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| ISSUE #13 | October 9,1997 |
| ISSUE #13 | October 9,1997 |
This was the headline over a short newspaper article describing how defense appropriations could be affected by H.R. 2400, a three year, $103.2 billion piece of legislation that was wending its way through Congress.
The bill, which would extend the Intermodal Surface Transportation Efficiency Act (ISTEA), was seen by congressional leaders as a major breach of the May 1997 balanced budget agreement that called for highway spending of approximately $70 billion.
Defense hawks feared that enough members of Congress might wake up, find that the bad old Cold War had ended, and decide that, indeed, America could shift its priorities from military spending to needed domestic programs. Estimates were thrown about that defense might be hit for as much as $15 billion to help close the $33 billion gap. But this $15 billion figure seemed to be based on the premise that, to maintain a balanced budget, current nonmandatory (discretionary) expenditures had to be reduced by an equal amount. With defense is half of all current discretionary spending, the reasoning went, it should cough up half.
What is baffling in this particular instance is the concept that the Department of Defense should be exempt from concern about and paying for the nation's road system. Forty-three years ago, when President Eisenhower first proposed legislation for the interstate highway system, his primary justification for the building program was national defense.
Even in the aerospace age, with C-17 cargo planes able to deliver troops and supplies around the world and satellites able to pinpoint troop locations down to meters, the military still needs roads to move heavy equipment to ports. A prime example is Fort Hood, Texas, home of III Corps. To ship the tanks, artillery, infantry fighting vehicles, and trucks of the two heavy divisions located at Fort Hood, the Army must have first class road and railroads to get to the Gulf ports. (It should be noted that in the early 1990s, the Army invested over $2 billion in all facets of transportation infrastructure--rail, ports, ships, and roads--supporting its power projection units at Forts Hood and Stewart.)
The truth is that good roads contribute to a strong defense and a strong economy, both necessary for total national security. In recognition of this fact, Representative John Dingell introduced H.R. 2382, the Highway and National Defense Investment Act. This bill would break the firewalls between defense and nondefense appropriations and permit additional spending of $6 billion on our nation's roads--and do so without breaking the budget agreement.
Representative Dingle's effort notwithstanding, in the short term there never was any danger that defense would have its budget cut for ISTEA. Pentagon money is shielded until 2000 by the 1985 Gramm-Rudman-Hollings law that prevents any cuts in military funds from being used for domestic programs, no matter how desperate the need. Congress does not seem prepared to cut short this exemption.
The battle over ISTEA is not over, however. The $103 billion House measure has been postponed and a substitute, six month stop-gap of $11.9 billion approved by the House--with no reference to the Pentagon. While acquiescing in the House action, the House Transportation and Infrastructure Committee laid down a marker for next spring. The committee agreed to look at a six year, $218 billion measure.
Meanwhile, the Senate is trying to negotiate its own transportation funding bill (S.1173).The Senate measure includes a six year, $145 billion highway transportation authorization that accords with the balanced budget agreement. As such, it would not affect Pentagon spending.
What do taxpayers think of all this? One question from an August 1997 poll conducted for the Transportation Construction Coalition gives an indication. When asked their choice between spending an additional $6 billion per year "to make the nation's highways and bridges safer and less congested or using that money to maintain military bases that the Pentagon has acknowledged are unnecessary," 76 percent said they preferred safer highways and bridges.
For Fiscal Year 1998, Congress gave the Pentagon and additional $3.7 billion over what the Administration requested. "Hey, General, can you spare a dime?"
Postscript: One ought to remember that Eisenhower's vision has been a bargain for the nation. In 1958, two years after the President signed the National System of Interstate and Defense Highways Act, the Department of Commerce estimated the system would cost $41 billion. Through 1995, estimated actual costs in 1957 dollars total $58.5 billion. Translated into 1996 dollars, these figures equate to $231 billion and $329 billion, respectively. Some one third of this increase is attributable to system additions, safety, relocation, and environmental requirements.
The Wide World of Military Spending and Arms Sales
by David Isenberg, Senior Research Analyst, disenber@cdi.org
Welcome to the wide world of world military spending and arms sales. The latest scores are in and the news is a classic good news/bad news story.
Actually, there is probably more bad news than good. But let's start with the good.
According to "World Military Expenditures and Arms Transfers 1996" (online at http://www.acda.gov/wmeat95/wmeatcov.htm), the latest annual report of the U.S. Arms Control and Disarmament Agency, in 1995 world military spending was $864 billion, down from the all time high of $1.36 trillion in 1987 and the eighth consecutive drop.
Most of this drop, however can be credited to the developed group of countries, mainly in Europe, North America and East Asia. In contrast, military spending by developing countries, mainly in South and Central America, Africa, and Asia, experienced a sizable increase in 1995 compared to 1994. In terms of regional military spending, five out of 12 regions around the world--South America, East Asia, South Asia, Oceania, and Central Asia and Caucasus, showed rising rates of military spending.
