Assessing Arguments About Defense Spending

With the release of the Obama administration’s final budget request imminent, the longstanding debate over the size of the defense budget will reach a fever pitch. Recently, proponents of increasing the defense budget have claimed there has in fact not been a “surge” in defense spending, and that the national debt has nothing to do with national security. They say that the fact that the U.S. has more aircraft carriers and spends more than the next seven countries combined is irrelevant to debating the appropriate level of defense spending. 

Does the United States really not spend enough compared to the rest of the world?

Second, Johnson argues that the downward trend in U.S. defense spending compared to the rest of the world—demonstrated by the fact that it only spends more than the next seven countries combined when it previously outspent the next thirteen—is the more important figure. Yet he ignores the composition of that group of countries. Of the seven, only two are potential U.S. adversaries. The remaining five—and numerous others among the next seven as well—are U.S. allies, friends, or partners. And the two adversaries? Washington on its own spent over twice as much last year on defense. This disparity suggests at least some relative advantage exists in military means that is worth mentioning in the debate over the size of the defense budget. 

Has defense spending really grown little in recent years? 

While comparing the relative ability of potential rival countries to produce military means is apparently a fruitless activity, comparing defense spending to the rest of the U.S. budget and larger economy is entirely appropriate.[BB1]  For example, Johnson recently noted that, “Defense Department outlays now account for only 15 percent of all federal spending, less than its share before 9/11.” Of course, that percentage would be higher if other parts of the budget were smaller. It is unclear however what this percentage at any level says about the appropriate size of the defense budget.

Noting that spending on national defense has fallen from 4.7 percent of gross domestic product (GDP) in 2010 to 3.3 percent in 2015, Johnson asks, “So where’s that so-called ‘surge’ in defense spending?” As I recently explained in a white paper for the National Taxpayers Union, GDP is a misleading way to measure defense spending because of economic growth. If the economy grows faster than defense spending does in inflation-adjusted terms, even an increasing defense budget will appear to shrink as a percentage of GDP. Johnson favorably cites defense spending at 4.7 percent in 2010, when outlays for national defense were $748 billion in inflation-adjusted terms. In 1976, as America continued it post-Vietnam War drawdown, outlays for national defense represented 5 percent of GDP, but $374 billion when adjusted for inflation.

As far as the “surge” in defense spending Johnson asks about, Pentagon budget authority in 2014 was 28 percent higher in inflation-adjusted terms than in 2002. Whether that amounts to a surge is up for debate, but it certainly seems like a significant increase.

Does national debt have nothing to do with national security?

“The debt is a serious problem, indeed,” Johnson concedes, “But it is not a national security threat, nor does it mean we must cut defense spending even more.” Instead, he says, the debt is a problem because it is a drag on the economy, before asserting that “it will not launch nuclear missiles or suicide attacks.”  This is certainly true, but if it undermines the economic basis of American power it will make it more difficult to deter, defend against, or respond to those things.

Moreover, adding to the debt will make it more difficult to effectively adjust to a major crisis, should it occur. As my colleague Joshua Hampson noted in a blog post last year, to ramp up to the modern equivalent of the peak year of World War II military spending, the U.S. would need approximately $6.6 trillion dollars. While a World War II-style conflict might be unlikely today, borrowing the funds necessary to prosecute one should it occur would be impossible.

Johnson rightly notes that entitlement spending, not defense, is the main driver of the debt. However, while there has been more popular support for a larger defense budget recently, entitlement spending remains popular. Increased defense spending will not replace entitlement spending. The former will be in addition to the latter.

Are quantitative comparisons to potential rivals irrelevant?

According to Mr. Johnson’s commentary, acknowledging the U.S. Navy’s overwhelming advantage in aircraft carriers bases the size of the military on “simple inventory counts,” rather than “security needs.” Yet immediately after condemning “inventory counts,” he pivots to an inventory of the U.S. military today versus past versions of itself. “[T]he U.S. military is smaller than any time since 9/11,” he writes, before citing a favorite talking point among Republican candidates for president: “America’s Navy, for example, has shrunk 14 percent since then. With only 272 ships, it’s our smallest fleet since 1916.”

Why comparing the size of the Navy today and on the eve of World War I is more important than comparing the capabilities of today’s Navy to potential competitors is unclear. Moreover, Johnson decries a shrinking Air Force and “our smallest Army since 1940,” despite the fact that in 1940 the Army and Air Force were a single service.

If America’s current disparity in aircraft carriers over potential rivals is irrelevant to the debate over the size of the defense budget, comparing the size of U.S. armed forces today to those of the past seems even less significant.

Defense spending is not about fighting terrorists in pickup trucks.

“Unfortunately, the United States needs to both fight terrorists,” Mr. Johnson writes, “and to deter potential adversaries, such as Russia and China.”

This is correct.

The defense budget should not be oriented around terrorism. Deterring a potential major war is a legitimate purpose for military spending. The problem is that Mr. Johnson assumes increased defense spending is the key to achieving that end.

Throughout his piece, Johnson refers to U.S. military strength as “marginal” according to “the most recent Index of U.S. Military Strength” as evidence for increased defense spending. He presents this “Index” as a definitive and objective assessment of the U.S. military when it is in fact neither. The “Index” in question is a product of Mr. Johnson’s organization, the Heritage Foundation. He is well within his rights to cite Heritage’s assessment of the U.S. military, but leaving the reader to assume his argument is based on an independent evaluation is misleading. 

As for the Index itself, its editor, Heritage Senior Fellow Dakota Wood, has compiled an impressive amount of data on the U.S. military. However, the basis for rating U.S. military strength as “marginal” is debatable. Wood uses the “two-war” standard for force sizing that was popular with the military in the 1990s as a way to preserve force structure during the post-Cold War defense drawdown. Yet in the nineties, the Pentagon used potential conflicts with Iraq and North Korea as a basis for planning. The Heritage Index does not seem to judge U.S. military strength relative to any potential adversary. So the question is, who exactly is the U.S. military marginal in comparison to?

This is why arguments about comparative defense spending or relative advantages in capabilities, such as aircraft carriers, are important. If the U.S. military is “marginal” when spending so much more than its potential adversaries, will more money buy the necessary improvements given a potential adversary’s capabilities? Appropriate responses to adversaries’ actions and capabilities are up for debate. And it is a debate worth having. Blithe dismissal of spending comparisons, the economic basis of military strength, and relative capabilities of adversaries, suggests that there is much headway to be made for these debates to reach fruitful and constructive conclusions.

Matthew Fay is a defense policy analyst at the Niskanen Center and a PhD student in the School for Policy, Government, and International Affairs at George Mason University