Thursday, March 8, 2012

DTN News - DEFENSE NEWS: The Defense Budget And American Power

DTN News - DEFENSE NEWS: The Defense Budget And American Power

(NSI News Source Info) TORONTO, Canada - March 7, 2012: Mr. Chairman, Mr. Ranking Member, other Members of the Committee, it is an honor to appear before the committee today. That is especially true for a Congressional Budget Office alum like myself who remembers well working for senators Domenici and Sasser and others some two decades ago, when the Cold War ended and we were collectively trying to reduce defense budgets responsibly. 

That is again our challenge today. As former chairman of the joint chiefs, Admiral Mike Mullen, has persuasively argued, federal debt and with it the possible erosion of our national economic foundations have become national security threats themselves. I begin from the premises that the right dose of defense budget cutbacks, as part of comprehensive deficit reduction, can strengthen American power and influence over time. Put differently, it can be the least risky option—accepting some near-term, modest, and calculated reductions in military strength now to help shore up our longer-term economic prospects and with them our long-term national security. 

As I argued in my 2011 book, The Wounded Giant, no great power in history has remained great while its economy eroded. Trillion dollar deficits are not compatible with U.S. economic health, as Brookings colleagues such as Alice Rivlin have convincingly shown, and thus they are not compatible with long-term American global leadership. And as another Brookings colleague, Robert Kagan rightly argues in his new book, there is no credible alternative to U.S. leadership at present. Absent such leadership, the general stability among major powers that we take for granted in today’s world would no longer be such a given, and extremist states such as Iran and North Korea might feel further emboldened to assert themselves aggressively in their respective regions as well. The trick is to get the balance right, and to combine defense budget reductions of the right magnitude and character with other measures of fiscal restraint and revenue increases. 

The Obama administration’s new defense strategy and budget plan, building on earlier cuts made by Secretary Gates during his tenure in office, is a good step in the right direction in my eyes. In fact it gets us, responsibly, most of the way towards where we need to go in defense—even if I would submit respectfully that neither the administration nor the Congress has done as well in regard to entitlement spending or tax reform. As a result of this budget, national security spending would decline from current levels of about 4.5% of GDP to just over 3%. (For comparison, norms were 8 to 10 percent of GDP in the 1950s and 1960s, 5 to 6 percent in the 1970s and 1980s, 3 percent by the end of the 1990s, and 4 percent during most of the Bush presidency). Looked at differently, U.S. defense spending as a share of the global total will decline from about 45 percent in recent years to 35 percent or so, and the American military edge over China might decline from roughly 4:1 today (using Pentagon estimates of China’s actual military spending adjusted for purchasing power parity) to 3:1 within half a decade. 

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