EXECUTIVE PRODUCER:
Rear Admiral Gene LaRocque (USN, Ret.),
President, Center for Defense Information
HOST:
Rear Admiral Eugene Carroll, Jr. (USN, Ret.),
Deputy Director, Center for Defense Information
DIRECTOR OF RESEARCH:
David T. Johnson
DIRECTOR of TELEVISION:
Mark Sugg
SENIOR PRODUCER & NARRATOR:
Ira Shorr
PRODUCERS:
Marguerite Arnold
Glenn Baker
Daniel Sagalyn
Stephen Sapienza
PRINCIPAL ANALYST & SCRIPTWRITER:
Dan Smith
SEGMENT PRODUCER:
Glenn Baker
VIDEO GRAPHICS:
Adam Luther
ORIGINATION:
Washington, D.C.
PROGRAM NO.:
806
INITIAL BROADCAST:
23 October 1994
CONDITION OF USE: Credit "AMERICA'S DEFENSE MONITOR"
(Center for Defense Information).
(C) Copyright 1994, Center for Defense Information. All Rights Reserved.
Videotapes also available.
Features commentary from:
GREG BISCHAK
National Commission for Economic Conversion and Disarmament
JACQUES GANSLER
Defense Consultant and Author
THOMAS McNAUGHER
Senior Fellow, The Brookings Institution, Author
DEFENSE JOBS AT THE ECONOMY'S EXPENSE
Senator DIANE FEINSTEIN (D-CA) (Congressional Floor Debate, June 30, 1994.): "This plane is capable of taking off from Whiteman Air Force Base with two people aboard, being refueled once in midair, striking anywhere in the world and returning home safely, with very few people in harm's way and with very little commitment. And it can deliver a large payroll."
NARRATOR: The distinguished senator from California undoubtedly meant to say "payload," but "payroll" was really on her mind during a debate on whether to spend $150 million in 1995 to preserve the ability to keep making the B-2 bomber. Many in Congress could have made the same slip, for many now value the defense industry more for the jobs it provides than for the weapons it builds for our military forces.
Is Congress risking our economic security by spending scarce dollars to keep unneeded military industries in business? Do more defense jobs really mean more security?
["AMERICA'S DEFENSE MONITOR" program introduction.]
NARRATOR: Franklin Roosevelt christened it "The Arsenal of Democracy." During World War II, some 12 million Americans worked in it, almost as many as were in uniform. "Rosie the Riveter," celebrated in song and in the media, became its national symbol.
Today, some regard America's defense industrial complex as a fifth service equal in importance to the Army, Marines, Navy and Air Force. But it wasn't always this way.
(Sample of post-World War II broadcast advertising.)
At the end of World War II, the "Arsenal of Democracy" retooled from war to peacetime production. Demand for homes, cars and other civilian goods was high, as Americans sought to fulfill their dreams of the good life.
(Sample of post-World War II automobile ad.)
The race that counted was not the arms race, but how to keep up with the Jones'.
(Sample of post-World War II Ford ad.)
But a new enemy soon emerged: The specter of the Soviet Union and an unstoppable communist alliance on the march. As we moved from the 1950s to the 60s, US political leaders called for ever-increasing military spending and a large peacetime military force became part of the American landscape.
With this peacetime military came a huge, often highly secretive industrial complex that consumed billions of dollars of taxpayer money and became a political and economic force in its own right. In January 1961, a former general turned president sounded a warning to the nation.
President DWIGHT D. EISENHOWER: "We annually spend on military security more than the net income of all United States corporations. Now this conjuncture of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development, yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved. So is the very structure of our society.
In the councils of government, we must guard against the acquisition of unwarranted
influence, whether sought or unsought, by the military industrial complex. The potential for the
disastrous rise of misplaced power exists and will persist."
NARRATOR: Today, with World War II and even the Cold War behind us, our military industrial base still churns out billions of dollars in weapons and other products the military wants, and some it doesn't want.
