President Trump’s upcoming budget proposal will reportedly call for increasing the $549 billion defense budget by $54 billion. While some may protest this 10 percent increase, it represents a responsible step towards reversing years of unsustainable defense cuts.
Although global conflict is at relatively high levels, defense spending—currently 3.1 percent of gross domestic product—is on the cusp of falling to levels unseen since the Great Depression. After surging to 37 percent of the economy during World War II, defense spending averaged 9 percent of the economy from 1946 through the Vietnam War. Spending levels fell by nearly half in the 1970s before rising to 6 percent of GDP in the 1980s.
The subsequent cold war victory provided a peace dividend that allowed lawmakers to slash defense spending to a post-WWII trough of 2.9 percent of GDP from 1999 to 2001. Then, the 9/11 attacks and ensuing wars pushed defense spending back up to 4.2 percent of GDP under President George W. Bush and 4.7 percent by President Obama’s second year in office. Even while fighting wars in Iraq and Afghanistan, defense spending’s share of GDP never reached 1980s levels.
In 2011, however, the Budget Control Act created ten-year “sequestration caps” on discretionary spending that were intended to be so tight that lawmakers would replace them with alternative savings. Instead, Congress deadlocked, and these caps—which imposed half of all spending cuts on defense, even though it comprised only one-fifth of the federal budget—are set to squeeze defense spending to 2.6 percent of the economy by 2021.
This means that defense spending is on pace to fall to its lowest level since before World War II, even lower than the “holiday from history” that Americans enjoyed in between the fall of the Soviet empire and 9/11. After comprising half of all federal spending under President Kennedy, defense could sink below 10 percent of the budget in a decade.
To which defense critics may respond “it’s about time.” It is often pointed out that the United States spends more on defense than the next seven countries combined. This is technically true, but misleading. America produces 25 percent of the world’s economic output, and thus spends more than other countries on many things. While a country’s national security needs are not determined by its gross domestic product, a larger economy affords a nation the ability to defend itself, deter potential aggressors, and safeguard human rights abroad. America’s role as a military superpower has long provided a degree of global stability and prosperity.
Additionally, comparing America’s defense spending to countries such as China does not accurately reflect the differences in our military capabilities. Nearly $180 billion of America’s defense budget is spent on compensation for our troops, including salaries, health care, allowances, housing, and retirement. This comes to more than $100,000 per active-duty service member, By contrast, Chinese troops earn a salary estimated at just one-ninth that of American personnel, and have cheaper health care costs. Furthermore, prices for domestic inputs are likely lower in China than in the United States. Thus, one should not assume that America’s much larger defense budget means proportionally more weapons and technology.
The world remains a dangerous place. America is certain to maintain a military presence in the Middle East for the near future. Russia and China are more aggressively asserting themselves in their regions, and North Korea is relentlessly expanding its nuclear capabilities. The U.S. military not only needs to remain nimble enough to fight small land wars, it must also remain a strong, deterrent force against aggressive nuclear powers.
In the face of such threats, funding deterrence is cheaper than having to fight wars. To the extent that it helped bankrupt the Soviet Union, the 1980s defense buildup paid for itself by setting the stage for nearly unprecedented military savings in the 1990s after the Soviet threat had been eliminated. Trillions of dollars spent fighting in Afghanistan and Iraq prove that an ounce of prevention is worth a pound of cure.
Consequently, a bipartisan consensus has emerged supporting more national security funding. President Obama last year proposed an extra $35 billion for 2018 defense, just $19 billion less than the proposal we are likely to see from President Trump. Obama’s former defense secretary Leon Panetta— a defense-cutting budget hawk when in Congress—has called the capped defense spending levels “catastrophic,” “a disaster,” and a “a goofy meat ax approach” that will “hollow out” the military.
Even the bipartisan National Defense Panel reported to Congress that current defense spending levels “constitute a serious strategic misstep” and have “caused significant investment shortfalls in U.S. military readiness and both present and future capabilities.”
The President and Congress have an obligation to adequately protect our national security and to finance the best technology available to keep our troops safe in the field. A $54 billion increase— which Congress should offset within the entitlement programs that are driving nearly 100 percent of Washington’s long-term budget deficits—would merely increase 2018 defense spending from 3.0 percent of the economy to 3.3 percent, one-third below the 50-year average level.
Increasing the defense budget would provide a strong first step toward implementing Henry Kissinger’s commonsense observation that “the United States should have a strategy-driven budget, not budget-driven strategy.”
Brian Riedl is a senior fellow at the Manhattan Institute. Follow him on twitter @Brian_Riedl.
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