With Billions Wasted, Is the Pentagon Spending Your Tax Dollars Wisely?

Defense Experts Say Mismanagement Isn't As Broad As Rumors Claim

By Dustin Siggins Published on May 4, 2016

As the 2017 budget stalls in Congress, the Pentagon continues its decades-long habit of turning a blind eye to tens of billions in misspent taxpayer dollars. Despite regular reports of improper payments, fraud, and simple incompetence, the Defense Department still hasn’t followed a 1990 law requiring an audit, and last year, a 2012 partial audit of the Marine Corps was investigated for enormous flaws.

Politics is partly to blame. Democrats and liberals often make the high-spending Pentagon the first target for budgetary discipline even as it shrinks compared to America’s skyrocketing entitlement costs, which causes many Republicans and conservatives heartburn. As a result, even some fiscal conservatives resist targeting the DoD in order to not sacrifice America’s defense on the altar of misplaced Democratic spending priorities.

For many on the right, resistance to Democratic efforts to cut the Pentagon’s budget aren’t just reactionary; they are part of a belief that the Defense Department’s spending habits are less relevant than its ability to discharge national security duties.

Waste and Inefficiencies Abound

The problems are severe. Over the years, hundreds of billions of dollars have been spent on cancelled programs and wasted in inefficiencies in Iraq and Afghanistan and elsewhere. Contractor issues in Afghanistan garnered significant attention from hawk Senator Kelly Ayotte in January and the press in March, as did a report that the Army lied to Congress about cutting a program.

Likewise, the Government Accountability Office (GAO) reports that while the projected costs of the F-35 fighter plane have been reduced from a years-old estimate of $1.5 trillion over several decades, the project will continue to be vastly over-budget. A congressional hearing last week addressed the same concerns, though several witnesses said that the plane will eventually be worth the enormous financial investment.

Also last week, several areas of wasteful DoD duplication were highlighted in GAO’s annual duplication report.

On the anti-war front, Bill Hartung of the anti-war Center for International Policy has outlined tens of billions in possible cuts. Five years ago Senator Bernie Sanders (D-VT) published a report showing that major defense contractors who paid civil fines or settled for amounts of $1 million or greater after allegedly defrauding the federal government still received over $500 billion in contracts in the prior decade.

Do Inefficiencies Matter?

Several experts who spoke to The Stream differed on the scale and import of the Pentagon’s fiscal problems.

According to former Reagan and George W. Bush appointee Ed Timperlake, concerns over the military’s fiscal discipline are overrated in light of threats facing America. “A major nuclear strike on America is the one event that can destroy us as a nation; everything else is second order,” said Timperlake, who served under the Secretary of Defense for Bush and as Principal Director of Mobilization Planning and Requirements for Reagan. “When Kim Jong-un, the  North Korean ‘Dear Leader,’ wants to kill us while we sleep and to turn Washington into ‘flames and ashes,’ we best believe him and take action.”

“Not to mention Iranian Religious Leaders’ Ayatollah Ali Khameni’s statement that America is the still ‘The Great Satan’ and in his own words, Israel is a ‘fake regime’ and  there will not be any Israel in 25 years,” concluded Timperlake, who shortly after providing his commentary interviewed the Commander of NORAD on the international threats to America from North Korea and elsewhere.

Justin Johnson, Heritage Foundation Senior Analyst for Budgeting Policy, was supportive of fiscal responsibility, but like Timperlake, he said other concerns are paramount. “As conservatives we generally think that a perfectly efficient and effective government is not possible. That’s part of why we think government should only be involved in areas where it is truly necessary.

According to Johnson, “National defense is one of those areas. Unfortunately, by its nature war is also inefficient. The military has to be designed for all kinds of potential threats and future scenarios. Buying insurance isn’t necessarily the most efficient use of resources, but probably is wise. The same is true of our investment in the military. We want it to be as efficient as possible.”

In a contrast to Timperlake, Hartung told The Stream that “there is no need to spend $1 trillion on a new generation of nuclear-armed submarines, bombers, and ballistic missiles, as is currently planned. Our existing arsenal is more than adequate to deter any nation from attacking the United States or any of its major allies with nuclear weapons, and current systems can be maintained in a ready and reliable state for decades without the need to build new delivery vehicles or nuclear warheads.”

 More Efficiency, Better Security

A number of defense experts said that the military can be substantially more fiscally responsible without sacrificing national security. Former Reagan Undersecretary of the Navy Seth Cropsey told The Stream that improving the efficiency of military expenditures in the right way would be beneficial.

“I think that decreasing the size of the central Office of Secretary of Defense staff and Joint Staff and returning accountability and responsibility for major weapons systems design and execution to the military services would save large sums, increase the chances that the military services would field the equipment they need and reverse the one-size-fits-all mentality that has come to govern the acquisition of military hardware,” he said.

“The F-35 is a good example of where this idea has failed,” explained Cropsey, who, while backing budget reforms, agreed with Timperlake that security concerns are paramount. “The threats that face us today won’t be stopped. They can be managed,” he said. “This requires a level of effort less than fighting a war.”

A spokesperson for Senate Armed Services Committee Chairman John McCain (R-AZ) told The Stream that the foreign policy hawk backs “reforming a Pentagon acquisition system that takes too long and costs too much,” something he said “was a central focus” of the 2016 defense authorization bill.

