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Defense Analysis Bulletin No. 2

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Experts give poor grades to expected defense budget proposal

March Update: The fiscal 2008 Defense Department budget request is $483 billion -- higher than anticipated by SPWG experts at the briefing. For FY 2008, President Bush requested a total of $647.2 billion for national defense -- which includes the DoD budget, $141.7 billion in projected 2008 war costs, and other defense-related spending. To this we should add $36.4 billion for non-DoD Homeland Security in FY 2008 and $84.4 billion for the Department of Veterans' Affairs. Thus, the total FY 2008 request for defense, homeland security, war, and war-related costs is $768 billion. In addition, the administration requested $93.4 billion in supplemental funding for extra FY 2007 war costs.

By Bipasha Ray
February 1, 2007

Washington, DC -- The expected $470 billion defense budget for fiscal 2008 to be released Feb. 5 will fall short of requirements, yet continue to be packed with pork despite recent reforms, according to defense experts at a briefing on Thursday.

In the FY 2008 Defense Budget Report Card released by the Security Policy Working Group, four analysts gave the government low and failing grades on every criterion except for an "A+" in advertising -- for the Pentagon managing to convince Congress that the world's largest defense budget is too small.

"We have the largest Pentagon budget since World War II, but we are losing to an opponent in Iraq that spends less over an entire year than what we spend in one day" on defense -- more than $1 billion, said Winslow Wheeler of the Center for Defense Information.

He gave Congress an "F" for "total failure to reform" despite all its talk of reform. Congress exempted the defense budget from earmark reforms, he said, and actually ensured "free advertising for porkers" by letting the authors give the required explanations for earmarks, rather than objective bodies such as the Government Accountability Office or the Congressional Budget Office.

The other experts -- Carl Conetta of the Project on Defense Alternatives, Steve Kosiak of the Center for Strategic and Budgetary Assessments and Cindy Williams of MIT's Security Studies Program -- said that, judging from the past, they expected the emergency supplemental requests for the global war on terror to incorporate numerous items not directly related to war, including modernization and transformation, that actually belong in the Pentagon's baseline budget.

The baseline Defense Department budget is expected to be $470 billion. With supplementals added on for the war on terrorism including Iraq and Afghanistan as well as other weapons expenses, the total military spending budget is expected to be $610 billion.

"Both the administration and the armed services have incentive to put things in the requests for GWOT funding, whether it is related to war or not. It sounds better politically, it has that emergency ring to it," Kosiak said. "If you can attach something to a bill that deals with troop pay and armor, it will have smoother sailing."

At the same time, the administration is being unrealistic in its projection of defense spending and its budget will probably fail to acknowledge $30 billion worth of war costs and support of military and personnel -- which will contribute to a $1 trillion cumulative gap in the Future Years Defense Program for 2008 to 2013, Williams said.

"The Defense Department has a history of pushing substantial amounts of realistic expenses off to the future, hoping that it will figure out how to deal with it later. This is not a good idea at a time when the baby boomers are preparing to retire, federal deficits are high and debt is mounting," Williams said. "By not recognizing the costs, we're making decisions today that will lead to expenses in the future, but we're not planning how we'll pay them."

A realistic defense budget -- 5 percent of GDP, rather than the expected proposal of 4 percent -- would not be affordable given America's current level of debt and looming costs of Medicare and Social Security, Williams said. However, the government needs to acknowledge the missing $1 trillion on its 5-year budget before the country can decide how it's going to pay for it -- whether by raising taxes, cutting back on retirement benefits or borrowing more, she added.

She also criticized the government's lack of transparency in releasing the true war costs, which leaves analysts and congressional oversight committees "working in the dark."

Conetta, who just released a report, "No Good Reason to Boost Army, Marine Corps End Strength," said that the proposed addition of 92,000 personnel would do nothing to solve the more immediate problems of troop readiness and shortages that the United States is facing in Iraq and Afghanistan.

"These initiatives would only bear fruit in 2009 at the earliest and they only make sense if we intend to stay in Iraq for years to come," he said, adding that the government has learned the wrong lessons from Iraq and it is taking the country down the wrong path of "coercive nation-building and regime change."

"Just as the troop surge [in Iraq] is an alternative to seeking a diplomatic solution, this proposed addition to end strength is a counter point to a new direction," he said. "We need to engage the lessons of Iraq. Trying to positively transform foreign societies by outside military intervention hasn't worked before and won't work now."

FY 2008 Defense Budget Report Card
Use of Emergency Spending and "GWOT" Funding D-
Transformation Grade Lost in Transmission
DOD Earmark Reform A for Advertising
E for Expelled
Use of Nation's Resources D
Force Size and Strength C
Affordability D
Realism D
Transparency F