NARRATOR: After more than a decade of slowly declining military budgets, the Clinton administration is proposing a major increase in Pentagon spending.

WILLIAM S. COHEN, Secretary of Defense: "It does represent an increase in defense spending since the end of the Cold War, a sustained increase. The president does make available $112 billion in additional resources between 2000 and 2005." [before House Armed Services Committee (HASC), 2/2/99]

NARRATOR: Some congressional leaders, however, think the proposed increase is too little.

Rep. FLOYD SPENCE (R-SC) (HASC, 2/2/99): "The bottom line, however, is that this budget falls well short of adequately addressing the services' unfunded requirements."

NARRATOR: Yet, with the Cold War over and no credible military threat to the United States, are any increases in Pentagon spending justified?

ADM. EUGENE CARROLL (USN, Ret.): Hello. I'm Admiral Eugene Carroll. After more than a decade of gradual reductions in military spending, the administration and Congress stand ready to boost the Pentagon's budget by as much as $27 billion a year. With the dissolution of the Soviet Union and overall reduction in global military spending, and the absence of any credible military threat to America, why are we considering major increases now

In this show, we will examine the forces that are driving the plan to increase the Pentagon's budget from $281 billion to $333 billion over the next six years.

NARRATOR: In January, 1999, President Clinton announced that he would seek a $12 billion increase in military spending for Fiscal Year 2000, the first increase in the Pentagon budget in 14 years. In all, the administration plans to add more than $110 billion to the Pentagon's budget over the next six years.

Yet, at a time when military spending is declining worldwide, and with no significant threat to America, what forces are driving these spending increases?

Under President Reagan, the military enjoyed a funding bonanza unrivaled in peacetime. Military spending during the 1980s exceeded that of any period since World War II, with the exception of the Korean War. At the same time, the national debt more than quadrupled. To put this in perspective, in 1979, each American's share of the national debt was roughly $3600, while by 1992, the figure had risen to over $16,000.

Spending began to slowly decline during the Bush administration. East-West relations began to warm, NATO and the Warsaw Pact signed the Conventional Forces in Europe Treaty between NATO and the Warsaw Pact which would reduce conventional military forces in Europe, and ultimately, with the break of the Soviet Union, military spending declined without endangering our national security.

During the early years of the Clinton administration, Pentagon budgets continued their gradual decline. Since 1995, however, Congress has added billions of dollars to the administration's annual funding requests for the Pentagon.

Between 1995 and 1997, Congress added more than $21 billion in unrequested spending to the Pentagon's budget as members of Congress vied to fund their favorite programs. Money was added for such things as the purchase of costly high-tech weapons, like the DDG-51 destroyer and the V-22 Osprey, and development of a national missile defense system. Special supplemental spending bills also provided money for operations in Bosnia and the Persian Gulf.

September 1997 marked a turning point in the debate over increasing military spending. Responding to growing concerns in Congress about the readiness of some US military units, President Clinton for the first time indicated his willingness to put more money into the Pentagon's regular budget request.

In a letter to Defense Secretary William Cohen and congressional leaders, the president encouraged them to work with the Joint Chiefs of Staff to examine long-term funding plans for the military. As a result of the president's letter, both the House and Senate held hearings on the status of US military forces.

Rep. IKE SKELTON (D-MO): "I was pleased to receive the president's letter. It indicated recognition of a serious problem that both the executive and legislative branches must address before the situation truly becomes critical." [before House National Security Committee (HNSC), 10/7/98]

NARRATOR: During these hearings, Senator John McCain, a member of the Senate Armed Services Committee, released "Going Hollow: America's Military Returns to the 1970s." The document was based on reports submitted by the members of the Joint Chiefs of Staff in response to a request by Senator McCain.

The report details funding shortfalls in the budgets of the Army, Navy, Air Force and Marine Corps. In all, the services stated that $27.5 billion in new annual spending for the Pentagon was needed in Fiscal Year 2000 to address problems in readiness, training, weapons modernization, and pay and benefits.

