Defending America, Defending Taxpayers How Pentagon Spending Can Better Reflect Conservative Values About the Organizations National Taxpayers Union The R Street Institute is a new non- (NTU) is America’s independ - profit, non-partisan think tank that ent, non-partisan advocate for supports free markets, limited and overburdened taxpayers. NTU effective government, and responsible mobilizes elected officials and the general public on environmental stewardship. Founded in 2012, R Street behalf of tax relief and reform, lower and less wasteful strives to craft pragmatic solutions to domestic budget, spending, individual liberty, and free enterprise. tax, and regulatory challenges. For more information Founded in 1969, the organization works at all levels about R Street's work, please visit www.rstreet.org . for the day when taxpaying citizens’ right to a limited government is among our nation’s highest democratic principles. For more information about NTU, please visit www.ntu.org . About the Authors Pete Sepp is Executive Vice President of the National Andrew Moylan is Senior Fellow and Outreach Taxpayers Union, where he has spent 25 years helping Director for the R Street Institute where he heads coali - to develop government affairs, public relations, and tion efforts, conducts policy analysis, and serves as the promotional strategies on behalf of the organization. organization’s lead voice on tax issues. He also helps to direct and supervise the research and Prior to joining R Street, Andrew was Vice President educational operations of the National Taxpayers of Government Affairs for the National Taxpayers Union Foundation. Union. He previously served with the Center for Sepp graduated cum laude from Webster University in Educational Freedom at the Cato Institute and complet - St. Louis, Missouri with a B.A. in History and Political ed internships in the U.S. Senate and House of Science. Before coming to NTU, he served with the St. Representatives with members from his home state of Louis County Board of Elections and with a U.S. Senate Michigan. He is a graduate of the University of campaign. Michigan with a degree in political science. Table of Contents Executive Summary . .Page 1 PART I – Introduction: A Fiscally Sustainable Approach to National Security . .Page 2 PART II – Recommendations for Reform . .Page 6 PART III – A Brief Political History: Fiscal Conservatives and the Pentagon Budget . .Page 11 PART IV A Field Guide for Pentagon Budget Reform . .Page 18 Appendix 1 – Full List of Specific Weapons System Reforms . .Page 28 Appendix 2 – Full List of Human Resources Reforms . .Page 30 Appendix 3 – Full List of Process Reforms . .Page 31 Executive Summary s conservative organizations, the R Street • $618.6 billion through 20 specific changes to per - A Institute and National Taxpayers Union sonnel and compensation (Appendix 2) . For exam - (NTU) believe strongly in a robust national defense. ple, trimming civilian positions at the Department However, our groups also believe strongly in exercising of Defense (DoD) by attrition could save nearly fiscal discipline in all areas of the federal budget. As by $37 billion by 2023. far the largest portion of discretionary spending, • $878.5 billion through 30 specific changes to pro - Pentagon expenditures must not escape scrutiny as grams and processes (Appendix 3) . For example, conservatives examine methods for reducing our stag - consolidating DoD grocery and retail stores could gering debt. save upwards of $9 billion by 2023. That is why we have joined together to produce this It should be noted that this report is not intended to report. By aggregating research from various reliable be an A-to-Z sequential “roadmap” to reform. Several sources, we hope to demonstrate that the “universe” of of the recommendations overlap or conflict with oth - programs and processes in need of reform at the ers, or would lead to spending additional money in Pentagon is more than large enough to allow for com - related areas to compensate. For instance, scaling back pliance with so-called sequestration while maintaining or eliminating the F-35 Joint Strike Fighter program the strongest and most capable military the world has would necessitate greater reliance on (and investment ever known. in) the existing F/A-18 as an offset. What follows is a written report and appendices with Furthermore, while the reforms listed here total 100 specific recommendations that fall into three roughly $1.9 trillion by 2023, our organizations realize broad categories, totaling nearly $1.9 trillion: that such a steep cut to total defense spending in the • $385.8 billion through 50 specific changes to next decade is not achievable and likely not desirable. weapons systems (Appendix 1). For example, We present the list in its totality here instead to show replacing the costly V-22 Osprey aircraft with MH- that existing avenues for reform are amply sufficient to 60 and CH-53 helicopters could net over $17 bil - accommodate sequestration as but a first step down lion in savings by 2023. the