Tag Archives: Domestic Spending

The Pentagon Budget as Corporate Welfare for Weapons Makers

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By William Hartung (with introduction by TomDispatch)

Source: TomDispatch.com

What company gets the most money from the U.S. government? The answer: the weapons maker Lockheed Martin. As the Washington Post recently reported, of its $51 billion in sales in 2017, Lockheed took in $35.2 billion from the government, or close to what the Trump administration is proposing for the 2019 State Department budget. And which company is in second place when it comes to raking in the taxpayer dollars? The answer: Boeing with a mere $26.5 billion. And mind you, that’s before the good times even truly begin to roll, as TomDispatch regular and weapons industry expert William Hartung makes clear today in a deep dive into the (ir)realities of the Pentagon budget.  When it comes to the Department of Defense, though, perhaps we should retire the term “budget” altogether, given its connotation of restraint. Can’t we find another word entirely? Like the Pentagon cornucopia?

Sometimes, it’s hard to believe that perfectly sober reportage about Pentagon funding issues isn’t satire in the style of the New Yorker’s Andy Borowitz.  Take, for instance, a recent report in the Washington Examiner that Army Secretary Mark Esper and other Pentagon officials are now urging Congress to release them from a September 30th deadline for fully dispersing their operation and maintenance funds (about 40% of the department’s budget).  In translation, they’re telling Congress that they have more money than even they can spend in the time allotted.

It’s hard to be forced to spend vast sums in a rush when, for instance, you’re launching a nuclear arms “race” of one by “modernizing” what’s already the most advanced arsenal on the planet over the next 30 years for a mere trillion-plus dollars (a sum that, given the history of Pentagon budgeting, is sure to rise precipitously).  In that context, let Hartung usher you into the wondrous world of what, in the age of The Donald, might be thought of (with alliteration in mind) as the Plutocratic Pentagon. Tom

How the Pentagon Devours the Budget
Normalizing Budgetary Bloat
By William D. Hartung

Imagine for a moment a scheme in which American taxpayers were taken to the cleaners to the tune of hundreds of billions of dollars and there was barely a hint of criticism or outrage.  Imagine as well that the White House and a majority of the politicians in Washington, no matter the party, acquiesced in the arrangement.  In fact, the annual quest to boost Pentagon spending into the stratosphere regularly follows that very scenario, assisted by predictions of imminent doom from industry-funded hawks with a vested interest in increased military outlays.

Most Americans are probably aware that the Pentagon spends a lot of money, but it’s unlikely they grasp just how huge those sums really are.  All too often, astonishingly lavish military budgets are treated as if they were part of the natural order, like death or taxes.

The figures contained in the recent budget deal that kept Congress open, as well as in President Trump’s budget proposal for 2019, are a case in point: $700 billion for the Pentagon and related programs in 2018 and $716 billion the following year.  Remarkably, such numbers far exceeded even the Pentagon’s own expansive expectations.  According to Donald Trump, admittedly not the most reliable source in all cases, Secretary of Defense Jim Mattis reportedly said, “Wow, I can’t believe we got everything we wanted” — a rare admission from the head of an organization whose only response to virtually any budget proposal is to ask for more.

The public reaction to such staggering Pentagon budget hikes was muted, to put it mildly. Unlike last year’s tax giveaway to the rich, throwing near-record amounts of tax dollars at the Department of Defense generated no visible public outrage.  Yet those tax cuts and Pentagon increases are closely related.  The Trump administration’s pairing of the two mimics the failed approach of President Ronald Reagan in the 1980s — only more so.  It’s a phenomenon I’ve termed “Reaganomics on steroids.”  Reagan’s approach yielded oceans of red ink and a severe weakening of the social safety net.  It also provoked such a strong pushback that he later backtracked by raising taxes and set the stage for sharp reductions in nuclear weapons.

Donald Trump’s retrograde policies on immigration, women’s rights, racial justice, LGBT rights, and economic inequality have spawned an impressive and growing resistance.  It remains to be seen whether his generous treatment of the Pentagon at the expense of basic human needs will spur a similar backlash.

Of course, it’s hard to even get a bead on what’s being lavished on the Pentagon when much of the media coverage failed to drive home just how enormous these sums actually are. A rare exception was an Associated Press story headlined “Congress, Trump Give the Pentagon a Budget the Likes of Which It Has Never Seen.” This was certainly far closer to the truth than claims like that of Mackenzie Eaglen of the conservative American Enterprise Institute, which over the years has housed such uber-hawks as Dick Cheney and John Bolton.  She described the new budget as a “modest year-on-year increase.” If that’s the case, one shudders to think what an immodest increase might look like.

