Sunday, October 04, 2015

Let's Salute Sequestration and Carry On

Ultimately, our defense must rest on a solid foundation of a sound economy and fiscal sanity. So I refuse to let defense budget concerns push me to demand the end of sequestration. It seems to be the only tool that works to get some fiscal sanity.

Yes, eliminating the deficit really is as simple as keeping the rate of growth in spending below the rate of growth in revenue.

And keep it up longer than that zero-deficit day and we can start paying down the debt--which is a separate issue from the deficit, which seems to confuse people.

Which would be nice before interest rates rise and make interest on the debt a crushing burden in the future even if we don't add to the debt any more.

I start this way because there are complaints that sequestration is crippling national defense.

Is it? This is defense spending actual and projected:

2005 $495.29 billion
2006 521.82
2007 551.26
2008 616.07
2009 661.01
2010 693.49
2011 705.55
2012 677.85
2013 633.45
2014 603.46
2015 597.50
2016 615.52
2017 603.86
2018 591.99
2019 590.41
2020 597.99

I'm not a budget guy, so I don't get why spending keeps dropping rather than seeing spending resume an upward trend as pre-sequestration projections showed. And why the bump up in 2016?

But 2020 spending is still more than we spend in 2007 during the surge offensive in Iraq. I know it doesn't keep up with inflation. But our military is already smaller now than in 2007.

And what about war funding?

The number of U.S. troops deployed in battle zones is at its lowest level since before the 2003 invasion of Iraq. Still, Congress has authorized a 38 percent increase in the war budget over last year.

The contradiction is the legacy of an emergency war fund, started in the aftermath of the Sept. 11, 2001 attacks, that has become a favorite Washington way to sidestep the impact of fiscal constraints on military spending.

The Overseas Contingency Operations account, or OCO, has been tapped to fund tens of billions of dollars in programs with questionable links, or none, to wars, according to current and former U.S. officials, analysts and budget documents.

In practice, it seems, we have a way of getting around the cap. I'm not sure I'm happy about this--as a rule of law guy. But for this post, doesn't it mean sequestration isn't so bad? Will this perhaps mean future years have higher defense spending when you add that funding source into the budget total?

This says OCO is included so maybe future years spending noted above just don't include this portion since it is appropriated for that year and can't be predicted. With it, defense spending does go up as I expected. Although slowly.

I was skeptical that sequestration would be as bad in practice. For one thing, I did not assume that defense spending would be untouched without sequestration. For me, reining in non-defense spending is so important that for the sake of national defense (that solid foundation thing), our defense budget had to take a formal hit.

Which, as I say, I think it would have taken anyway.

Granted, to make the sequestration less harmful, I think the Department of Defense should have some flexibility in spending categories to use funding more effectively rather than play the game of cutting visible services (actual defense) based on cuts that are relatively tiny in raw terms:

Are we forgetting that the massive bureaucracy of our defense infrastructure is for the purpose of sending an aircraft carrier out to be the pointy end of our spear? The carrier is not a life-support system for 50,000 desks and those who sit behind them. If the Pentagon can't cut spending in ways that keep a carrier forward, I want to know who is stopping them? If the Pentagon is refusing to make those choices even though it has the authority, I want courts martial convened. We are at war.

If civilians tell the Pentagon that budget cuts will blot out the sun, the Pentagon should reply, "then we will fight in the shade."

My outrage was based on the announced cancellation of a carrier deployment in a military version of the Washington Monument strategy of a bureaucracy.

The sequestration issue is a tough one. With caveats, I was narrowly against it in this post.

I don't like the effects of sequestration on our military. But I like even less the effects of budget deficits as far as the eye can see with a mounting national debt with no hope of paying it off without deliberately stoking inflation to make the debt cheaper.

Since it is impossible to lift sequestration on defense spending alone--notwithstanding the OCO account that bends sequestration--I think it is the best avenue we had to have even a hope of keeping spending increases below the rate of revenue growth.

The military is experiencing collateral damage as the result of politicians unable to deal with the fiscal picture without such a blunt tool as sequestration, but I don't know what choice we have.