In January 1999, President Clinton announced his plans for a major military spending increase. He proposed using the additional funds to improve military readiness, increase pay and benefits for uniformed personnel, and fund the purchase of new weapons.

In an unusual step, Congress held hearings on the proposed military budget before the administration's official funding request was even released. The testimony at the hearings focused largely on the need to deal with troop readiness and retention issues, such as pay and benefits.

Rep. IKE SKELTON: (HASC, 1/20/99) "People first. We need to take care of the troops. We need to take care of their families. Pay raises, pay table reform, retirement reforms, targeted bonuses. We need to authorize a thrift savings plan for the military. We must do a much better job in family housing and do a better job with barracks. All of these."

NARRATOR: Even opponents of additional military spending acknowledged the need for improved pay and benefits for men and women in the military. But many members of Congress raised the question: Do problems with troop readiness and retention necessarily mean that the United States should increase the overall Pentagon budget?

Rep. BARNEY FRANK: (congressional hearing) "The increases that the president is seeking in the defense budget are gravely mistaken for several reasons. First and most important, they are unnecessary. I think you will find that among most of the members of Congress who are here, and that includes some senators who are interested, as well as representatives, there is support for improving the living conditions of the troops. That's not at issue."

NARRATOR: At a Capital Hill press conference, just prior to release of the annual budget, members of Congress expressed their concerns about adding huge sums of money to the Pentagon's budget.

Congressman Barney Frank, of Massachusetts, has long been an advocate of reducing the military budget.

Rep. FRANK: (at press conference) "Our point, however, is that so much is wasted elsewhere, that what is needed to improve those living conditions and to improve readiness in the basic sense, can come from within the funds the Pentagon already has. Indeed, most all of us, I believe, think that they get too much."

NARRATOR: So, are huge increases in the Pentagon budget the only answer to problems with troop readiness and retention? Many experts believe that other factors are putting upward pressure on military spending. Significant savings are clearly possible which could free up money for personnel benefits. The major factor dictating the size of the Pentagon's budget is the military's strategic requirement that the United States be able to engage in two military conflicts at the same time.

IVAN ELAND: Well, the Pentagon currently has a requirement to fight two major theater wars nearly simultaneously.

NARRATOR: Ivan Eland is the director of Defense Policy Studies at the Cato Institute, a public policy research organization located in Washington, D.C. He describes the budgetary implications of the Pentagon's requirement that the United States be able to fight two major wars without the assistance of allies.

ELAND: What that means is they have -- give two examples of the Persian Gulf and also an attack of North Korea on South Korea. And there probably isn't enough resources in the Defense Department to conduct this type of a strategy. That is to say, there's a mismatch between the resources and the strategy itself.

NARRATOR: Congressman Frank also recognizes the impact of the two-war requirement on Pentagon spending.

Rep. FRANK: "As long as you are committed to a policy that says we will continue to deter -- we'll continue to maintain nuclear deterrent comparable to what we had 15 years ago at the height of the Cold War and we will maintain a conventional capacity to fight two wars at the same time, plus a kind of holding action, then you're going to be spending more than you need." [in congressional hearing]

NARRATOR: But how realistic is the two-war strategy in the post-Cold War era? Is it an actual military requirement or merely an effort to increase spending levels? In 1994, then-Secretary of Defense William Perry, in testimony before Congress, had this to say:

WILLIAM PERRY, then-Secretary of Defense (1994): "Nothing in our planning, nowhere in our planning do we believe we are going to have to fight two wars at once. I think it is an entirely implausible scenario that we would ever have to fight two wars."

NARRATOR: The 1997 Quadrennial Defense Review, the most recent attempt by the Pentagon to remake itself to meet the challenges of the post-Cold War era, reaffirmed the need for the two-war requirement. However, experts outside the Pentagon continue to question it.

