DOD Is $100 Billion Yearly Short Even Before Democratic Cuts, Analysts Say

By | January 22, 2007 | Uncategorized

The Department of Defense (DOD) already is $100 billion a year short of the funds it needs for existing, planned and needed programs, before Democrats taking over Congress begin to cut programs such as weapons platform procurement, leading defense analysts said.

While overall defense spending has soared since 2000, that hasn’t meant flush times for core military programs such as procurement, according to the analysts.

If Congress now were to support those programs, finding the $100 billion in extra funds could be done swiftly, because it’s already there in the DOD budget: just create that much in savings by pulling U.S. forces out of Iraq, according to discussions at the American Enterprise Institute (AEI) panel discussion.

Loren Thompson, chief operating officer of the Lexington Institute think tank near the Pentagon, stressed that he isn’t advocating a pullout from Iraq, but he said that is likely to occur nonetheless.

Democrats in the November general election won control of Congress in part by criticizing the war in Iraq and calling for an exit strategy, saying U.S., coalition and Iraqi troops aren’t winning the war against insurgents.

Comments of the analysts during the panel discussion came as President Bush is preparing to release his total federal budget proposal for the fiscal year ending Sept. 30, 2008, which the White House Office of Management and Budget will unveil Feb. 5. That spending plan will include proposed funding for DOD. Bush is adamant that he opposes any abrupt pullout from Iraq.

The president at 9 p.m. ET tomorrow night will deliver his annual State of the Union address to Congress, and may outline some of his budget priorities in the nationally televised speech.

Gary Schmitt, resident scholar at AEI and director of its Program on Advanced Strategic Studies, and Thomas Donnelly, AEI resident fellow in defense and security policy, edited a new book of more than 170 pages that AEI published, “Of Men and Materiel: The Crisis in Military Resources.”

Schmitt, Donnelly and Thompson contributed to the tome, as did Robert O. Work, senior fellow with the Center for Strategic and Budgetary Assessments think tank in Washington; Francis G. Hoffman, of the Marine Corps Center for Emerging Threats and Opportunities; and Frederick W. Kagan, an AEI scholar.

Schmitt said the extra $100 billion-$120 billion-$140 billion per year required to support existing projected procurement programs and some other items such as personnel costs could be funded with a defense spending increase equal to just 1 percent of U.S. economic output (gross domestic product). That would include a shortfall of $20 billion to $40 billion annually just for procurement programs alone.

Thompson said the Air Force, for example, is about $20 billion short per year, with procurement programs for the air service needing another $10 billion annually.

Work said the Navy, which proposes raising the size of the fleet to 313 ships from the current 276 ships and submarines, would require far more than the $14.5 billion yearly that the Navy projects for its shipbuilding budget, perhaps requiring another $7.5 billion annually. And aviation programs might need another $5 billion annually, so that all told the Navy easily might require another $20 billion yearly overall.

Hoffman said the Marine Corps might require another $3.5 billion yearly, with $1.5 billion more annually needed for procurement.

Donnelly said the Army might need a $38 billion shot of funds, and also might need to raise its procurement outlays by $10 billion yearly.

Considering that the nation now is at war, and it only spends about 4 percent of its gross domestic product (economic output of goods and services) on defense, that is far short of the 6 percent yearly GDP outlay during Cold War years when there was no open conflict, he said.

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