so (not the Pentagon’s own hopelessly self-serving measure of inflation), we can compare the 2015 Pentagon budget to its post-World War Two history.

See the figure below from a study by the Center for Strategic and Budgetary Assessments (CSBA) study “Chaos and Uncertainty: The 2014 Defense Budget and Beyond” by Todd Harrison (2013); see Figure 18 on page 25. Spending is in OMB Constant GDP (Chained) 2015 dollars.

Chaos and Uncertainty
From “Chaos and Uncertainty: The FY 14 Defense Budget and Beyond”, CSBA (2013)

This graph tells us that the 2015 level of Pentagon spending would return us to the same overall level as 2005 when Donald Rumsfeld was secretary of defense and the DOD budget was generally considered flush with money and supporting substantial fighting in both the Iraq and Afghanistan wars. Note also that this is a level of spending that matches the peak of the Ronald Reagan years that was thought by its advocates to be a US build up so massive it was intimidating the Soviet Union into collapse. The 2015 level is also an amount that significantly exceeds the peaks of the Korea and Vietnam wars — both of them higher intensity conflicts with hundreds of thousands more US troops deployed than are currently in Afghanistan.

The Defense Machine is well-fed

World Military Spending

To repeat, the problem is not scarcity of money. The problem is how it is being spent. We are getting very little defense — training, maintenance, hardware, and troops — for a gigantic amount of money. By virtue of how they characterize $1 trillion dollars as penury, our national security leaders in the Pentagon and Congress are clearly incapable of dealing with the problem.

Our equipment is outrageously expensive and yet too much of it is a step backwards in effectiveness. Since the mid-1990s Congress has bulldozed money into across-the-board pay raises, double pensions for many military retirees, significantly increased benefits for the survivors of WW2 veterans and much else that has much more to do with placating constituencies than addressing 21st century security problems.

In addition, the Pentagon’s civilian and military leadership has bloated itself to historically unprecedented levels of overhead.

Worse yet, none of them have even bothered to fundamentally understand the dimension of the problems because, under their tutelage, the Pentagon remains unaudited and un-auditable, which will remain the case even after it meets its decades overdue, and embarrassingly modest, financial management goals-which by the way, it will do no time soon.

One more time: the problem is not scarcity of money.

———————————————————————

About the author

Winslow T. Wheeler is Director of the Straus Military Reform Project at the Project On Government Oversight (POGO) in Washington, D.C.

From 1971 to 2002, Wheeler worked on national security issues for members of the U.S. Senate and for the US Government Accountability Office (GAO). He was the first, and according to Senate records the last, Senate staffer to work simultaneously on the personal staffs of a Republican and a Democrat (Pryor and Kassebaum).

In the Senate staff, Wheeler was involved in legislation concerning the War Powers Act, Pentagon reform, foreign policy, and oversight of the defense budget/programs. At GAO he directed comprehensive studies on the 1991 Gulf War air campaign, the US strategic nuclear triad, and weapons testing. Each of these studies found prevailing conventional wisdom about weapons to be badly misinformed.

In 2002 when he worked on the Republican staff of the Senate Budget Committee, Wheeler authored an essay, under the pseudonym “Spartacus,” addressing Congress’ reaction to the September 11, 2001 terrorist attacks (“Mr. Smith Is Dead: No One Stands in the Way as Congress Lards Post-September 11 Defense Bills with Pork“). When senators criticized in the essay attempted to have Wheeler fired, he resigned his position.

He has authored two books:  The Wastrels of Defense (2004) about Congress and national security, and Military Reform (2007).  He was the Editor of America’s Defense Meltdown (2009).  He also edited of two anthologies, The Pentagon Labyrinth: 10 Short Essays to Help You Through It (2011) and America’s Defense Meltdown: Military Reform for President Obama and the New Congress (2009).