The Pentagon Wins Big

So let’s look at the money.

Though the Pentagon’s budget was already through the roof, it will get an extra $165 billion over the next two years, thanks to the congressional budget deal reached earlier this month.  To put that figure in context, it was tens of billions of dollars more than Donald Trump had asked for last spring to  “rebuild” the U.S. military (as he put it).  It even exceeded the figures, already higher than Trump’s, Congress had agreed to last December.  It brings total spending on the Pentagon and related programs for nuclear weapons to levels higher than those reached during the Korean and Vietnam wars in the 1950s and 1960s, or even at the height of Ronald Reagan’s vaunted military buildup of the 1980s. Only in two years of Barack Obama’s presidency, when there were roughly 150,000 U.S. troops in Iraq and Afghanistan, or about seven times current levels of personnel deployed there, was spending higher.

Ben Freeman of the Center for International Policy put the new Pentagon budget numbers in perspective when he pointed out that just the approximately $80 billion annual increase in the department’s top line between 2017 and 2019 will be double the current budget of the State Department; higher than the gross domestic products of more than 100 countries; and larger than the entire military budget of any country in the world, except China’s.

Democrats signed on to that congressional budget as part of a deal to blunt some of the most egregious Trump administration cuts proposed last spring.  The administration, for example, kept the State Department’s budget from being radically slashed and it reauthorized the imperiled Children’s Health Insurance Program (CHIP) for another 10 years.  In the process, however, the Democrats also threw millions of young immigrants under the bus by dropping an insistence that any new budget protect the Deferred Action for Childhood Arrivals, or “Dreamers,” program.  Meanwhile, the majority of Republican fiscal conservatives were thrilled to sign off on a Pentagon increase that, combined with the Trump tax cut for the rich, funds ballooning deficits as far as the eye can see — a total of $7.7 trillion worth of them over the next decade.

While domestic spending fared better in the recent congressional budget deal than it would have if Trump’s draconian plan for 2018 had been enacted, it still lags far behind what Congress is investing in the Pentagon.  And calculations by the National Priorities Project indicate that the Department of Defense is slated to be an even bigger winner in Trump’s 2019 budget blueprint. Its share of the discretionary budget, which includes virtually everything the government does other than programs like Medicare and Social Security, will mushroom to a once-unimaginable 61 cents on the dollar, a hefty boost from the already startling 54 cents on the dollar in the final year of the Obama administration.

The skewed priorities in Trump’s latest budget proposal are fueled in part by the administration’s decision to embrace the Pentagon increases Congress agreed to last month, while tossing that body’s latest decisions on non-military spending out the window.  Although Congress is likely to rein in the administration’s most extreme proposals, the figures are stark indeed — a proposed cut of $120 billion in the domestic spending levels both parties agreed to. The biggest reductions include a 41% cut in funding for diplomacy and foreign aid; a 36% cut in funding for energy and the environment; and a 35% cut in housing and community development.  And that’s just the beginning.  The Trump administration is also preparing to launch full-scale assaults on food stamps, Medicaid, and Medicare.  It’s war on everything except the U.S. military.

Corporate Welfare

The recent budget plans have brought joy to the hearts of one group of needy Americans: the top executives of major weapons contractors like Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. They expect a bonanza from the skyrocketing Pentagon expenditures. Don’t be surprised if the CEOs of these five firms give themselves nice salary boosts, something to truly justify their work, rather than the paltry $96 million they drew as a group in 2016 (the most recent year for which full statistics are available).

And keep in mind that, like all other U.S.-based corporations, those military-industrial behemoths will benefit richly from the Trump administration’s slashing of the corporate tax rate.  According to one respected industry analyst, a good portion of this windfall will go towards bonuses and increased dividends for company shareholders rather than investments in new and better ways to defend the United States.  In short, in the Trump era, Lockheed Martin and its cohorts are guaranteed to make money coming and going.

Items that snagged billions in new funding in Trump’s proposed 2019 budget included Lockheed Martin’s overpriced, underperforming F-35 aircraft, at $10.6 billion; Boeing’s F-18 “Super Hornet,” which was in the process of being phased out by the Obama administration but is now written in for $2.4 billion; Northrop Grumman’s B-21 nuclear bomber at $2.3 billion; General Dynamics’ Ohio-class ballistic missile submarine at $3.9 billion; and $12 billion for an array of missile-defense programs that will redound to the benefit of… you guessed it: Lockheed Martin, Raytheon, and Boeing, among other companies.  These are just a few of the dozens of weapons programs that will be feeding the bottom lines of such companies in the next two years and beyond.  For programs still in their early stages, like that new bomber and the new ballistic missile submarine, their banner budgetary years are yet to come.