Knowing that the Quadrennial Defense Review, or "QDR," would be conducted by the Pentagon itself, certain members of Congress became concerned whether the QDR could be a truly impartial analysis of the nation's strategic needs. To address these concerns, Congress created the National Defense Panel, a group of independent experts assembled to critique the QDR's findings.

In fact, the National Defense Panel, which included four top-ranking former military officers, questioned the strategic basis of the two-war requirement. In its report, the panel stated: "The panel found the two-war strategy primarily 'a means of justifying the current force structure.'"

The questions about the rationale behind the two-war strategy raise a very fundamental issue about one reason the Pentagon says it needs more money: readiness. The issue, simply put, is readiness for what? What should we be defending? Against whom?

ELAND: People use the term "vital interests for Bosnia" or "vital interests for Somalia," or whatever, or "vital interests" for these two scenarios, but no one has really ever stopped to think about what our vital interests really are.

NARRATOR: Some members of Congress, like Representative Frank, believe that changes in the international environment, rather than dictating increases in military spending, should in fact allow further cuts in the Pentagon.

Rep. FRANK: I do believe that if you look at the diminution of the threat that came with the defection of the Warsaw Pact countries and the breakup of the Soviet Union, the military threat has ben diminished by more than we have cut the defense budget.

NARRATOR: Ivan Eland feels that current spending levels are unjustified, given the state of the world's other military powers and the continued dominance of the United States military.

ELAND: If you stop and think about it, we spend almost twice as much as all the threat or potential threat countries combined. I would include Russia, China, Libya, Iran, Iraq, North Korea, Cuba, and Syria in that. And so, we spend almost twice as much as all those countries combined.

GREG WILSON: Right now the United States spends nearly $280 billion on the military. That's four times more than Russia, the country with the second biggest defense budget. And together with our allies, we out-spend the rest of the world combined. So, knowing that, do you think we should add to the Pentagon budget?

WOMAN-in-the-Street: Definitely not. Mm-hmm. I don't think so. I think right now the most important thing is to put it into education, if anything.

MAN-in-the-Street: No, I think we should keep it the way it is right now, the Pentagon budget, because I think they have enough. I mean, let's do some stuff that's important. Let's worry about the kids, and homeless people, and things like that.

MAN-in-the-Street: No, I do not think we should add to the Pentagon budget. I think that that's a tremendous amount of money that we already spend and I think there are many other more useful purposes for which we can spend this money.

NARRATOR: Lack of a clear strategic vision and continued support of the two-war requirement are not the only factors which contribute to unnecessary spending and significant waste within the Pentagon budget. Billions of dollars are being spent on the development and purchase of costly unnecessary weapons systems originally designed to fight World War III.

ELAND: Yes, I think there's a lot of systems that are left over from the Cold War and they have a lot of industrial might behind them as far as industries lobbying the Pentagon to keep these weapons.

NARRATOR: According to Eland, the defense industry and members of Congress with major contractors in their district are providing the momentum for continued purchase of weapons designed to replace systems that are already the best of their kind or to meet a threat that does not exist.

ELAND: We have an F-22 fighter and yet we have complete air superiority. We have the best fighter in the world, the F-15 already. The Comanche helicopter. They're still producing the DDG-51 destroyer, which is a really complex and deluxe ship which is left over from the Cold War.

RALPH DEGENNARO: (at congressional hearing) "President Clinton and Republicans in Congress are playing political games with U.S. national security and American taxpayer money by launching a new bidding war to see who can throw more money at the Pentagon that it doesn't need."

NARRATOR: Ralph DeGennaro is the Executive Director of the Taxpayers for Common Sense, an independent organization that identifies wasteful government programs.

DeGENNARRO: The Pentagon is now embarking on a shopping spree with taxpayer money to buy three new tactical aircraft. The plan is to spend $350 billion in coming years on 4400 new tactical aircraft. These are duplicative aircraft that we cannot afford. Even the experts say you just can't afford to buy all three of these.

