Defense Savings Could Partially Offset Sequestration

by Nick Schwellenbach, 7/2/2013

Sequestration's blunt approach to spending reductions is bad policy, and legislators from both parties have recognized this and proposed targeted savings at the Department of Defense (DOD) as a partial alternative. The amount of money at stake is significant. DOD and other defense-related spending typically represents more than 50 percent of federal discretionary spending each year.

At the same time, a number of policymakers are arguing that it's time to shift our focus from deficit reduction – which has dominated the policy direction in Washington since at least 2010 – to job growth. Cutting back on federal spending in any form is contrary to the goal of creating more jobs in both the public and private sectors. However, the likelihood of passing new stimulus funding is slim.

Thus, savings at the DOD could be used to preserve or increase spending elsewhere in the federal budget (including within DOD), since economists believe that dollar per dollar, spending on budget areas such as education, health care, or on clean energy creates more jobs on average than defense spending.

In normal years, Congress passes two major pieces of legislation that determine the size, direction, and content of defense spending. So far this year, most of the annual bills that authorize and appropriate funding for the DOD have been unveiled by congressional panels with the notable exception of the Senate Appropriations Committee's version of the defense appropriations bill. But, generally speaking, enough is public to have a good sense of the direction defense spending is heading.

While the overall defense spending level appears to be heading downward along with most of the rest of the government, several proposals for further defense savings have been floated by the White House, the Congressional Budget Office, individual members of Congress, deficit reduction groups, and others, but are not reflected in these bills.

The Center for Effective Government has combed through many of these proposals. Serious additional savings could be found if risky, "exquisite" weapon systems (as former Defense Secretary Robert Gates called them – referring to paying too high of a premium for marginally improved capabilities) are replaced with cheaper, low-risk alternatives or by simply canceling or delaying new weapons if they are currently unnecessary. Other savings can be found with commonsense reforms that have no impact whatsoever on national security but would save the government money.

The following are a handful of proposals – far from comprehensive – that illustrate some of the ways the military could further cut spending. Note: Many of these ten-year savings estimates are from reports that are now a few years old, so the potential savings may now be somewhat different.

Cancel the Ground Combat Vehicle and Upgrade the Bradley Fighting Vehicle

Potential Savings: $24 Billion

The Army is planning to develop the Ground Combat Vehicle (GCV) as a replacement for its Bradley Infantry Fighting Vehicle, which is an armored personnel carrier, at an estimated cost of $29 billion. However, the program's necessity has been questioned. The "least risky and least expensive" of four options considered by the Congressional Budget Office (CBO) in an April 2013 report is a proposal to simply cancel the GCV and refurbish and upgrade the Bradleys currently in the Army's inventory. This proposal would save almost $24 billion, according to the CBO.

Cancel the V-22 Osprey and Replace It with Cheaper Helicopters

Potential Savings: $17 Billion

The V-22 is a controversial and expensive tilt-rotor aircraft built for the Marine Corps and Air Force that can take off like a helicopter and fly like an airplane. It has been beset with technical issues and is expensive on a per unit basis compared with helicopters that can provide most of its capability. Multiple groups and deficit reduction commissions, such as the Simpson-Bowles Fiscal Commission and the Rivlin-Domenici Debt Reduction Task Force, have recommended eliminating the V-22 and replacing it with cheaper helicopters. Last year, the Project On Government Oversight and Taxpayers for Common Sense estimated that a proposal to replace the V-22 "with MH-60 and CH-53 helicopters would save more than $17.1 billion from FY 2013 to FY 2022."

