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FYI #48

December 30, 1994

More Non-Defense Spending in the Defense Budget

By

(Archived document, may contain errors)

December 30,1994

MORE NON-DEFENSE SPENDING IN THE DEFENSE 13UDGET

By John Luddy Policy Analyst Since its Reagan-era peak, funding for the military has fallen by 35 percent, from $390 billion in 1985 to $252 billion in 1995 (in constant 1995 dollars). I While some of this reduction was justified after the collapse of the Soviet Union, it is becoming clear that these cuts have gone too far, too fast. After two years of denial, the Clinton Administration officially acknowledged the truth about the im- pact of these cuts on America's military readiness: on November 15, Secretary of Defense William Perry revealed to Congress that one-fourth of the Army's combat forces are not fit for battle. 2 Secretary Perry's announcement came just one week after the election of the 104th Congress. The new Republican majority was elected on a platform that calls for less government, lower taxes, and a stronger military. Clearly, to restore the combat readiness of America's armed forces, more will have to be spent on defense. But while increased defense spending is necessary, the Pentagon must apply every dollar it has to its primary mission: responding to threats to America's interests any- time, anywhere. As it begins the formidable task of rebuilding America's defenses, the new Con- gress can start by attacking the billions of dollars in non-defense "pork" spending now buried in the defense budget itself. In a study released in March 1994, The Heritage Foundation drew attention to the billions of dol- lars in Pentagon funds being used to pay for items and programs that have nothing to do with de- fending America. Citing a General Accounting Office (GAO) study, the Heritage paper noted that between fiscal 1990 and 1993, $10.4 billion in the defense budget was used for such civilian activi- ties as World Cup Soccer, the Summer Olympics, and the National Defense Center for Environ- mental Excellence. From 1990 to 1993, spending for these types of programs rose by 238 percent even as overall defense spending fell by almost 20 percent. In 1993 alone, Congress required the Department of Defense to spend $4.6 billion on non-defense items-enough to buy one nuclear air- craft carrier or maintain two additional Army divisions, and $800 million more than was spent on ballistic missile defense.

After two years of Clinton Chart I defense cuts, there is an ur- As Overall Defense Spending Has Been Cut, gent need to focus defense Non-Defense Spending Skyrockets dollars on real defense needs. Unfortunately, recent Con- Change in SpendinLr 1990-1994 gressional Research Service 400% 11 (CRS) studies reveal that Pen- -------------- tagon spending on non-mili- 300 +361% tary items has risen dramatically even while total 200 defense budgets have been cut. From fiscal 1990 to 1994, in constant 1995 dollars, total 100 -25% defense spending fell 25 per- Y cent, from $339 billion to 0 $254 billion, while non-de- -50 fense spending identified by Non-Defense Defense Budget CRS rose 361 percent, from Related Spending Authority $3.6 billion to $13 billion. For fiscal 1995, CRS has iden- Soumes: Department of Ddense, Congressional Research Service. tified $11 billion in the de- fense appropriations bill for "items that may not be directly related to traditional military capabili- ties," more than three times the highly touted $3.2 billion increase for "readiness" that the Admini- stration requested for the Pentagon from fiscal 1994 to 1995. 4 Non-defense spending takes on even greater significance when the five-year budget is considered. The Clinton Administration released its Bottom-Up Review (BUR) of defense strategy and military forces in September 1993. The BUR calls for a military large enough to win two "nearly simultane- ous major regional conflicts" like Desert Storm. Experts across the political spectrum now agree that the Administration's proposed budget will not support such a force. 5Estimates of the funding gap between the Administration's proposed defense structure and its fiscal 1995-1999 defense budg- ets range from the Pentagon's own estimate of $49 billion, to The Heritage Foundation's $100 bil- lion, to the General Accounting Office's $150 billion. Assuming that non-defense spending stays at constant levels through 1999, this could amount to as much as $60 billion in constant fiscal 1995 dollars between 1995 and 1999. This is more than half of the shortfall projected by The Heritage Foundation for this period and more than one-third of the higher GAO estimate of a $150 billion shortfall (see Chart 2). Since the Administration plans to reduce real defense spending from now through fiscal 1999, spending on non-defense items will consume an increasing percentage of scarce defense funds, further undermining day-to-day military readiness and long-term combat capa- bilities. Spending $11 billion of the defense budget on non-military activities is difficult to justify at a time when the services have huge maintenance backlogs and insufficient training funds and are de- laying much-needed modernization of weapons and equipment. The Pentagon on December 9 an- nounced the delay or cancellation of seven major weapons programs, including the top priorities of each of the services, in order Chart 2 to save $7.7 billion over five Recapturing Non-Defense Spending Can years-far less than the $11 Shrink The Defense Gap billion spent in a single year on non-military programs.6 $200 Billions of Current Dollars Immediate readiness is also in Three Estimates of Fiscal 1995-1999 Budget Shortfall jeopardy. In November, Secre- $150 tary of DefensePerry in- ISO formed Congress that one- Amount of Non-Defense Spending: $60 billion third of the Army's divisions $100 are not prepared to go to 100 _X 7 war. Examples of readiness problems in the armed forces abound. 50 X When U.S. forces $49 were rushed to Kuwait #W%" last October, Deputy Secretary of Defense Department The Heritage General John Deutch claimed of Defense Foundation Accounting Office that the readiness of U.S. forces is "as high as it's ever been-higher, in my judgment, than they were in 1990, when we were worrying about Iraq the first time."g Yet the first Army brigade sent to Kuwait last October had platoon leaders who had never trained with their troops in the field, pla- toons that had never been evaluated in a live-fire training exercise, and tank crews that had not completed vital crew drills. X In a training exercise for the 2nd Armored Division, insufficient funds for fuel, ammu- nition, and maintenance forced one tank battalion to conduct platoon training without actual tanks. Instead, crews walked through the range pretending to be in tanks. X Because of funding shortfalls, the Anny was able to train enough helicopter pilots to meet only 69 percent of its requirement for 1994; as recently as 1992, the Army met 92 percent of this requirement.9

