Defence spending - Always more, or else

ACCORDING to most everyone, as a result of the supercommittee's failure last week, the Pentagon will face devastating cuts to its spending over the next decade. So says John McCain and Lindsey Graham, who warned that "these cuts represent a threat to the national security interests of the United States"; and Buck McKeon, who vowed, "I will not be the Armed Services Committee chairman who presides over the crippling of our military"; and the president's own defence secretary, Leon Panetta, who sees America becoming a "paper tiger". My own colleague mulled the "terrible swift sword" falling on defence last week, much like the rest of the media.

So by how much will the defence budget decline over the next decade? That could be seen as a trick question, because in nominal terms it will grow. Prior to the supercommittee's failure, the defence budget was slated to increase some 23% between 2012 and 2021. Now, according to Veronique de Rugy, the Pentagon will have to make do with a 16% boost. According to Todd Harrison of the Center for Strategic and Budgetary Assessments, that means funding would fall by 11% in real terms from FY2012 to FY2013, then grow by slightly more than the rate of inflation for the rest of the decade. Or to put it another way, as Lawrence Korb does, the "sequestration will return defense spending in real terms to its FY 2007 level, the next to last year of the Bush administration, when no one was complaining about devastating levels of spending."

At a time when money is tight, that would seem reasonable, no? According to Winslow Wheeler, of the Center for Defense Information, the FY2007 level of funding would be higher, in real terms, than average annual military spending during the cold war. But these numbers have not quieted the critics. And perhaps the most ardent among them has been Mr Panetta. My colleague cites a statement from the secretary, in which he lists the tragic results of a 16% increase: "We would be left with our smallest ground force since 1940, the fewest ships since 1915 and the smallest Air Force in its history." Here's another fact: America already has the fewest ships since 1916, despite a 70% increase in defence spending between 2001 and 2010. Now that could be because America's military needs yet more money, or it could be because the nature of warfare has changed and new technology has made our weapon systems more efficient. Does Mr Panetta believe a P-51 is equal to an F-35, or might this be an effort to mislead and alarm?

Mr Panetta says the latest funding plan "invites aggression", while Messrs McCain and Graham claim America will face a "swift decline as the world’s leading military power". But if we look at America's military spending in relative terms, these arguments sound inane. America spends as much on defence as the next 17 countries combined (most of whom are American allies). America's main competitor for the title of most profligate is China, which spends about 17% as much as America on defence. That number will continue to grow, but to give you a sense of where China stands in relation to America, look at its big military accomplishment from this year: the successful refurbishment of an old Soviet aircraft carrier, its first. America has 11 aircraft carriers, another in construction, and one more in reserve.

All of which isn't to say that America's generals should rest easy, or that the president should disband the army. It is merely a plea to start viewing the defence budget in more realistic terms, where proposed cuts, or small increases, are not viewed as doomsday scenarios. In today's fiscal environment, this is especially important. For though it is largely true, as my colleague says, that "[h]ealth and pensions, not defence, are the real drivers of the deficit", we should not dismiss the Pentagon's deleterious effect on America's fiscal position. Medicare and Medicaid made up 20% of the federal budget in 2010; Social Security accounted for 19%; and the Defence Department for 19% (see here). The first two items are expected to grow much faster than the last. But the current debate invites scepticism over whether Washington can keep the defence budget under control.

Origin
Source: Economist