NARRATOR: The Pentagon is not alone in supporting weapons and strategies that create an unnecessary drain on the military budget. Congress also shares responsibility for unneeded military spending by adding funds to the Pentagon's budget for weapons that the services have not requested and in many cases, do not want.

In congressional hearings last Fall, Senator Carl Levin, the Ranking Democrat on the Armed Services Committee, raised the issues.

SEN. LEVIN (D-MI): "There are just too many examples where we added money for programs that the services did not request and told us that they did not need." [at Senate Armed Services Committee hearing, 9/29/98]

NARRATOR: Local politics oftentimes supersedes issues of national security.

ELAND: Well, I think there's a lot of parochial concerns. Senators and congressmen have pet weapons systems programs in their particular district or state and to keep that, they'll have to keep another one in somebody else's state or district, you know. Horse trading, as far as that goes.

NARRATOR: Ironically, funding for weapons systems which are important to individual members of Congress sometimes come at the expense of higher Pentagon priorities, such as spending for Operations and Maintenance. Funding for Operations and Maintenance, known as the O&M account, is a key component of military readiness, one of the priorities being used to justify this year's planned budget increase.

SEN. LEVIN: "The FY 99 Authorization Act increases the budget request for procurement by almost $800 million and includes funding for planes and ships which are not even in the future year's defense program, while it reduces O&M funding by almost $350 million below the FY 99 budget request."

[SASC hearing, 9/29/98]

NARRATOR: One huge waste is for operating and maintaining unneeded U.S. military bases. To the Pentagon's credit, last year the military asked Congress for the authority to conduct two additional rounds of base closures. According to the Defense Department, the additional closures would save a further $21 billion from 2008 to 2015, and $3 billion in every successive years.

Defense Secretary COHEN: (HNSC, 2/5/99) "Unless we get the savings in future BRAC rounds, we will not be able to modernize at the same pace, we will not be able to modernize with the same technology that we're planning on procuring. Either that or we will suffer serious degradation in our readiness accounts."

NARRATOR: Yet despite calls from the Pentagon to close more unneeded military bases, Congress has steadfastly resisted the effort.

SEN. LEVIN: (SASC, 9/29/98) "In the undone category is our continuing failure to allow the Department of Defense to close more bases. For the last two years, Secretary Cohen and the Joint Chiefs have pleaded with Congress to give them the authority to close unneeded military bases in this country in order to reduce overhead and cut wasteful infrastructure spending.

"Unfortunately, even this committee, which has the best understanding of the needs of the military services, has not given the Department of Defense this authority."

NARRATOR: Senator Levin and his colleagues on the Armed Services Committee, Republican John McCain and Democrat Chuck Robb, recently introduced legislation to permit two additional rounds of base closures.

Another area where Congress is requiring the military to spend more money than the services want is the U.S. nuclear arsenal. The United States currently spends at least $25 billion annually to maintain and enhance our ability to wage nuclear war. Under current congressional restrictions, the Pentagon cannot reduce the current arsenal below the levels called for in the START I treaty.

Although the United States has ratified the START II treaty, which reduces the number of strategic nuclear warheads deployed by the United States and Russia to 3,500 each, U.S. law requires the Pentagon to keep thousands of unneeded warheads deployed pending Russian ratification of the treaty. The Pentagon wants to continue reducing its nuclear arsenal, freeing up funds for other higher priority programs.

For example, the Navy is currently required to operate 18 Trident nuclear missile submarines, although they would prefer to reduce that number to 14. Deploying the additional four submarines costs the Navy $500 million extra each year.

SEN. KENNEDY: "Do you think we need the same number of those submarines that we had at the height of the Cold War? With all of the kinds of challenges that you presented us, do you think we need to have those 18?"

ADM. JAY L. JOHNSON, Chief of Naval Operations: "Right now, sir, I believe the law says we have to keep them."

SEN. KENNEDY: "But I'm asking you, would you make a recommendation, in terms of your priorities, that we change it? That was the law that we urged."