Many military contractors are household names: McDonnell Douglas, Boeing, General Dynamics, General Electric, and the newly merged Northrop-Grumman and Lockheed Martin. But the defense industrial base is much larger than these corporate giants.
Greg Bischak is executive director of the National Commission for Economic Conversion and Disarmament.
GREG BISCHAK: The defense industrial base includes both those production lines, technologies and workforces that are required for particular weapons systems, like submarines, combat aircraft, and tanks, and all of those other industries that produce the components, subcomponents, assemblies, all the way down to the nuts and bolts and computer chips.
NARRATOR: During the Cold War, America's military indus-trial base provided an unrivaled number of tanks, submarines, planes, and jobs. But as the world changed, so did the indus-tries involved, even though we continued to spend at record military levels for peacetime.
THOMAS McNAUGHER: The aerospace industry started shedding labor in the late 80s. Even though the defense budget was still pretty high, they could see the writing on the wall.
NARRATOR: Thomas McNaugher, a senior fellow at The Brook-ings Institution and author of "New Weapons, Old Politics: America's Military Procurement Muddle," has studied the aerospace industry in detail.
Mr. McNAUGHER: Thousands of people came out of work. But the commercial economy was growing at a pace and creating new jobs at a pace where there was no change in the national unemployment figures, and so nobody worried about the defense industrial base. Then along came the recession in the early 90s and, at the same time, the Groton submarine plant looks like it's on the block. And what do we have? We have a jobs issue.
NARRATOR: The recession did more than highlight job losses. It also confirmed that defense firms had become isolated from the rest of American industry in their research endeavors, management practices and products.
Mr. McNAUGHER: Over 40 years the number of industries working for the DoD became a pretty elaborate set. Also, over 40 years, what they make became increasingly unique. A lot of overlap in jet engines, for example, back in the 50s, a lot less overlap now that we're dealing with highly sophisticated engines for the F-22 fighter aircraft. And the same is true for ships and tanks.
NARRATOR: In some areas, such as the early development of computers, the Pentagon moved America's technological horizon forward by making large purchases from manufacturers. But once the civilian market took off, the Pentagon couldn't keep up.
JACQUES GANSLER: If defense doesn't change the way it does business, it's going to keep losing out.
NARRATOR: Jacques Gansler is a longtime defense consultant and author of the forthcoming book, "Defense Conversion: Transforming the Arsenal of Democracy."
Mr. GANSLER: Some of the most critical things for defense, things like software, and electronics, and new materials, manufacturing technology, those are areas in which the commercial world is well ahead of the defense world.
NARRATOR: The defense industry lags in these areas because it became captive to the Pentagon's burdensome specifications.
WILLIAM PERRY, Secretary of Defense (March 9, 1994): "One of the famous horror stories on defense acquisition is the military spec for chocolate chip cookies, specifying how many chocolate chips had to go in each cookie. And then the -- it's not just the specification that's the problem, Senator Dodd, it's once you make that specification, then you have to set up a system for certifying that it's been met, somebody to go out and count the chocolate chips."
NARRATOR: Nevertheless, despite losing the ability to operate in civilian markets, many companies prospered since their output was always funded by high levels of government spending, justified by the magical words "national security."
GEN JOHN SHALIKASHVILI, Chairman, Joint Chiefs of Staff (February 8, 1994):
"Within the department, we're going to have to protect the industrial base and the mobilization base to make sure we don't allow a vital capability to atrophy or disappear, leaving us with a future hole in our defense when we can least afford it."
Mr. GANSLER: The argument, according to the Defense Department, is there are certain technologies, like the capacity to build attack submarines, ballistic missile submarines, nuclear-powered aircraft carriers, combat fighter aircraft, and tanks and other kinds of very sophisticated systems, anti-ballistic missile systems and so forth, all of these in the estimation of the Pentagon are defense-unique and critical to our future security requirements and will require large outlays by the US Government to retain. That's the argument.
NARRATOR: But if industry became the captive of Pentagon regulations and requirements, the Pentagon has also become captive to the defense industry.
