Monday, September 10, 2012

8/23/12 RD Bulletin: Grover Norquist Says "Defense Spending Is Not Magic"

PDA Perspective: Carl Conetta analyzes the differences between Gov. Mitt Romney, Rep. Paul Ryan, and President Barack Obama’s defense spending plans over the next five and ten years and finds that there’s a much larger difference between Romney and his vice-presidential running mate’s spending plans than there is between the Ryan and Obama’s budgets. 
News: In its latest economic forecast, the Congressional Budget Office predicts that if Congress fails to extend the Bush-era tax cuts and allows sequestration to take effect, unemployment would rise to 9 percent in the latter half of 2013 and gross domestic product would fall by half a percentage point between the end of 2012 and the end of 2013. 
Editors’ Note: Reset Defense’s editors will be on vacation next week.  Please let us know how you like the bulletin and if there are any areas that we can improve.  We look forward to your feedback.
State of Play
As the lame-duck session of Congress looms large, lawmakers are still unsure of how to tackle a number of controversial issues that must be addressed before the end of the calendar year: the expiration of the Bush-era tax breaks, pending sequestration cuts, and a host of other expiring tax provisions.  Enter the Congressional Budget Office, which this week released an updated economic forecast.  In its latest report, and in an associated infographic, CBO predicts that if Congress fails to extend the Bush-era tax cuts and allows sequestration to take effect on January 2, 2013, unemployment would rise to 9 percent in the latter half of 2013 and gross domestic product would fall by half a percentage point between the end of 2012 and the end of 2013.  However, on the opposite hand, if Congress extends the Bush tax cuts and nullifies sequestration for FY13, the federal budget deficit will increase from $641 billion (under current law) to $1 trillion – boosting real GDP by 1.7 percent and keeping unemployment stable at 8 percent. 
According to the report, if Congress adheres to the spending caps implemented by the Budget Control Act and allows sequestration to take effect as scheduled, defense spending (function 050 including mandatory spending) would be set at $491 billion in 2013, $501 billion in 2014, $511 billion in 2015, $522 billion in 2016, and $535 billion in 2017. 
Meanwhile, the Center for Security Policy, in conjunction with the For Our Common Defense Coalition, released a series of studies which examine, on a Congressional district-by-district basis, how much defense contracts were awarded in 2011.  The report then examines the impact of spending reductions, both under the Budget Control Act’s budget caps as well as under sequestration, on those contracts.  The report assumes that BCA’s spending caps would result in a nine percent reduction in contract spending from 2011, while projecting an 18 percent reduction under sequestration. 
Unlike in past years, House and Senate Armed Services Committee staff are not holding “pre-conference” meetings on the National Defense Authorization Act, reports CQ Today.  Staffers and members often meet to discuss differences between the chambers’ versions of legislation so that once the bills have passed the House and Senate, final conference negotiations can move quicker.  The Senate has yet to pass its version of the National Defense Authorization Act, and with only three weeks of session left before the November election, it is increasingly likely that Floor consideration of the measure will be delayed until the lame-duck session of Congress despite the best efforts of SASC Chairman Carl Levin (D-MI) and HASC Chairman Buck McKeon (R-CA). 
This week, President Barack Obama warned Syrian President Bashar al-Assad that if his regime moves or uses chemicals weapons in its ongoing civil war, it would cause the United States to reconsider military intervention in the Middle Eastern country.  Meanwhile, the White House is in discussions with allies over a potential “worst-case scenario” in Syria, in which Assad’s embattled regime falls and leaves up to a dozen chemical weapon stockpiles insecure.  In such a scenario, up to 60,000 ground troops would be required to move in and secure vulnerable stockpiles. 
Appearing this weekend on ABC’s This Week, former Treasury Department official Neil Barofky predicted that Congress would be unable to enact a “grand bargain” that could replace the sequester in its entirety, but from an economic perspective, Barofky warned Congress and the public that the United States could not weather automatic cuts to defense and non-defense while the economy continues to underperform.  When the topic shifted to the discussion of defense spending, and whether it should be considered sacrosanct in the context of national security, another panelist on This Week, Grover Norquist, pointed out that “defense spending is not magic. Just because it's defense doesn't mean you shouldn't question it and you shouldn't figure out how to spend it more effectively and more efficiently and, yes, there are way to save money and we ought to look at those.”  Norquist has been blamed by many pundits and analysts for imploring the Republican party and moderate Democrats not to raise income taxes as a means of shielding the Defense Department from additional spending reductions. 
The Navy has decided to repair a severely damaged nuclear powered submarine after a dock worker set fire to the vessel in May.  The Navy estimates that the submarine will cost at least $450 million to repair.  The 22-year-old USS Miami is a Los Angeles-class submarine, which the Navy is currently in the process of replacing with the less-costly Virginia-class attack submarine.  The Associated Press reports that the damaged submarine is expected return to service by 2015.
Project on Defense Alternatives Perspective
Governor Romney’s choice of Representative Paul Ryan for the #2 spot on the GOP ticket has renewed interest in Ryan’s "Path to Prosperity" budget plan, including its provisions for National Defense (see Table 2). How does it compare to the President’s defense plan and the path charted by the Budget Control Act (BCA - Title III)?
Looking at the vital next five years, Ryan’s plan would authorize $2,905 billion for National Defense (050) discretionary spending, apart from war. By contrast, the President allocates $2,856 billion – a difference of $49 billion or 1.7 percent over five years. In the "out years" the plans diverge more. So for the decade 2013-2022, Ryan exceeds the President by almost $200 billion or 3.2 percent.
There’s a more significant difference between either plan and the BCA. The BCA spending caps and sequestration would allow no more than about $2,565 billion in discretionary National Defense (050) authority for 2013-2017. That is $340 billion less than what Ryan advises and $290 less than what the President wants.
