The Blog

The Unbearable Lightness of Barney

A Democratic congressman's irresponsible and impossible plan to cut the defense budget by 25 percent.

12:00 AM, Oct 31, 2008 • By STUART KOEHL
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One reason nobody takes Democrats seriously on matters of national security are statements like those of Representative Barney Frank (D-Mass.) to the effect that he wants to cut the Defense budget by a mind-numbing 25 percent in order to reduce the deficit and to pay for programs he and his Democratic colleagues hold near and dear to their hearts. Aside for the questionable wisdom of cutting the defense budget at all when more than 200,000 American troops are deployed in combat zones around the world, Frank's proposal suggests that the man, for all his years in Congress dealing with budgetary matters, simply does not understand the military or how the country pays for it. Because any halfway informed person, hearing Frank's proposal, would realize that it is not physically or fiscally possible to do what he wants.

"Why?" one might ask. After all, we will spend some $650 billion on the Department of Defense next year. Surely, it should be possible to eliminate a measly $162 billion, just by cutting "waste, fraud and mismanagement." In fact, the Defense Department is actually quite well managed as compared to some of Barney Frank's more favored government bureaucracies, like the Department of Housing and Urban Development, or the Department of Health and Human Services. If all the inefficiency and corruption were squeezed out of the Defense Department, I doubt that one could save more than $20-30 billion. So when Frank calls for cuts, he means real cuts. So let's look at how that would have to be done.

The first thing to know is the Defense budget is not a pot of money. In fact, it consists of several different pots of money, known as "accounts"; each fiscal year (which runs from October 1 to September 30), the president submits a budget to Congress that indicates how much money is needed in each account, and Congress appropriates that money and authorizes the Defense Department to spend it. Money can be moved from one pot to another during the fiscal year to respond to emergencies, but this causes serious disruption throughout the military, since each service has planned how it will spend its money. It's robbing Peter to pay Paul, and it's best to avoid it, if possible.

The four main accounts are Military Personnel (MILPERS); Procurement (PROC); Research and Development (R&D); and Operations & Maintenance (O&M). MILPERS includes all funds used to pay the troops, provide subsistence for their dependents, their pensions and retirement pay, and their medical expenses (housing is paid out of a separate but relatively small account). Procurement is money spent to buy equipment--everything from rifles to aircraft carriers, including money spent to upgrade existing weapon systems. R&D is money spent to develop the next generation of weapon systems, to ensure that the U.S. maintains a technological edge over our adversaries. Finally, O&M is the money used for training, to buy fuel and food and other consumables, to fix broken equipment, and to sustain forces in the field.

O&M is by far the largest account, mainly because the country is at war, and wartime operations are expensive. In Fiscal Year 2008, the total defense budget (including $141 billion in supplemental appropriations to pay for the war in Iraq and Afghanistan) came to $624 billion. Of that, some $165 billion (26 percent) went to O&M in the "baseline" appropriation. But about two-thirds of the $141 billion "supplemental" appropriation was also directed to O&M. So the total O&M account comes to $258 billion (41 percent). If we exclude supplementals from the calculations and use only the baseline submission, then O&M accounts for 35 percent of the budget.

MILPERS is the next largest account, at $119 billion. About 15 percent of the supplemental goes to MILPERS, for a total of $140 billion (23 percent of total DoD expenditures). Again, if we only consider the baseline request, MILPERS accounts for 25 percent of the budget.

Procurement includes $102 billion in the baseline submission, plus about 19 percent of the supplemental, for a total of $129 billion, or 21 percent of total DoD expenditures; using just the baseline submission, it accounts for 22 percent of the budget. Almost all of the $75 billion allocated to R&D is paid out of the baseline submission (16 percent); if we include the supplemental, this falls to just 12 percent.