Mr. McNAUGHER: When the industry has the power to tell the Pentagon we don't like all those regulations, go find somebody else to do it. And, oh, by the way, nobody else exists, so you've got to deal with us, that's when somebody on Capitol Hill and in the Pentagon, people are going to get together and say, boy, the system is really broke now.
NARRATOR: But worst of all, American taxpayers became economic and political hostages to the false perception that defense industry jobs are critical to national economic strength. Yet, as defense dollars decreased between 1987 and 1993, civilian non-farm employment grew by over 10 million, while defense jobs decreased by only 1.6 million.
Mr. BISCHAK: There's little doubt that jobs have played a very large role in identifying what weapons systems are going to continue to be funded. It's clear in the last presidential election that it came to the fore as a critical issue.
NARRATOR: Even when defense dollars were slim, as in the post-Vietnam 70s, the Pentagon, defense contractors and their congressional allies worked to keep as many programs as possible by cutting the number of weapons bought, stretching out delivery schedules, or removing whole projects from public scrutiny by classifying them.
The strategy worked. But even the Pentagon and defense contractors could not anticipate the money explosion that occurred during the Reagan years. Military industries simply couldn't absorb it all. At the start of 1994, the Pentagon had over $53 billion just sitting in its procurement account, money Congress has provided for weapons but the military had not yet committed to production contracts.
Translated into 1995 dollars, the Pentagon received from Congress over a trillion dollars for weapons procurement between 1982 and 1991. With so much money available, companies rushed to bid on military contracts, sometimes -- as with Bath Iron Works and SACO Defense in Maine -- virtually abandoning commercial work to build everything from warships to machine guns.
The spending binge that started under President Reagan couldn't be sustained and military spending flattened out during the Bush years and began a modest decline. The end of the Cold War brought more rapid changes.
Mr. GANSLER: A number of the smaller firms are actually going out of business. There's a consolidation taking place in terms of both acquisitions and mergers and also some of the firms simply leaving the defense industry.
Mr. BISCHAK: Roughly 650,000 defense industry workers have been laid off and we're looking at perhaps another 650,000. And, in fact, if the military has to trim even further to meet its budget targets, we could be looking at another million workers all told over the balance of the decade being laid off in defense industry.
NARRATOR: Jobs -- not military readiness -- are the real point of the battle in Congress over many weapons programs and the defense industrial base.
Mr. McNAUGHER: I think there's plenty of times when the services really don't want something that the Congress will force them to buy. I mean, the Air Force has been buying six to 12 C-130s a year forever because it's built in Georgia and the Georgia contingent puts it in. And, you know, in a tight budget environment, that means something else has to come out.
NARRATOR: With limited resources and no clear threats to America's military dominance, the defense industry is now trying to sell itself and its wares as an insurance policy against a set of imaginary threats. Whether it's tanks, nuclear propulsion for submarines and aircraft carriers, munitions, rations, or military aircraft, defense contractors are pleading that their work is vital.
Mr. BISCHAK: Americans should be concerned about the defense industrial base issue for two reasons. One, it's going to cost them money if we continue to buy into the rationale that's being laid out there by defense contractors and the secretary of defense. And two, there's the real issue of security is economic security versus a simplistic notion that we buy security through buying more weapons.
NARRATOR: The key question becomes are there parts of the defense industrial base that are critical to our national security parts that must be kept regardless of cost?
DOD Secretary PERRY (February 7, 1994): "We have a substantial amount of funds in that budget for upgrading the M-1 tank to the latest version of the M-1 tank, so we still have -- that is one way of keeping our industrial base alive."
Mr. GANSLER: In the tank case, there was a question of whether any more tanks would be bought for the next decade. We have more than we need, and so the question is, well, why buy any more then? Well, the question is, if you come back in 10 years and say I want to buy a tank and there's no industrial base, what do you do?
NARRATOR: Take the B-2 bomber described by Senator Feinstein. Although no more B-2s are to be built after 1997, Congress put money into the Pentagon's 1995 budget to let Northrop-Grumman keep design teams and second-level suppliers available just in case more planes are needed.
