10 Myths About the Defense Budget
by Lawrence Korb
In These Times magazine, April 2001
After the Cold War ended, many U.S. military leaders were
worried that the defense budget would be slashed dramatically.
Gen. Colin Powell, then chairman of the Joint Chiefs of Staff,
expressed the concerns of many when he said he feared there would
be a stampede in Congress to shift money from the military budget
to such things as schools, housing and crime prevention.
Still, there were those who recognized the need to shift funds
from defense to social needs. The late Sen. John Tower, for instance,
said during the 1989 hearings on his unsuccessful bid to become
secretary of defense in the first Bush administration that if
the Soviet Empire collapsed, the U.S. obviously would reduce its
allocation of resources to defense. Tower was a defense hawk who,
as chairman of the Senate Armed Services Committee, was largely
responsible for the Reagan buildup, but he asserted that the United
States could be spending enormously less on defense in the absence
of a Soviet threat. "If there were no Soviet threat,"
he said, "we'd be maintaining the kind of Army we had in
1938, which was] about half the size of what the Marine Corps
is now" (or about 197,000 troops).
But the Army of today is not half the size of the Marine Corps
of a decade ago. The active duty Army still has nearly 500,000
soldiers. Even the Marine Corps is not half the size it was a
decade ago. Today's Corps has 172,000 marines, down only about
12 percent since 1989. Nor are we spending enormously less on
defense than we spent during the Cold War. In fact, the budget
for fiscal year 2002 that President George W. Bush just outlined
to Congress calls for spending $324.8 billion, which is $14.2
billion more than the spending slated for this year (and the likelihood
of additional spending is high).
Even if one adjusts for inflation, we are again hovering in
the range of our defense spending during the Cold War. Our military
spending is nearly three times that of all our potential adversaries
combined. Yet we have not shifted enormous sums of money from
defense to such areas as education and housing. In fact, for fiscal
year 2001, Congress passed a budget resolution that gives the
Pentagon 51.3 percent of the total discretionary budget.
One would think the current situation has materialized because
the threats we face are growing or our adversaries are spending
more. In fact, the U.S. share of the world's military spending
today stands at about 35 percent, substantially higher than during
the Cold War. In 1985, at the height of the Reagan build-up, the
United States and the Soviet Union spent equal amounts on defense;
now Russia spends only one-sixth of what the United States spends.
If one adds in the spending of U.S. allies, the picture becomes
even more favorable to the United States. Our NATO allies spend
three times more on defense than Russia. Israel spends as much
as Iraq and Iran combined. South Korea spends nine times more
on defense than North Korea. And Japan spends more on defense
The main reason political leaders from both parties and continue
to approve ever larger expenditures on defense than necessary
is that they have accepted a series of misleading assumptions,
or half-truths, about the current state of America's military.
Before developing a more realistic budget, it is important to
confront these myths squarely.
MYTH #1: Defense spending should be increased because it consumes
the smallest portion of the GDP and the smallest percentage of
the overall budget since the beginning of World War II.
This argument has been advanced by President Bush, Sen. John
McCain (R-Arizona) and former Army Chief of Staff Dennis Reimer.
While this statement is true as far as it goes, it tells us more
about the tremendous growth of our economy, the rising cost of
health care, and the aging of the population than it does about
national security. Moreover, it implies that the U.S. military
is now in as bad shape as it was in 1940. What has been forgotten
is that, at the beginning of World War II, the U.S. military was
one-tenth the size of Germany's, half the size of Japan's, and
ranked 16th in the world.
MYTH #2: The defense budget has been reduced over the past
decade to help lower the budget deficit. Now that the federal
budget has a hefty surplus, defense spending should be increased.
The defense budget has been reduced from the lofty levels
of the Reagan years primarily because the Cold War ended and the
Soviet Union collapsed. Moreover, the total combined defense expenditures
in 1999 of the "countries of concern" (formerly "rogue
states")-Iran, Iraq, Libya, North Korea, Cuba and Syria-was
$13.8 billion, or about 4 percent of the U.S. defense budget.
The United States and its allies account for 65 percent of the
world's total military expenditures.
MYTH #3: Defense spending should increase because there is
a gap between defense programs and defense resources.
The Joint Chiefs claim there is a $150 billion gap between
current defense funding and what is needed. The fact is the Joint
Chiefs will never be satisfied. Had we listened to them during
the Cold War, this nation would have spent several trillion dollars
more, throwing money at all sorts of nonexistent gaps in our defense.
MYTH #4: The military needs more funding to implement its
two war strategy.
Such a position-the need to be able to conduct two major conflicts
simultaneously-defies both logic and history. When the United
States was bogged down in Korea, Vietnam and the Gulf wars, no
other nation threatened U.S. vital interests elsewhere in the
world. At least two bipartisan groups established by Congress
since the end of the Cold War have rejected the two-war strategy,
simply calling it a justification for larger forces. Yet it remains
a guiding policy of the U.S. military.
MYTH #5: Deploying troops in peacekeeping operations like
Bosnia has diverted large sums of money from core defense functions.
In fact, peacekeeping operations consumed less than 2 percent
of the defense budget during the Clinton administration. Only
10,000 U.S. troops, out of a total force of 2.3 million, are currently
involved in these small-scale contingencies. Furthermore, the
threat from regional "rogues" has been wildly overestimated
and is rapidly declining.
MYTH #6: The Pentagon needs more money because it is facing
an investment shortfall.
