Drowning in Dollars: More MOney is Sinking America's Armed Forces by Winslow Wheeler, Straus Military Reform Project, Force Structure Series

Abstract: Compared to the defense plan that President George W. Bush inherited in 2001 (and an extrapolation of it), the Pentagon has received an additional $770+ billion, not counting any of the funds appropriated by Congress (another $700 billion) for the wars in Iraq and Afghanistan. This 2001-2009 “plus-up” for DOD’s “base” budget has done nothing to reverse three core, long term, negative trends; we continue to have defense forces that are shrinking, aging, and becoming less ready to fight – at increased cost. This is the first of a five part series on the Pentagon's major components. This analysis uses publicly available data to update a notable analysis done in the late 1990s by Franklin C. Spinney.







Straus Military Reform Project Force Structure Series

Introduction
Drowning in Dollars: More Money Is Sinking America’s Armed Forces
By: Winslow T. Wheeler, Straus Military Reform Project Director

It is now conventional wisdom to say that the Pentagon budget is higher in “real” dollars[1] than at any point since the end of World War II. The $635 billion appropriated in fiscal year 2007 is $31 billion, or 5 percent, above the previous high water mark, 1952 at $604 billion. 2008 will be higher still at about $670 billion, [2] and 2009 will likely be more again.

What is not conventional wisdom - but should be - is that at today’s historic high level of spending, our military forces are smaller than they have ever been since the end of World War II; equipment is – on average – older than it ever has been before, and key elements of our most important fighting forces are not fully prepared for combat. Recently, the addition of substantial additional sums of money – separate from the additional funding for the wars in Iraq and Afghanistan – have made things not better, but worse.

For the budget data, little if any analysis is required, they are all readily available in an annual DOD publication, known as the “Greenbook.”[3] It consists of a couple hundred pages of Pentagon budget and related data going back as much as 60 years. With the aid of this volume, people in Washington “analyze” Pentagon budgets: often merely by transcribing the Pentagon’s numbers onto a spreadsheet, if not directly into an article or commentary.

Important basic data not included in the Greenbook are the numbers that comprise the force structure of US Armed Forces. Here and there, one can find how many divisions were in the Army for a given year; how many aircraft are in the Air Force, how many ships in the Navy, the nuclear bombers in the so-called strategic forces, and so on. Sometimes the Congressional Research Service (CRS) will crank out the numbers in a year by year table for a specified – but relatively short – period of time. The Defense Subcommittee of the House Appropriations Committee has published numbers for each of the military services for several years, and one can find various numbers in the budget justification materials the Armed Forces send to Capitol Hill. However, no one publishes the data in a reliable manner in annual increments for the post-World War II period for the key military forces; what data that are available from then to now jump from one way of counting the “beans” to another. There is no apples-to-apples, comparable set of numbers that reliably show the changes over time.

For example, data for the Army sometimes addresses only divisions; sometimes the data include independent combat brigades or regiments; sometimes it is unclear whether the numbers do or do not include the Army Reserve and/or National Guard. For the Navy, some presidential administrations anxious to inflate the numbers (such as the Reagan Administration when John Lehman was Secretary of the Navy) have included logistics ships in the “battle fleet;” others did not. Some include ships in the Naval Reserve; some will include lesser patrol craft; some do not. The differences from one year’s listing to another are rarely made clear.

The biggest mess in the data appears to be in the Air Force. The historical data that is publicly available sometimes addresses “Primary Aircraft Authorization” (PAA); sometimes it counts “Total Available Inventory” (TAI, a number that can be significantly different from the PAA count). Sometimes the data for the “tactical” Air Force conflates attack aircraft along with fighter aircraft, and sometimes it is not clear what is included. Phone calls and e-mails to the Air Force’s historical offices at Bolling and Maxwell Air Force Bases only confirmed the confusion: “No, we have no consistent data base;” “Sometimes aircraft are just aircraft.” One would think the Air Force’s detailed count in its so-called “Statistical Digest” would help, but parts of it are not available to the public, and the parts that are would seem to require mysticism to interpret, rather than mere familiarity with Arabic numbers.

Therefore, a simple – even simplistic – analysis that tracks the budgets of the military services (readily available from the Greenbook) together with the annual force structure of the Army, Navy, and Air Force is not easy to put together. Unless, that is, if you consult a remarkable analysis by Franklin C. Spinney, “Defense Death Spiral,” put together in the late 1990s and available at http://www.d-n-i.net/fcs/defense_death_spiral/contents.htm.

While I should reveal that Spinney is a personal friend and a colleague over the years, I must also say his extraordinary analysis is far from simplistic; using unclassified data available inside the Pentagon, he put together a comprehensive work of 75 briefing slides. It addresses the Pentagon’s budget, the military services’ force structure and modernization programs, military readiness and training, and the resources spent for each. Inter alia, it stands alone as an evaluation of what we get for our money. Its conclusion - that America’s defense forces have been shrinking, aging, and becoming less ready to fight, at increasing cost – is unassailable.

