Where Are The Fiscal Conservatives On War Costs?

Where is the fiscal conservative voice to cut federal defense spending?

war_costsI’m on the fiscal conservative team. By that, I mean that I believe responsible government expenditure includes a plan for paying government obligations. Sometimes that means cutting spending. Sometimes that means raising taxes.

If you’re a fiscal conservative in Congress and you voted this month to increase the federal debt by “only” $1 trillion over the next ten years through tax cuts targeted to business owners, you’re not playing for my team this year. You’re benched.

But more importantly, if you cut taxes to increase the deficit and you don’t even consider cutting our massive defense spending, then I’m sorry, you’re not a fiscal conservative. You’re off my team permanently. Hit the showers. Just leave your uniform by your locker, you won’t need it anymore.

The problem is nobody even shows up for my team anymore, Democrat or Republican.

Ryan_McConnell
You guys are off the team, hit the showers.

Where is the anti defense-spending wing of Congress? Does it even exist? Ever since 9/11, Democrats and Republicans have fallen all over themselves to shovel money at our military. I wrote recently about the waste, fraud, and abuse of our unending commitment to rebuilding Afghanistan. The bigger fiscal issue is our extraordinary commitment to wars since 9/11.

Here are some facts that matter for a discussion on federal fiscal responsibility.

Net federal debt stands at about $14.8 trillion.

Only 3 big areas really count when it comes to controlling federal spending. One is “discretionary,” and two are “non-discretionary,” otherwise known as “entitlements.” These two latter categories are made up largely of Social Security/Welfare and Medicare/Health Care costs.

The US spends roughly $600 billion per year directly on our Department of Defense, a larger amount than the next 8 countries combined: China, Russia, Saudi Arabia, UK, India, France, Japan, and Germany.

The Department of Defense budget makes up 54 percent of “discretionary” spending in the federal budget, meaning Congress has a choice of what to spend each year. If fiscal conservatives aren’t talking about this spending, they’re not addressing the single biggest use of resources over which Congress has control.

Some of you paying very close attention now want to talk to me about entitlements spending. Fine. Just gimme a second to finish some thoughts on defense spending and I’ll get back to entitlements in a moment. I promise.

Leaders in our discussion about the impending tax breaks like to talk about the theoretical average savings for a middle class family after tax cuts. We hear a number like $1,182 (from House Speaker Paul Ryan). While overly simple, perhaps we should understand our wars since 2001 in such basic per-household terms as well.

There’s both the narrow view and there’s the more complete view of what these wars cost each household.

The Department of Defense (DoD) takes a narrow view of accounting for the cost of spending on Iraq/Syria and Afghanistan/Pakistan – what are called Overseas Contingency Operations (OCO). This cost totals $1.75 trillion between 2001 and 2018, according to the DoD. The DoD then breaks down that $1.75 trillion into “cost per taxpayer,” at $7,740.

We don’t normally think of reducing military expenses as the way to make every taxpayer $7,740 richer, but it’s a legitimate a way to think of it, in my view.

Probably, however, the DoD’s estimates of war-cost-per-taxpayer come in way too low, according to Boston University professor Neta Crawford, author of the recently updated article “The Costs of War.”

Taking into fuller consideration the increased State, Homeland Security, and Veteran Administration’s costs, plus the increase in a baseline budget for the DoD on a war footing, Crawford estimates the Global War on Terror since 2001 has cost the country approximately $5 trillion.

As Crawford argues, this $5 trillion price tag actually skews conservative, as it does not include huge categories of costs such as state and local expenditures, many non-federal forms of veteran’s care, and costs externalized to families. Crawford’s conservative estimate means the wars since 9/11 have cost $23,386 per taxpayer. Personally, I’d like to be $23,386 richer.

I’m not mentioning the even more important human costs of war like death and injury and misery, since this is a financial column, but yes, those are even more important than the dollars and cents. I’m also not saying, obviously, that we need to eliminate the military. I’m saying that if you’re a real fiscal conservative, you have to be talking about winding down the wars and cutting military spending to a more sustainable level.


Now you want to talk about entitlements spending on Social Security, welfare, Medicare. Ok fine, let’s do that.

“Entitlements” is an apparently confusing word that sounds either moralistic, or somehow immoral, depending on if you like entitlements-spending or not. But that’s missing what the technical term means. It means instead that the federal government adopts a certain set of criteria for payments, and that it is then obligated to make those payments, regardless of budgetary decision-making by Congress. It means we essentially don’t budget for entitlements. The payments get made according to pre-set criteria and we deal with the financial consequences once payments are made.

War_costsAnd sure, we shouldn’t forget about entitlements spending either. But these issues are already part of active political debate daily: ACA repeal, Medicaid cuts, Social Security reform. As a fiscal conservative, I am quite confident that a significant group of powerful people is working to limit two of the three big expenses of government: healthcare and Social Security. Entitlements spending isn’t likely to get out of control with such hawk-eyed defenders of our financial situation. But I keep looking and I can’t find a fiscal conservative wing fighting to limit the one thing Congress can control each year – our war spending.

