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Defense Dollars for the War on Terrorism

March 18, 2002 at 12:00 AM EDT

TRANSCRIPT

RAY SUAREZ: As the Pentagon rapidly rebuilds from the September 11 attack, the Department of Defense is carrying the costs of the administration’s worldwide war on terrorism. Spending on the mission in Afghanistan runs more than $1.5 billion a month. Add that to continuing air operations over Iraq, expanding duties in the Philippines, and beefed up homeland defense.

The Bush Administration’s 2003 budget has asked Congress for $379 billion in military spending, a $48 billion increase over last year. Within five years, the defense budget could grow to $470 billion per year. The increase is the biggest since the 1980s buildup during the Reagan Administration and reflects the President’s commitment.

PRESIDENT GEORGE W. BUSH: Our first priority is the military, the highest calling. To protect the people is to strengthen our military, and that will be the priority of the budget I submit to the United States Congress. We will invest in more precision weapons, in missile defenses, in unmanned vehicles, in high-tech equipment for soldiers on the ground. The tools of modern warfare are effective. They are expensive. But in order to win this war against terror, they are essential.

RAY SUAREZ: A year ago when Donald Rumsfeld took over the Pentagon, reforming the military without significant additional resources was the primary goal, in part because Congress was reluctant to spend much more on the Pentagon and risk federal deficits. Then Mr. Bush and Defense Secretary Rumsfeld said the emphasis was getting the military to face new and unforeseen challenges and to make hard choices among costly weapons systems.

Now administration officials say the budget is aimed at making sure the U.S. military has what it needs to pursue the terrorism war overseas and at home. The spending plan includes a 4% pay raise for the 1.4 million people now on active duty, a number that remains unchanged despite the anti-terror war. It calls for $150 billion for operations, maintenance, and training; $54 billion for research and development; and $69 billion for procuring weapons such as the Army’s crusader artillery, the Air Force’s F-22 Stealth fighter, the Marine Corps’ V-22 tilt- rotor aircraft, and the joint strike fighter for the Air Force, Navy, and Marines. There is also $1 billion for unmanned aerial vehicles, so- called UAV’s, which have been the surprise performers of the Afghan campaign, and $7.8 billion for missile defense.

The defense budget has generated predictable controversy. Some editorials and op-ed columns have said the budget reflects no hard choices and funds weapons systems carried over from the Cold War era. They point to Candidate Bush’s speech at the Citadel where he promised to make major reforms to the military.

PRESIDENT GEORGE W. BUSH: The real goal is to move beyond marginal improvements, to replace existing programs with new technologies and strategies, to use this window of opportunity to skip a generation of technology. This will require spending more and spending more wisely. I intend to force new thinking and hard choices.

RAY SUAREZ: Yet some members of Congress say the $379 billion budget request is still not enough, and recently took Rumsfeld to task for not making more funds available to build even more ships and aircraft. For more on the military budget and the war on terrorism, we get two views. Dov Zakheim is the comptroller at the Department of Defense. Lawrence Korb is vice president for studies at the Council on Foreign Relations. He was an Assistant Secretary of Defense during the Reagan Administration.

Lawrence Korb, let me start with you. In recent statements the Secretary of Defense and the President laid out the short- and long-term goals for the American military. Does this budget make a first step toward getting them where they want to go?

LAWRENCE KORB: No, I don’t think so. In fact, I think it’s going to make it impossible for them to get there, because by not making any hard choices or cutting any of the weapons systems that they inherited, this budget that they presented to Congress, over the next couple of years, cannot be… will not buy everything that they want. The chairman of the Joint Chiefs of Staff, General Myers, has already told Congress it’s underfunded by $30 billion to $40 billion. And as these weapons that they haven’t cut continue to come closer to production, like the F-22 and the Crusader, you’re going to have to spend more and more to fund those particular weapons, not to mention the fact that, as this budget grows to close to $500 billion, it’s at the same time that the baby boomers– some 77 million– begin to retire, and it’s going to be difficult for the federal government to afford a defense budget that size without going back into the deficits that occurred back in the 1980s.

RAY SUAREZ: Dov Zakheim, same question.

DOV ZAKHEIM: Well, I think, in fact, we made a very big turn in that direction. We’ve funded a number of programs that we hadn’t before. For example, we fully funded all our readiness. In years past, what we did was take funds from procurement– what Larry’s been talking about– and put them in readiness. What we did this time was completely fund readiness. And we made some tough choices. We’ve reduced shipbuilding, even though we’re under tremendous pressure to build more ships, and frankly, need them, as we’ve seen in the war in Afghanistan. But we figured we could hold off a little bit on that. The F-22 that Larry mentions already is in production. In fact, it’s the only Air Force fighter that we can buy right now unless we want to stick with 1970s technology of the F-15. I think we’ve made some very smart choices, not just tough ones.

