A New York Times article on Friday said that “[t]he defense contractor Northrop Grumman gave money to the left-leaning Center for American Progress, founded by John D. Podesta, as the nonprofit group at times bemoaned what it called the harmful impact of major reductions in Pentagon spending.” But how does this claim line up against CAP’s policies, writing and reporting?
The Times linked to one article on CAP’s website highlighting some of the negative effects that sequestration will have on the country. The piece does say that the more than $1 trillion automatic spending cuts will negatively impact the Defense Department, but it actually argues for reducing military and defense spending, just not by the means of the indiscriminate cleaver that is sequestration.
In fact, this idea is consistent with a large body of work from CAP on the sequester and military spending. “The process and timing of sequestration as it stands today would take a serious toll on our military,” CAP experts Lawrence Korb and Max Hoffman wrote in February of this year. “That’s too bad,” they add, “Because the idea of reducing defense spending by $500 billion over the next 10 years is a good one.”
CAP experts have also regularly advocated against Northrop Grumman’s financial interests. CAP argued for slowing down and reducing procurement of the Virginia-class nuclear attack submarine, of which Northrop is one of the primary contractors; advocated against the military buying more F-35s which would affect Northrop’s AN/APG-81 AESA radar and AN/AAQ-37 electro-optical Distributed Aperture System (DAS); questioned the effectiveness of the Littoral Combat Ship which Northrop Grumman has a financial stake in; called to limit procurement of the DDG-51, for which Northrop provides materials and radars; highlighted the tremendous cost-overruns of the DDG 1000 Zumwalt Class destroyer, of which Northrop was one of the main contractors (in the past, CAP also called for its cancellation); and called for the cancellation of the V-22 Osprey tilt-rotor transport, for which Northrop is a subcontractor.
Beyond Northrop Grumman, CAP’s criticism of bloated military spending and defense industry profits — on this blog and from our policy experts — is extensive. Here are a few examples:
Unsurprisingly, the defense industry has enjoyed remarkable prosperity during this time, with industry profits quadrupling between 2001 and 2010. But with a struggling economy and the conclusion of two wars, the United States can no longer afford to fund a massive defense buildup in the absence of an existential threat.
Center For American Progress, 4/11/13:
The United States faces no existential threats or rival superpowers. We should not be spending as much on defense as we did during the Cold War. Returning the defense budget to historical norms will force the Pentagon to better manage its affairs and will help ensure that taxpayer dollars are spent responsibly.
Center for American Progress, 1/27/12:
Yesterday, Secretary of Defense Leon Panetta and Chairman of the Joint Chiefs Gen. Martin Dempsey released details of the Pentagon’s plan to reduce projected military spending by $487 billion over the next 10 years. At first glance, nearly half a trillion dollars in reductions might sound like a huge cut. But in reality, if Panetta’s reductions survive Congress, the baseline defense budget will fall by just $6 billion next year and resume its growth thereafter. [...]
Unfortunately, we have done nothing to roll back more than a decade of continuous growth in military spending, despite the end of the war in Iraq and the beginning of our drawdown in Afghanistan.
The Hill, by Lawrence Korb, 5/24/13:
[T]he nation does not face any existential threats and the Pentagon is still buying too many weapons and keeping too many people on the payroll that are ill-suited to addressing the asymmetrical threats we face.
Politico, by Lawrence Korb, 3/07/12:
It is true that defense reductions alone won’t fix the deficit. But given their portion of the budget, security spending must play a part. In addition, large reductions in defense spending can be made without jeopardizing national security because the baseline budget has gone up for 13 straight years in real terms. It is now higher than it was on average in the Cold War and higher than the next 17 nations in the world combined.
It is time for DOD, the administration and Congress to stop playing games and begin to bring defense spending under control as part of our overall plan to cut the burgeoning deficit. Our security depends on it.
Politico, by Lawrence Korb, Alex Rothman and Max Hoffman, 12/18/12:
In order to make a deal to avert the fiscal cliff and put the country on a more sustainable fiscal path, political leaders from both sides of the aisle agree that some cuts to discretionary spending must be part of the package. The defense budget, which accounts for about half of all discretionary spending, should bear a significant percentage of these reductions.