The secretary of defense and the Joint Chiefs claim the Pentagon
has needed $60 billion a year in new equipment to keep its forces
modernized. But during the past five years, the Pentagon on average
has spent less than $50 billion on new equipment. Moreover, the
$60 billion dedicated to new equipment in the fiscal year 2001
budget has put the U.S. military in an arms race with itself.
For example, the amount of money earmarked for new equipment
assumes that the Defense Department must replace its current generation
of tactical aircraft, the F-16, F-15, F-14 and F/A-18 C/D, with
the newer, more sophisticated and much more expensive, F-22 and
F/A-18 E/F, even though the current aircraft are already the best
in the world. Similarly, the Pentagon claims it needs a new generation
of submarines, even though the current generation has many years
of useful life left-and no next generation of Soviet submarines
to threaten it. Finally, the current $60 billion benchmark ignores
the tact that the U.S. procurement budget is 40 percent more than
all of our allies combined, 75 percent more than either Russia
or China, and nine times greater than that of Iraq and North Korea
MYTH #7: The readiness of our armed forces is declining because
we are not spending enough on "operations and maintenance,"
which is the money it takes to keep weapon systems functioning.
In fiscal year 2000, real operations and maintenance spending
per capita was 10 percent higher than at the height of the Reagan
build-up, exceeding $100 billion for an active duty force of 1.36
million. Moreover, the armed services are still using the same
readiness criteria as they did during the Cold War to justify
additional expenditures. Even if the mission-capable rates of
tactical aircraft have declined by 5 percent or even 10 percent
compared to 1985, as some have claimed, that's not a real problem
unless the North Korean or Iraqi military is 90 to 95 percent
as capable as the Soviets were.
MYTH #8: The services are failing to meet their recruiting
goals, even though they have lowered the quality standards they
maintained in the '80s.
On the contrary, the armed services now have a higher percentage
of "high quality accessions" (high school graduates
and people scoring average or above average on the armed forces
qualifications test) than at any time during the Reagan years.
MYTH #9: Personnel are leaving the services because a much
higher percentage of the force is deployed overseas than during
the Cold War.
Some have claimed that the military has been deployed overseas
once every nine weeks in the past decade. The fact of the matter
is that in the '80s more than 500,000 (or 25 percent) people of
an active duty force of 2.1 million were deployed outside the
United States. Today that number is about 230,000 or 15 percent
of an active force of 1.36 million.
MYTH #10: There is a pay gap between the military and civilian
sectors; therefore, pay and benefits for all military personnel
must be increased substantially. As evidence of the gap, proponents
of a pay raise claim that the military suffers a 13 percent pay
gap relative to the private sector. They also argue that this
has created a situation in which 12,000 military people are on
food stamps. But as Cindy Williams, former head of the Congressional
Budget Office's National Security Division, has demonstrated,
there really is no pay gap. The majority of the men and women
in the armed services earn more than 75 percent of their civilian
counterparts. An entering recruit with a high school diploma makes
$22,000, while an officer earns $34,000. After 20 years, the salary
of an enlisted man exceeds $50,000, while that of officers tops
$100,000. In addition, throughout their careers, military personnel
are eligible for a wide variety of bonuses and receive a generous
package of fringe benefits (free health care, generous noncontributory
While it is true that some 12,000 military personnel are technically
eligible for food stamps, the Wall Street Journal has pointed
out that the vast majority of them are individuals with large
families in the lower ranks who live on-base. Because they live
on-base in rent-free quarters, they do not receive their housing
allowance. If they lived off base, or if their compensation were
adjusted to reflect the fair market value of their housing, most
of these people would not be eligible for food stamps. Correcting
these distortions reduces the number to less than 1,000 soldiers.
None of this analysis is meant to indicate that the military
does not face challenges. But these challenges or problems can
be met without throwing more and more money at the Pentagon. The
majority of the problems faced by the Pentagon are self-inflicted.
In the '90s, the Defense Department conducted three reviews of
its strategy and force structure. Despite the fact that these
reviews were conducted by three different secretaries of defense,
they did not result in any fundamental changes. Structurally,
the force of 2000 is little different from what it was a decade
ago. Although the force is somewhat smaller, it is in essence
a "Cold War-Lite" force. The troops drive the same tanks,
fly the same planes, and sail the same ships as they did in 1990.
Moreover, they use the same procurement strategy and employ the
same organizational and operational models.
While such a development is understandable from a bureaucratic
and political view, it has given America the worst of all possible
worlds. Not only do we spend more than is necessary on defense,
we get far less than we should for our money. A true "bottom-up
review that resulted in a realistic budget would give us a more
effective defense at a greatly reduced cost.
What would this budget look like. The United States could
have a realistic defense budget for around $260 billion, which
is about 20 percent less than the $324.8 billion budget proposed
for fiscal year 2002 by President Bush.
The reasons for the current excess in U.S. defense spending
are clear. Our leaders have accepted a number of half truths about
defense spending, the current shape of our armed forces and the
threats to our national security. They have not shown the political
courage to stand up to the Pentagon and its supporters who wittingly
or unwittingly mouth these misleading statements. If these trends
continue, the United States is likely to spend at least $500 billion
more on defense in the coming decade than is necessary to provide
for our national security. Although we are a wealthy nation, and
currently have a budget surplus, this is still a large amount
of money that could be put to much better use elsewhere. K
Lawrence J. Korb is vice president and director of studies
at the Council on Foreign Relations. From 1981 to 1985, he served
in the Reagan administration as assistant secretary of defense
for manpower, reserve affairs and logistics. This article is excerpted
and updated from "A Realistic Defense Budget for the New
Millennium," a report produced by Korb in conjunction with
Business Leaders for Sensible Priorities (www.businessleaders.org)