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DefenseHas Defense Spending Declined Significantly Since 1965? It Depends on Which Numbers You Use In a recent op/ed, the Washington Examiner featured a chart from our friends at the Heritage Foundation (based on data from the Office of Management and Budget) that shows spending on national defense and entitlements as a percentage of GDP over the past several decades. The data shows that defense spending consumed 7.4 percent of GDP in 1965, rising to its peak of just under 10 percent a few years later during the Vietnam War. The subsequent years show a steady decline that was partially interrupted by the Reagan years, but then resumed, sinking to around 3 percent of GDP in 2000. The post-September 11th build-up saw defense spending rise to 5 percent of GDP by 2010. A caption on the chart notes that “spending on national defense … has declined significantly over time, despite wars in Iraq and Afghanistan.” But there are other ways to examine the numbers. Here’s another chart, also based on budget data.
The above chart converts annual defense spending totals to the dollar’s value in 2005. A constant-dollar comparison illustrates how much we have been spending while accounting for inflation that changes the worth of the currency from one year to another. In 1965, defense spending was $364 billion in constant dollars. Rather than shrinking steadily since that time, the chart shows that spending on defense reached $402 billion in 2002 before rising to $608 billion in 2010. Because our economy is much larger than it was in 1962, we were able to spend comparatively more on defense than we did in 1965, $245 billion more, in constant dollars, even though the figure represents a smaller percentage of total GDP. In current dollars, we spent $693.6 billion on defense in FY 2010. If we did return to a 7.4 percent level of GDP, defense outlays would have been $1.07 trillion in current dollars. But is it necessary to maintain that ratio of defense spending? As our technology and productivity improves, shouldn’t we expect to get a bigger bang from our defense dollar as we do from domestic programs? We can invest less as portion of the economy, but get smarter, better results than were possible half a century ago. The President has called for a plan to cut the number of forces and procurement of programs in order to reduce defense spending by $487 billion over a ten year period. These reductions would be in addition to the military cuts mandated in last year’s deficit deal. Many are concerned that this will reduce our regular troop levels too far, especially given the extensive reliance on National Guard units that were deployed in Iraq and continue to be deployed in Afghanistan. There is also concern as to how much of these savings will be used to reduce the deficit, and how much would be re-allocated to expand discretionary programs. After consecutive years of annual deficits exceeding $1 trillion, savings need to be found across the board. But despite the President’s vow to go line-by-line through the budget to cut out waste and duplication, taxpayers have not seen significant reductions in domestic program from this Administration. If last week’s State of the Union address was a preview of the forthcoming FY 2013 budget, we will see more of the same: NTU Foundation tallied up the cost of new proposals in the President’s speech and found that for every dollar in domestic spending that would be cut, defense spending would be cut by $128. And only lip-service was paid to confronting the fastest growing part of the budget: entitlements. Over the ten years since FY 2001, defense spending rose by about $24 billion a year, in constant dollars. After major wars, such expenditures typically decline with a draw-down of forces. We are now having a national debate about the best way to proceed with reductions while maintaining a strong military. A complete picture of the budget figures needs to be a part of this discussion. 1 Comments | Post a Comment | Sign up for NTU Action Alerts
Iran Threat Reduction Act - Taxpayer's Tab Supplement This week's Taxpayer's Tab focused on H.R. 3638, Act for the 99%, which left us with some additional material that we're highlighting here. This week's "Most Friended" bill is H.R. 1905, the Iran Threat Reduction Act of 2011. Annualized Cost: $3 million ($13 million over five years) Number of Cosponsors: 364 Congressmen Congresswoman Ileana Ros-Lehtinen (R-FL) sponsored the Iran Threat Reduction Act to compel Iran to abandon its pursuit of nuclear weapons. In order to achieve that goal, H.R. 1905 would expand existing sanctions. The bill calls for the President to coordinate with other nations to place additional pressure on Iran to give up it efforts to obtain or develop a nuclear weapon or systems that would deliver a nuclear bomb. The U.S. would lobby the United Nations Security Council to impose new sanctions and would work to limit to whom Iran could sell its petroleum products. The President would also be authorized to impose sanctions on individuals or companies investing in, buying from, or selling Iranian petroleum. The trade of restricted nuclear or other weapons of mass destruction technologies is also prohibited. The U.S. would also reserve the right to cancel any transaction or transfer of goods, services, or money between Iran and anyone that is subject to the jurisdiction of the U.S. government. Iranian assets would remain frozen. Fewer Iranians would be granted visas to enter the U.S. The sanctions would be terminated when, and if, it is verified that Iran is no longer perusing a nuclear weapon, supporting international terrorism, and “poses no threat to the national security, interests, or allies of the United States.” Federal funds would also go toward supporting democratic change in Iran. The Secretary of State would be required to develop a strategy of promoting Internet freedom and access to information in Iran. According to a CBO estimate, H.R. 1905 would result in $13 million in new spending over the next five years. New regulations and financial tracking would lead to increased administrative expenses however, the sanctions would not result in any new spending or increased revenues. Cosponsors include 148 Democrats and 216 Republicans in the House. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Spending Smarter on Missile Defense