The problem is that Spinney’s briefing is now several years old. It does not include two important subsequent developments: 1) the wars in Iraq and Afghanistan and the additional money appropriated for them, along with the additional stress the wars have imposed on the people and equipment in our armed forces, and 2) the additional funding that has been put into the Pentagon’s budget, other than what has been spent in Iraq and Afghanistan. One would hope that, despite the human and material stress of the wars, the fundamentally negative trends Spinney found in the1990s would have been ameliorated. Indeed, the so-called baseline (or “base”) DOD budget, which is supposed to exclude war-related spending, has increased – in constant dollars – from $370.8 billion in 2001 to $518.3 billion,[4] a 40 percent increase, in 2009. It would be hoped that one of the largest increases in “peacetime” military spending since World War II would have brought some redress to the shrinking, aging, less ready nature of the higher cost military that Spinney found and documented.

However, the increase in non-war spending since 2001 has been significantly larger than the 40 percent cited above. Both the military services and Congress have crammed non-war spending into the “war” supplementals that have been enacted each year since 2002. Items such as additional C-17, V-22, F-16, and other aircraft, which are highly unlikely to ever see service in Iraq or Afghanistan, have been added as well as money for a reorganization of the Army, initiated well before the wars started, an expansion of the Army and Marine Corps, which also is unlikely to show any presence in the wars, plus much else. The problem is that no specific measurement has been made of this non-war spending in the “war supplemetals.” Each year’s war funding measures contain several billions that are readily identifiable, plus other amounts that are not so easily identified and which would require a detailed analysis of budget data that are not publicly available.[5]

Were anyone with access to the detailed Pentagon accounts to set out upon that analysis, they would encounter the chaos of the Pentagon’s financial records. Finding just what that has actually been spent for the wars, and what has not, will be no easy task. The financial books are literally incompetent – according to all too many years of reporting by GAO, CRS, and the Pentagon’s own Inspector General (DOD IG). The precise amount of non-war spending in the war supplementals could only be identified after many, many man hours of auditing and investigation, and it may never be fully known, thanks to the Pentagon’s very deficient self-management.

We can only say at this point that the 40% increase in the baseline Pentagon budget is an understatement of how much has been available to address the concerns Spinney identified. Understatement or not, the amount is considerable. Comparing actual Pentagon base budgets to the base budgets planned when George W. Bush came to office for the years from 2001 to 2005 (and extrapolating out the same planned rate of increase to 2009) computes to over $770 billion[6] added to the base Pentagon spending plan since 2001. The data for this calculation appears below in table 1:

Table 1: DOD: Additional Funding in the “Base” DOD Budget:

Source: National Defense Budget Estimates, volumes for 2001-2009, Office of the Under Secretary of defense (Comptroller)





2001


2002


2003


2004


2005


2006


2007


2008


2009


Total

2001 “Plan”

(Extrapolated for 2006-2009


291.1


294.8


301


308.3


316.4


325


335


346


358


2875.6

Planned “Base” Budgets


295


327.8


378.6


379.6


402.6


421.1


441


483.2


518.3


3647.2

DOD “Plus-Up”


3.9


33.0


77.6


71.3


86.2


96.1


106


137.2


160.3


771.6





In other words, almost three quarters of a trillion dollars over has been added above the level of Defense Department spending planned just before George W. Bush was inaugurated; none of it has been specified for the wars in Iraq and Afghanistan; it is a “peacetime” addition to the defense budget. One would hope that it has been used effectively to address the problems – the shrinking, the aging, the reduced readiness – that Spinney identified.

As we shall see in three sections that will follow, it has not; the added money has not reversed these trends, some of which are now significantly worse.

[1] “Real” dollars are those adjusted for inflation. In dollars not adjusted for inflation, the 2008 budget (at $670 billion) is 63 times higher than the post-World War II 1947 Pentagon budget of $10.6 billion.

[2] If one were to also count Department of Energy nuclear weapons costs ($17 billion) and miscellaneous defense costs in other federal agencies ($3.8 billion), the total so-called “National Defense” budget function, used by OMB, would come to $693.2 billion. If other defense-related costs in the Departments of Homeland Security, Veterans Affairs, and State, some retirement costs in the Department of the Treasury, and DOD’s share (21%) of the annual interest on the national debt were also to be counted, the grand total for all national security related costs for the 2008 federal budget would come to $926.8 billion.

[3] This publication, officially titled “National Defense Budget Estimates” can be found for recent fiscal years at the website of the Defense Department’s Comptroller at http://www.defenselink.mil/comptroller/defbudget/fy2009/index.html.

[4] Constant 2009 dollars.

[5] That analysis is not performed here; it would best be done by the Congressional Budget Office (CBO), the Congressional Research Service (CRS), the Government Accountability Office (GAO), or any of the hundreds of hired “professional staffers” on Capitol Hill working for committees and subcommittees purporting to exercise oversight of the defense budget. Each of those entities has access to the requisite detailed budget data.

[6] The dollars counted here are “current year” dollars. The calculation in 2008 or 2009 dollars would be a larger number.

Winslow T. Wheeler
Director
Straus Military Reform Project
Center for Defense Information
301 791-2397
winslowwheeler@msn.com