Arguing the Budget (Continued) UPDATED

Last week, I gave some space on the blog to Tom Donnelly of the American Enterprise Institute to raise concerns about the defense budget. This week, in addition to this op-ed on the F-22 by the secretary of the Air Force and the Air Force Chief of Staff and this fact sheet on the defense budget provided by friend-of-the-blog Sean Duggan at the Center for American Progress, I am posting a response to what Donnelly wrote by Travis Sharp of the Center for Arms Control and Non-Proliferation. Like Donnelly's initial post, these views do not necessarily represent the views of the blog. I do, though, believe this is an important debate and am honored to host it.

1. Donnelly says in 2008, “total DOD spending was about $670 billion.” Then he says in 2009, total spending “should be about $650 billion.” Then he says “the Pentagon will have about $30 billion less in 2009 than in 2008.”

$670 billion minus $650 billion does not equal $30 billion.

2. Donnelly uses some pretty generous standards for his rounding. For instance, according to the administration’s February budget outline, 2008 and 2009 funding was $666.0 billion and $654.7 billion, respectively. (Note that these figures are the most updated figures available – DOD Green Book and OMB Historical Tables figures are a year old now).

The problem is that these numbers are Donnelly-ized into $670 billion and $650 billion, as noted above, for 2008 and 2009, respectively. Now, as a budget analyst, I understand and appreciate rounding, but Donnelly just rounded away $8.7 billion dollars. For those keeping score, Donnelly just rounded away enough funding for two full years of continued F-22 production…before fudging 670 minus 650. You can’t just round wildly to make your “cut” seem bigger.

3. I’ve spilt enough ink on why presenting U.S. defense spending as historically low as a percentage of GDP, as Donnelly does at the end, is flawed. Conservatives and progressives will continue to talk past each other on this one. Donnelly has his talking points (spending low as % of GDP), I have mine (spending historically high in real terms, higher than next X highest spending countries combined), and never shall the two meet.

4. Finally, and most importantly, I would point out that for someone trying to communicate precision, Donnelly makes some risky assumptions for FY 2011. He says in 2011, “Baseline budget stays flat, supplementals fall all the way to $50 billion.” Consulting Table S-7 (page 130-31) in the budget outline, you’ll see that the defense budget will actually increase by $8.1 billion from 2010 to 2011 (which, in inflation-adjusted terms, is essentially flat as Donnelly says). However, on the supplemental only being $50 billion, I would draw AM readers’ attention to footnote 7, which reads “The Budget includes placeholder estimates of $50 billion per year for Overseas Contingency Operations in 2011 and beyond. These estimates do not reflect any specific policy decisions.”

I would suggest that treating the FY 2011 $50 billion supplemental as the word of God is a mistake. I would assume that if the Obama team does manage to fully integrate war costs by FY 2011, which seems unlikely, the baseline projection of $541.8 billion would increase. Conservatives like Donnelly are treating these FYDP budget figures as if they were set in stone, when in reality they are regularly ignored. For instance, the FYDP during Bush’s tenure always showed defense spending decreasing in the years ahead. How’d that turn out?

Moreover, Donnelly’s full-throated accusation that Obama is planning to cut defense spending is based on remarkably flimsy evidence considering that the full, detailed FY 2010 budget has not even been released yet. Based on the budgeting practices of the last few years, I would expect the administration’s future estimates of needed defense funding to be revised as events unfold. For FYs 2010, 2011, and beyond, ongoing revisions based on war developments may mean bigger base budgets, bigger supplemental budgets, or both. They may mean lower budgets. We just don’t know enough at this time to make an informed assessment.

I do give Donnelly credit, however, for at least acknowledging the existence of the FY 2011 $50 billion supplemental placeholder. Republicans on HASC conveniently omitted that detail while accusing the Obama administration of proposing a 26 percent cut in defense spending. That kind of math is Inhofe-ian in its spuriousness.

I’ll close by pointing out the irony that liberals’ rebuttal to the accusation that Obama is cutting defense spending has been “No he’s not. He’s actually increasing it.” Don’t most liberals think we could properly protect the United States with less defense spending? We’re not allowed to say that or what?

Donnelly responds:

I appreciate Tavis Sharp's corrections to some of my budget math - the errors were due entirely to haste on my part.

A more substantive objection is that he entirely mischaracterizes my arguments about defense spending as a proportion of gross domestic product. I do not believe that there is any necessary link between the cost of adequate forces and any pre-defined slice of the American economy, or who else is spending what.

The measure of GDP does however pertain to the issue of affordability, not just in the narrow year-to-year budgetary sense but also in the larger sense of sustainability. That is, if we need to spend 5 or 6 percent to build a large enough and capable enough force to meet what we think our strategic needs are, that's a level of spending that we can afford and continue to afford indefinitely - there's no threat to our standard of living, to our ability to shape a just society or of "imperial overstretch." Of course, that also assumes that social spending on the part of the federal government doesn't continue to consume an ever-expanding slice of the pie, but to reiterate: I see no reason why we can't afford a force that better meets our strategy rather than redefining our strategy to better suit the force. That latter approach would seem to me to repeat the errors of the Bush Administration.