The spokesperson said that McCain and his colleagues had discovered $11 billion in waste and reinvested it in other programs, and that the defense bill gave “greater authority to the services to manage their own programs” as well as acquisition in exchange for enhanced accountability.

Contractor Reforms Are Key

Cropsey, Johnson and others agreed that contractor reform could significantly reduce inefficient and ineffective spending in the U.S. military.

“Large cost overruns could be reduced by fixed price contracts rather than cost plus contracts,” said Cropsey. “With the former, defense contractors are required to supply equipment at an agreed upon cost, like when you buy a car. Cost plus contracting allows additional money to be spent on changes while a weapons system is being constructed.” He said costs could be controlled by “a requirement that senior civilian and military officers of a particular service agree whenever a question of increased cost to pay for a system under construction arise.”

Johnson said that while Heritage backs “efforts to get DOD to full audit readiness…full auditability does not guarantee that there will be any less waste than today. Any specific program or agency can already be audited today, and people can go to jail today (and they do) for defrauding the government.”

“On acquisition,” he continued, “Congress is both a help and a hindrance by constantly adding new requirements and changing (‘improving’) the system to make it more complex. We are supportive of efforts in Congress to make DOD acquisition more effective and affordable, but it is a really, really complicated problem.”

McCain’s spokesperson said that the 2016 bill “adopted commercial buying practices for the Defense Department, making it easier for non-traditional firms to do business with the Pentagon.” This would help the military to “be able to access emerging innovations in cyber, robotics, and more that are increasingly likely not to come from the defense establishment.”

Kevin Hayes, a senior systems engineer and innovative technologies manager with 26 years of experience with the Department of Defense, told The Stream there are three important ways to improve the Defense Department’s acquisition processes. “First, the DoD needs to recognize that the specialization in technology requires managers who have the acumen to respond quickly to challenges,” he said. “Simply having exposure to a technology is not enough to understand the nuances of changing a technology.”

Hayes also described that there is a focus on “developing new solutions from scratch” rather than using existing technological foundations. “For example, each time you need to drill a new hole, you don’t go buy a new drill, you just get the right drill bit,” he explained, noting that “there needs to be a corresponding information infrastructure appropriate to the scale of DoD.”

Other Ways To Save

In addition to widespread reforms, targeted changes could make a difference, experts said.

Cropsey noted that a major weapons program needed the approval of dozens of agencies a 35-member panel. “The system is reminiscent of the Soviet Union’s central planning. It should be streamlined, pared back, and reconstituted to move quickly to take advantage of the increasing pace of technological breakthroughs.”

McCain’s spokesperson said that Congress’ legislative habits have made things worse. “Some of that waste is the responsibility of the Congress – billions of dollars for medical research unrelated to the military, science and technology projects of questionable value, or two Joint High Speed Vessels the Navy does not need and did not ask for that were inserted into last year’s appropriations bill.”

Hartung said that reforms “scaling back government contractors by 15%, shifting away from the F-35 combat aircraft towards upgrades of current generation systems, and eliminating unnecessary and destabilizing systems like a new nuclear-armed cruise missile.”

“Going after excess overhead within the Pentagon would add billions more in savings, as would taking steps to reform runaway health care costs,” continued Hartung, who also said the U.S. should change its international posture. “Force should be a last resort, while diplomacy and economic tools of statecraft should be in the forefront of efforts to ensure the safety and security of the United States.”

How Much Is Too Much To Cut?

Some critics of the DoD’s spending habits claim that as much as one-quarter of the Pentagon’s budget is mismanaged and could be eliminated without harming national security, military readiness or troop readiness and care. Several years ago, former Senator Tom Coburn (R-OK) told The Washington Times wasteful spending could cut 15 percent.

However, McCain’s spokesperson and Johnson were critical of making the Pentagon’s budget too small, with Johnson rejecting the idea that a large portion of DoD’s spending is mismanaged.

“We don’t have a firm estimate on DOD loses to fraud and mismanagement, but I would say no more than a single digit percentage,” said Johnson. “With DOD, that still adds up to a huge dollar amount, and so American citizens and Congress should continue to push for better accountability.

The Heritage Foundation has consistently pushed for greater defense spending, especially in light of the 2011 sequestration that cut the growth in the DoD’s budget over the subsequent decade. Johnson said his group’s advocacy for defense spending to be at four percent of Gross Domestic Product is “a good historical benchmark that we’re well below, but the defense budget shouldn’t be built toward an arbitrary number.”

He added: “We believe that a strong national defense budget is a prudent way to preserve the peace. Like Reagan, we believe in peace through strength. A strong military doesn’t guarantee the peace, but makes it much more likely.”

McCain’s spokesperson hammered the 2011 spending deal, which Congress has temporarily overturned. “Sequestration-level funding for our military is not only inadequate, it is dangerous,” he said, noting that $100 billion would be eliminated from DoD from 2018 through 2021. “Last year, each one of the military service chiefs testified that if sequestration is allowed to return, the lives of our military service members would be put at greater risk.

“While continued efforts to root out and eliminate wasteful spending in the Department of Defense are vital, they will not solve defense budget shortfalls confronting our military,” he continued. “The military services’ unfunded requirements total nearly $23 billion for the coming fiscal year alone.”

He quoted Secretary of Defense Robert Gates who said, “the proverbial ‘low-hanging fruit’ … have not only been plucked, they have been stomped on and crushed. What remains are much-needed capabilities.'”

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