(INTRO)

NARRATOR: After more than a decade of gradually declining military spending, The White House and Congress seem intent on restoring Pentagon spending to Cold War levels.

FAIRBANKS: Cold War's over. We won. But we're still spending money like the Cold War was running full steam.

NARRATOR: As military spending increases, there is growing concern about the effect that higher Pentagon budgets will have on other federal programs which are already feeling the burden of federal budget cuts.

SPEETER: I think we really need to begin to think about where we're going as a country, now the post Cold War era. We're about to enter a new millennium.

NARRATOR: With the Cold War over, and no credible military threat to the United States, are increases in Pentagon spending justified, especially at the expense of domestic programs?

(END INTRO)

NARRATOR: After more than a decade of gradually declining Pentagon budgets, the result mainly of the demise of the Soviet Union, the United States now stands poised to dramatically increase military spending. The budget released by the Clinton Administration in February, 2000, includes $12 billion in additional funding for the Pentagon, the second successive year of military spending increases. While some of the additional funds are intended to attract and retain quality personnel and ensure the readiness of the U.S. military, most of the new spending is for expensive weapons systems designed to fight the Soviet Union.

Yet even though military spending is going up, there are those in Congress, both Democrats and Republicans, who believe that the planned increases are not sufficient. For example, while the Administration's Fiscal Year 2001 proposal reached the Pentagon's goal of $60 billion dollars in annual spending for new weapons, members of Congress felt that even this was not enough.

SKELTON: We must modernize our weapons systems if we are to preserve the technological edge that has served us so well in the Persian Gulf war. And I am pleased to see that the hardware accounts are up over $60 billion this year, though in all honesty, it should be higher.

NARRATOR: Many supporters of higher military spending were clearly not satisfied with simply increasing funding for the purchase of new weapons. Some made dire predictions about the results of failing to make significant across the board increases to meet future spending needs.

SPENCE: We find ourselves at the bottom of a steep mountain that we must climb, steadily and aggressively, if we are to avoid the defense budget train wreck that is widely recognized as being just around the corner.

NARRATOR: Yet amid these calls for higher Pentagon budgets, there is growing concern about funding for domestic programs. Under current law, increases in one federal program like the Pentagon must be funded by cuts in others. Supporters of domestic programs such as low-income housing assistance and job training worry that the funds needed to fuel increased Pentagon budgets will squeeze their priority programs.

FAIRBANKS: Well, I think that we have some major critical national crises that deserve national attention. One of them is child poverty. Another one is the lack of child health. Another one is affordable housing. Another one is clean water. Another one is really addressing some of the infrastructure needs that we have with education.

NARRATOR: Greg Speeter is the Executive Director of the National Priorities Project, a non-profit research and education organization which focuses on domestic programs. One of their primary areas of concern is the growing number of Americans without access to affordable health care.

FAIRBANKS: You'll see that people are losing access to health care nationwide. We lose about a million people a year for the last 13 years, who have health insurance. So we've gone from about 31 million people who needed health insurance in 1986, or ‘87, to now 44 or 45 million people who lack health insurance.

NARRATOR: Of the nearly 45 million people in this country without health insurance, many are children. In fact, one out of six children in America does not have health care coverage. Another area of concern is ensuring that there is an adequate supply of affordable housing. According to a report by the Department of Housing and Urban Development, over 5 million families have crisis-level housing needs, and the waiting lists for federal housing assistance are growing, particularly among low-income, working families. Ironically, the current crisis in affordable housing is partially the result of the continued strength of the U.S. economy, which is driving up the costs of all housing.

FAIRBANKS: We've seen a dramatic, dramatic loss of affordable housing units. In 1980 we needed about 1.2 million affordable housing units. We now need about 4.5 million affordable housing units. We just don't have them. That is directly related to cuts in federal expenditures.

NARRATOR: According to a study done by the National Priorities Project, federal support for low-income housing has fallen dramatically. The budget for the Department of Housing and Urban Development, which supports federal low-income housing programs and urban economic development programs, has been cut by almost 80% percent over the last twenty years, from nearly $100 billion in constant dollars in 1978, to just over $20 billion in 1998. Speeter is also concerned about the number of children who live in poverty in the United States, the vast majority of whom come from working families.

FAIRBANKS: 70% of the children living in poverty, are living in families where there's at least one worker. So people are working and they're working very hard, but they're not making the kind of money they should be making.