He appears in interviews on national TV and radio and has written articles and commentaries for national, local, and professional publications. These venues include “60 Minutes,” C-SPAN’s “Book Notes” and “Q & A,” National Public Radio, the PBS News Hour, the Washington Post, Politico, Mother Jones, Barron’s, Defense News, and Armed Forces Journal.

Click here for more information about the Straus Military Reform Project.

A few articles by Winslow Wheeler at POGO:

  1. The Myth of American Military Superiority, 13 October 2012
  2. Budget and Hardware Myths, Part II, 1 October 2012
  3. Budget and Hardware Myths, Part I, 1 October 2012
  4. Sequester: Not All It’s Cracked Up To Be, 16 August 2012
  5. Common Defense Quarterly Article on Drones, 15 June 2012
  6. Think-Tanked: Old Wine in Dark Bottles, 13 June 2012
  7. A Peek at Pentagon Pork: A Taxpayers’ Guide, 29 May 2012
  8. The Jet That Ate The Pentagon, 2 May 2012

For More Information

Other posts by Winslow Wheeler:

  1. Another step in America’s Defense Meltdown, 30 July 2009
  2. The ultimate 21st Century cage match: Titanic Government vs. the National Security Iceberg, 20 December 2012

Posts about military spending:

  1. The foundation of America’s empire: our chain of bases around the world, 8 September 2008
  2. The economic Death Spiral of the Pentagon, 7 February 2009
  3. Do we overpay the members of our armed services?, 25 June 2010
  4. About the rising pressure to cut the US military budget, July 2010
  5. Dragging American Military Culture into the 21st Century, 13 August 2010
  6. We could reduce government bureaucracy, but much of it is military/intel – and untouchable, 31 August 2010
  7. Important new articles about reforming our military, a key to balancing the Federal budget, 29 April 2011
  8. Reconfiguring the US military for life after The Long War, 27 September 2011 — By Doug Macgregor
  9. Profits in the New America: lobbyists drill for public money, 13 March 2013

FY13 Military Spending

 

 

8 thoughts on “Do you know how DoD will spend a trillion dollars this year?

  1. And amazingly capabilities are dropping. A cynic (not that I am one of course) would say ‘of course’.
    A-10 gone, lots of F-16s and F-15s gone, frigates gone, lots of soldiers …gone. But the costs go every upwards.

    Yet, despite these declining capabilities (not to mention the just lost wars, over and above the previously lost wars) there have never been greater involvement in wars, destabilisation of more countries (creating even more wars), bases being built, new theatres being opened up (hint Africa). And of course more threats of war such as Syria, the endless threats to Iran, and now the big ones ….like China and the biggest of them all .. Russia.

    Personally I think, sitting reasonably safely here in the Southern Hemisphere, time to go for broke … attack all them at the same time…. A trillion dollars will produce quite a firework display … for a few minutes..

    Note the dynamics between the ‘politicians and the ‘military’ are interesting. The military are quite happy to threaten everyone (inc China) and get involved in ‘small’ wars all over the place. This gives them the rational for gobs of money, most wasted on absurd (and usually useless ) equipment (eg F-22 & F-35) that pays for the golden retirement for the senior officers (hello defense contractor).

    They play up their ‘capabilities’ all the time and promise that their ‘gold plated’ boondoggles are the best in the universe and can defeat anything (shock and awe and 50:1 F-22 kill ratios and all that).

    All nonsense of course and for these commanders the last thing they want is a real war.
    But, by over selling their military power they encourage the politicians, especially the real nut jobs, (like the neo-cons) who take this rubbish at face value … and then want to use it in their endless plans for ‘global domination’.

    And after being told, over and over again, that this ‘gold plated whatsit will beat anything in the universe’ they have no desire to use alternatives, like that long forgotten thing the US once used .. diplomacy. They actually believe this nonsense.