Promotional Tape: "...The plane has no logical mission. It's costs are out of control. So, if the plane isn't going to help us, what in the world will it ever be used for?"
Mr. BISCHAK: In the case of the B-2, we're talking about Congress authorizing 150 million to keep the line intact in some fashion, and then people talk about 400 million, and then maybe 800 million in succeeding years to keep the thing up. And, pretty soon, as Senator Dirksen once said, "You're talking about real money."
NARRATOR: Congress finally gave the Air Force $125 million for the B-2 industrial base. The line for more federal handouts is already forming.
The munitions industry wants $2 billion for each of the next three years. The Navy wants another aircraft carrier at about $5 billion, plus $2.5 billion for the Seawolf submarine, which was originally designed to counter threats from the old Soviet Union.
DOD Secretary PERRY (March 9, 1994): "Nuclear submarines, we are going from a force of just under 90 nuclear submarines to a force of just under 50. And, therefore, we do not need to build submarines for the rest of this decade in order to maintain those force levels. We have elected to build, and it's in this budget, another Seawolf submarine in order to sustain the capabilities for building nuclear submarines. That's a controversial decision. You may want to challenge the wisdom of that judgment."
Mr. McNAUGHER: I think one could ask questions about how much of a submarine capability you need to keep around. If you don't think you need a submarine for quite some time to come, but you will want one down the road, you know, at some point, no matter what it costs to reconstruct a capability to produce something, it's probably cheaper to just let it go dead now because the submarines will be different and the carrying costs are so high.
NARRATOR: Military security is a necessity for America and must be funded, but the security of the American people should not be sacrificed for the security of America's military industries. With pressing needs at home, national security is now seen by many as meaning more than simple military power. It involves economic security and jobs, the great majority of which are outside the defense industrial base.
Senator JIM SASSER (D-TN) (9 March 1994): "You really don't have to be a rocket scientist to understand that when you buy a tank, that is a wasting investment, it's not an investment. It's a wasting expenditure. Within a few years that thing will be obsolete. It requires constant maintenance and it produces nothing by way of growth, economic produce. It is perhaps an insurance policy, but that's all. An investment in a school or an investment in a machine that produces capital goods, an investment in a factory, all of those things produce things for long term growth."
NARRATOR: Since a smaller military force can be adequately supported by a smaller defense procurement base, more effort and resources can be devoted to creating or maintaining jobs that can help meet pressing domestic priorities.
One strategy being tried calls for developing products and processes that have military as well as civilian applications. This concept, commonly known as "dual use," has not yet been successful, in part because the emphasis has been on producing products that meet military needs first, with civilian applications a distant second.
Jacques Gansler thinks that the emphasis should be on developing commercial technologies and processes and only if necessary adapting these to military needs.
Mr. GANSLER: One of the big fallacies of thinking about dual use is that you have to use the same product for both. In fact, it's very frequently the case that the product doesn't fit, that it's a different product for commercial and military, but that the production process and the labor can be the same.
I mean, an extreme example would be a cannon. I mean, there's no commercial need for cannons, clearly, but the rotary forge that builds the cannon is identical to the one that builds railroad car, freight car axles. And so, in production, you could be building the freight car axles, and then if you had the surge for cannons, you could do that.
NARRATOR: For other military technologies, computer simulations and the building of a few prototypes can be cost- effective tools that can preserve some jobs.
Mr. GANSLER: Well, you need to certainly keep that engineering base in one form or another. One way of doing it is through more use of simulations and training devices. It's not so much just in pure design, but it's the way in which that design impacts the field, so that you can actually see the value of the design in military operations, and you can use simulation and training devices for that. That's one way of doing it.
Another way that you could do it and that's being pushed today is more prototyping, where you build a few and you send them out to the field and try them.
NARRATOR: But there are cutting edge technologies unique to the military. In such cases, the nation must decide how to develop them.
