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Defense Budget Is Making It Rain

President Donald Trump signed a $716 billion dollar defense budget yesterday that contains so much money I’m surprised he wasn’t throwing hundos at the audience just for fun.  The bill represented a 16 billion dollar increase in new money flowing to the Pentagon.

Lawmakers say the bill starts the Pentagon down the path toward fulfilling the Trump administration’s national security strategy, which calls on the military to prepare for an era of great power competition with Russia and China.  However, The WaPo reports that critics are concerned not enough is being done to deal with radical changes that will be necessary to adapt to 21st-century fights…

But the bill stops shorts of the radical changes defense analysts say the American military would need to make to prepare for the sort of great-power confrontation the administration outlined in its strategy. The military would have to make tough choices about what activities and technologies to discontinue, which are largely absent from the legislation, according to defense budget analysts.

The administration’s national security strategy came out only after much of this year’s defense bill was already in motion, making it difficult for policymakers to include any more radical changes. Pentagon officials are hoping to make a sharper strategic shift for fiscal 2020. https://wapo.st/2KS9Sr3

This bill was about as bipartisan as anything gets in Washington today.  The House voted 359-54, while the final Senate roll call was 87-10.  It’s not all that surprising because nothing brings Washington together quite like spending money.   Eric Boehm at Reason says the problem isn’t a shortage of funding, but a misuse of money they already receive…

Unfortunately, we don’t know much about that because the Pentagon has still not been subjected to a full scale audit, despite the fact that all federal agencies and departments were ordered to undergo mandatory audits in 1990. A preliminary audit of just one office within the Pentagon found that more than $800 million could not be accounted for. Auditors said the Pentagon’s Defense Logistics Agency (DLA)—described as “the military’s Walmart” because it’s responsible for processing supplies and equipment—has financial management “so weak that its leaders and oversight bodies have no reliable way to track the huge sums it’s responsible for.”

Whether it’s investing in bomb-sniffing elephants, paying $8,000 for something that should cost $50, or shelling out for the famous $640 toilet seat, there’s no shortage of absurd waste in the Pentagon. A Reuters probe in 2013 found “$8.5 trillion in taxpayer money doled out to the Pentagon since 1996 … has never been accounted for. That sum exceeds the value of China’s economic output [for 2012].” http://bit.ly/2Md6Rah

Let us also not forget the WaPo December 2016 expose that found that the Pentagon had buried an internal study that found 25 billion dollars of waste a year.  As the saying goes, a billion here and a billion there and pretty soon you’re talking about real money.

Making sure that money is spent efficiently is also important because on Friday it was reported that our budget gap was up 21% from last year.  Friday’s release showed the federal budget deficit was $77 billion in July, 79% wider than July 2017’s deficit of $43 billion for a grand total so far of $684 billion.  The real fear is not how high the deficit is this, but that it might never go away…

If either the optimistic growth assumptions or the ambitious spending cuts don’t materialize, trillion-dollar deficits could be here to stay. The Trump administration’s fiscal projections account for extending certain tax cuts set to expire next decade for individuals, but not others for businesses. Extending those would further reduce federal revenues.

Other challenges loom, including retiring baby boomers. In June, trustees for the Social Security program said its costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits. https://on.wsj.com/2nHANNj

FINAL THOUGHTS: To say we are spending like drunken sailors is really an insult to drunken sailors.

 

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