Can we end these wars and balance our budget? I don’t need my tax break as badly as I want my peace dividend.

 

Please see related post:
SIGAR and Afghanistan Waste

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SIGAR And The Afghanistan War Costs

SIGARThis month we debated tax reform and upcoming tax cuts, and a logical follow-up thought to the tax-reform debate is “why does the federal government cost so much to run?” Each of us will answer that question differently – possibly depending on our political persuasion – but everyone likes to agree in a bipartisan way on the need to reduce “waste, fraud and abuse.”

Which is why we should all applaud the work of internal government groups like the Special Inspector General For Afghanistan Reconstruction (SIGAR), dedicated to reporting on waste, fraud and abuse in our nation’s longest war. SIGAR makes quarterly reports to Congress on where our money went, and conducts investigations on fraud and enforcement, all with respect to the Afghanistan conflict.

If you think like me, you might have this vague gnawing sense that pursuing a perpetual war against a shadowy non-state enemy with no end in sight is the surest way to blow our nation’s budget. When you read a SIGAR report, that vague gnawing becomes very specific, with cold hard numbers attached to it.

Here’s just one example of $70 billion in waste. A recent report by SIGAR  studied the cost of building up the Afghan National Defense and Security Forces (ANDSF). The money appears mostly wasted.

In 2005, officials estimated a total $7.2 billion price tag for building up the ANDSF. Bolstering internal police and security forces is an important and logical step toward reducing the US military presence there. As the SIGAR report describes in excruciating detail, 15 years and $70 billion later our efforts at capacity-building have utterly failed. Afghanistan cannot keep its own peace, and the local security forces are wholly dependent on US support, both financially and militarily.

soldier_afghanistanThe devil of this failure is in the details of the report, but the waste, fraud, and abuse is nothing short of mind-boggling.

There’s the obvious, like the $500 million for second-hand Italian transport planes that couldn’t operate in Afghanistan’s harsh conditions.

Or like the unspecified cost of what are believed to be thousands of “ghost” soldiers on the payroll of the Afghan army, basically paid for by us. One estimate in 2015 put that cost at $300 million in phantom payments.

The Afghan Ministry of Defense Headquarters, originally budgeted at $48.7 million, ended up costing $154.7 million, and took five more years to build than expected.

Oddly, given the amount of money we spent, the history of training the ANDSF is often one of equipment shortages. In the early years of US rebuilding efforts, Afghan units would attempt to seize Taliban weapons caches because they were better quality than what they could get from us. Afghanis preferred former Soviet-era weapons because they broke down less easily than the higher-tech US weaponry. We provided high-tech solutions, but we built the wrong level of military and security technology for local conditions.

An estimated 70 percent of Afghanistan’s population is illiterate. What that means is that after we deliver state-of-the art military electronics equipment, and then something goes wrong, the equipment can’t be fixed, using local expertise. So the US military ends up resuming control of the abandoned high-tech equipment. According to SIGAR, the ANDSF remains totally dependent on our high-tech close air support and reconnaissance technology to be effective.

This mismatched technology problem is in fact both a cause and a giant metaphor for wasted expenditures in Afghanistan. We continue to build expensive high-tech solutions unsustainable in the Afghan context.

SIGAR estimated in July 2017 the total cost of the war effort to the United States, so far, as $714 billion. An academic study by Professor Neta Crawford of Boston University, a specialist in tallying war costs, estimates an even higher cost to the Afghanistan war, at $877 billion.

That cost can only increase from here, because the ongoing problem is that we can’t seem to walk away financially, without a fiscal collapse in the country. The Afghanistan government, according to SIGAR’s July 2017 quarterly report, is on total financial life-support from the US government.

How do we know about this dependency? Here are the numbers: The Afghanistan government raised $2.1 billion in total revenues in 2016. The cost of the ANDSF alone will be $4.9 billion, while their government as a whole costs an estimated $7.3 billion. Who pays the difference of roughly $5 billion each year? That would be you and me, with some help from international donors.

SIGARIt’s as if we built a $50,000 Habitat-For-Humanity house for someone who badly needed a home, but then burdened the house with technology, utilities and taxes appropriate for a $2 million mansion. The “lucky” recipient now has an unsustainably expensive albatross of a house. He can’t afford to live there. The Afganistan people cannot afford the armed forces, and government, that we’ve built for them.

There’s no foreseeable path to fiscal sustainability for the Afghanistan government. So, we’re stuck there.

There’s very little to celebrate over the blown $70 billion in rebuilding Afghan security forces, or even the between $714 and $877 billion spent to conduct the war since 2001.

If you’re worried about the rising cost of our government, check out SIGAR’s reports and the progress made in our perpetual war, with ill-defined goals, against a shadowy enemy that can’t be defeated.

 

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