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  • As in Britain, Discontent Portends Danger for Defense

    According to George Will, some Republicans in both the Senate and the House are unhappy with financial controls at the Defense Department. No question: The Defense Department should produce auditable financial statements. In fact, it deserves credit for how far it has come toward that goal since 2001.

    But a look at Britain’s experience reveals the problem with making decisions about freezing or cutting defense spending on the basis of allegations about inadequate financial controls. In 2009, British politics were rocked by a series of leaks and then an exhaustive report that made many of the same allegations of mismanagement, waste, and lack of control in Britain’s procurement budget.

    The result was that many leading commentators decided that cutting the defense budget was not only inevitable but even a wise thing to do, because it would force the Ministry of Defense to become more efficient. The Economist claimed that “military spending cuts are likely under the next government” because, “thanks to the ministry’s reputation for waste, cuts in procurement could be comparatively uncontroversial.” The Times said that “cuts are inevitable.” The Conservatives—then out of power—ring-fenced funding for the National Health Service and international development but did no such favors for defense spending.

    In short, the consensus that Britain rapidly arrived at was that, because Labour had misspent some of the little it had given the armed forces, the forces should learn to get by with even less. In 2010, carrying through on this consensus, the coalition Conservative-Liberal Democrat government in Britain completed a series of defense and spending reviews that will by 2015 reduce British defense spending to the NATO minimum of 2 percent of GDP.

    What this enthusiasm for cuts ignored was the fact that much of the waste was the fault of the government as a whole, not the Ministry of Defense. That exhaustive report on wasteful British defense spending in fact revealed that approximately two-thirds of the waste was the result of delays in procurement programs. These delays, in turn, were caused partly by the fact that inventing new technologies is not easy but also by the fact that the government was spending so little on defense that programs had to be continuously “reprofiled”—or, in other words, put on hold.

    Unfortunately, hitting the pause button on a major project like building an aircraft carrier is extremely expensive: Even though construction has been halted, lots of people still get paid simply in order to keep them in place and available to work when construction resumes. The British government’s desire to make nice in the European Union by buying the inefficient products of the European defense industry also gave Britain poor value for its money. So did its tendency to order projects to protect British jobs instead of to provide the forces with necessary equipment. Finally, as one former procurement official confessed in 2004, procurement in Britain is “as much intent on ensuring the UK’s defence industrial base, as securing very best value for money.”

    In other words, while the Ministry of Defense was top-heavy, bureaucratic, and inefficient, most of the serious problems with British defense spending were not the fault of the Ministry of Defense. They were the fault of the government as a whole, which refused to allow the ministry an adequate budget to buy items that everyone agreed were needed, and Parliament, which was more interested in jobs for the boys than guns for the troops.

    Even more than in Britain, with its parliamentary system, much of the burden of improving the efficiency of defense spending in the U.S. rests with the legislative branch. Conservatives in the U.S. must therefore walk a delicate line: pressuring the Department of Defense to improve its financial management system and shifting inefficiently used resources to more productive programs while not using inefficiencies or other failings in defense spending as a reason to freeze or cut the entire defense budget. The U.K.’s recent experience suggests that, if U.S. conservatives fail to walk this line, the American military will be the loser.

    Posted in Security [slideshow_deploy]

    One Response to As in Britain, Discontent Portends Danger for Defense

    1. George Colgrove, VA says:

      Let’s assume for simplicity that we have a budget of $1 trillion dollars for defense. Let’s say through accurate auditing we find that the DoD is wasting $200 billion, and spending $150 billion on non-security/non-defense administrative duties, and $200 billion on pensions and benefits. That leaves $450 billion for defense spending. Now if we say we eliminate the waste; cut the non-security/non-defense spending in the DoD by 50% and move the rest out to similar programs outside the DoD; and then say we convert the pension plans to the private sector and make the DoD personnel pay for their own with adding a cut from the general fund of the federal government (not DoD) funds, then we can say we can cut $650 from the DoD budget, leaving the untouched $450 that has always been there for actual defense spending alone. Defense spending stays at 100% although an alarmist could say the DoD budget got pounded by a 55% reduction.

      A defense alarmist will cry that defense was cut by 55% and we are now unsafe. If their cries are successful, we then end up raising the resulting defense budget by say another $200 billion. This sleight of hand move then results in an actual defense budget of $650 billion or an increase of 44%. Simply transferring all that waste and needless DoD expenditures over to “reinvestments” in the military means we end up raising the defense budget by 122%.

      In these economic times, we should desperately try to recapture every dollar wasted in the entire government including the DoD and reduce overall spending. No one wants to reduce the actual dollars being used to defend this nation. Please do not decrease our soldier count, nor decrease the spending on working and needed weapons. But I think all of us wants to get rid of the waste, and where we can, eliminate redundancy and overlap of government operations. Making the federal government AND the DoD accountable is key in solving this financial mess we are in. The DoD is the single largest department with the largest discretionary budget (54% of the non-mandatory budget!) in the federal government. Making it exempt from hard choices in these days is not being reasonable.

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