While their upward trends have little influence on global spending, they are significant from the standpoint of arms control, nonproliferation, and regional stability. As the report notes, "It is here, after all, that much conflict and war occurs, and such conflict or its potential provides incentive for the acquisition of ordinary conventional weapons and, ultimately, advanced conventional and mass destruction weapons."
With regard to weapons the news is not mixed; it is just bad. In terms of arms deliveries, world arms trade rose by $5.2 billion in 1995, the first significant upward turn after a steep, 16%-per-year, 8-year decline which ended with 1994 totals below the 1972 level. While the 1995 total of $32 billion brought the level of arms deliveries back to only two-fifths of the 1987 total, the upturn suggests that the post-Cold War drop in the arms trade may be bottoming out. Furthermore, the 1995 upturn was the result of a significant $5.6 billion (36%) rise in weapons imports by developing countries. Of the 12 regions identified in the report, seven raised their imports in 1995. The Middle East alone accounted for over two-thirds of the 1995 world increase.
And where does the United States rank as a supplier? I'm glad you asked.
The U.S. rules. In 1995 it had 49% of world arms exports. In 1985 it only had 26%. How times change! According to ACDA "The United States dominates the arms export market with nearly half of the world total. U.S. sales increased 28% from $12.2 billion in 1994 to $15.6 billion in 1995." During the years 1993-1995 the U.S.'s largest recipient regions were the Middle East with 43%, followed by Western Europe with 21% and East Asia with 19%. During those three years the U.S. had 48% of world arms deliveries and 54% of world arms agreements.
NATO and Russia in Bosnia: Lone Example of Cooperation
by Tomas Valasek, Research Analyst, tvalasek@cdi.org
NATO - Russia cooperation in Bosnia is often cited as a proof of positive relations between Russia and the West, despite the much publicized fallout over NATO expansion. But the Bosnia operation also had its share of ups and downs from the very beginning.
Approximately 1,400 Russian soldiers serve in Bosnia as a part of NATO's Stabilization Force (SFOR). Before they arrived, however, the Kremlin raised objections about the "standard" command arrangements between NATO and other non-NATO forces participating in the operation. In response to these objections, NATO developed a special command arrangement for the Russian troops. They are directly subordinated to a Russian general who has been named a deputy to NATO's Supreme Allied Commander Europe.
More recent disagreements between Russia and NATO have arisen as SFOR adopted a more aggressive approach towards implementing the Dayton Accords, apprehending war criminals, and reducing the influence of the shadow Bosnian Serb government in Pale.
Russia protested NATO actions that seemed to tilt the Alliance onto the side of the elected Bosnian Serb president, Biljana Plavsic. Further protests were made when SFOR troops arrested one and shot another suspected war criminal with close ties to the former Bosnian Serb president Radovan Karadzic. Russian Foreign Minister Primakov promptly denounced these latter actions as a "cowboy raid" and warned against a NATO-planned takeover of a television station controlled by Karadzic. Since the Russian objections, no further arrests of war criminals have been made in Bosnia.
Tensions subsided further in the middle of September when Foreign Minister Primakov announced that Russia would not oppose controversial elections that President Plavsic scheduled in the Serb part of Bosnia. Then, on September 26th in New York City, Russia and NATO held their first meeting of a Permanent Joint Council to discuss cooperation in Bosnia. According to the participants, both parties came closer in their views of how to implement the Dayton agreements.
This renewed harmony was immediately reflected on the ground. On October 1st, with new confidence in Russia's backing, NATO troops in SFOR took over four transmitters of the Pale TV station (affiliated with Karadzic) that were cited for inciting violence against NATO troops. Although NATO claimed that Russian troops were present, Defense Minister Sergeev denied their participation, arguing they were mere "observers."
This distinction, however, probably does not signal a fresh disagreement with NATO about SFOR. Rather, it reflects the uncertainty that Russia confronts with the whole Bosnian problem. Russia wants to be regarded as an important participant, an equal partner with NATO, but it is reluctant to be part of actions that might harm her relationship with her traditional Serbian allies, especially since Karadzic's faction cannot be completely dismissed yet.
SFOR's mandate is scheduled to expire in June 1998. For all its shortcomings, SFOR arguably is proving to be the most positive and substantive military link between NATO and Russia since the end of the Cold War. Unfortunately, it is also about the only example of such close cooperation--the exception that highlights the general confrontational stance resulting from the widespread, eager cooperation between NATO and virtually every country around Russia.
Funding the QDR: Where to cut?
by Chris Hellman, Senior Research Analyst, chellman@cdi.org
The Pentagon's Quadrennial Defense Review (QDR), released in May, calls for an additional $15 billion in the annual procurement budget to upgrade the services' current weapons systems. Recognizing that military spending is likely to remain at today's level, the QDR made a number of recommendations intended to reallocate spending within the Pentagon's budget to fund weapons buys.
According to a recently released report by the Congressional Budget Office (CBO), this means cutting as much as $11 billion out of the current Operations and Maintenance (O&M) budget by the year 2002. This is a difficult task, made even tougher by the fact that if current spending trends continue, the O&M budget is likely to increase $18 billion by that time.
