Balancing the national checkbook

Jim Toedtman, editor, AARP Bulletin, July-August 2011

As a reporter, I spent years following the money — from scoundrels and scammers on Long Island, to town and county budgeteers, to Washington tax writers and big spenders. That journey included a seat at the Senate Budget Committee hearing on Jan. 25, 2001, when Federal Reserve Chairman Alan Greenspan famously concluded that the federal government faced a huge $5.6-trillion budget surplus over the next decade, and the nation needed a tax cut. Congress leaped at the opportunity. But the lawmakers missed the rest of his message. “Economic relationships,” he told them that day, “are different from anything we have considered in recent decades,” and the projections could be wrong. His conclusion: Consider a short-circuit for the tax cuts if targets in the surplus trajectory aren’t hit.

No one listened to that part. Instead, we went on an $11.4-trillion spending spree to fight two wars, expand Medicare, finance a sequence of gigantic tax cuts, and battle the greatest economic challenge in two generations.

What happened to the age of prudence? In a word, plastic.

As a nation, we stopped saving, became greedy and put our expenses on a credit card that will be paid off by our kids. Spending became the easier choice, especially after the reassurance by Dick Cheney that “Reagan proved that deficits don’t matter.” Now we know better. They certainly do matter.

The age of plastic has produced a budget gap that is exceeded only by the chasm between what the public expects from government and the willingness to pay for it. In the words of the head of the nonpartisan Congressional Budget Office, “The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance these services.”

The nation is facing a big money moment. Washington lawmakers must raise the legal borrowing limit. The money has already been spent, after all. But while the lawmakers wrangle, it’s worth recalling the common sense warning about balance. Spending is easy. Saving and building up reserves is slow and painful — but necessary.

– PeaceMeal July/August 2011

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)


House boosts military budget in time of austerity

Money for the Pentagon and the nation’s wars in Iraq and Afghanistan is proving largely immune from the budget- cutting that’s slamming other government agencies in the rush to bring down the deficit. On a 336-87 vote July 8, the Republican-controlled House overwhelmingly backed a $649-billion defense spending bill that boosts the Defense Depart-ment budget by $17 billion. The strong bipartisan embrace of the measure came as White House and congressional negotiators face an August 2 deadline on agreeing to trillions of dollars in federal spending cuts and raising the borrowing limit so the U.S. does not default on debt payments.

While House Republican leaders agreed to slash billions from the proposed budgets for other agencies, hitting food aid for low-income women, health research, energy efficiency and much more, the military budget is the only one that would see a double-digit increase in its account beginning October 1. Concerns about undermining national security, cutting military dollars at a time of war, and losing defense jobs back home trumped fiscal discipline in the House. Only 12 Republicans and 75 Democrats opposed the overall bill.

“House Republicans demonstrated responsible leadership that sets priorities and does not jeopardize our national security interests and our nation’s ongoing military efforts,” Rep. Tom Price (R-Ga.), chairman of the House Republican Policy Committee, said in a statement. But Rep. Barney Frank, D-Mass, scoffed at the suggestion that “everything is on the table” in budget negotiations between the Obama administration and congressional leaders. “The military budget is not on the table,” he said. “The military is at the table, and it is eating everybody else’s lunch.”

The bill would provide $530 billion to the Pentagon and $119 billion to cover the costs of the wars in Iraq and Afghanistan. It would provide a 1.6-percent increase in pay and buy various warships, aircraft and weapons, including a C-17 cargo plane that the Pentagon did not request, but is good news for the Boeing production line in Long Beach, Calif During three days of debate, the House easily turned back several efforts to cut military spending, including amendments by Frank on the Democratic side and tea party-backed freshman Rep. Mick Mulvaney, R-S.C. Frank’s amendment to cut $8.5 billion failed on a 244-181 vote July 7. Mulvaney’s amendment to set the Pentagon budget at current levels failed 290-135.

The House also rejected an amendment by Rep. Dennis Kucinich (D- Oh.) that would have barred funds for the U.S. operation against Libya. The vote was 251-169. The House has sent mixed signals on Obama’s military action against Libya, voting to prohibit weapons and training to rebels looking to oust Moammar Gadhafi, but stopping short of trying to cut off money for American participation in the NATO-led mission.

The overall bill, which must be reconciled with a still-to-be- completed Senate version, is $9 billion less than President Barack Obama sought. The White House has threatened a veto, citing limits in the legislation on the president’s authority to transfer detainees from the U.S. prison at Guantanamo Bay, Cuba, and money for defense programs the administration didn’t want.

– edited from The Associated Press, July 8, 2011
PeaceMeal July/August 2011

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

Defense expenditure per capita in constant 2008 U.S. dollars

                                  1998           2008

United States         $1,500        $2,750

Russia                          500              600


Pentagon can cut the military budget and still keep us safe

by John Cavanagh, Anita Dancs and Miriam Pemberton

The upcoming election is our best chance in years to demand a new foreign policy, one that puts the terrorist threat in proportion and engages the world differently. Under this policy, the military would assume its rightful role as a tool of last resort.

