Cutting the Federal Budget To Prevent U.S. Bankruptcy, Part II: Cutting the Defense Budget

by Jim Grichar (aka Exx-Gman) by Jim Grichar

(Author's note: I ask readers for their indulgence because of my extensive use of the b-lingo – bureaucrat-lingo – and the detail I used in presenting my arguments. I do this to reduce bureaucratic counter-arguments – which I expect to receive – to the absurdity that they invariably are.)

Because the public is upset with George Bush's war in Iraq and generally upset with the worthless United Nations and U.S. foreign adventures in general, major cuts in defense spending and foreign aid, accompanied by a major change in U.S. defense strategy and tactics, are the area offering the best promise for savings. And the recent surge in attacks on U.S. troops in Iraq suggests that a civil war there has begun, with dire consequences for the U.S. The prospects for a U.S. "victory" there are falling rapidly every day. So now is even a better time for a third-party presidential candidate to begun to end the warfare state.

What level of defense does the U.S. need?

While the Bush Administration's fiscal year (fy) 2005 official budget for the Department of Defense (DOD) has estimated outlays of $430 billion, this reportedly excludes money for continuing the U.S. occupation of Iraq, also referred to euphemistically as democracy-building. Some have estimated that an extra $50 billion will be sought by Bush, in a supplemental budget request, after the November election. Even assuming that only half of the $50 billion will be used in fy 2005 and that only $25 billion per year will need to be budgeted for the occupation of Iraq in years beyond 2005, this bumps defense outlays up to $455 billion. And as long as the U.S. government wants to dictate what type of regime runs Iraq, taxpayers here are going to be stuck paying the bill for a large and continued U.S. military deployment there. Either the U.S. moves most of its NATO forces to Iraq, or it will have to spend more money to keep troops there. And these totals do not include funds that would be needed to build permanent military bases in Iraq, a scenario suggested by many critics of the Bush "democracy-building" plan for Iraq.

To that total of $455 billion tack on another $16.9 billion that goes for nuclear reactors in Navy submarines and aircraft carriers, the construction and maintenance of the nation's nuclear weapons stockpile, and the disposal of radioactive waste from nuclear weapons and Naval reactors. All of this $16.9 billion is included in the Energy Department budget. Thus, actual military outlays for fiscal year 2005 could reach $471.9 billion, if not more. One then can add the nearly $16.6 billion of foreign aid – money shoveled to foreign countries in order to buy their support and/or buy the support of U.S. voters who have personal fondness or attachments to other countries. This last amount pushes estimated national security spending to $488.5 billion for fiscal year 2005 compared to the roughly $470 billion being spent this year.

Ending the Warfare State Will Save Hundreds of Billions

There is plenty of room here for major cuts, although no presidential candidate has even raised the question as to what the U.S. really needs to defend itself. Sending the U.S. military to invade and occupy other countries in an attempt to impose our version of government is absolutely insane, and, as many authors on this site have stated, it just helps create more enemies for the U.S.

So the first needed change in U.S. national security policy and strategy is to adopt a U.S. foreign policy of strict neutrality, extending the hand of free trade to all, but favoring no one when it comes to defense. That means pulling out of all military alliances, bringing our troops and military equipment home and defending only the United States.

The U.S. needs to withdraw from Iraq and Afghanistan and then needs to pull out of the NATO alliance. Getting out of NATO will enable the U.S. to bring home a very large part of the forces it has deployed overseas and will make it much more difficult for future presidents to get the U.S. involved in imperial adventures or foreign conflicts in Europe or West Asia, including the Middle East. Such a display will, over time, gain more friends for the U.S. and genuine assistance for the U.S. government in any war on terrorism. As regards NATO countries, they are wealthy enough to provide for their own defense and should not be subsidized any more by the U.S. taxpayer.

Some may claim that if the U.S. pulls back from its forward deployments, particularly in the Middle East, that Arab states will hold the world hostage to higher oil prices. Anyone taking a close look at what it costs the U.S. to "protect the flow of oil from the Middle East" and what the savings would be in reduced defense expenditures realizes that over the longer term, defense savings would outweigh any higher costs of oil. In the past, Arab oil producers – when they had a high enough market share to raise world oil prices – eventually did themselves in by stimulating conservation and additional supplies, which eventually lowered oil prices. Here, as in many other so-called national security problems, the free market is the best defense.