Cancel and Replace the Littoral Combat Ship Program with a Simpler Ship

Potential Savings: $14 Billion

The Littoral Combat Ship (LCS) is a ship being designed for the Navy to operate in waters relatively close to shore. The ships are meant to fulfill a variety of roles, with so-called "plug and play" mission modules to be used depending on the tasks they are intended to face. The estimated $37 billion program has been plagued by technical problems and huge cost overruns. More fundamentally, many in Congress and within the Navy itself are questioning the LCS concept itself, as there are performance compromises that stem from trying to make the design fulfill too many different roles, as well as excessive complexity built into the program. One retired Navy commander wrote in the U.S. Naval Institute's influential Proceedings journal, "Instead of muddling forward to an almost certainly marginal outcome, the Navy should cancel the LCS program and acquire a proven single-mission hull." A plan by the conservative CATO Institute to terminate the LCS and replace it with "an alternative low-cost frigate or corvette in its place" would save $14 billion, according to its 2010 estimate.

Shut Down Separate DOD Schools that Are No Longer Needed

Potential Savings: $10 Billion

In communities throughout the U.S., the DOD operates a parallel system of elementary and secondary schools that are far more expensive to run per student than their civilian counterparts. They were originally created because the DOD desegregated earlier than many of the communities it operated in, but this justification no longer exists. "This option could save over $1.1 billion per year and over $10 billion between now and 2022," according to a report by Sen. Tom Coburn (R-OK) based on information from the Congressional Research Service and the President's Fiscal Commission. These savings factor in reimbursements to local school districts, including "$14,000 for an allowance to cover the cost of additional students as well as Impact Aid, a payment to compensate local governments for the loss of property tax revenues because of military bases." This proposal would not affect DOD schools outside of the U.S.

Replace Subsidies to DOD Grocery Stores with Higher Subsistence Compensation

Potential Savings: $9.1 Billion

Coburn also has been a proponent of an alternative developed by the CBO to end subsidies for the DOD's grocery stores and simultaneously supplement the military's Basic Allowance for Subsistence to make up for higher food prices. "DOD could supplement the existing military pay benefit of Basic Allowance for Subsistence (BAS) by this amount and still save $9.1 billion over ten years for deficit reduction or other defense priorities. The benefit could also be designed to provide more money for military members with families," according to a report by Coburn that cites CBO.

Pause Development of a Next-Generation Bomber

Potential Savings: $6.6 Billion

The DOD intends to develop and procure 80 to 100 "next generation" long-range strike bombers, projected to cost $6.3 billion between FY 2013 and FY 2017, and billions more afterwards. For fiscal year 2010, the Obama administration initially cancelled the program, arguing there was "no urgent need" for a new bomber because "current aircraft will be able to meet the threats expected in the foreseeable future." However, the administration reversed course. This is unnecessary, according to the Project On Government Oversight and Taxpayers for Common Sense, which wrote that "[d]eferring development of costly and unnecessary next-generation systems saves money and is low-risk because of robust U.S. nuclear- and conventional-bomb delivery capabilities that will be available for decades." Congressional overseers are not on board, at least not yet. The Senate Armed Services Committee wrote in its report accompanying its version of the FY 2014 National Defense Authorization Act that "[a]s the only new aircraft development program planned for the next decade, continued development of the new bomber is essential to maintain U.S. teleological superiority and a highly specialized workforce."

Shrink the Number of Military Bands and Performances

Potential Savings: $1.8 Billion

"Former Secretary of Defense Robert Gates often noted that there are more members of Pentagon bands than all U.S. Foreign Service Officers, who are our first line of defense at American embassies around the world," states a Congressional Progressive Caucus budget roadmap. The caucus adds, "Over the past four years the Department of Defense has spent more than $1.5 billion on military bands, musical performances, and concert tours around the world." This completely frivolous and unnecessary area of spending can be shrunk with no impact to national security. Rep. Betsy McCollum (D-MN) has authored legislation that reduces spending on military bands and musical performances from $388 million to $200 million on an annual basis, saving some $1.8 billion over ten years.

All of these ideas run up against interests that benefit from the status quo, and there are certainly arguments for and against making such changes. But these reductions alone would save over $80 billion over the next ten years. It is clear there are numerous ways billions of dollars could be freed up from wasteful and/or unnecessary defense programs for other types of spending that may more broadly benefit Americans.