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Troop Costs Vie With Weapons

By Greg Grant Thursday, November 19th, 2009 10:29 am
Posted in Air, Land, Naval, Policy, Space

The non-partisan Congressional Budget Office, the new force in Washington policy debates amid fears over sky-high federal deficits, said defense budgets must grow by at least 6 percent beginning next year to pay for weapons programs currently on the books. The base defense budget would have to increase to an average of $567 billion annually for two decades; the 2010 budget request was $534 billion.

While a 6 percent increase in defense spending might not appear all that high — the defense budget had been increasing by nearly 8 percent a year since 2001 — it looms large when viewed in the context of sluggish U.S. economic growth, record deficits, and the need to pay interest on that growing pile of debt.

Higher defense spending is driven by four factors: first, rising labor costs due to ever higher pay and benefits; second, higher bills to repair and maintain war worn equipment; third, costly new weapons programs; and fourth, buying new intelligence and surveillance assets, said CBO’s Matthew Goldberg, in his testimony Wednesday before the House Armed Services Committee. Increased pay and benefits to military and civilian personnel is the key driver here.

While Goldberg listed weapons cost growth as a factor in higher budgets, CBO actually shaved $25 billion from DoD’s projected investment accounts (investment spending includes procurement funds and research and development spending). The savings come from Defense Secretary Robert Gates’ recent weapons cancellations. With those cuts, CBO projects investment spending to drop to $177 billion by 2013, down from $194 billion in the base budget in 2009.

Still, defense budgets will continue to see big increases even with Gates’ cuts. Put simply, labor costs are killing DoD’s investment plans. Military healthcare alone costs over $47 billion a year and the Center for Strategic and Budget Assessment’s projects healthcare spending to nearly double in ten years.

CBO’s figures are based on pretty rosy assumptions of labor cost growth, particularly medical expenses, as well as weapons cost inflation. It also excludes the costs of the wars in Iraq and Afghanistan (CBO’s projections makes the totally unrealistic assumption that only 30,000 U.S. troops will be deployed overseas by 2013, so I’ve left out the unbudgeted costs for the wars). Still, defense budgets are the highest in real terms this country has ever seen and President Obama is projected to spend more on defense than any other president.