The U.S. also needs to pull troops out of East Asia, particularly in South Korea and in Japan. Once again, both are wealthy enough to provide for their own defense and need no American defense subsidies. And a proper withdrawal from this area will be more likely to lead to peace in the region, with the current North Korean dictator, Kim Jong-Il, either being bribed by South Korea and Japan into being peaceful or being overthrown by his own people. Mr. Kim needs to have a bogey-man to keep his country under his thumb, and the U.S. does the best job of playing that role for him. As far as Japan goes, it can protect itself from all enemies or potential enemies, including China. The U.S., at the height of its military power in World War II, was afraid of invading Japan to end the war. So anyone who thinks the Chinese have designs on invading Japan should see a psychiatrist.

Furthermore, neutrality also would mean pulling out U.S. military advisers – often a front for special operations that get the U.S. entangled in other country's conflicts – from many countries around the world. Drug war or no, the U.S. makes more enemies by insinuating its forces into such countries, and this is most readily apparent in Latin America.

Neutrality also would mean imposing a tight control on what U.S. defense contractors are able to sell to foreign countries. The U.S. government should either permit American arms manufacturers to sell specific military equipment and supplies to all potential buyers or to none. Any other selective sales policy, which would rightly be construed as favoring one or a group of nations over others, would only serve to make more enemies for the U.S.

And the U.S. needs to end all foreign aid and withdraw from membership in the United Nations, which is used as a tool to bully other countries and often force them into doing what they would normally not do. That would mean that the U.S. would no longer take part in any so-called peace-keeping missions around the planet. Eliminating all foreign aid and getting out of the United Nations (payments to the UN are made from the State Department’s budget, which will be dealt with in a future installment) would help reduce over the longer term the number of enemies the U.S. has in the world and could immediately save about $16.6 billion per year for the U.S. taxpayer in fy 2005 and even more in future years.

With the return to the U.S. of troops and equipment that were deployed overseas, it would be safe for the Congress to reduce the size of the U.S. military. Instead of estimating what budget, manpower, and weapons it would take for the U.S. military to win one, two, or however many "major regional conflicts" and associated guerrilla wars that Dick Cheney, Donald Rumsfeld and their associated bunch of Dr. Strangelove's think we need to win, defense officials and members of Congress would only have to estimate what it would take to deter and/or defeat a country or countries that would attack the U.S.

And that would be much lower than the currently projected defense outlays that the President has proposed for fy 2005 and subsequent years. Significant cuts could be made in: 1) the number of active duty and reserve troops; 2) the inventory of weapons systems; 3) air and sea transportation systems that would no longer be needed to deploy troops and equipment to faraway places; 4) the extra costs of moving troops and families back and forth to foreign bases; 5) housing and additional costs associated with providing military personnel and their families with subsidized food, clothing, health care and other consumer goods and services; and, 6) surplus military bases. In all, cuts of about 1/3 could be made, without jeopardizing U.S. security, over the next few years.

To those that complain that the U.S. will not be able to fight the war on terror, I would say BALONEY! The war on terror is certainly not a conventional conflict, and, if the U.S. government is serious about destroying al Qaeda and other groups that directly threaten the U.S., then it will not rely on conventional forces or fight conventional wars.

In total, the published defense budget plus estimates of spending on nuclear weapons and the Iraqi war could be cut by about 1/3, down to $314.9 billion by the third year of a reduction program (and that includes ending foreign aid). At that level, taxpayers would actually save almost $174 billion from estimated fy 2005 spending levels and even higher amounts as budgets are projected to grow in the out-years. Once the rest of the world was convinced that the United States was no longer going to act like imperial Rome, the number of potential enemies would decrease, making further intermediate- to long-term cuts in defense spending possible.

Downsizing the Army

How large would such a force have to be to prevent some country or countries from launching an invasion of the United States and to defeat them should they actually attack? One crude assumption (with which some readers may disagree) is that, everything else being equal, an attacker needs an advantage of 3 to 1 in the numbers of its forces to win a battle over a defender. Of course, an attacker with plenty of aircraft and missiles can narrow that requirement, but the U.S. would not be without such weapons to use in the defense of the homeland. Roughly speaking, even with an active Army reduced to about 360,000 troops, it would take an enemy or enemies 1 million troops to invade the U.S.