Admiral Mike Mullen, who recently completed a stint as Chairman of the Joint Chiefs of Staff, was a thoughtful proponent of the connection between America’s economic security and its national security, often mentioning the national debt as the biggest threat to both and stressing the need to “steward every dollar that we have.” Mullen has retired, but the national debt sure hasn’t been, which means that “stewardship” is more important than ever. Earlier this week NTU weighed in with a letter to lawmakers on one such development our budget team came across – the Senate Appropriations Committee’s decision to shift tax dollars away from a missile defense project with uncertain prospects and toward ventures with greater near-term promise. Much bigger brains than my own can delve into the technical details of the SM-3 missile, which is part of the anti-missile phase of the Navy’s Aegis air defense system. However, NTU’s four-decade institutional knowledge of federal contracting and project oversight tells us that the Senate Committee made the smart move. SM-3 Blocks II-A and I-B, which the Committee chose to fund, have good potential for a solid capability to defeat several ballistic missile threats our nation may be encountering before Block II-B (the version the Committee directed funding away from) could be reliably tested and fielded. Plus, on a dollar-for-dollar basis, funding II-B might not pay off with a vastly better weapon in a predictable period of time -- potentially risking an all-too-familiar ascent into an alarming cost spiral. As the Committee noted, “the requirements for the SM-3 Block II-B remain in flux, as does its acquisition strategy and the associated costs for integration into the Fleet.” NTU has communicated its views to Congress on a variety of defense projects this year, including the F-35 alternate engine and the Evolved Expendable Launch Vehicle. In many cases, we’ve had to offer words of caution about Congress’s decisions. But on SM-3, the Senate Committee is making the right call. As our letter to Appropriators in both chambers states, “the Senate Committee’s funding choice on SM-3 represents the best possible prioritization of resources based on prudent risk assessments, and [NTU] would urge that any conference agreement reflect this stance.” We’ll be keeping a watchful eye and urging a steady hand as the appropriations process moves forward, to make sure the Senate’s position on SM-3 becomes law. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
VIDEO - Pete Sepp weights in on $300M Spent On Navy Ships Never Finished Or Used 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Taxpayers Win in Pentagon Decision to Stop F-35 Engine If cutting spending was the equivalent of the NCAA basketball tournament then the costly F-35 alternative engine program would be the ultimate Cinderella story. I’m not talking about the feel-good “small school taking on the big boys” type Cinderella, mind you, I’m talking about the “how in the world did they last this long with that kind of talent” type of Cinderella. Fortunately for taxpayers, the F-35 Cinderella may have just been bounced from the competition to reduce our nation’s overspending problem. Having survived a White House veto, numerous congressional budget battles, and a bombardment of bills to defund the program, the Pentagon may have finally put an end to the alternative engine project. Yesterday, the U.S. Defense Department issued a 90-day stop-work order to General Electric and Rolls-Royce, temporarily halting development of a second engine for the F-35. In a statement announcing the decision, the Pentagon called the program a “waste of taxpayer money that can be used to fund higher departmental priorities.” This should come as great news to taxpayers who have been shelling out nearly $1 million a day to fund an engine program that many in Congress don’t want and the Defense Department says it does not need. Given this year’s $1.65 trillion deficit it simply makes no fiscal or logistical sense to continue to fund two design teams, two supply chains, and two production sites for what is expected to be no performance gains. If made permanent, ending the alternative engine program could save taxpayers up to $3 billion over the next 5 years. The National Taxpayers Union has long pushed for this result, arguing that although the added competition may have achieved marginal potential savings, it would have come with enormous upfront cost to taxpayers. More recently NTU supported an amendment to H.R. 1 that would have stripped funding for the F-35 alternative engine, saving taxpayers $450 million over the remainder of the fiscal year. Although the 90-day stoppage is by no means a lasting solution, it is a long overdue step towards fiscal sustainability. Having now survived two successive Presidential administrations, both of which have tried to eliminate its funding, the alternative engine program is a testament to the durability of pork. Fortunately, it’s Cinderella run appears over and taxpayers are all the better because of it. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