In explaining the flood of funding that enables a company like Lockheed Martin to reap $35 billion per year in government dollars, defense analyst Richard Aboulafia of the Teal Group noted that “diplomacy is out; air strikes are in… In this sort of environment, it’s tough to keep a lid on costs. If demand goes up, prices don’t generally come down. And, of course, it’s virtually impossible to kill stuff. You don’t have to make any kind of tough choices when there’s such a rising tide.”

Pentagon Pork Versus Human Security

Loren Thompson is a consultant to many of those weapons contractors.  His think tank, the Lexington Institute, also gets contributions from the arms industry.  He caught the spirit of the moment when he praised the administration’s puffed-up Pentagon proposal for using the Defense Department budget as a jobs creator in key states, including the crucial swing state of Ohio, which helped propel Donald Trump to victory in 2016.  Thompson was particularly pleased with a plan to ramp up General Dynamics’s production of M-1 tanks in Lima, Ohio, in a factory whose production line the Army had tried to put on hold just a few years ago because it was already drowning in tanks and had no conceivable use for more of them.

Thompson argues that the new tanks are needed to keep up with Russia’s production of armored vehicles, a dubious assertion with a decidedly Cold War flavor to it.  His claim is backed up, of course, by the administration’s new National Security Strategy, which targets Russia and China as the most formidable threats to the United States.  Never mind that the likely challenges posed by these two powers — cyberattacks in the Russian case and economic expansion in the Chinese one — have nothing to do with how many tanks the U.S. Army possesses.

Trump wants to create jobs, jobs, jobs he can point to, and pumping up the military-industrial complex must seem like the path of least resistance to that end in present-day Washington.  Under the circumstances, what does it matter that virtually any other form of spending would create more jobs and not saddle Americans with weaponry we don’t need?

If past performance offers any indication, none of the new money slated to pour into the Pentagon will make anyone safer.  As Todd Harrison of the Center for Strategic and International Studies has noted, there is a danger that the Pentagon will just get “fatter not stronger” as its worst spending habits are reinforced by a new gusher of dollars that relieves its planners of making any reasonably hard choices at all.

The list of wasteful expenditures is already staggeringly long and early projections are that bureaucratic waste at the Pentagon will amount to $125 billion over the next five years.  Among other things, the Defense Department already employs a shadow work force of more than 600,000 private contractors whose responsibilities overlap significantly with work already being done by government employees.  Meanwhile, sloppy buying practices regularly result in stories like the recent ones on the Pentagon’s Defense Logistics Agency losing track of how it spent $800 million and how two American commands were unable to account for $500 million meant for the war on drugs in the Greater Middle East and Africa.

Add to this the $1.5 trillion slated to be spent on F-35s that the nonpartisan Project on Government Oversight has noted may never be ready for combat and the unnecessary “modernization” of the U.S. nuclear arsenal, including a new generation of nuclear-armed bombers, submarines, and missiles at a minimum cost of $1.2 trillion over the next three decades.  In other words, a large part of the Pentagon’s new funding will do much to fuel good times in the military-industrial complex but little to help the troops or defend the country.

Most important of all, this flood of new funding, which could crush a generation of Americans under a mountain of debt, will make it easier to sustain the seemingly endless seven wars that the United States is fighting in Afghanistan, Pakistan, Syria, Iraq, Libya, Somalia, and Yemen.  So call this one of the worst investments in history, ensuring as it does failed wars to the horizon.

It would be a welcome change in twenty-first-century America if the reckless decision to throw yet more unbelievable sums of money at a Pentagon already vastly overfunded sparked a serious discussion about America’s hyper-militarized foreign policy.  A national debate about such matters in the run-up to the 2018 and 2020 elections could determine whether it continues to be business-as-usual at the Pentagon or whether the largest agency in the federal government is finally reined in and relegated to an appropriately defensive posture.

 

William D. Hartung, a TomDispatch regular, is the director of the Arms and Security Project at the Center for International Policy and the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.

 

Trump proposes huge hike in military and police spending

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discretionary_spending_pie_2015_enacted

By Patrick Martin

Source: WSWS.org

The Trump administration sent instructions to federal agencies Monday proposing a $54 billion increase in spending for the Pentagon, the intelligence agencies and the Department of Homeland Security, to be offset by $54 billion in cuts for other agencies, mainly those involved in domestic social services and regulation of business.

Trump’s budget outline sets the stage for his first address to Congress on Tuesday. It provides further evidence that the Trump administration will be dedicated to radically rolling back social spending to finance a dramatic escalation of military operations, both in the neo-colonial wars in the Middle East and against the United States’ ‘great power’ rivals: China and Russia.