But what country or countries could send that kind of a force to attack the United States? Certainly not Canada, at this point, nor Mexico (although illegal aliens from Mexico have launched a different invasion of the U.S. to which most federal politicians seem oblivious). Even China, with possible assistance from Russia, does not now, nor would it likely have in the next 10–20 years, the capability to build such a force and attack the U.S. with any reasonable likelihood of victory. Even if Beijing had a nuclear weapons force that would prevent the U.S. from launching a pre-emptive nuclear attack against it in such a situation, it still would not have the capability of successfully invading the U.S.

Which gets us back to the Army budget and what is really needed to defend the United States. For fiscal year 2005, the Army budget is a proposed $96.8 billion, with over $71 billion going for military personnel salaries and operations and maintenance. This would pay for an estimated active duty army of 482,000, with 12 divisions. (Note: Donald Rumsfeld's proposed reorganization of the army will reduce the need for the amount of heavy equipment like tanks and instead use more helicopters to lift lighter (read less mechanized) divisions to far off "hot spots" on the planet. Instead, Rummy wants more special forces – the Green Berets.) The nearly $31 billion proposed for Army salaries is almost a $10 billion cut from fiscal year 2004 so it is apparent that the Bush budget is understating the costs unless the U.S. actually gets out of Iraq and Afghanistan. We know this since the operations and maintenance budget is slated to rise by about $600 million over fy 2004.

In any case, an initial scaling back to 2/3 of the current active duty Army would not be an unreasonable initial cut, bringing down active duty Army strength to about 360,000 troops, and further significant cuts could be made without jeopardizing U.S. security once proper defense plans, taking into account the real threat to the U.S., were made. Savings of about $25 billion per year in the Army budget would be possible by the third year, with more likely to follow once current adversaries realized there was less to fear from the U.S.

Reducing the Navy

Next on the cut list is the Navy. Active duty Navy personnel are expected to number nearly 366,000 in fy 2005. Total Navy fy 2005 outlays are estimated at nearly $102.2 billion, with another $15.4 billion for the active duty Marine Corps. Of this total, the Marines – an extremely versatile force – should initially be kept intact. Never politically correct, these folk can still fight tenaciously and would be a great and relatively inexpensive deterrent during the years when the U.S. was bringing troops home.

Without foreign commitments, the need for the current 12 carrier battle groups (the aircraft carrier plus the complement of ships necessary to defend it from being attacked and destroyed) in the Navy would diminish significantly. Aircraft carriers are portable air fields, useful when the U.S. needed to attack some country when it did not have access to ground air fields where the U.S. Air Force could operate. While not all aircraft carriers (new ones cost $4–5 billion each) are deployed simultaneously, reducing the fleet by 4 would not be unreasonable in the first few years of a neutral U.S. foreign policy and revised defense strategy. In addition, similarly proportional reductions could be made in nuclear attack submarines (fewer needed to protect aircraft carrier battle groups from attacks by enemy subs; new nuclear attack submarines being built now cost approximately $2 billion each) and the complement of surface combatants (cruisers, destroyers, and supply ships) used to protect and service deployed fleets. Initially, fleet ballistic missile submarines, which are the prime element of the U.S. nuclear deterrent, should be left alone. Any cuts in these should be part of any comprehensive nuclear arms reductions negotiated with both Russia and also China that is subject to strict verification.

For fy 2005, the Navy's major proposed expenditures include $24.6 billion for salaries, $31.1 billion on operations and maintenance, $11.7 billion in procurement of new ships or conversion of old ships to new functions, nearly $8.8 billion for new aircraft, almost $2 billion for munitions (including missiles), and $15.6 billion for research and development. Cuts of about 1/3 could also be made in the Navy budget, saving about $35 billion per year, and would be in line with the cutbacks in ground forces. Further significant cuts could be made in the Navy budget in future years.

I can hear the howl of protests in nasty emails right now (I need to contact Burt Blumert for the latest version of his Hate-o-meter software!) from past and current Navy personnel. Why, they will say, the Navy is needed to protect our supply routes? My response is, since we are running the largest trade deficit on the planet, almost $500 billion per year, let those wanting to sell to us worry about protecting the sea lanes for their exporters. For critical foreign supplies, let the military either develop substitutes or stockpile the needed items. For those who correctly state that building a new ship takes a very long time, the U.S. Navy can mothball ships. Ship hulls are designed for at least a 40- to 50-year life and can be useful for a longer time since more defense systems on ships are now based on advanced electronics.