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	CharlesHouston November 19th, 2009 at 5:12 pm In this time of an enormous defense budget — we are having to cut people (the AF is currently looking to lose about 2k officers) — we have to ask where is the money going? For one thing, weapon systems costs have continued to increase rapidly, often for no additional capability. Stealth particularly is very expensive but seldom needed.
	pennst98 November 19th, 2009 at 7:12 pm It isn’t as thought this is new, there is always money for the internetworked C24ISR-PDQ Supercalifragilisticexpialidocious full spectrum undersea $500B dollar defense system, yet when we need trucks that don’t explode or rifles that don’t jam we’re told we can’t afford them.
	pennst98 November 19th, 2009 at 7:12 pm The real problem is that the PPBE process has become the problem. Political patronage, institutional incompetence, and outright corruption are now coming to a head where we can’t keep the lights on for ONLY $500+ Billion a year….. The only way to fix this is to develop a process which forces the services to FULLY FUND immediate needs before they go out and program unbelievably expensive and “gee that would be nice” programs. Only programs that could JUSTIFY their cost and expenditure in relation to real threats and needs requirements would be funded. Services would be required to STABILIZE forces BEFORE entering into development projects. This would keep them from arguing that their new money hole is the solution to everything. Senior leadership that pad the budget or attempt to perform an end run around the process would be relieved of command, demoted, and separated from service.
	Drake1 November 19th, 2009 at 7:13 pm Taxes are going to have to be raised at some point to pay for all of this…oh wait, when do we pay for anything. Happy International Men’s Day.
	Capt America November 20th, 2009 at 12:17 am A four-year pay freeze will fix the problem. Pay has doubled over the past twenty years, not counting inflation, which is why reenlistments are no problem. Use some of the savings to increase combat pay, but those based in nice places like Hawaii or San Diego would never think of leaving the military for the much lower paid private sector.
	bobbymike November 20th, 2009 at 1:35 am Defense spending IS NOT THE PROBLEM! There was $787 billion for a stimulas plan that failed, where did that money come from. There are two competing healthcare plans that will costs TRILLIONS. Social Security and Medicare have a $37 TRILLION unfunded liability. Anyone who says defense is the problem or is unaffordable is unbelievably ignorant.
	topV7051 November 20th, 2009 at 1:57 am Funny how the ones who complain about troop pay are always the ones who benefit by large weapons purchases. We tried your “transformation” before, and it proved that we need bodies, not whiz bangs.
	Ed November 20th, 2009 at 8:29 am Proponents for federal stimulus spending said every $1 the government spends returns $1.50. With two wars on-going, DOD has the most “shovel-ready” programs bar none; just look at all the broke-assed stuff the military has to replace from Iraq and Afghanistan. Remember, it was spending for WW2 that brought the US out of the Depression. Increasing military personnel and their pay means more people with jobs and more taxes collected. Replacing broken-down stuff and developing new stuff means more defense industry jobs. How can it be a good thing to spend taxpayer money on new roads (or other non-military programs), because it creates (or saves) jobs, but a bad thing to spend taxpayer money on military programs. Remember, every buck spent by Uncle Sam returns buck and half. Just ask Paul Krugman.
	Charlie November 20th, 2009 at 8:34 am Deployment and use consumes resources that need to be replaced. On one hand, semi obsolete wepons and systems get used more or less for what was intended. Since many of the systems are quite old, just making another one is not appropriate, and, in not a few cases, impossible for one reason or another, (EPA, law, vanished vendor, lack of tech data, etc.) It all costs money. Things have reached a point that less money must be spent in the military, and more on infrastructure and “social” programs. Too many “promises” have been broken already, and there is just more to follow. Unless and until our allies are willing to fund and support our efforts at a much higher level, we cannot afford to continue as we have.
	NHRonin November 20th, 2009 at 10:36 am Until the tail stops wagging the dog (contractors determining our requirements) things will only get worse. They’ll keep lining their pockets and the men and women in uniform will get stuff they don’t need or doesn’t work like it’s supposed to.
	TMB November 20th, 2009 at 4:51 pm Except for the money spent on the auto industry. GAO just said we’ll never see that money again. WW2 might have brought us out of the Great Depression, but remember a couple things: 1) there was a massive increase in taxes and getting people to buy government bonds to try to pay for it (and we still racked up debt) 2) there was a recession immediately following the war because we stopped employing all those people and 3) If government spending is supposed to give a return on investment, why hasn’t the government had a balanced budget since before WWII?____The pitfall of using federal tax dollars to employ people is it doesn’t have a lasting effect unless you spend that money indefinitely. Increasing military personnel isn’t a financial investment. You spend $30,000 a year employing a soldier who only pays $6000 in taxes. As far as his other spending habits, you’re still spending everyone else’s tax dollars for this employee to be a consumer.____And for that $800 billion stimulus, remember every dime of that had to be borrowed. Do you think the money spend or invested is going to outpace the interest that has to be paid on it? In over 70 years it hasn’t yet.