ADM. JOHNSON: "My personal belief is that a 14-boat force is the minimum acceptable force right now."

SEN. KENNEDY: "But would it be acceptable now? Would you rather have a 14 and use those resources?"

ADM. JOHNSON: "Personally, I would, yes, sir." [at Senate Armed Services Committee, 1/5/99]

NARRATOR: Additional stress is being put on the Pentagon budget by a flawed accounting system that is unable to track billions of dollars spent by the military.

DeGENNARRO: The truth is the Pentagon's accounting systems and invoicing systemsare a complete mess. The Department of Defense admits that it cannot account for $18 billion in specific expenditures. It can't match those expenditures with an invoice, doesn't know what the money was spent for. The General Accounting Office says that that number may be low, it may be up to $43 billion that the Pentagon spent, but nobody knows where the money went. That's outrageous.

NARRATOR: Part of the problem with Pentagon bookkeeping comes because the Department of Defense does not have the same accounting requirements as corporations or private citizens.

DeGENNARRO: There's no question that America's military is different from private companies and the military will have unique needs and circumstances, but there's no reason why the military can't tell taxpayers what it did with $18 billion of our money. You know, every American taxpayer has to be ready to pass an audit by the IRS, but the nation's military cannot pass an audit.

NARRATOR: Yet despite the many areas where savings could be achieved without reducing America's security, such as cutting spending on unneeded weapons or streamlining Pentagon accounting practices, supporters of higher Pentagon budgets seem determined to increase spending. If supporters of increased Pentagon budgets succeed, spending on other badly needed non-defense programs will surely be cut.

Rep. FRANK: What we're talking about here is a zero sum gain under the Balanced Budget Act that was adopted.

NARRATOR: The Balanced Budget Act, enacted in 1997, sets specific limits on total federal spending. Under the law, if the White House or Congress want to increase spending for one federal program, they have to do so by making reductions in other federal programs.

Rep. FRANK: Every dollar we spend making sure that Russia doesn't invade France -- and that's why we got into NATO in the first place -- is a dollar that's not spent to keep a cop on the street in Fall River or New Bedford, or Detroit, or Chicago. It's money not spent cleaning up the SuperFund site. It's money that we took away from the Medicare program.

ADM INTERVIEWER: What do you think should be the number one spending priority for the government?

WOMAN-in-the-Street: I think the number one spending priority for the government should definitely be education because I think that without education, even if we don't care about other people, we're never going to be able to live in a good and safe country.

GREG WILSON: What do you think should be the number one spending priority for the U.S. Government?

MAN-in-the-Street: Military raises.

WOMAN-in-the-Street: I would say, not in terms of volume, but in terms of directing funds in that direction, I think that education should be a big priority.

NARRATOR: Recent efforts to increase military spending have been slowed by the 1997 Balanced Budget Act. In 1998, however, the government posted a budget surplus of more than $70 billion by adding a $100 billion in Social Security receipts to general revenues. With the first annual budget surplus in almost three decades and an even larger surplus expected next year, congressional hawks will no longer be restrained by the common-sense question of "Is there a real threat that warrants increased military spending?"

For now, the debate is between the administration and Congress over how big the military spending increase should be, with the American taxpayer the loser.

ADM. CARROLL: In the coming days, Congress will be considering President Clinton's request for more military spending. Yet throwing money at the problem without addressing the fundamental questions about how the military does its planning and sets its priorities will simply guarantee a massive waste of money.

Questions such as why the Pentagon is pressing for a $350 billion program to replace our current fleet of tactical fighter aircraft, why the military continues to spend $25 billion each year preparing to fight a nuclear war, and if the United States should continue to prepare to fight two wars simultaneously need to be examined very carefully. Until we do, no amount of money will solve real or imaginary problems and we will find ourselves ill-prepared to face the true challenges to the long-term security and well-being of all Americans.

Until the next time, for "America's Defense Monitor," I'm Eugene Carroll.