NARRATOR: When compared to a sample of other Western industrialized nations, a smaller percentage of American children, one in three, face poverty conditions. Yet other nations provide much higher levels of government assistance to poor children. For example, in France, where nearly half of all children live in conditions of poverty, all but about 8% receive the necessary government assistance. Meanwhile, in the United States, federal assistance reaches less than half the children in need.

But perhaps the most critical need for federal support is in the area of public education. To Speeter, this means more than just college tuition assistance and hiring more teachers. In many cases it means repairing our children's schools. According to the General Accounting Office, the national average for funding needed for repairs is $1.7 million per school.

FAIRBANKS: Um, we've also taken a look at the issue of education and we see that schools are falling apart. The GAO has done a study that shows one out of every three schools is in major need, is in need of major repair. It's going to cost $112 billion dollars to repair the schools in this country.

NARRATOR: Representative Barney Frank agrees. He has been a leading congressional opponent of efforts to boost military spending at the expense of critical domestic programs.

FRANK: I'm not gonna be able to build school buildings in those urban areas where students are going to school in inadequate facilities. You know, we talk about increasing computer literacy. There are many schools in America where if you gave them computers, and they plugged them in, the next sound you would hear would be the fire engines coming when the wiring blew up.

NARRATOR: Yet while many of America's school systems find themselves in a crisis situation, there is a growing awareness that ensuring access to quality education for children is critical to our nation's ability to compete in the global economy.

FAIRBANKS: In the future, the nation's security also includes our economic vitality. In other words, will we be able to compete with our neighbors, our allies, emerging economies like China, you know, the most populous nation in the world. Will we be able to compete with them on economic terms. And if the answer is "no," then our national security is threatened.

NARRATOR: John Fairbanks is the Washington, D.C. Communications Director for Business Leaders for Sensible Priorities, a group conducting a national public information and issues campaign. Members include about 500 business executives from across the country representing a broad range of industries. He explains why members of his organization are concerned about the effect of continued high levels of military spending.

FAIRBANKS: The idea behind the campaign was to first educate the American public into how their taxpayer dollars are spent. A lot of people don't realize that 51% of the discretionary budget of the United States government goes to the Pentagon and that only six percent goes to federal support for education...

NARRATOR: The discretionary budget represents money that the President and Congress must act on to spend each year, and accounts for roughly one-third of all federal spending. It does not include mandatory spending, which is money that is spent as a result of permanent laws for such things as Social Security, Medicare, and interest on the national debt.

FAIRBANKS: We think those priorities are terribly skewed, especially when you consider that the Pentagon itself is not held to the same standard of fiscal accountability as other agencies.

NARRATOR: Because of their backgrounds in business and accounting, the members of this organization bring a unique perspective to the debate over proper levels of military spending. They understand the bottom line.

FAIRBANKS: The people who make up the membership of Business Leaders for Sensible Priorities have, in effect, looked at the books. They're experienced business leaders, they know what it takes to build a budget, they know something about fiscal restraint. They know about making tough choices when it comes to how they spend their money and how they invest their resources. They think that it makes perfect sense to apply these kinds of business related principles to the Department of Defense.

NARRATOR: In fact, the Pentagon's accounting system is so badly flawed that auditors are unable to track billions of dollars spent by the military. Ralph DeGennaro is the Executive Director of Taxpayers for Common Sense, an independent organization that identifies wasteful government spending.

DeGENNARO: ...the truth is the Pentagon's accounting systems and invoicing systems are a complete mess...the Department of Defense admits that it can not 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. Um, 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.

DeGENNARO: There's no question that America's military is different from our 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 Pentagon's flawed accounting practices, and the growing need for additional funding for domestic programs, supporters of higher Pentagon budgets seem determined to increase spending. If supporters of increased spending by the Pentagon have their way, spending on other badly needed non-defense programs will surely be cut. Congressman Frank explains the financial repercussions of raising the Pentagon's budget.

FRANK: ...what we're talking about here is a zero-sum game, under the Balanced Budget Act that we've adopted.

NARRATOR: The Balanced Budget Act, which became law 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.

FRANK: Every dollar that 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 is not spent to keep a cop on the street in Fall River or New Bedford or Detroit or Chicago. It's money not spent on cleaning up a Superfund site. It's money that we took away from the Medicare program.

NARRATOR: But is relying on the federal government the best way to solve these problems?

FAIRBANKS: I think we need a federal commitment to address those issues. That doesn't mean that the federal government needs to go in and tell communities what to do and how to do it. I do think they could provide monies, make those monies available and that that could make a difference.