Federal departments are being told to file budget requests for the fiscal year that begins October 1, 2017 based on the numbers they were given by the Office of Management and Budget. Each agency will be responsible for working out the cuts required to meet proposed reductions, while the Pentagon, CIA and DHS will propose expanded operations with the additional funds they are to be awarded.

There were no details made public about the exact budget ceilings given to each federal department, but White House officials made it clear that foreign aid programs in the State Department and anti-pollution regulation through the Environmental Protection Agency (EPA) would suffer some of the largest cuts.

The total budget of the EPA is only $9 billion, so many other domestic programs are certain to be hard-hit, involving such departments as Education, Labor, Transportation, Agriculture (which includes food stamps), Housing and Urban Development and Health and Human Services.

The biggest federal social programs, Social Security, Medicare and Medicaid, are not affected by the budget order, which involves only funding for so-called discretionary programs, those financed through annual congressional appropriations. Entitlement programs, where benefits are paid out automatically to those who establish their eligibility, are covered by a separate budget process.

OMB Director Mick Mulvaney appeared at the White House press briefing Monday afternoon to explain the action taken by the Trump administration. He emphasized that setting what he called the “top-line budget number” for each department was only the start of a protracted process.

The OMB will use the figures from each department and agency to prepare a budget outline to be submitted to Congress on March 16. A full budget will not be ready until sometime in May, Mulvaney said. He also indicated that while spending on Social Security, Medicare and Medicaid were not addressed in the action taken Monday, “entitlement reform”—i.e., cuts in these critical programs—would be a subject of discussion with congressional leaders later in the budget process.

Press reports identified the three White House officials who have played the main roles in the initial budgeting: Mulvaney, who was confirmed on February 16 as budget director; National Economic Council Director Gary Cohn, the former president of Goldman Sachs, the huge investment bank; and Stephen K. Bannon, Trump’s chief strategist, the former chief executive of the fascistic Breitbart News site, who exercises increasingly broad sway over all White House policy decisions.

While no details have yet been released of what the $54 billion increase in military-police spending will pay for, the scale of the increase, in and of itself, shows the real character of the Trump administration. This is to be a government of war abroad and mass repression at home.

Trump himself touched on this theme in typically rambling and unfocused remarks to a meeting of the National Governors Association Monday. “We never win a war,” he said. “We never win. And we don’t fight to win. We don’t fight to win. So we either got to win, or don’t fight at all.”

He continued, telling the governors, “My first budget will be submitted to the Congress next month. This budget will be a public safety and national security budget, very much based on those two with plenty of other things, but very strong. And it will include a historic increase in defense spending to rebuild the depleted military of the United States of America at a time we most need it.”

Additional money for the Pentagon is likely to go to a dramatically increased tempo of operations in Iraq and Syria. Defense Secretary James Mattis delivered proposals to the White House Monday for an offensive against Islamic State in Iraq and Syria (ISIS), as required by an executive order issued by Trump last month. No details are available yet, but any acceleration of the bombing campaign, let alone the deployment of significant numbers of the US ground troops, would increase the cost of that war by many billions.

The $54 billion increase would also presumably include funds for the construction of Trump’s planned wall on the US-Mexico border, as well as a massive increase in spending on detention facilities for the hundreds of thousands of immigrants to be rounded up under the executive orders already issued by the White House.

The federal budget is operating under the constraints imposed by the 2011 Budget Control Act, the bipartisan legislation negotiated by the Obama White House, the Republican-controlled House of Representatives, and a Democratic-controlled Senate. This set up the so-called sequester process, under which all discretionary spending is subject to a budget freeze, for both domestic and military programs.

Each year, increased spending for programs under the sequester has been worked out on the basis of roughly equal increases for domestic and military programs. Last year, for fiscal year 2016, Congress approved $543 billion for domestic discretionary programs and $607 billion for the military. The Trump White House plan would thus represent a cut of about 10 percent for domestic programs, and an increase of nearly that amount for the military.

Any significant change in the sequester process would require support from congressional Democrats, particularly in the Senate, where the Republican party holds only a narrow 52-48 edge, and any major legislation would require a 60-vote majority to pass.

Several congressional Republican leaders criticized the White House plan as insufficiently skewed to the military. House Armed Services Committee Chairman Mac Thornberry of Texas issued a statement criticizing the “low budget number” and adding, “The administration will have to make clear which problems facing our military they are choosing not to fix.”