    I will bet $100 that a lot of politicians really believe (after being told endlessly by the money seeking military brass) that they can sweep anyone militarily under the carpet in an instant. Heck one of those ‘literal combat ships’ could take on the whole Russian fleet … of course.

    So why should they negotiate with anyone, they can win, can’t they?

    Of course when they lose all the time (in recent times Afghanistan, Iraq and of course, by their mirror image Israel in Lebanon) the politicians and military just lie and forget it all, both have huge incentives to forget the (endless) mistakes..

    So they both reinforce their mutual fantasies. That feed their own, short term, personal benefits.

    Oh now and then (eg over Iran in particular in recent times, 2007 was a classic) the military brass dig their heels in, because they know they will get thumped (the US Navy does not want to lose a carrier group), But then the politicians fire them.

    So you are seeing Darwinian process here, military lying about their capabilities, politicians actually believing that nonsense and acting on it, military getting cold feet over that if asked to do more than kill a few people in flip flops, those who object at that time get the boot .. who is left? You get still the lying military people, living off the gravy train, who wont have the backbone to say ‘NO’ when some idiot want to, say, drone attack Putin.
    Or put an obsolete F-16 up against a Su-30 … as a ‘show of force’.

    This has the words ‘disaster’ written all over it. Liars egging themselves on .. and in the same time (some at least) actually believing the lies. That the problem with lies (and propaganda) you tell it often enough and even the people that (initially cynically) created the lies … start to believe them.

    Classic, as I have mentioned before a ‘self referential system’. To paraphrase Fawlty Towers (look it up, especially the ‘Germans’ episode) … “I mentioned reality once by accident .. but I got away with it, I think”.

    Hey I’m here in Australia, it is your atoms that will be hitting the stratosphere…because Putin is NOT going to back down.

  2. Another superb post by FM. This one really knocks the ball out of the park. The detailed breakdown of spending leaves little doubt about what is really going on. Of course, the big problem with getting a specific estimate of current costs is the fact that the Pentagon does not have a functioning accounting system in place (sounds incredible, but, yes, it’s true) and as a result, the Pentagon has never actually passed an audit, despite being required to do so by law.

    Linda Woodford spent the last 15 years of her career inserting phony numbers in the U.S. Department of Defense’s accounts.

    Every month until she retired in 2011, she says, the day came when the Navy would start dumping numbers on the Cleveland, Ohio, office of the Defense Finance and Accounting Service, the Pentagon’s main accounting agency. Using the data they received, Woodford and her fellow DFAS accountants there set about preparing monthly reports to square the Navy’s books with the U.S. Treasury’s – a balancing-the-checkbook maneuver required of all the military services and other Pentagon agencies.

    And every month, they encountered the same problem. Numbers were missing. Numbers were clearly wrong. Numbers came with no explanation of how the money had been spent or which congressional appropriation it came from. "A lot of times there were issues of numbers being inaccurate," Woodford says. "We didn't have the detail … for a lot of it.

    Source: “Special Report: The Pentagon’s doctored ledgers conceal epic waste,” Reuters news service, 18 November 2013.

    As Oldskeptic noted, capabilities are dropping.The late Chalmers Johnson has discussed this in his 2009 article “The Economic Death Spiral at the Pentagon.” Chuck Spinney (and Martin van Creveld, in his book The Transformation of War) also wrote about this issue — more lethal weapons are necessarily more sophisticated. This makes them exponentially more expensive. But because the new weapons are so expensive, few of them can be purchased — and because they’re so complex, they break down more often. But the cost of the components to keep the new weapons is so high that the increasingly aging stock of Buck Rogers superweapons is small, and because the procurement process takes so long to design and build new weapons, the old weapons age and break down, and the expense of the weaponry components means they can’t be repaired properly. The classic example is hangers full of gutted F-22 jet fighters stripped for components to repair an increasingly small squadron of functioning F-22 fighters in forward areas.

