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Pentagon seeks $570 billion for 2010

The U.S. military wants an increase of $57 billion in the 2010 budget, a 13.5 percent increase over this year’s $514.3 billion budget. Outgoing Pentagon comptroller Tina Jonas told Bloomberg News this week that the jump is needed to try and get much of the current funding that has been provided in emergency supplementals, a looming target for congressional budget cutters, tucked safely away in the base budget.

If the Pentagon can convince both the White House’s Office of Management and Budget and Congress that it’s truly desperate for more money, a lot more money, the resulting 2010 budget of around $571 billion would be roughly in line with the high-end forecast recently produced by the Congressional Budget Office of what DoD would need to carry out its current expansion and modernization plans. CBO’s low end estimate was $535 billion, based on the unlikely assumption that DoD would do what it never has been able to do: hold down cost growth in its acquisition and operations accounts.

The Center for Strategic and Budgetary Assessment’s Steven Kosiak, speaking at a recent gathering of defense experts in DC, said historical cost and spending trends suggest that even a $570 billion defense budget would still leave the Pentagon's current plans short of cash. He pointed out the fallacy in CBO’s projection that procurement funding would increase but funding for R&D would drop significantly. Since the end of World War II, R&D and procurement funding have always moved in the same direction. The planned increase in force structure, skyrocketing weapons costs and the rapid rise in personnel salaries and medical benefits will all exert significant upward pressure on DoD budgets.

But that upward pressure is about to hit a ceiling as the Pentagon’s timing on this request for a huge bump couldn't be worse. The nation is headed for a prolonged recession. Fewer jobs and slower growth means less revenue for the government in the form of personal and corporate taxes just as deficits are reaching all time highs. Coming down the pike we have fiscal pressures from retiring baby boomers and the onward and upward march of health care costs. To get the nation out of the recession will probably require a series of costly stimulus packages and increased spending at all levels of government that, at least in the Keynesian view, should produce more aggregate demand and consumption. Most likely are big infrastructure projects that translate into politically pleasing jobs.

A big jump in the defense budget would mean less discretionary spending available for lawmakers to steer toward such projects. Big increases in defense spending, like Jonas wants, is unlikely to generate lots more jobs, it can produce a few more for airplane and ship builders, but not a lot more.

All of which is to say that a jump in defense spending on the order of 13.5 percent will not be politically palatable. The era of big increases in defense spending is coming to a close.

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