Of course, Ryan isn’t running for President. Romney is. But what the Governor has put forward on defense is not so much a budget plan as a sound bite: the so-called "four percent solution." This would peg the Pentagon’s base budget to 4 percent of GDP – and add about $2.4 trillion to the Ryan ten-year plan. It never makes sense to peg any part of federal spending to GDP.  Moreover, Chris Preble at Cato Institute is right to wonder, where will the money come from?  Governor Romney needs to be told that the "four percent solution" last gained some currency when the federal budget was in surplus. Today, his view is more aptly called "the four percent delusion."
News and Commentary
Republicans on the campaign trail, including Presidential candidate Governor Mitt Romney and his running mate, House Budget Committee Chairman Paul Ryan (R-WI), have vocally criticized President Obama for slashing the Pentagon budget as a result of spending reductions mandated by the Budget Control Act.  However, many of these GOP candidates fail to mention that they refused to increase the statutory debt limit and widely voted for the resulting Budget Control Act, which mandates significant military spending reductions relative to previously planned spending levels.  Furthermore, before the Budget Control Act was implemented, President Obama was set to increase defense spending above the levels forecasted by the Bush administration in the latter years of its term.  (8/20/12)
Washington Post: Exploding costs
The National Nuclear Security Administration is planning on extending the life of B-61 thermonuclear weapon, a device first developed during the 1960s -- some of which are currently stationed in Europe as a deterrent. While the original estimate put the cost of the B-61 life extension program at $4 billion, recent estimates put the cost at between $8-10 billion.  The Washington Post’s editorial board wonders why the United States is putting increasingly constrained resources toward upgrading a Cold War-era nuclear weapon whose deterrence value is increasingly irrelevant and may be eliminated in future bilateral disarmament negotiations between the United States and Russia.  The board writes; “Nuclear weapons have not been used in combat for 67 years — they are intended to deter. Who will be deterred by the refurbished B-61? Is the symbolism of deploying the nuclear gravity bomb in Europe worth the billions of dollars? Does it make sense to embark on a $10 billion program to refurbish a weapon that could be put on the table in negotiations with Russia a few years from now? In an age of scarce resources, such questions can’t be slighted.”  (8/19/12)
Concern has been growing in Virginia and other defense industry-heavy states over the potential impact of automatic cuts to defense spending scheduled to take effect next year.  However, several notable defense analysts, including Chris Hellman of the National Priorities Project and Bill Hartung of the Center for International Policy, point out that the United States’ military will still remain unrivaled on the world stage even if sequestration cuts take effect.  Furthermore, according to analysis by the Project on Defense Alternatives and the nonpartisan Congressional Budget Office, sequestration would only bring the defense budget down to Fiscal Year 2006/2007 levels, at which point the United States was embroiled in two large-scale overseas contingency operations.  The Center for Strategic and Budgetary Assessments’ Todd Harrison points out that the combined withdrawal of U.S. troops from Afghanistan and sequestration cuts would entail a 31 percent reduction in defense spending, which is comparable to other American post-war drawdowns. (8/17/12)
In 2010, the Navy requested that Congress approve procurement of two competing versions of the Littoral Combat Ship, instead of selecting one model, as was originally intended.  Since then, a myriad of developmental problems have been identified in the vessel, including its inability to survive hostile combat situations.  Recent internal documents obtained by the Project on Government Oversight and Aviation Week show that Navy officials had identified at least one problem with the LCS, but did not notify Congress of it, before the legislature approved acquisition of the two variants.  The Navy told officials to downplay or reword criticism of the ship’s steering capabilities in calm waters so as not to create unfair competition between the Lockheed Martin and General Dynamics’ versions of the vessel.  Meanwhile, in related news, the Navy is responding to criticism that the LCSs’ small crew size is causing “exhaustion” amongst its sailors.  (8/17/12)
In a recent opinion piece in Government Executive, the head of the Aerospace Industries Association, Marion Blakey, warned that sequestration would bring defense spending down to its lowest point since the conclusion of World War II. Citing data provided by the Department of Defense and Congressional Budget Office, however, Winslow Wheeler points out that not only would sequestration not bring defense spending down to post-World War II levels, it would still be higher than the average amount spent by the United States during the Cold War.  (8/17/12)
Amid the pandemonium over shrinking Pentagon budgets and the potential for sequestration cuts to defense, some conservative defense analysts are warning that the Air Force’s modernization budget could be slashed imperiling the service’s future procurement plans and the ability of the United States to project air power overseas.  However, former assistant secretary of defense Larry Korb points out that relative to the other services, the Air Force budget is expected to do quite well under the Obama administration’s new defense posture: “By 2017, its share of the defense budget will rise to 27.7 percent, just a point and a half below that of the Navy. This share of the overall defense budget is roughly equal to the Air Force's share of the budget just before 9/11, and the service's actual budget of $149 billion will be $32 billion larger than it was in 2000.”  (8/16/12)
“Romney apparently sees himself as the reincarnation of Winston Churchill,” Steve Chapman writes sardonically.  Chapman points to a desire on behalf of the GOP presidential nominee to create the image of a dangerous world where in fact none exists.  Emphasizing calculated and decisive maneuvers made by the Obama administration, as well as the state of world affairs, Chapman concludes that Romney is “a man with a hammer, looking for nails.” (7/29/12)
Congressional Research Service: Armed Conflict in Syria: U.S. and International Response (8/20/12)
Congressional Research Service: Crisis in Mali (8/16/12)
Department of State International Security Advisory Board: Mutual Assured Stability: Essential Components and Near Term Actions (8/14/12)
Congressional Budget Office: Sequestration Update Report: August 2012 (8/9/12)