    As time goes on, the stock of superweapons gets older and fewer of them still work. Meanwhile, increasing sophistication of new superweapons means that even fewer get built (see the F-35 boondoggle) and those are even more fragile and more complex, so fewer of them stay in working order and it becomes even more costly to repair them.

    So as time goes on, paradoxically, the better the weapons get, the fewer of them work and the older the stock of weapons becomes in America’s arsenal. Net result? Military capability decreases over time. The ultimate example remains the stealth B2 bomber which is so expensive and so fragile that the Pentagon has become extremely hesitant to actually deploy any of these superweapons in a real theater of war, lest they become damaged.

    The U.S. military aids and abets this death spiral of declining operational military capability by increasingly shifting funding away from readiness (troops, maintenance, logistics) into procurement (even more exotic and more expensive superweapons — laser death rays mounted on battleships, portable particle beam guns for soldiers, “rods from god” orbital weaponry platforms). So the number of troops in a state of full readiness constantly declines. This has the effect of exponentially decreasing the tooth-to-tail ratio. So vast numbers of service personnel and immense amounts of money are required to field an increasingly small number of troops.

    What the result will be if the Pentagon actually gets its wish and moves to a fully robotic fighting force, is predictable. Glitches and bluescreens and computer crashes will eventually reduce a 100% robotic military force to complete immobility. But then, if you’re rooting for world peace, I guess that’s one way to get there…

  3. I have read several of Winslow Wheeler’s analyses. They are meticulous, enlightening and pinpoint the essentials. Obviously, he knows what to look for, where to look, and how to interpret what he finds in that jungle called the federal budget.

    I also increasingly tend to view them as a superfluous endeavor.

    The waste of close to a yearly trillion, lack of proper accounting, entire herds of white elephants, decreasing capabilities with increasing costs, all this has been going on for decades. The MIC is simply Too Big To Reform.

    We are reaching the point where it looks like the only events with the potential to cure the rot are (by decreasing degree of probability):

    1) A collapse of the economic basis for the MIC — no more money to pay for weaponry, insufficient industrial and technological infrastructure to maintain it, shortages of necessary resources (e.g. refined oil products) to keep it working.

    2) A total defeat that utterly devastates the material (i.e. tanks and airplanes end up as smoldering husks, carrier groups end up at the bottom of oceans), the personnel (i.e. several hundreds of thousands of fatalities), and the credibility of the military.

    3) An equivalent of Mahmud II who disbands the existing military structures, fires the officers, and slaughters the corps that dare resisting the reform.

    Basically, all of these mean a purge, not a reform. But the circumstances leading to these situations would also imply that the USA would find itself in very dire straights.

    1. guest,

      (1) “I also increasingly tend to view them as a superfluous endeavor.”

      Me, too. Continuing to pour water on a rock does not make it wetter. After some point continued analysis becomes a substitute for action. Most reformists outlets (e.g., Naked Capitalism) have become entertainment. Nothing more. Directionless. Explaining this has become one of the major themes of the FM website.

      (2) “We are reaching the point where it looks like the only events with the potential to cure the rot are (by decreasing degree of probability):”

      There are many more possible scenarios. For example, perhaps one day we’ll go too far with military interventions and spark a reaction, as the world turns against us as a destabilizing outlaw. A President McCain or President Palin might already have done so; so far we have been lucky.

    2. I don’t know if I personally really want the Pentagon to be more efficient with its money. Do I really want the Afghanistan war to be managed well and efficiently? If the people rose up and managed to fix waste in the Pentagon, wouldn’t that just make the war go a little better, but then ultimately just prolong it. To me, I feel we have to end the war first — and only then will this country be worth saving. Everything that’s done to fix it while the war is still running just supports that war.

      And I’m afraid it’s Obama that killed all hope once and for all. As long as it was Bush we could always hope that a new leader might make some difference, but now, to me at least, it’s clear that the only political solution has to go beyond the two party system, and that’s a long a tough slog, really.

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