NARRATOR:According to Speeter, not only is additional funding critical to the fiscal well-being of these programs, a visible federal commitment will show that these programs are truly a national priority. Yet Congress seems to be sending quite a different message. During last year's budget deliberations Congress added nearly $5 billion dollars to the Administration's spending request for the Pentagon. Yet of the 13 spending bills that Congress must act on each year, only the military received an increase. Every other spending bill either remained frozen or was cut. If additional federal support is the answer to America's problems in such areas as education, housing and health care, can funding for these programs be taken out of the military's budget without undermining our nation's security?

One expert who believes that significant savings can be found in the Pentagon's budget is Dr. Lawrence Korb, a former Assistant Secretary of Defense during the Reagan Administration, and now the Vice President of the Council on Foreign Relations.

KORB: By bringing more of our troops home, and reducing our force size accordingly, and following a more prudent weapons procurement program, we could save over $20 billion a year. Include the savings from a more sensible military posture, and we could free up more than $40 billion a year.

NARRATOR: In testimony before the Senate Committee on Health, Education, Labor and Pensions in September, 1999, Dr. Korb described several areas where substantial savings could be achieved in the Pentagon's budget without jeopardizing U.S. security. Dr. Korb noted the dramatic changes that had occurred within the Russian military since the end of the Cold War.

KORB: The Russians have cut their military spending to less than $65 billion a year, they've cut their armed forces from 5 million to 1 million, yet we still keep hundreds of thousands of troops stationed around the world.

KORB: The Russians are not only not building new submarines, they've drydocked most of their current fleet.

NARRATOR: Yet while the principal historical threat to U.S. security, the former Soviet Union, is now a shadow of its old self, U.S. military policy has not yet reacted to changes in the international climate.

KORB: In addition the Pentagon spends billions of dollars each year to keep these troops in a state of readiness that was necessary to fight the Soviet military machine.[23:09:03]

NARRATOR: The Defense Department has also failed to critically re-examine its plans for the purchase of new weapons. As a result, the military is about to spend hundreds of billions of dollars over the next decade to purchase Cold War-era weapons systems not suited to meet the real threats of the new century. These weapons, such as the Air Force's F-22 fighter, the Navy's New Attack submarine, and the Army's Comanche helicopter, will cost the American taxpayer tens of billions of dollars over the next two decades, and even the Pentagon is unsure how they can pay for them.

KORB: Our weapons procurement policies also seem little effected by the changed world around us. For example, we have the finest fighter aircraft in the world, but yet Congress and the Pentagon are considering the purchase of the F-22 "Raptor" at a cost of $188 million an aircraft, even though there are no new fighters rolling off any assembly line in our adversaries' or potential adversaries' countries.

NARRATOR: In fact, in some cases, perfectly good weapons systems are being taken out of service so that the military can afford to buy these costly, unnecessary new weapons.

KORB:Nobody else in the world has a credible underwater fleet, yet the Pentagon has begun decommissioning "Los Angeles" class submarines, which remain the best in the world and have a lot of years of useful life, and seeks to replace them with thirty new "Virginia" class submarines at a cost of $64 billion.

NARRATOR: Another weapon system being retired before the end of its useful life is the Navy's Ticonderoga class of cruisers, which are being cut up into razorblades to make room for additional purchases of the DDG-51 destroyer. And the Air Force plans to retire a portion of its fleet of F-15s, the premier fighter aircraft in the world, so it can afford to buy and operate its next generation fighter, the F-22. Both supporters of reducing military spending and those who want to give more money to the Pentagon recognize the role of Congress in deciding future budgets.

SKELTON: This is now the second year of real increases in defense spending. Some might argue that the increases are not enough. However, under the Constitution it's the Congress, it is us, that has the primary responsibility for making appropriations. If not enough then we here in Congress should increase the funds for the Armed Forces as we've done for the past few years.

FAIRBANKS: ...what we want to see is this issue of budget priorities, of how Congress spends the money, and whether or not the Pentagon itself is spending money appropriately injected into the public debate. Right now we're in an election year, and there's no better time for calling into question how federal money, how taxpayers money is being spent.

NARRATOR: The President and Congress plan to drastically increase military spending, adding tens of billions of dollars to the Pentagon's budget over the next few years. But with the end of the Cold War, and no significant threat to our security, is this really necessary? While our elected representatives in Washington make critical decisions about federal spending, ultimately, it is up to the American people to determine how our tax dollars should be spent. It is essential that we understand the tradeoffs that are being made every day between military and non-military programs, and that we, as voters, make it clear to our leaders what we want our priorities to be as a nation.

Produced by the Center for Defense Information
Scriptwriter:Christopher Hellman
Segment Producer: Steve Sapienza
Show Number: 1325