Reality on Pentagon Spending

September 17, 2012

Election-year politics and defense contractor lobbying are building debate over sequestration to a new pitch. The reality is bad enough – the threat of a renewed recession if a comprehensive solution is not found. National security leaders are calling for a balanced and comprehensive budget deals that protects America’s military, economic and political strength. And, in independent analyses, they reject overblown and misleading claims about the risks to our national security and defense jobs.

Contrary to overheated rhetoric, experts say “there’s actually some cushion” before sequestration would cut defense employment. A recent major study by the Center for Strategic and Budgetary Analysis highlighted that defense contractor jobs would be only moderately effected in 2013, “The reduction in outlays for procurement and RDT&E [research, development, testing and evaluation] —the accounts that primarily fund defense contractors—would be 3.5 percent and 5.9 percent respectively.” Moreover, the study also found that “While sequestration will reduce funding for nearly all acquisition programs across DoD, it will not directly terminate programs,” further reducing the risk to contractors. For these reasons, the author of the study commented, “There’s actually some cushion here for the defense industry.” [CSBA, 8/24/12. Todd Harrison via AOL Defense, 8/24/12]

Economists: Pentagon spending creates fewer jobs per dollar than other government spending. According to analysis from the University of Massachusetts, “military spending creates about 11,600 with $1 billion in spending. By a significant amount, this is the fewest number of jobs of any of the alternative uses of funds that we present. Thus, household consumption generates about 14,800 jobs, 28 percent more than military spending. Clean energy generates about 17,100 jobs, (48 percent more than military) and health care generates about 19,600 jobs (69 percent more than the military). Spending on education is the largest source of job creation by a substantial amount, generating about 29,100 jobs overall through $1 billion in spending, which is 151 percent more than the number of jobs that are generated through $1 billion in military spending.” [Pollin & Garrett-Pelter, 10/09]

Sequester was designed to force a comprehensive and balanced solution, which is what U.S. national security requires. Deputy Secretary of Defense Ash Carter explains, “Sequester was supposed to be … a trigger so irrational that the prospect of it would … drive the leadership to do what was needed, which was to put together an overall budget package for the nation’s finances that could win wide support.” Approaches like those before Congress this week, that would delay defense sequester while increasing cuts in other areas – which CBO has warned would tip country back into recession – miss the point.

National security requires a balanced and comprehensive approach because our strength at home and abroad cannot be separated. As Joint Chiefs Chairman Martin Dempsey has said, “[W]e have come to grips fairly effectively, I think, with the interrelationship of the diplomatic, military and economic instruments… truly, we are only as strong as those three pillars — diplomatic, military and economic — can interrelate with each other to achieve a common outcome.” [Ash Carter via Washington Times, 5/30/12. Martin Dempsey, 1/12/12]

 

What We’re Reading

Libyan authorities made multiple arrests in connection with the attack on the U.S. consulate that killed four Americans.

Hezbollah has called for a week of protests targeting American embassies and pressing Muslim governments to express their own anger to the US.

The commander of Iran’s Revolutionary Guard Corps announced that members of the elite Quds Force are inside Syria but not directly involved in military work.

An Afghan soldier shot at a vehicle on the shared base with NATO forces wounding a foreign civilian worker.

Turkey claimed that 500 Kurdish rebels were “rendered ineffective” in the past month.

A Kenyan terror suspect admitted in court to bomb possession and membership in the Somali extremist group, al-Shabab.

The White House makes two complaints against China to the World Trade Organization.

The U.S. and Japan agreed to deploy a second advanced missile defense system on Japanese territory.

A U.S. teenager was arrested in Chicago on suspicion of planning a bomb attack.

Mexican hackers took over at least 10 official government and media websites in a political protest to mark Mexico’s independence day.

Commentary of the Day

Secretary of Defense Leon Panetta talks about al Qaeda, the embassy attacks, and what Americans should prepare for.

Paul Volcker discusses international banking scandals, U.S. economic policies and the outlook for American competitiveness.

Robert Wright examines potential underlying causes for the recent anti-American protests in the Muslim world.

Jamie Crawford assesses President Obama’S and Governor Romney’s stances on foreign policy issues.

 

 

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