Guest Post: A Useful and Informative Budget Study/Briefing

From Winslow Wheeler

CSBA's Todd Harrison released and explained today a very useful and informative briefing on past, present and future DOD budgets.  I urge any who take an interest in the defense budget to read the study.  For budget studies, it is easy to read and will not take a long time.  It is at http://www.csbaonline.org/publications/2013/10/chaos-and-uncertainty-the-fy-14-defense-budget-and-beyond/ at the CSBA website.

 

While there is much there to study and learn from, one element of this needed work merits particular attention, I believe.  As Todd Harrison notes in the footnote (#19) on page 15, he did not use DOD's formulas to calculating constant dollars; instead he used OMB's GDP deflators.  This seemingly minor, technical matter makes a highly significant difference. 

 

Look at Harrison's graphs of post-World War II DOD spending in constant 2014 dollars and out through 2021; see Figures 18 and 19 on page 25.  Note how far above any previous period the post-2001 spending has been--and remains.  We peaked in 2010 well above any previous peak, and after significant declines, including the dreaded "doomsday mechanism" that Leon Panetta and most of Congress shrieked about, we remain today at a spending level that exceeds all previous peaks, including Reagan's.  Kudos to Todd Harrison for using the same deflator to adjust dollars for inflation as the rest of the economy, rather than DOD's thoroughly cooked ones.

 

DOD would have you see a very different budget history: one where spending over time has been up and down, but not persistently growing as shown in Todd Harrison's graphs.  DOD's trend line is relatively flat, not growing: making the impression that DOD spending today does not dramatically exceed that of the past, on average.  DOD would also have you believe that the reductions that brought us to the 2012 level are below previous peaks and future projected cuts would leave us further depressed.  Something to be avoided, or so the DOD version of its budget history would have you believe.

 

To visualize the differences in the DOD and OMB/GDP versions of the Pentagon's budget history, see the graph below that shows them both--and the actual dollars appropriated in any given year, known as current-year or then-year dollars.  DOD's version is in blue; OMB/GDP is green; the current dollars are in black.  (The green GDP line is slightly different from Todd Harrison's; it is from an analysis I did earlier this year, at Time Magazine's Battleland blog (http://nation.time.com/2013/07/16/correcting-the-pentagons-distorted-budget-history/). 

 

The next time you hear a Senator or Representative moan about a scarcity of dollars for defense now or in the foreseeable future, show him/her Todd Harrison's graph showing post-World War II budget history and just where sequestration would put us, relative to that past.  (Figure 18 on his page 25)  Note how all through sequestration, we would exceed every year before 9/11 except about two of Ronald Reagan's peak years. 

 

The next time you hear a general or admiral say he cannot manage a budget so low as that in sequestration, tell him he's right; he can't manage it, and he shouldn't be allowed to.

 

 

 

 

 

 

 

__________________
Winslow T. Wheeler
Director
Straus Military Reform Project
Project On Government Oversight
301 791-2397 (home office)
301 221-3897 (cell)