By Peter Huessy, President of Geo-Strategic Analysis
Defense spending is on the chopping block we are now assured of by many media reports. And Republicans are supposed the ones who will be wielding the axe.
The story is based on some small truth but a lot of big misunderstandings.
It is true that pushing back all discretionary spending to FY 2022 levels would reduce the FY2023 spending for defense by some $75 billion as that is the spending increase for defense approved in late December 2022 and will be the level of spending for defense for the rest of the fiscal year or through the end of September. Not only would defense be reduced, but non-defense annual spending would also be cut by nearly $100 billion.
However, further details are what are important. The requirement adopted by the House majority is that overall spending for discretionary programs has to go back to the FY2022 levels or the spending from October 1, 2021, through September 30, 2022. That was roughly $1.6 trillion. That requirement is not that every department of government get hit equally, but that priorities are set and defense and non-defense get levels of spending based on the merit of the case each can make for a requested budget.
Now yes critics will complain that is not the way Washington works. One has to have what is known as logrolling. Lard up every spending bill with goodies for everyone, and then everything will flow downstream---like a huge line-up of big logs floating down the river to the sawmill---one doesn’t want to get in the way.
While Washington indeed “works” that way, and that is why we have a $32 trillion deficit and annual interest payments of $1.5 trillion that nearly equals the entire discretionary funding of the US government from the EPA to Commerce to the State Department to EEOC and to the US Department of Defense.
The House majority adopted new rules precisely because the House majority wish to have Washington run differently. This push by the Freedom Caucus in the House did indeed give many members of the 4th estate and of the Democratic Party a case of vapors. That was easily predictable. Of course, any proposal to change the spending habits of the Washington, D.C. swamp would get folks’ hair mussed up.
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To do its job of oversight, Congress has to look not only at policy but also budgets. And do so in some detail so that the American people can determine what is being done in their name.
No, it is also true that every budget fight in the Senate and the House portray the spending proposals as wasteful. Programs of research that make no sense and can be ridiculed show up in the media, but like research about why monkeys clench their teeth done by the National Science Foundation, the amount of spending identified is always relatively low, totally in the hundreds of millions or low billions of dollars.
The House Freedom Caucus went a few steps further. They want each appropriations bill examined by itself, including defense. They want the woke agenda to be deleted and green energy mandates. Steven Forbes says that there is over $500 billion in the Federal Budget in subsidies and grant support for the push for zero carbon emissions for US energy consumption.
Speaker McCarthy specifically mentioned both areas of defense funding that he wants to take down---climate change mandates and other woke programs. For defense, there may be multiple billions—on the low side—for such programs. Overall, modest defense cuts will help, but that is not where the real cuts are possible.
How much is spent for 1612 type educational narratives? How much for green energy? Here there is real spending in the hundreds of billions. And for what is considered everyday type spending that is not questioned now has to be put on the table in order to be examined---often for the first time.
When added to the proposal for a balance budget which the House also included in its reforms, subsidized programs and entitlements are thus on the table. The House simply wants to examine spending and see where the bodies are buried. As the Mercatur Center once published, means tested poverty programs hit $1.9 trillion a few years ago, and these entitlement programs are alongside new pandemic funding which also reached trillion of new dollars.
The aim of the House reforms is also to prevent defense from having to automatically also be accompanied by domestic non-defense discretionary funding that “balances” each other. Thus, needed increases in defense are held hostage to non-defense spending hikes, whether the latter funding is required or necessary. Since the non-defense spending won’t be opposed, the tendency is for Congress to lard up that portion of the spending with grants and other goodies for political connected parties, who then in turn extoll the virtues of the new spending plan, making sure the logs are really rolling.
In short, spending should stand on its own, whether defense or non-defense, discretionary or entitlements. Otherwise, spending will remain out of control, inflation and interest rates will stay high, and fewer Americans will be working as the American economic dream passes over the horizon, outside the grasp of hundreds of millions of American citizens.