RAY SUAREZ: With a $48 billion proposed increase, for people around the country looking at that number, what should they understand about how September 11 has changed that proposal?

DOV ZAKHEIM: In a number of ways. In the first place, $19.5 billion of that $48 billion increase is directly related to the war in Afghanistan. We have about $9.5 billion in programs that were accelerated because of the war or that we’ve emphasized because of the war, and another $10 billion that’s essentially there in case the war, or the war against terrorism generally, carries on into fiscal ’03, which simply means after October 1 of this year. So that’s $19.5 (billion) right there. You add to that pensions. The Congress has now legislated also health care for retirees over 65– military retirees– something we didn’t have three or four years ago — that’s $8 billion right there — some of the readiness programs I mentioned… and pretty soon you have about $10 billion for really new programs out of that big $48 billion number.

RAY SUAREZ: Lawrence Korb, how about that: This idea that with what you’ve been paying for and the fixed costs that you must pay for, something unexpected like a war inevitably is going to drive the price tag up?

LAWRENCE KORB: Well, but the things that Dov just talked about take account for less than 10% of the defense budget. If you take a look at fully funding readiness, the operations and maintenance account, per number of persons on active duty, is higher even in real terms than it was back in the… in the 1980s. You know, it’s very interesting. The cost of the weapons systems since they’ve been in office… the cost of the major weapons systems has gone up by over $100 billion, and it’s going to continue to go up. The Office of Management and Budget looked at the Pentagon graded it unsatisfactory– this is the Bush Administration’s Office of Management Budget– in the way that they manage programs. And by not… by throwing this money at it, you’re not forcing people to make these choices.

Last spring, when the administration came into office, and Dov’s boss, Paul Wolfowitz, was testifying before Congress, people said to him, well, how are you going to afford some of the things that he’s been talking about in terms of transforming the military, fully funding readiness? And he said, “Well, we’re going to cut some programs.” Dov mentioned the F-22. You could buy the F-16 block 60, which is six times more effective than the one that was built… the original F-16; you could buy those rather than the F-22, which is right now $225 million per copy. You’re not going to be able to afford to buy enough of those to replenish the aircraft as they age. You should have been buying the F-16 block 60, and then go ahead and buy the joint strike fighter. Remember, President Bush, when he came in… when he was campaigning, said he was going to skip a generation of technology and do exactly that. He did not do this.

Now, we’re not talking about the cost of the war against terrorism, or homeland security. We’re talking about what he, in the campaign, called legacy systems or Cold War-type of systems, that basically were not touched at all in this budget review, many of whom last spring, based upon the panels that Secretary Rumsfeld himself had set up, were recommending that we cancel.

RAY SUAREZ: Well, the V-22 Osprey for the Marines, the crusader artillery systems for the Army — Lawrence Korb suggests that you haven’t made the hard choices, that you’ve funded everything plus added the cost of fighting the war.

DOV ZAKHEIM: No, we haven’t funded everything at all. For example, the F-22 that Larry mentions, we’re buying actually fewer aircraft this year than we had projected last year. We’re being already criticized for buying fewer F-18s, which are the carrier-based fighters, than we had projected, even though the carriers made such a difference during the Afghan War.

We have canceled 18 Army programs, all of those legacy programs, to use Larry’s term and the term that’s used as jargon amongst the cognoscenti– basically programs that have been held on for a long time — 18 of those have been killed. We’re spending $1 billion on unmanned aerial vehicles, which will allow us not to have to replace fighters on a one-for- one basis. The crusader that was mentioned: The crusader is not the one… the 70-ton monster that people talked about three or four years ago. It’s now reduced to 40 tons. The buy has been reduced as well. Unless we want to have no new artillery facing North Korea’s artillery, we need something.

We have to remember it’s not just a matter of fighting on horseback with satellites and B- 52s as we did in Afghanistan. We still face Kim Jung-Il in North Korea. We still face Saddam Hussein in Iraq. We face others who use conventional weapons, and the question then becomes, do you want to modernize those, or do you not?

RAY SUAREZ: Lawrence Korb?

LAWRENCE KORB: Let me give you an example of where I think the priorities are misplaced. In this budget there’s $5.3 billion to buy 23 F-22s. There’s $1.1 billion to buy 22 unmanned aerial vehicles. That’s exactly the wrong balance, and that’s the way that President Bush, when he campaigned, said we were not… we were not going to go. We were not going to go ahead with something like the F-22.

RAY SUAREZ: But Lawrence Korb… and you’ve been critical of the legacy spending. When you’re transforming an institution like the Department of Defense, don’t you have to continue to spend on the things you’ve got and the things you have to do today while you’re building what it is you’re going to become? Isn’t there a transitional time where you’re trying to serve both agendas, that’s going to be expensive?