Mr. McNAUGHER: There are some things that you only learn when you bend metal, solder wires, and that's going to be the problem. The industry will argue, I think legitimately, that, no, we just have to build these things, you can't do this in a computer. There's going to be a balance there; it's going to hard to find. But in the end, I think the balance will move towards using simulations as the simulation capability becomes more effective.
NARRATOR: But more simulations and more prototypes trans-late into fewer defense jobs overall. Is there a way to determine where tax dollars should go to boost opportunities for those looking for work?
The Congressional Budget Office and the independent Employment Research Association have found that tax dollars spent on the military create far fewer jobs than money spent in the civilian sector. For example, while $1 billion spent on defense creates 25,000 jobs, the same billion dollars in mass transit would create 30,000 jobs; in housing, 36,000 jobs; in education, 41,000; and in health care, 47,000 jobs.
Mr. BISCHAK: For every dollar you spend on the military, you tend to buy more capital goods, more high tech equipment and employ relatively less people than you do when you spend money on civilian programs funded by the federal government, whether it be teachers, day care, the various social services or even, for that matter, in construction trades which tend to buy and command more domestic employment, more domestic resources, are relatively less capital intensive than the military.
NARRATOR: As with housing, education and health care, America could create large numbers of jobs by tackling head-on our continued and growing dependence on imported energy.
Implementing the National Energy Strategy through more efficient energy use and the development of alternative energy sources would both reduce our dependence on foreign energy sources and add between 225- and 400,000 jobs.
Similarly, refurbishing our nation's waste disposal systems, which will cost some $85 billion, could add over two million jobs annually by the year 2000.
As our threats decline in the post-Cold War era, fewer jobs can be justified by military necessity. Domestic challenges, crime, a crumbling infrastructure, education and health care needs call for a transition from our 40-year policy of unquestioned support of the military industrial sector to renewed investment in critical civilian industries.
Holding us back from this transition is jobs. Congress is running scared on this issue as legislators scramble to bolster their own standing among voters.
Mr. GANSLER: In general, I think they're just simply trying to maintain the work in their district, is what that amounts to.
NARRATOR: Finding the balance between economic and military security will not be easy, but doing so is critical to our nation's well-being.
Mr. BISCHAK: Economic security, in fact, is one thing that most American citizens are increasingly worried about. And with good reason, too, not just because military downsizing is leading to large scale layoffs in the defense industry, science and technology fields, and so forth, but also because of corporate down-sizing, the effects of international trade, the environmental requirements of restructuring our industry. People are really concerned about the economics of all of these things.
NARRATOR: In terms of military security, our first concern must always be what we need, not how much employment will be gained or lost if a weapons system is funded or cancelled. No nation, not even America, is wealthy enough to throw money away building unneeded weapons to keep people working. Defense is not and should not be a jobs program.
Mr. GANSLER: Defense has to determine what it believes to be critical first, and that's something that defense has to analyze and it shouldn't be driven by jobs, in that case, it should be driven by what technologies are going to be required in the 21st Century.
NARRATOR: Real national security encompasses social, economic and environmental needs, as well as military strength. During the Cold War, a predominant part of America's resources were funneled into the military. We now have the opportunity to reassess our priorities, invest in our economy and our people, and assure our nation's long term security.
ADM CARROLL: You heard a number of people today explain that producing weapons creates far fewer jobs than useful programs such as renewable energy, health, housing and education. These programs also increase our security and the quality of life for all Americans.
President Eisenhower left us some very useful advice on the question of military spending:
"Every gunman is made, every warship launched, every rocket fired signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed. The world in arms is not spending money alone, it is spending the sweat of its laborers, the genius of its scientists, the hopes of its children."
We can no longer justify spending for unneeded weapons. We must spend to meet the real needs of Americans and protect the hopes of our children.
Until the next time, I'm Eugene Carroll for "AMERICA'S DEFENSE MONITOR."
[End of broadcast.]
CONDITION OF USE: Credit "AMERICA'S DEFENSE MONITOR"
(Center for Defense Information).
(C) Copyright 1994. Center for Defense Information. All Rights Reserved.