Horror stories like these have begun to get attention in the media, the Congress, and even the White House. If the President and Congress are serious about meeting critical training, maintenance, and equipment shortfalls, they can start by taking a hard look at Pentagon money now being spent on medical research, the Summer Olympics, and research on electric vehicles. Regardless of their in- herent worth, these civilian projects should be included in the domestic budget where they belong. Today, more than ever, they have no place in the defense budget.

APPENDIX

Some Non-Defense Programs Funded by the Defense Department In Fiscal 1995 Non-Environmental Programs Rifle Practice $2,544,000 Summer Olympics $14,400,000 Special Olympics $3,000,000 50th Anniversary of WWII $5,000,000 Memorial Day and July 4th Concerts $950,000 LA Youth Programs $10,000,000 Mentor Protege Program $30,000,000 Electric Vehicles $15,000,000

Natural Gas Vehicles $10,000,000 Breast Cancer Research $150,000,000 Prostate Cancer Research $4,250,000

Women's Health Research $40,000,000

Ovarian Cancer Research $7,500,000 Cell Regulation Research $2,000,000 Mammography Research $2,000,000 Coastal Cancer Control Program $5,000,000 Osteoporosis $5,000,000 Lyme Disease Research $500,000 Bone Marrow Research $34,000,000 Mammography Development $2,000,000 Breast Cancer Center $5,000,000 AIDS Research $33,410,000 Ranch Hand II Epidemiology Study $3,160,000 Medical Free Electron Laser $25,938,000 Cooperative DODNA Medical Research $50,000,000 Los Alamos Meson Physics Facility $20,000,000 Project Plowshares $5,000,000 End Item Industrial Preparedness $35,820,000 Industrial Preparedness $191,785,000 Joint Seismic Program $12,000,000

National Airspace System Plan $30,980,000 Historically Black Colleges & Universities $25,000,000 Experimental Evaluation of Major Innovative Technology $683,971,000 Maritime Technology Office $12,000,000 Advanced Concepts Technology Demonstration $32,100,000 High Performance Computing Modernization Program $73,048,000 Consolidated DOD Software Initiative $27,500,000

Kaho'olawe Island Trust Fund $50,000,000 Native American Environmental Programs $8,000,000 Defense Reinvestment $623,700,00010 Materials and Electronics Technology $260,853,000 Manufacturing Technology $382,629,000 Computing Systems & Communication Technology $400,912,000 Semiconductor Manufacturing Technology $90,000,000 Advanced Simulation $30,937,000 Small Business Innovative Research $161,000,000 Office of Economic Adjustment $39,127,000 Junior ROTC $59,800,000 National Guard Youth Opportunity Pilot Program $71,400,000 Personnel Assistance Programs $1,040,573,000

EnvironmenW Programs (includes Environmental Restoration, BRAC Restoration, Environmental Compliance, Environmental Conservation, Pollution Prevention, and Environmental Technology) $5,267,400,00011

10 These defense conversion programs subsidize manufacturers' reinvestment in non-defense industries. I I The inclusion of these programs in this study does not mean they are without merit. Rather, Congress should review them in the context of national environmental cleanup priorities. The proper place to do so is in the budget for the Environmental Protection Agency.

Show references in this report

1 Office of the Comptroller, Department of Defense, National Defense Budget Estimatesfor FY 1995, March 1994.

2 Secretary of Defense William J. Perry, letter to Representative Ronald V. Dellums, Chairman, House Armed Services Committee, November 15, 1994.

3 See John Luddy, "I"his Is Defense? Non-Defense Spending in the Defense Budget," Heritage Foundation F. YL No. 14, March 30,1994.

4 Information derived from two memoranda with same title: Keith Berner and Stephen Daggett, "Items in FY1995 Defense Legislation That May Not Be Directly Related to Traditional Military Capabilities," Congressional Research Service, March 21, 1994, and October 31, 1994.

5 See Lawrence T. Di Rita, Baker Spring, and John Luddy, "Thumbs; Down to the Bottom-Up Review," Heritage Foundation Backgrounder No. 957, September 24, 1993.

6 Department of Defense news release, "Modernization Priorities in the FY 1996-01 Budget," December 9, 1994.

7 Secretary of Defense William Perry, letter to Representative Ronald V. Dellums, Chairman, House Armed Services Committee, November 15,1994.

8 Deputy Secretary of Defense John Deutch, Pentagon press briefing, October 13, 1994.

9 Examples are found in Representative Floyd Spence, House Armed Services Committee, "Military Readiness: The View from the Field," December 1994, pp. 4-7.

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