NTU Urges End to Funding for the Unwanted MEADS Air-Defense Missile Program The National Taxpayers Union has sent Secretary of Defense Robert Gates a letter pushing for an end to the Medium Extended Air Defense System. The project has been a joint effort between Germany, Italy, and the United States. The program has already been deemed unnecessary and will not be pursued to fruition. However, it is still on schedule for the next development stage, set to cost $804 million. The threat of $1 billion in penalties for terminating development is being used as an excuse to continue spending on unneeded stages of development. This odd contracting arrangement has led to questioning by Congress. Even so, experts disagree on the total, some estimating the termination cost at less than $500 million. Irrespective of the exact figure, the tripartite-cost-sharing arrangement (the U.S. at 58%, Germany at 25%, and Italy at 17%) should insulate the U.S. from paying the full penalty. To read the entire letter click HERE. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Fair Tax Act, Gun Control Bill Highlighted in Latest Tab
After our entitlement reform panel at CPAC and releasing our report on the President’s FY 2012 budget, NTUF has a new Taxpayer’s Tab with four newly scored bills. We’ve got a lot of research going on at the Foundation so be sure to keep up-to-date with @NTUF and be even more sure to support NTUF so we can get you the information you’ve come to expect! One of the issues that have surfaced in the 112th Congress is tax reform. Many legislators are calling for tax simplification while others support a different stance: system replacement. The Fair Tax is one of those system alternatives that has gained more attention in the last few years. NTUF scored the Fair Tax Act at an $11 billion annualized savings. Check out the full Fair Tax description and how NTUF estimated the savings in the latest Tab edition. Scored bills in Issue 6 of the Taxpayer’s Tab include:
Reflections on CPAC Today is the third and final day of the 2011 Conservative Political Action Conference (CPAC), the largest annual gathering of conservatives and libertarians in the nation. After three days of staffing a well-visited booth, meeting with dedicated activists, and listening to dynamic speakers, I’m looking forward to some rest and relaxation, but also to what the future holds for the conservative movement. This year’s CPAC had the highest number of attendees (11,000) in the history of the conference. CPAC speakers ranged from Rep. Paul Ryan of Wisconsin, the House Budget Committee Chair, to Governor Mitch Daniels of Indiana, a potential presidential candidate who gave, in my view, an outstanding keynote address, which you can read here. Also, CPAC 2011 featured a number of new participating organizations that focus on both activism and policy related to social, economic, and political issues at the federal, state, and local levels. While attending CPAC, I had the opportunity to participate in a number of discussions about important tax and fiscal policy issues facing the United States. NTUF hosted a discussion about entitlement reform that featured experts such as Rep. Devin Nunes, Maya MacGuineas, Douglas Holtz-Eakin, Steven Moore, and Dan Mitchell. The bottom line of their presentation was that we need to start tackling the problem of runaway entitlement spending before it’s too late. But budget reform should not be restricted to social programs. CPAC also featured a panel on how the nation can reduce defense spending to a more manageable level without jeopardizing readiness. As a former military aide to a fiscally conservative Member of Congress, I was pleased to hear all of the views presented and the many ideas for maintaining an affordable defense posture. The passion the attendees displayed at the panels, and in conversations with me at the NTU table, was striking. It bodes well for conservatives if these activists carry their views home and remain outspoken and active in the political process. For the last several weeks, there has been a lot of talk in the media about differences in the conservative movement over certain policies and suggestions that these differences spell certain doom the conservative movement. After three days of observing conservatives of all stripes from across the country, I can unequivocally say that reports of destructive differences among conservatives are greatly exaggerated. In fact, I would argue that the conservative movement has never been stronger and ready to bring real solutions to the many serious problems facing the nation. 3 Comments | Post a Comment | Sign up for NTU Action Alerts
Tune into NTU's State of the Union Coverage tonight Tonight at 9 p.m. EST, the National Taxpayers Union's crack government affairs and policy analysis teams will provide special online coverage of the President’s State of the Union Address, and we want you to be there and be a part of the discussion. We will be breaking down the President's proposals and what they will mean for taxpayers. Details on how you can join the conversation are below.
We look forward to seeing you online tonight at 9 p.m. EST!
Presidential Travel Study Update President Obama made a surprise trip to Afghanistan last night and into today. The 26-hour round trip from Washington D.C. to Bagram Air Base will cost taxpayers at least $4.7 million in Air Force One costs alone. The cost includes maintenance, fuel, and aircraft overhauls. However, the figure does not include the security entourage or vehicles accompanying the President. This trip to Afghanistan will total 16 foreign trips, totaling 56 days. President George H. W. Bush is the next most traveled President at 54 days during his first two years in office. Calculations for Air Force One flight hour costs were included in NTUF’s latest Issue Brief #161: Incredible Journey: How Barack Obama Became the Most-Traveled President His First Two Years in Office by Senior Policy Analyst Demian Brady. The paper is a survey of international travel made by Presidents Eisenhower through Obama and the costs associated with operating Air Force One in the past two decades. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
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