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| December 10, 1998 |
| December 10, 1998 |
Pentagon May Seek Substantial Increase in FY 2000 Top-line
With agency budget requests due in the Office of Management and Budget by December 15 in preparation for the release of the annual budget request, the Pentagon and the White House are engaged in last minute negotiations over whether and by how much to increase military spending.
Based on last year's budget request, Pentagon funding for Fiscal Year 2000 was expected to be roughly $275.9 billion. During the negotiations over the FY'99 Emergency Supplemental spending bill this past October, however, members of the Joint Chiefs of Staff testified before Congress that significant increases in the Pentagon's budget were needed. Estimates ranged as high as $27.5 billion annually.
In response to press questions earlier this week, Pentagon spokesperson Kenneth Bacon acknowledged that discussions between President Clinton, Defense Secretary Cohen, and the Joint Chiefs were underway. While he refused to discuss specific dollar figures, Bacon stated, "You know what the [Joint] Chiefs said. The Chiefs testified on the Hill and they all came up with a list of their needs and it was a fairly substantial amount of money."
The Balanced Budget Act of 1997 (BBA) set specific limits on annual discretionary spending -- the money that the President and Congress must decide on and act to spend each year. In addition, the BBA set caps on the amount of total defense vs. non-defense discretionary spending, and created "firewalls" between the two categories. Under the BBA, any reductions in either the FY'99 defense or non-defense accounts could only be used for deficit reduction, and could not be transferred to the other account. Members of Congress interested in increasing military spending could not do so by cutting other federal discretionary programs.
Instead, in a classic example of budgetary sleight-of-hand, Congress exploited a loophole in the BBA which permits the government to exceed the specific spending caps in an emergency. After weeks of negotiations, Congress added roughly $9 billion in "emergency" spending to the Pentagon's budget. And in a compromise with the Clinton Administration, they also added $13 billion in non-defense "emergency" spending. As a result, a number of members who might have opposed increasing spending for the military voted for the bill because it also increased funding for domestic programs they supported.
In order for the White House and Congress to make significant increases in the Pentagon's FY'00 budget, they have four options. First, they can rewrite the BBA and change the spending caps. This would reduce any future projected budget surpluses, a difficult step politically. Second, as the BBA's "firewalls" are no longer in place, non-defense spending could be reduced and the savings transferred to the military. Again, this could provide some difficult political choices for both the GOP and the White House.
Third, the Administration or Congress could utilize some form of creative budgeting, as they did this year through the emergency supplemental process. Or fourth, they may attempt some combination of the three previous options.
In actuality, there is a fifth option -- raising taxes. Given, however, that both the Administration and Congress are taking credit for creating the first federal budget surpluses in nearly thirty years, a tax increase is what is referred to in Washington as a "political non-starter."
What is missing here is an answer to the fundamental question: why is any increase in Pentagon spending even being considered? Adding $27 billion to the current military budget of $271 billion would be a 10 percent increase, and would return Pentagon spending to the levels of the early 1980's when the Cold War was in full swing. But with the Soviet Union gone and global military spending down 49% since 1985, does a $300 billion military budget make sense?
-- Research Analyst Chris Hellman, chellman@cdi.org
Lifting of Ban on High-Tech Weapons Sales Shows No Effect
In August 1997, the Clinton Administration announced a Latin American Arms Export Policy which stated that sales of high tech equipment can be allowed on a case by case basis. The announcement essentially lifted the unofficial ban on high-tech weapons sales to Latin America that had existed for two decades. In 1977 then-President Jimmy Carter issued Presidential Decision Directive 13, which stated that the US would not be the first to introduce advanced weapons to a region, and restricted conventional arms transfers to countries which abused human rights. At that time Latin America was ruled by a host of dictatorships, all which abused human rights, and therefore were not eligible to receive US weapons.
As a consequence of the end of the Cold War and the resulting decrease in global military spending, however, the United States has been eager to find new markets for its high-tech, big-ticket weapons. Latin America was seen as an excellent venue to sell US weapons. The Clinton Administration has put economic interest and the viability of American weapons manufacturers at the forefront of their arms export policy.
Earlier this year, many analysts predicted that removing the ban of high-tech weapons to Latin America would result in an arms race and would escalate the probability of instability in the region. Although Chile initially expressed interest in purchasing 24 F-16 fighter jets, and Ecuador had probed the possibility of weapons purchases, none of the dire predictions of a regional arms race have occurred.
However, the lack of any purchases by Latin American countries is not due to the regions's unwillingness to engage in a arms modernization race, but rather is a result of the economic crisis that has plagued the region for many months. Chile has had to put off its purchase of F-16's indefinitely. Chilean Defense Minister, Jose Florencio Guzman said Chile's inability to fund the purchase had to do with the "international financial crisis."
The Clinton Administration now has an opportunity to change their current arms export policy. As the world recovers from a global economic crisis, resources should be spent on items necessary for society building. Responsible arms export policies that take into consideration the human rights situation and the level of technology present in the region are needed to help the world recover from an economic crisis and countries still coping with years of undemocratic regimes.
Although the world has changed considerably since 1977, Jimmy Carter's policies are as appropriate today as they were then. The United States should not shift the balance of power in a region for purely economic gain. As a global leader, the United States has a responsibility to ensure that resources are not wasted on military hardware, but are available for schools, hospitals and other components of the infrastructure. There is still time to prevent the negative effects caused by introducing these weapons to the region.
-- Research Analyst Rachel Stohl, rstohl@cdi.org