Seven Deadly Myths of U.S. Defense Spending

(Bloomberg View) -- The U.S. is about to become embroiled in a debate of fundamental importance to its role in the world. That discussion, which will unfold with the release of President Donald Trump's first budget proposal and his speech before Congress on Tuesday, will nominally be about how much America should spend on defense. But the real issue is whether Washington can continue playing its traditional leading role in international affairs.

For decades, the U.S. has stabilized the international order, in part by maintaining a preponderance of military power. Yet today, America is approaching “strategic insolvency” -- the point at which its commitments exceed its capabilities and its ability to defend allies and deter adversaries is badly compromised. The only way to avoid the dangers this situation entails is to devote significantly greater resources to the military. 

Unfortunately, efforts to make this case have long been hampered by persistent misunderstandings about U.S. defense spending. Puncturing seven myths in particular is crucial to informing the coming debate. 

America spends plenty on defense. Yes, the Pentagon has a budget of nearly $600 billion -- more than the next seven countries combined. Yet American military dominance is less impressive than this statistic implies. For one thing, in constant dollars, defense spending has declined from $768 billion in 2010 to $595 billion in 2015 -- the fastest drawdown, percentage-wise, in many decades. Moreover, the U.S. is a global superpower that confronts an increasingly dangerous array of threats: from great powers China and Russia to smaller but equally worrisome adversaries such as the Islamic State, Iran and North Korea.

Today, the Pentagon simply does not have the capacity to face all these challenges. Recent assessments by the RAND Corporation have shown, for instance, that the U.S. would struggle to defend Taiwan in a conflict with China, and that Washington and NATO would face a nearly hopeless situation should Russia invade the Baltic region. The U.S. may still be superior to any single rival, but its military power is nonetheless insufficient to support its global strategy. 

America cannot afford to spend more on defense. Some analysts contend that greater defense spending will impose unbearable burdens on the U.S. economy and cause the national debt to skyrocket. But this view ignores history and exaggerates the role of defense in U.S. budget deficits. The U.S. spends around 3 percent of gross domestic product on defense, as compared to 10 percent to 12 percent during the 1950s. It is simply hard to argue that America is economically incapable of spending more on the military.

Nor is greater defense spending fiscally untenable. True, the U.S. debt-to-GDP ratio has reached 76 percent. But defense consumes 16 percent of federal spending, compared to 49 percent on domestic entitlements such as Social Security. If Washington can make politically difficult decisions regarding taxes and entitlement reform, it can spend more on defense while also getting its fiscal house in order. If not, the deficit will explode regardless of how much the country spends on the military. 

The Pentagon can find the necessary resources by combating bureaucratic waste, fraud and abuse. This is a hardy perennial. One recent study argued that the Pentagon could save $125 billion through better business practices. 

The Pentagon certainly can and should become somewhat more efficient. The trouble, however, is that some waste, fraud and abuse is simply unavoidable in any large organization. Moreover, what appears to be wasteful or redundant to one observer may be a useful -- even critical -- program to another. And although better business practices can reduce inefficiencies, no workable reform program can close the capabilities-commitments gap that America now confronts. As the bipartisan National Defense Panel concluded in 2014, “The savings from a robust effort to tackle waste and inefficiency, though substantial, will not come close to addressing the Department's current, gross funding shortfall.”  

Technological innovation will save us. Another canard is the idea that the military can innovate its way out of strategic insolvency. In particular, Pentagon officials and defense experts have touted the idea that a “Third Offset” strategy -- which centers on the development of high-tech weaponry and operational concepts designed counter Moscow's and Beijing's growing abilities to deny U.S. forces access to contested areas – can sustain deterrence on the cheap. 

Clearly, technological innovation is essential to preserving U.S. deterrence in Europe and the Asia-Pacific. Yet right now, there is simply not sufficient funding to develop and field even the most promising new technologies in sufficient numbers. “We'll do the demo, we'll be very happy with the results, [but] we won't have the money to go on,” Undersecretary of Defense Frank Kendall acknowledged in 2016. Offsets and innovation can help sustain U.S. military advantages, but only if funded more generously

Overseas bases drive up defense spending. Since World War II, the U.S. has forward-stationed hundreds of thousands of troops to deter conflict and enable a prompt response to crises. During the 2016 campaign, Trump repeatedly alleged that these deployments were unaffordable. This argument is dead wrong. 

Because U.S. allies provide billions of dollars in host-nation support, stationing U.S. planes, ships and personnel overseas can actually be just as cheap, if not cheaper, than stationing them at home. The Congressional Budget Office has estimated that bringing home nearly all Army forces stationed overseas would produce annual savings of less than $1.5 billion -- one-fourth of one percent of the overall defense budget. Overseas presence is not unaffordable; it is a cost-effective investment in maintaining international peace and U.S. influence.

Greater defense spending will provoke arms races. This argument holds that more military funding would be self-defeating, by spurring America's adversaries to undertake their own buildups. But there are already arms races underway; U.S. rivals just happen to be the ones racing the hardest. China has been increasing its military spending by double-digit annual increments for roughly two decades. Russia, even with its economy in a shambles, has been pouring money into a buildup meant largely to offset traditional U.S. and allied strengths. And Iran, with its nuclear program on ice, is testing new missiles and doing whatever else it can to shift the balance in the Persian Gulf. Failing to counter those buildups, and to limit the opportunities for successful coercion or aggression, would be the more destabilizing course. 

Spending more on defense will give U.S. allies a free ride. It is true that U.S. allies are not spending enough on defense, and that bolstering stability in East Asia or Eastern Europe will require them to do more. But historically, the U.S. has been most effective at getting its allies to do more when it, too, has increased its contributions to the common defense. In the early 1950s, increases in NATO military spending went hand-in-hand with significantly increased U.S. defense outlays. Similarly, NATO's long-term defense program of the late 1970s and early 1980s featured increased efforts by Washington and the allies alike. Contrary to conventional wisdom, Washington usually gets the best performance from its allies when they feel confident of the U.S. commitment.

Reasonable observers can disagree over precisely how much Washington should spend on defense, and what mix of capabilities it should buy. But if the U.S. is to have a realistic debate on defense -- and face up to the current problems and possibilities for its global leadership -- it must first dispel these seven deadly myths.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Hal Brands is the Henry A. Kissinger Distinguished Professor at the Henry A. Kissinger Center for Global Affairs, Johns Hopkins University's School of Advanced International Studies (SAIS) and the author of "Making the Unipolar Moment."

To contact the author of this story: Hal Brands at Hal.Brands@jhu.edu.

To contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.net.

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