In his two terms in office, President Bush has managed to turn a budget surplus of $236 billion in 2000 into a projected deficit of $482 billion in 2009. Last month, Douglas Holtz-Eakin, senior economic adviser to Senator John McCain (R-AZ), submitted the presumptive Republican nominee’s budget proposal to the Washington Post editorial board. In it, McCain proposes to balance the federal budget by 2013, in part by curbing defense expenditures. While there is certainly a need to cut wasteful and unnecessary spending in the Pentagon budget, this proposal is a tepid effort at best.
Holtz-Eakin suggests that McCain will achieve $470 billion in savings in the entire federal budget in 2013. He proposes to save $150 billion by reducing deployments to Iraq and Afghanistan by as much as half and another $160 billion from “slower discretionary spending in non-defense and Pentagon procurements.” While he indicates that a number of defense procurements can be terminated, he specifies only three: the C-17 Globemaster, the Airborne Laser (ABL), and the Army’s Future Combat Systems (FCS). Unfortunately for McCain, these three programs provide nowhere near enough savings to meet his proposed $160 billion reduction.
- The C-17 Globemaster, which provides the U.S. military with intercontinental airlift capabilities, should be a target for budget cuts. The Department of Defense (DOD) noted in its FY2009 budget justification that “There are sufficient C-17s to support our nation’s military airlift requirements as determined by the 2005 Mobility Capabilities Study.” Despite continued efforts by politicians and members of the Air Force to continue C-17 production, the DOD requested only $935 million in funding for support and equipment for the planes in the FY2009 budget. There is currently no money allocated in the DODs’ regular budget for FY2010 – 2013 for new aircraft, so terminating the program would yield zero savings.
- The Airborne Laser (ABL) program offers an opportunity for genuine but minimal savings. The ABL is designed to give the U.S. military the capability to destroy ballistic missiles soon after launch using a plane-mounted laser system. In FY2008, the DOD projected $970 million in spending on this program for FY2013, plus $57 million in program support funding. Thus, if McCain terminated this program in 2013, he could expect to save slightly more than $1 billion.
- The Army’s Future Combat Systems (FCS) offers the greatest potential for budget savings. FCS consists of a group of fourteen high technology manned and unmanned vehicles and systems designed to support the transition of the army to a more flexible, easily deployable force. Although completion of the FCS could consume substantial funding in the long-term, terminating funding for the project in 2013 would yield $8.1 billion in savings. This includes about $6.8 billion in saved procurement costs and approximately $1.3 billion from research and development funding in FY2013.
McCain’s plan offers unrealistic expectations for the amount that could be saved from the ABL, Globemaster, and FCS. Together, the cancellation of these initiatives would net approximately $9.1 billion dollars in FY2013. If McCain hopes to cut $160 billion in government procurement, he will have to offer to cut many more and larger defense programs, such as the National Missile Defense Program or the Joint Strike Fighter, or make more than $150 billion in reductions in non-defense discretionary programs.
Also dubious is McCain’s proposal to save $150 billion through reduced deployments of U.S. forces in Iraq and Afghanistan. According to CBO projections, about $82 billion could be saved in FY2013 if the U.S. dropped the number of troops in both countries from 200,000 to 75,000 by FY2013. This represents slightly more than half of McCain’s target savings. However, the candidate’s own policies call into question his ability to deliver these cuts. As long as McCain refuses to commit to a timetable for the withdrawal of the 140,000 U.S. troops from Iraq, it is disingenuous for him or his advisers to project any savings, much less an unjustifiable $150 billion, from their safe return home, especially since he also wants to send at least 10,000 more troops to Afghanistan.
After years of budget deficits driven by poor economic choices and failed security policies in the Middle East, the presidential candidates must address seriously how they intend to deal with America’s growing budget deficits. McCain’s proposal barely scratches the surface.