During the Cold War, the Soviet Union was willing to try to match our military spending. Now, no country even thinks of trying. As terrorism has replaced the Cold War as the new focus of our foreign policy attention, the United States has neglected four equally urgent security challenges: climate change, nuclear weapons, regional conflicts and growing global inequality. None of these requires a military cure. A foreign policy that refocuses its attention on these challenges would involve major shifts in our foreign policy budget.

A $213-billion cut in military spending is possible almost immediately, according to a preliminary analysis at our organization, the Institute for Policy Studies. This would include ending the expensive Iraq occupation, closing many U.S. overseas military bases, eliminating weapons systems that are redundant and economically inefficient, and cutting military assistance to other countries.

First, we must end the immoral and counterproductive Iraq War. A small fraction of the $99 billion that the United States is likely to spend on the war in 2008 could be used to bring the U.S. troops home. A larger amount would be needed to help those troops transition into civilian life, similar to the post-World War II GI Bill. To that end, troops brought home from Iraq — as well as from other bases overseas — could be retrained to help create a clean energy and energy-efficient infrastructure in the United States to stave off the disastrous effects of climate change. This kind of investment could generate millions of new jobs retrofitting U.S. buildings and constructing solar, wind and other clean energy infrastructures.

Second, we must cut the sprawling network of U.S. bases around the world, many of which are relics of the Cold War. Today, nearly 700,000 military and civilian personnel are stationed overseas or at sea. Closing just a third of the more than 1,000 overseas facilities would save taxpayers $46 billion — but it’s an issue that none of the U.S. presidential candidates dares touch.

Most of these facilities are located in three countries: Germany (302 bases), Japan (111) and South Korea (106). These nations should top the list if, and when, the United States starts the rollback. But we also need to stop the new U.S. Africa Command and close U.S. bases in the Caspian Sea region, where our interests are tied to our fossil-fuel energy past rather than our clean energy future. What’s more, shutting down bases would remove targets of anti-Americanism overseas.

Like our allies, who remain secure without a network of bases around the world, the United States should put more foreign policy priority on engaging with other countries culturally, diplomatically and economically.

Third, at least 11 areas of unnecessary weapons spending could be cut from the budget without decreasing U.S. security — saving another $44 billion. These include the F/A-22 “Raptor” fighter jet, which was originally designed to counter a Soviet aircraft that was never built; the Ballistic Missile Defense, a system that doesn’t work for a threat that doesn’t exist; and the C-130J transport plane, a costly item that has 168 documented deficiencies.

Fourth, and finally, we can cut several smaller budget areas that include military assistance to countries that frequently enable human rights abusers, fuel conflicts and strengthen the military of countries at the expense of civil society. For example, more than $1 billion goes toward the so-called “drug war” in Colombia, Bolivia and Peru — roughly 70 percent of which funds military approaches that have increased violence and killings, yet done nothing to decrease the drug trade.

The United States currently spends nine times more money on its military forces than on all other security tools, including diplomacy, nuclear nonproliferation, peacekeeping, foreign aid and homeland security put together.

The American people know this over-militarized approach has not made them or the rest of the world safer. In an October 2006 Angus Reid poll, 65 percent said the country has been “too quick to get American military forces involved” in conflicts. Instead, the public supports more “preventive” measures. According to a November 2007 World Public Opinion poll, for example, 78 percent of Americans “believe that all countries should eliminate their nuclear weapons” through a well-established international verification system.

Our diplomatic mission requires more resources, particularly to address shortfalls in staffing and to upgrade antiquated information and communications systems. And even after 9/11, the Bush administration continues to shortchange the very programs that experts believe are needed to protect against terrorist threats — such as increased funding for our first responders and public health system. Such improvements would help us deal with other hazards and emergencies, as well.

Major deficiencies in our rail, transit security procedures and cargo screening also exist, according to the 9/11 Public Discourse Project, the successor organization to the 9/11 Commission. In each case, the main obstacle has been a lack of money.

In 1989, when the Berlin Wall came down and the world celebrated the end of the Cold War, a number of military experts and U.S. generals suggested that the United States could slash its defense budget without jeopardizing the country's security. “I’ve been maintaining for some time now;” former CIA Director William Colby said in 1993, “that our defense budget could safely and modestly be cut to one-half what it was in the later days of the Cold War.” At the time, the military budget stood at $300 billion. Fifteen years later, the Cold War is long over and the U.S. military budget has more than doubled — and that’s without taking inflation into account.

Voters — Republicans and Democrats alike — have been telling pollsters they want not a modest course correction, not a turned page, but a whole new book. With a new president as the author, let’s hope the book rewrites our country’s wildly unbalanced security policies.

John Cavanagh directs the Institute for Policy Studies (IPS) in Washington DC. Anita Dancs is research director of the National Priorities Project. Miriam Pemberton is a research fellow at IPS. Their article is excerpted from In These Times, April 2008.

– PeaceMeal, May/June 2008

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)