LAWRENCE KORB: Very definitely. That’s why I mentioned the F-16 block 60, which is six times more effective than the F-16s that were originally built. Look, the V-22 is something that now-Vice President Cheney canceled when he was Secretary of Defense. You should be buying other helicopters, Black Hawk helicopters. Right now you have no fallback. We don’t know if the V-22 is ever going to be able to do what it’s supposed to do, and if it can’t, the Marines have nothing… nothing behind it. I would accelerate, you know, the joint strike fighter. That is an improvement. It’s affordable. You ought to go ahead and do it. And even the crusader, at 40… you know, 40 tons, is still too big to get where you need it to go, and if you… the army can’t get there to do what it needs to do, you haven’t accomplished your objectives. There are equivalent systems that you could buy that our… some of our European allies built in the interim to fill in that gap.

DOV ZAKHEIM: Larry has mentioned so many systems. Let me try to keep up with him. On the Crusader, you can fit two of those in one of our C-17 lifters. That would allow you to bring two of them to a place like Afghanistan. As for the Europeans, we’ve seen how far behind they are. In fact, they’re terrified that we’ve totally left them in the dust in terms of technological advancement. I’m not sure I would particularly want to recommend that we buy European systems to replace our cutting edge systems.

As for the F-16, the fact is, the F-22 is on the production line. The F-16 isn’t. Who knows what it would really cost if we actually went down that route? We… you put it absolutely right, Ray. We have to do two things at once, and it’s not easy to do. We have to transition to a time when we will rely even more heavily on satellites, on technology that allows us to use unmanned systems, on the kinds of communications, many of which are classified, but which the viewing public certainly got a glimpse of in Afghanistan. But at the same, time, the bad guys that are out there haven’t folded their tents and gone away. If we were to say to them, “hold on, folks, we’re not going to build F-22s; we’re not going to build crusaders; we’re not going to build ships; we’re not going to build the systems that could pulverize yours; but just hang on for ten years until we get our stuff,” what do you think they’re going to do? I mean, it’s not just a system- by-system issue.

It’s that the United States, with a global posture, with interests in people everywhere, and being threatened at home, fighting a two-front war as we speak, has a very, very different kind of requirement than some smaller country or even a medium-sized country elsewhere. That is the critical issue. When our people go to the airport and they see the National Guard there, they don’t think about the fact that the… there are 76,000 Guardsmen right now, and that people are pressing us to increase our military, which is down from 2.2 billion when Larry was in office– million, rather– to 1.4 million people now. This costs money. This creates pressure. And we simply can’t walk away and say, “well, we’re spending too much.” The bottom line really is this: We are in a war, yet we are spending 3.3 cents on the dollar out of our Gross Domestic Product for defense.

LAWRENCE KORB: You’re spending…

DOV ZAKHEIM: Larry, let me finish, please.

LAWRENCE KORB: Okay.

DOV ZAKHEIM: During the Carter Administration, where many people, including my friend Larry, accused the Carter Administration of neglect, they were spending 4.7 cents.

RAY SUAREZ: Well the Cold War was still on.

DOV ZAKHEIM: And the Cold War was on, but we are in a war now. It is not a high premium to pay.

LAWRENCE KORB: Since you brought this up, take a look. We’re spending more now than we did, even if you control for inflation, during the war in Vietnam. During the war in Vietnam, we sent 600,000 people to Southeast Asia. We’re not sending anywhere near that, you know, to Afghanistan. The number of tonnage we dropped in the first 70 days or so of the war against Afghanistan was not any different than the war in Kosovo. Certainly we ought to fund the military, but the military is not the major component, as they were, for example, in Korea or Vietnam or in Desert Storm. And this comparison to the GDP is nonsense.

The budget that Don Rumsfeld inherited when he came into office, even if you control for inflation, was higher than the budget that Gerry Ford gave him. And this idea that they keep talking about percentage of GDP makes no sense at all. Our economy has grown so much. I mean, paradoxically, when Secretary Rumsfeld came out and he said we’re only spending 3.3% of GDP On defense, the fact of the matter is by the time that OMB and CBO Re-estimated the GDP, it’s now up to 3.5%. That’s meaningless. That doesn’t tell you anything. You ought to spend what you need to deal with the threats. And we were… we are so far ahead, on a conventional basis, of any other country in the world. Nobody is even close to us, and that’s why President Bush in the campaign said you could skip a generation, because our current weapons were so good and so far ahead of everybody.

RAY SUAREZ: Gentlemen, I have to end it there. Dov Zakheim and Lawrence Korb, thank you both.