Grounding Part of the Air Force

The U.S. Air Force is also on this budget-cutter's radar screen. If LRC readers can recall, prior to the war on Iraq U.S. citizens were being barraged with statements by current and former Air Force officers about how the Iraqis were going to be finished off by precision guided munitions. Well, the Iraqis may have lost the initial part of the war (certainly not as quickly as promised by the Air Force), but they are still fighting and appear to have launched their version of the Tet offensive. Guerrilla warriors have a knack for confounding high-tech military opponents, including air forces.

The U.S. Air Force budget for fy 2005 has proposed outlays of about $112.4 billion. This budget funds an active duty Air Force of nearly 360,000, with $25.5 billion for salaries of active duty personnel, $32.4 billion for operations and maintenance, $12.3 billion for new aircraft procurement, $4.1 billion for missile procurement, $1.3 for ammunition purchases, and $20.6 billion for research, development, test and evaluation.

Initial cuts of about 1/3 can also be made to the Air Force budget while still leaving plenty of trained personnel and hardware to defend the United States from enemy air attacks. Cuts can be made in the number of active duty fighter squadrons – composed of squadrons of F-15’s and F-16’s, which total between 500–700 aircraft. Keeping the F-117 stealth fighter (of which there are 55) and the B-2 bomber (of which there are 16) makes sense, at least in the next three years or so. The Air force has a huge transport capability, including 120 C-17’s and 70 C-5’s in its active inventory. Some of these could be mothballed as part of the cuts.

Especially vulnerable to cuts are such new programs as the extremely costly F-22, a replacement for the F-15 that is going to cost over $100 million per copy. And even the new Joint Strike Fighter – supposedly for use by the Air Force, Navy, and Marines – should also be scaled back, if not cut out totally. If the U.S. is not attacking other countries, then what is the point of building these new weapons? To paraphrase former Lockheed Martin Chairman and CEO Norm Augustine, at the rate of increase in the cost of military aircraft, the Air Force will eventually only be able to buy one aircraft costing $100 billion. Well, the Air Force has certainly adhered to Mr. Augustine's forecast with the B-2, which ended up costing several billion dollars or more per copy. If allowed to continue along this path, then I suspect that the Air Force will eventually prove Augustine's Law (it was actually known by this name) to be true. But then that's the Air Force, wanting to shoot money away on manned aircraft when unmanned vehicles or missiles can do as good a job for a lot less money.

Total cuts to the Air Force by fy 2007 or 2008 would amount to at least $38 billion per year.

Trimming the rest of the Pentagon's budget

HA! And you thought I had finished cutting the Defense budget, but you are wrong. Defense also spends on items labeled "DOD-wide," meaning Department of Defense wide. For fy 2005, that amount is budgeted at about $71.3 billion. This area should be cut at least by 1/3, just like the rest of the Pentagon budget, yielding savings of about $24 billion in several years.

And last, but not least, the various components of the military reserve system, including the Army and Air National Guards, should also be cut back. The DOD budget for fy 2005 seeks $31.9 billion for all these components. They should not be immune from the rest of the cuts so they get the same 1/3 clipping given to all the rest of DOD's major budget categories. This would save an additional $10 billion per year.

And the "Cut-o-Meter" total is … $155 billion!

This puts the "Cut-o-meter" savings at $25 billion (ending the military missions in Iraq and Afghanistan) +$16.6 billion (abolishing foreign aid) + $25 billion (initial cuts in the Army) + $35 billion (initial cuts in the Navy) + $38 billion (initial cuts in the Air Force) +$24 billion (initial cuts in the Pentagon-wide budget) + $10 billion (initial cuts in the Reserves and the Guard). The grand total is an estimated $174 billion annual savings below the proposed fy 2005 level of spending and $155 billion below the level estimated for the current fiscal year. It is this estimated $155 billion in cuts from the current level of actual spending that goes into the "Cut-o-meter."

While this only covers only 30% of the current estimated deficit, it is a reasonable start, and given the increasing anger by the public with U.S. overseas military adventures that have nothing to do with defending the nation, these are probably the easiest cuts to achieve.

Stay tuned for proposed cuts in domestic programs!!

Jim Grichar (aka Exx-Gman) [send him mail], formerly an economist with the federal government, writes to “un-spin” the federal government’s attempt to con the public. He teaches economics part-time at a community college and provides economic consulting services to the private sector.

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