Senator John McCain of Arizona, chairman of the Senate Armed Services Committee, declared that the Trump plan is “a mere 3 percent above President Obama’s defense budget, which has left our military underfunded, undersized and unready.”

For all the statements by Trump and the Republicans bemoaning the supposedly “depleted” state of the US military, the United States spends more on its armed forces than the next 15 countries in the world combined. The military budget is only inadequate if the mission of the US military is assumed to be the conquest of the entire planet and the subduing of all armed resistance from any quarter—which is actually the perspective of the American ruling elite.

America: Dangerous Curve Ahead

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dangerous-curve

By Helaine Olen

Source: The Baffler

At some point in the early 1980s, a large yellow placard began turning up in the back window of cars proclaiming “Baby on Board.” At first it seemed a joke, an inadvertent high-sign that the driver was someone who took this parenthood thing a little too seriously. Even as the shiny placards became omnipresent, a lot of us dismissed them as yet another badge of Baby Boomer self-importance.

Of course we were wrong. It’s now conventional wisdom that the Baby on Board sign was one of the precursors to a more widespread change in parenting from a time when, to us, children appear to have been neglected to our present situation in which doting over children is every parent’s self-congratulatory purpose in life. But those Baby on Board announcements dovetailed with something else too, something we don’t normally connect them with: the decline in the United States’ spending on infrastructure. As we were begging people to give special consideration to this babied-up car or that screaming station wagon, even as we were increasingly crazed with protecting our own individual children, we were not exactly securing their future.

According to a report released last year by the Council on Foreign Relations, spending on transportation went from more than one percent of the gross national product in the 1960s to just under one percent by 1980. That latter percentage point, which would have seemed at the time to be low, is now considered a 35-year high point. If you are looking for a common point of reference for our nation’s crumbling bridges—which received a C+ for maintenance from the American Society of Civil Engineers for 2013—or train derailments, like last week’s fatal Amtrak wreck outside of Philadelphia, look hard at that number. The most recent grade for our overall infrastructure? A D+.

The collapse in public funding for our transportation needs did not lead to anger by the vast majority of the population, however. While our leaders ran the country off the road and into the ditch, we coped. And truly, no one seemed to want to pay the tax bill to fill potholes, but we were happy to spend more and more of our money on things ranging from ridiculous bright yellow signs begging other drivers to take care of our children to purchasing ever larger cars and trucks that we thought would keep us personally safe, and damn everyone else.

Those driving SUVs certainly thought they would receive a safety boost, and didn’t seem to care that it came at the cost of driving a weaponized car known for a design that actively and provably caused disproportionate damages in collisions. As New York Times Hong Kong bureau chief Keith Bradsher noted in his 2003 book High and Mighty: The Dangerous Rise of the SUV, market research showed many consumers buying the behemoth automobile were “self-centered,” willing to “endanger other motorists so as to achieve small improvements in their personal safety,” adding “the public perception that SUVs provide considerable protection in a crash has been an important factor in their sales for many years.”

And if something did go wrong in an SUV? Well, the sad tale of Ellen Brody, the suburban New York City woman who drove her Mercedes SUV onto the tracks at a notorious Westchester County Metro-North crossing this past winter during a massive traffic jam, is instructive. Six people—including Brody—died when the safety gates came down and, apparently discombobulated, she drove onto the tracks instead of backing up.

But inquiries into how and why Ellen Brody ended up making her fatal wrong move seem almost designed to obfuscate the fact that if it hadn’t been this luckless woman, then it would have been someone else on those tracks eventually. As it turns out, there have been transportation reports going back to 1970 begging for investment in the area and recommending sane reforms such as eliminating the crossing entirely or at least adding gates and lights to make the sight lines significantly safer for drivers. None of it happened.

The Amtrak derailment last week is bringing us more of the same blame game. There’s the open question of why the train’s engineer permitted the train to reach 106 miles-per-hour as it approached a curve with a speed limit of 50 miles-per-hour, for example. And the accident exposes the political lobbying that persistently enervates our society, possibly preventing the installation of a safety system that would have slowed this train automatically. These are all legitimate and important lines of inquiry to pursue. But the search for individual villains and lunge toward stop-gap safety solves is also a wreckage clearance and scrubbing operation, allowing us to forget that the number one cause of the Amtrak accident is the United States’ tax and spending policies and priorities that have left us with transportation system falling apart a little more every day. The kids grow up, the world spins in reverse.

Hmm. What about those goddamn Baby on Board signs? A survey from 2012 found they might have contributed to an increase in car accidents by blocking driver sight lines. Self-absorption left too many of us blind to the curve ahead.

Helaine Olen is the author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, a contributing editor for Pacific Standard, and a regular Slate contributor.