The Chaos in America's Vast Security Budget

The new 2009 defense budget has just been released. The more you look into the numbers, the more things become unclear, very unclear. Most of the numbers being released are inaccurate or incomplete, or both. Other numbers will change as the year progresses, but we do not know if they will go up or down.

The Department of Defense (DOD) says its budget request for the next fiscal year – 2009 – is $515.4 billion. George W. Bush's budget as shown Monday by the Office of Management and Budget (OMB) says the Pentagon request is $518.3 billion, a $2.9 billion difference. OMB is right; the Pentagon "forgot" to include some permanent appropriations (also called "entitlements" or "mandatory" spending) for retirement and some other non-hardware spending.

The $518.3 billion is incomplete. It does not include $70 billion requested to pay for the wars in Iraq and Afghanistan. But that number too is inaccurate. It does not include enough money to fight the wars for more than a few months in 2009. If the violence in Iraq stays at its recently reduced levels – or even declines – that $70 billion should be about doubled to get through the entire year. If things fall apart in Iraq and continue to deteriorate in Afghanistan, as is very likely, that $70 billion should be about tripled. In either case, the amount requested in the budget for the wars is off by up to $140 billion.

This barely scratches the surface of the numbers in the Pentagon's budget that are cooked by the military services, civilian managers, and budget personnel. But, to add to the confusion and obfuscation, there are other national security costs, and uncertainties, in other agency budget requests.

The Department of Energy (DOE) has requested $17.1 billion for nuclear weapons research, storage, and related activities. Programs sure to be rejected by the Democratic Congress have been included, and Congress loves to add pork to DOE's budget, just as it does to the Pentagon's budget. How much? It could be as much as 10 percent, but it is not clear if Congress will add the money for its pork or force DOE to pay for it out of the programs DOE requests.

The president is requesting an additional $3.2 billion for miscellaneous defense costs in other agencies, such as the General Services Administration's National Defense Stockpile, the Selective Service, and the FBI's international activities. Quite minor and usually ignored, these accounts are not usually the subject of gimmicks from OMB or enough attention in Congress to mean significant changes.

If you add all the official estimates from OMB for the above, you get a total of $608.6 for 2009. That total equates to a category in the president's budget called "National Defense." It includes the programs that should be included, beyond just the Pentagon, to calculate what we spend for our security. But none of the numbers are right. Not only are they incomplete, as indicated above, but $608.6 billion is not the number OMB shows for the combined total for these activities, $611.1 billion. The budget materials released Monday do not seem to explain. Your guess is as good as mine.

There is more – both spending and confusion. Lots more.

Any inclusive definition of U.S. security spending should surely also include the budget for the Department of Homeland Security (DHS): add $40.1 billion. With DHS being one of the worst-managed federal agencies – according to both conventional wisdom and OMB's rating of federal agencies called the scorecard of the "President's Management Agenda" – there is no telling just what will happen to its budget request. Will it go up because homeland security is important, or will it go down because DHS is incompetent?

There are also important security costs in the budget of the State Department for diplomacy, arms aid to allies, UN peacekeeping, reconstruction aid for Iraq and Afghanistan, and foreign aid for other countries. Surely, these contribute to U.S. national security: add $38.4 billion. Recently, Secretary of Defense Robert Gates argued that the nation spends too little on diplomacy and aid to other nations. Will this help boost Secretary of State Condoleezza Rice's budget, or will Congress take a few whacks at politically unpopular "foreign aid" in an election year, as it usually does?

Surely, U.S. security expenses include the human costs of past and current wars: add another $91.3 billion for the Department of Veterans Affairs. Does this budget under-predict the costs for veterans from current and past wars as has been the case for the last few years? Very probably, but by how much is currently unknown.

We should add the share of the interest for the national debt that can be attributed to national defense spending, but few agree what that share is. One reasonable calculation argues that the "National Defense" budget category constitutes about 21 percent of federal spending, and that percent of the 2009 deficit should be calculated. That would be $54.5 billion. However, that number is certainly too small as the deficit is likely to grow with spending not yet counted for the wars and economic stimulus. Moreover, some argue that spending for the wars has come on top of other spending and, thus, a larger percentage of the deficit should be charged to national defense.

There's more. Add the cost to the Treasury for military retirement and that are not counted in the DOD budget: that's $12.1 billion. Some would also add the interest earned in Treasury's military retirement fund, another $16.2 billion.

Get the point? The articles that newspapers all over the country publish today will be filled with numbers to the first decimal point; they will seem precise. Few of them will be accurate, many will be incomplete, and some will be both. Worse, few of us will be able to tell what numbers are too high, which are too low, and which are so riddled with gimmicks to make them lose real meaning.