path to a long-overdue fundamental restructuring of Pentagon spending. DEFENDING AMERICA , D EFENDING TAXPAYERS | 1 PART I Introduction: A Fiscally Sustainable Approach to National Security hen it comes to the Pentagon’s budget, why guarantee prosperity better than truly private economic Waren’t political conservatives in Congress activity. and elsewhere working to bring excessive expenditures Or, they are treated to political platitudes such as under control? The answer is, many of them have been “we can’t put a price tag on defending our freedoms” doing so, and all of them should be doing so. – a curious proposition, since countries that pay little Unlike many of the dubious functions the federal heed to government expenditures are generally not government improperly assumes, “provid[ing] for the known for having strong free-market economies. 1 common defence” is granted to Congress and enumer - Ultimately, these purported justifications for excessive ated in several parts of the Constitution, such as to levels of Pentagon spending ignore what is rapidly “raise and support Armies” and “provide and main - becoming the single greatest threat to our survival as a tain a Navy.” powerful capitalist nation: financial instability from an Safeguarding the nation from its enemies is the single unaffordable government. The main drivers of this most important task the American people have entrust - instability are structurally unsound entitlement pro - ed to Washington. As such, it confers upon our leaders grams. Nonetheless, other expenditures cannot be a special responsibility to balance all aspects of nation - overlooked in this arithmetic. Between the al security in developing a coherent policy. This entails Departments of Defense (DoD), Energy (nuclear not simply cobbling together a warfighting capability weapons), Veterans Affairs, Homeland Security, State, and funding sophisticated weapons. It must also mean and other agencies, national security-related spending differentiating needs from wants, planning for econom - goes well beyond weapons and uniformed soldiers. For ic as well as military strength, exercising consistent Fiscal Year 2013, this more inclusive measurement oversight, and ensuring that our defense posture would exceed $800 billion. 2 reflects the sustainable, right-sized government conser - The expenditure levels on individual components of vatives seek. national security are also eye-opening when put in a Unfortunately, Congresses and Presidents have often historical context. As National Taxpayers Union fallen short of fulfilling this responsibility. Instead of Foundation Director of Research Demian Brady wrote methodical budgeting, taxpayers are frequently treated in 2012, “Over the ten years since F[iscal] Y[ear] to horse-trading sessions designed to allay parochial 2001, defense spending rose by about $24 billion a fears over “local jobs.” Such a notion is offensive to year, in constant dollars.” 3 conservatives, who opposed the 2009 “stimulus” bill’s premise that government-directed deficit spending can 2 | DEFENDING AMERICA , D EFENDING TAXPAYERS National Discretionary Defense Spending In Constant (FY 2005) Dollars (in billions) $700 $600 $500 $400 $300 $200 $100 $0 5 7 9 1 3 5 7 9 1 3 5 7 9 1 3 5 7 9 1 3 5 7 9 6 6 6 7 7 7 7 7 8 8 8 8 8 9 9 9 9 9 0 0 0 0 0 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 Source: National Taxpayers Union Foundation, from federal budget data. Such a large sum – amounting to roughly one-fifth of all federal outlays and more than half of all discre - tionary spending – must, a long with civilian do mestic “Not on ly does t he Pentagon bid up the prices programs, be part of any comprehensive blueprint for of items which only it can buy – like tanks – but fiscal restraint. it also pays too muc h for everyday items – like screws – which anyone could buy for less. Furthermore, the U.S. defense establishment should be Since the military does not need to compete in confronting a drawdown brought on by withdrawals providing our defense, it has no reason to worry from Iraq and Afghanistan. Compared to other post- about cost-effectiveness.” conflict eras, however, current plans for expenditure ________ pare-backs are quite modest. In fact, Cato Institute research (summarized in the following chart) has indi - James Davidson, Chairman Emeritus, cated that under most scenarios, defense outlays are National Taxpayers Union projected to begin rising again well before the end of Quoted in NTU’s Dollars & Sense Newsletter this decade. 4 Normally, recent post-conflict drawdowns have led to large spending reductions. 5 September/October 1982 Edition DEFENDING AMERICA , D EFENDING TAXPAYERS | 3 Pentagon Spending Since 1976 and Projections Constant 2012 Dollars, PB = President’s Budget $700 $600 $500 $400 $300 $200 $100 $0 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 6 8 0 7 7 8 8 8 8 8 9 9 9 9 9 0 0 0 0 0 1 1 1 1 1 2 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 Actual Obama FY11 PB Obama FY12 PB Obama FY13 PB Sequester Cuts Source: Cato Institute.