The O&M budget in Fiscal Year 1998 is $93 billion, approximately $25 billion of which is allocated for defense-wide programs such as healthcare, environmental cleanup, and drug interdiction. According to the CBO, these items account for about two-thirds of the growth in the O&M accounts since the drawdown of U.S. forces began at the end of the Cold War.
In order to achieve the necessary savings, the CBO looked at several major areas of potential savings: cutting health, environmental, and drug programs; streamlining O&M administrative support functions (the so-called "Revolution in Business Affairs"); increasing privatization of support services such as depot maintenance; reducing the readiness of certain combat units; closing additional bases; and further reducing the force structure. The report found each of these either difficult to achieve, politically contentious, or producing only incremental savings.
The CBO study indicated that streamlining the O&M support system and increasing privatization could yield as much as $4.5 billion in savings. Privatization of the military's network of depots is faces strong Congressional opposition. Reducing environmental programs is unpopular with voters, while the military's involvement in fighting the war on drugs has strong support in Congress. Cutting health benefits would likely aggravate current problems with personnel retention.
The study also pointed out that force structure reductions are an inefficient means of cutting costs, requiring almost twice the cuts as the actual O&M savings achieved. For instance, if troop cuts alone (including the resulting reductions in training costs) were used to raise the necessary procurement funds, current troop levels would be cut by approximately 23% in the Army, 24% in the Navy, and 36% in the Air Force. Such troop cuts, while yielding significant savings, would be unacceptable unless the Pentagon were willing to modify its current strategy, reaffirmed in the QDR, that calls for the United States to be able to fight two major wars nearly simultaneously.
For more information, see CBO's report "Paying for Military Readiness and Upkeep: Trends in Operation and Maintenance Spending," at http://www.cbo.gov/showdoc.cfm?index=58&sequence=0&from=7
DOE's Nuclear Cleanup In Doubt
by Andrew Koch, Senior Research Analyst, akoch@cdi.org
With the reduction of the U.S. nuclear weapons stockpile and the closing of nuclear weapons' production facilities, we will finally escape the threat and expense caused by past U.S. nuclear policies, right?
Think again, for unfortunately this is not the case. The U.S. government is yet to successfully tackle the daunting task of cleaning up areas contaminated by nuclear weapons production, a task that is largely the responsibility of the Department of Energy (DOE).
One of first test cases of this $100 billion plus cleanup program is being conducted at the Idaho National Engineering and Environmental Laboratory (INEEL) in Idaho Falls. To date it has been a marked failure.
In 1994, DOE hired defense contractor giant Lockheed Martin to clean up a football-field-sized piece of land at INEEL, called Pit 9. This approach was to be a test case for a new strategy to privatize the cleanup effort. Pit 9 contains about 250,000 cubic feet of waste, ranging from hazardous chemicals to plutonium-bearing sludge, produced at the Rocky Flats nuclear weapons plant during the 1960s.
Lockheed was awarded a contract to clean up the site for the fixed-price of $179 million after the company guaranteed that it would complete the job, losing money if necessary. After nearly three years of work, the project is at least 26 months behind schedule and not one shovel of contaminated soil has been removed. To make matters worse, Lockheed now wants to renegotiate the contract, demanding a $257 payment for work it has completed through June 1997. Lockheed has said the new contract should be on a cost-reimbursable basis, and they have largely stopped work on the site until a new contract is negotiated. On these terms, the project's cost would soar to over $600 million, more than three times Lockheed's guaranteed price.
At issue is responsibility for the cost overruns. Lockheed claims the problems are due to DOE interference and original underestimation of the type and amount of waste at Pit 9. DOE says Lockheed was aware of the risks involved with the project, including the possibility that there might be more waste than expected, and should be forced to honor its contractual commitments. DOE also claims the problems are due to internal company technical and managerial problems, in part associated with the 1995 merger of Lockheed and Martin Marietta. Although Lockheed was granted the contract in 1994, Martin Marietta personnel took control of Lockheed's environmental division after the merger and proceeded to switch technologies used on the project.
The General Accounting Office (GAO) found that, despite obvious oversight errors by DOE, Lockheed should be made to honor its commitment as it was aware of the risks when it gave its corporate guarantee that the project would succeed within the agreed costs. Lockheed's demands that the government pay for its administrative failures, caused in part by the 1995 merger, are a clear attempt to fleece the U.S. tax payer.
The question now is, even with GAO's findings that the Pit 9 project is "clearly a failure," will this episode become a model for how to cleanup from the taxpayer rather than how to cleanup the environment?
This week, America's Defense Monitor--CDI's weekly TV series, looks at the past, present, and future of US foreign aid programs. While debunking two common misperceptions of foreign aid--that it consumes a large portion of the federal budget, and that it represents a taxpayer burden with no return--this episode takes a clear-eyed view of forein aid's past failings, rooted in its Cold War political and military orientation.
The awkward but important relationship between the US military and humanitarian efforts, as embodied in the tragic and turbulent intervention in Somalia, is also discussed, with a view toward how the lessons of Somalia can be used to improve--rather than deter--such humanitarian missions and aid programs in the future.
Featured guests include Brian Atwood, head of the US Agency for International Development.