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On Budgets and National Security

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Just what exactly is the cost of national security? After spending the better portion of a week researching this very question, I’m hard-pressed to give an answer. Looking through countless tables of budgets, estimates, inflation calculations, congressional testimonies, fact sheets, and think tank assessments, I’m ready to declare anyone who claims to have an accurate figure to be an inaccurate fibber.

The first question to arise concerns what programs actually comprise our national security. Certainly the National Defense Budget, Foreign Affairs Budget, and Homeland Security Budget are all factors in creating a secure America. It is relatively easy to look at these line item numbers in the budget and make an estimate, but that’s not necessarily accurate. Throw in other factors that contribute to the overall security of the U.S., like renewable energy research or disease preparedness and the number is simply impossible to calculate.

The second question involves the actual dollar amounts we spend on these very items. Here’s where it gets murky. The government has a variety of tracking agencies for spending, including the Congressional Budget Office, the Office of Management and Budget, the Government Accountability Office, and the internal accounting offices of the various agencies of government. However, no one ever seems to present the same numbers, and there is no clear and consistent presentation of what we actually spend.

There have certainly been efforts by various organizations to tackle this question. The Institute for Policy Studies has put together a report on the “Unified Security Budget” for the past several years, making an attempt to calculate the entirety of security spending between agencies while accounting for overlap. The problem is the report has not been around long enough to provide historically comparative metrics that would make it useful. It also fails to account for spending by the Department of Justice through agencies like the FBI that add to U.S. national security.

Though each agency puts forth a budget request, what is less clear is the actual amount that was spent during each fiscal year. Certainly, one can trudge through document after document by various agencies trying to find solid answers, but there is no universally praised single document laying out actual expenditures by year. The closest document to a holy grail of budget numbers is the Historical Tables issued by the Office of Management and Budget.

Furthering the complication, the Department of Defense has also split its budget into two separate accounts, considering its baseline budget to be separate from a fund known as Overseas Contingency Operations (OCO)—a euphemism for war funding that the Obama Administration has substituted for references to the Global War on Terror. It’s noteworthy that the State Department has also embraced the idea of the OCO fund, and in fiscal year (FY) 2012 began formulating its budget request in the same fashion as DoD.

In light of the super committee’s failure to reach a deal on cutting spending, the Defense Department is threatened with cuts (aka sequestration) based on a complicated formula that affects only its baseline budget. Interestingly, OCO funding remains immune to sequestration, creating incentive for DoD to move certain items out of its baseline budget and into the OCO request, though this doesn’t appear to have happened yet.

On the diplomatic front, the numbers are just as foggy. The entirety of the International Affairs Budget is contained within the Function 150 line item of the federal budget. That seems fine, until you try to find out what the actual total budgets for the State Department or USAID are independently of each other. In fact, at the budget briefing in February 2011 by DoS, reporters expressed confusion between the Function 150 line and State and USAID’s combined budget, and the State Department has routinely used a variable mix of Function 150 components when making budget presentations. Asked about percentage of increase or decrease over previous years, the answers given by Deputy Secretary Thomas Nides were confusing and muddled.

However, despite the confusion caused by inconsistent numbers across agencies, clear trends can be identified with regards to defense spending.  In terms of “current dollars” (not adjusted for inflation), defense spending over 10 years has doubled. But when adjusted for inflation, defense spending has reached a point higher than any since the end of the Second World War. As a percentage of GDP, Defense Department spending increased from roughly 3% in FY2000 to around 4.8% by FY2010. This is neither as high as the 7.9% experienced in 1970 during the Vietnam War, nor the 6.4% in 1985 during the Reagan buildup.

It’s also important to consider that increased output by the defense industry also contributes to the overall GDP. Alternatively, as a percentage of total government outlays, defense spending has gone down significantly from over 40% in 1970 to 20% by 2010. In comparison to other national security-related agencies, the budgets for the State Department and Homeland Security have also roughly doubled over the past decade, nearly matching the increase in military spending, and reflecting the general rate of increase in total federal outlays.

While it is clear that the wars in Iraq and Afghanistan have been extremely expensive by all accounts, the numbers indicate that they are not alone responsible for the significant increase in the budget deficit. As a nation, we are spending more on everything. Though this is likely to cause a philosophical debate over where our spending priorities should lie, the U.S. government is facing an overall problem of spending more money than it has. For the sake of national security, we need to put partisan politics aside, and hold ourselves accountable for our budgetary decisions.