The Magazine

Panetta Plays Chicken

May 21, 2012, Vol. 17, No. 34 • By GARY SCHMITT and THOMAS DONNELLY
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When he was director of central intelligence, Leon Panetta earned a reputation as an energetic advocate for his agency. When he replaced Robert Gates at the Pentagon, it was reasonable to hope that Panetta would continue to play the role of a senior statesman. And to some extent he has—explaining that defense cuts would heighten risks to the nation’s security and stating that, should the “sequester” mandated by the 2011 Budget Control Act come to pass in January 2013, cutting another $500 billion from defense, it would be a “disaster” for America’s military. As he told the Senate Armed Services Committee, “Congress must do everything possible to make sure that we avoid sequestration.”

Photo of Panetta

But no longer. Now that the Republican majority in the House of Representatives has actually introduced a plan to avoid this disaster, blocking sequestration and proposing alternative reductions in federal spending to meet the goals set by the Budget Control Act, Secretary Panetta has reverted to his Democratic-congressman-from-California self. At a press conference Thursday, Panetta said the Republican bill would, “by taking these funds from the poor, middle-class Americans, homeowners, and other vulnerable parts of our American constituencies,” virtually guarantee “confrontation, gridlock, and a greater likelihood of sequester.” To top matters off, the secretary added that “defense should not be exempt from doing its share to reduce the deficit.”

So, naturally, the news accounts portray the fight between the House GOP and the Obama administration as a choice between “protecting defense” and “slashing funds for the poor.” 

Except it’s not. Since 2002, spending for the federal government’s food stamp program, the Supplemental Nutrition Assistance Program (SNAP), has increased 270 percent, with participation in SNAP growing 160 percent since 2000. The proposed “slash” to the program would leave funding for food stamps in 2013 still 260 percent higher than a decade ago. Indeed, given the liberalized rules for eligibility, even if the economy recovers and returns to normal growth, the CBO projects nearly 37 million people will be receiving benefits in 2020, up from 17 million in 2000. 

Or, take the proposed reforms to Medicaid and the Children’s Health Insurance Program in the House bill. While the past decade has seen a large expansion in Medicaid spending, the program is projected to grow by some 125 percent in the next 10 years. The House bill would slow that growth to 123 percent. 

These proposals hardly justify the Democrats’ accusations that the House GOP is rampaging through the federal budget like Attila the Hun. 

Not that a little slashing isn’t sometimes called for. The health care law passed in 2010 created a “Prevention and Public Health Fund” to prevent disease and promote “wellness.” While presumably some of the money was well spent, U.S. tax dollars also went to improving signage for public parks and bike lanes in North Carolina, promoting “urban gardening” in Boston, and helping New York in its lobbying campaign to increase taxes on soda. 

Nor is it the case, as Secretary Panetta suggests, that those trying to prevent further cuts to the military budget are ignoring the need to address the deficit or arguing that defense shouldn’t share the pain. Over the past four years, some $800 billion has already been taken from defense coffers. If the sequester stands, defense, though consuming less than 20 percent of federal spending, will bear half the total cuts. 

The real issue here is the desire of the administration and its allies on Capitol Hill to keep defense spending as low as possible to make room for the domestic welfare and entitlement programs they want. In this connection, it should be no surprise that the $800 billion already lopped from defense is essentially the price tag for the 2009 Obama stimulus package that failed to restore the economy to healthy growth. 

So, over the longer term, this really will be a matter of “guns versus butter”—with liberals wanting to add oleo, margarine, and extra virgin olive oil to one side of the ledger, while leaving the U.S. military looking more and more like the armless, legless Black Knight from Monty Python and the Holy Grail. Under the administration’s current plan to flat line future defense spending, and using CBO projections for the economy, America’s defense “burden” will drop to just over 2.5 percent of GDP in a decade. This is a remarkable figure—half a percentage point lower than the lowest level reached in the post-World War II era and well below even the post-Cold War average. With this level of resources, the United States simply cannot continue to play the role it has over the past 60 years in keeping the great powers at peace and helping provide the global security environment that has seen America prosper. 

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