	Jim November 20th, 2009 at 5:36 pm Right on target, fire for effect.
	pennst98 November 20th, 2009 at 7:27 pm Calling the stimulus a failure when we’re in the spending cycle is entirely too premature. It may yet prove to be a failure, but let’s at least wait until the patient passes before calling time of death. Healthcare spending is projected by most figures to be $8-900B OVER 10 YEARS, which means it is NOWHERE near as bad as Defense spending. To put that into perspective each year the ARMY ALONE spends more than $100B. So I guess we just ignore the problem that is 4x larger year over year than any healthcare figure cited by anyone at anytime?? (strike two…) From your logic if we were racing out of control and about to hurtle over a cliff we should be more worried about that the fact that if we don’t quit smoking we’ll die of lung cancer when we’re 70 rather than the fact that if we don’t do something now we’ll hurtle to our deaths any minute now.
	Byron Skinner November 20th, 2009 at 2:38 pm Good Morning Folks, As usual a very important statistic was left out and also Greg assumes one false assumption, first is the percentage of GDP/GNP that defense takes up including war costs and the assumption that everything is zero based costs. Using the current under estimation of a $14 trillion GDP the real cost is estimated at 7% which is on the high side and if that estimate of GDP/GNP was accurate we would be having WWII type shortages and rationing in the civilian sector of the economy currently, fortunately that $14 trillion number is not even close to reality. A more accurate number is $22.3 trillion which fit current reality with about 5% of the economy going toward Defense spending and the current war. While I do agree with Drake 1 that a tax increase is likely it would be against those in the upper 5% who have enjoyed the tax decreases of the past twenty years and pay a disproportionately lower tax then even the lower third of working Americans, when you factor in the amount of Government services they consume. The Federal Government pays for a lot of over head so that they can make both their earned and unearned incomes. ALLONS, Byron Skinner
	William C. November 20th, 2009 at 7:22 pm You are all too right. I am sick of hearing demands for defense cuts while spending everywhere else goes unchecked. Everything from the F-22 being cut to the state of our helicopter industry is simply disgusting.
	bobbymike November 21st, 2009 at 2:01 am Pure BS there buddy. On recovery.gov the director of the “tracking the jobs” program recently said “I cannot prove one item on this site is accurate” ya but let’s WAIT to see if it is a failure. So $800 to $900 billion over tens years huh? So all spending stops after ten years? If spendings continues after ten years (which of course it will) it is TRILLIONS of ADDITIONAL spending like I said. Remember we already spend about $600/year billion on Medicare and Medicaid. As my first post said, anyone who blames defense spending for our current budget woes is incredibly ignorant. Thanks for proving my point :)
	Gordon of Khartoum November 26th, 2009 at 11:30 pm If by “rising labor costs due to ever higher pay and benefits”, we’re talking about Haliburton, that is more like mismanagement. he Army has anMOS, called cook, so why we did we contract out meals? There is an MOS, truck drvier, so why„„„,? If we’re talking about GS and military pay, the idea is to get good people who can use high tech weapon systems and maintain them-and the pay isn’t out of line with what’s expected, or recievve, until you get to the top.
	Gordon of Khartoum November 26th, 2009 at 11:53 pm The fatal flaw in weapons development is that all the easy stuff has been done, but DoD expects the same rate of technical advance, which just gets exponentially expensive-way out of proportion to what you get out of it-and contractors happy to have DoD fund their R&D, which they patent. The military needs to focus on tactics and stategy-that’s how bin Laden is beating us. He has time, low profile, and the initiative. He can wear us out at little expense to himself, and we become our own worst enemies by relying upon expensive, high tech solutions. Al Qu’da doesn’t have an aircraft or even a SCUD missile, so why the Osprey? “Vanity Weapons” is a good term for it–
	William C. November 29th, 2009 at 3:30 am Problem is Gordon, those expensive, high-tech solutions often save lives or have the potential to do so. Clearly a Stryker ICV loaded with all sorts of extra armor, sensors, and equipment is far costlier than the “aluminum box” that was the M113, but if hit the Stryker is much more likely to protect it’s crew. Obviously the Stryker will cost much more to repair and replace but it is better than losing another soldier. When it comes to the V-22, it seems to be finally on track, and don’t forget that many aerospace and defense investments find their way into the civilian world. Some company has been working on a civilian tilt-rotor aircraft for awhile now for example.
	William C. November 29th, 2009 at 3:30 am Problem is Gordon, those expensive, high-tech solutions often save lives or have the potential to do so. Clearly a Stryker ICV loaded with all sorts of extra armor, sensors, and equipment is far costlier than the “aluminum box” that was the M113, but if hit the Stryker is much more likely to protect it’s crew. Obviously the Stryker will cost much more to repair and replace but it is better than losing another soldier. When it comes to the V-22, it seems to be finally on track, and don’t forget that many aerospace and defense investments find their way into the civilian world. Some company has been working on a civilian tilt-rotor aircraft for awhile now for example.

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