The Huffington Post, by Lawrence Korb, 7/28/11:
In Congressional testimony over the past week, several high ranking military officers, led by Army General Martin Dempsey, the nominee to become the next Chairman of the Joint Chiefs of Staff, have warned about the dire national security consequences that could occur if the defense budget is cut by more than a token amount. Their comments have been reinforced by several Republican members of the House Armed Services Committee. But there are at least five reasons why the defense budget can and should be cut substantially without undo risk.
Politico, by Lawrence Korb, 11/16/11:
Defense is not now — nor was it ever intended to be — a jobs program.
So when an Aerospace Industries Association study — supported, unfortunately, by Defense Secretary Leon Panetta and House Armed Services Committee Chairman Buck McKeon (R-Calif.) — attempts to warn Congress and the American people that cutting projected defense spending by as much as $1 trillion over the next decade, which might happen if sequestration takes effect, could cost 1 million jobs, the appropriate response is that this is irrelevant.
Center for American Progress, 8/11/11:
The cuts to national security spending in the recent deal to raise the debt ceiling have attracted significant criticism from conservative commentators who argue that these cuts are unexpected, unprecedented, and threatening to our national security. In reality, however, any reductions in military spending are likely to be moderate, at best.
Defense contractors have managed to not only stay afloat but also thrive in a climate of government closure and massive cuts to the Pentagon’s budget, continuing to rake in billions upon billions of dollars in profits.
Under the terms of sequestration, the Department of Defense is slashing budgets left and right, with about $41 billion cut in 2013 alone. That hasn’t prevented the major defense contractors — including Lockheed Martin and Northrop Grumman — to continue to post huge profits according to Bloomberg. Northrop Grumman in particular has had a surprisingly good year, showing a 56 percent increase in the price of its shares. In the third quarter, Northrop’s net income grew to $497 million, compared to $459 million for the same period last year
Military contractors are eager to promote the theory that cuts in military spending — and the resulting decrease in government contracts for their businesses — will slow the economic recovery. A large part of their strategy has focused on promoting statistics showing the oversized effect of cuts in military spending on economic growth. But statistics about the role of military spending in the U.S. economy are often used to misrepresent the importance of military contractors.
Panetta does repeatedly say the military spending sequester would be “devastating” to the U.S. military but he has also failed to explain why. Panetta’s most specific remark on this point has been to say that the U.S. would have to reduce its presence in Latin America and Africa — i.e. hardly a “devastating” blow to the military or U.S. security. Moreover, a recent non-partisan Congressional Budget Office report found that the automatic spending cuts would bring the Pentagon’s budget back to what it spent in 2006.
Last November, Rep. Howard “Buck” McKeon (R-CA) earned his keep as the top congressional recipient of defense industry campaign contributions fiercely fighting back against military spending cuts and claiming that defense expenditures are the the only form of government spending that can create jobs. McKeon’s unique pro-defense industry fiscal policy was so appreciated by defense contractors that it appears they are throwing their financial weight behind his wife’s campaign for a seat in the California Assembly.
Military contractors are in a full court press to prevent the automatic military spending cuts that will come into effect on January 2, 2013, an estimated $55 billion per year, if policymakers fail to avert a budget “sequester.” But while contractors are waving a defense industry funded report warning of 1 million defense industry jobs to be lost if sequestration occurs and the potential to push the U.S. into a new recession, experts are calling into question the veracity of the findings and the underlying assumptions about military spending’s benefits to the U.S. economy.
The apparent contradiction of House Armed Services Committee members passing an oversized defense budget which exceeds that requested by the military and defies the U.S. public’s preference for a reduction in defense spending makes more sense when viewed in the context of defense industry, and industries which benefit directly and indirectly from defense related appropriations, contributions to committee member’s campaign committees and leadership PACs. Indeed, the contributions offer a monetary incentive for committee members to advocate for additional budget items — such as an East Coast missile defense system which Gen. Demspsey said was unnecessary — and create “Pentagon pork.”
A new Economist/YouGov poll has found that there is little support for increasing military spending. Just 40 percent, (27 percent of Democrats and 58 percent of Republicans) of those polled said they wanted the federal government to “spend more on national defense and security”
Sens. John McCain (R-AZ) and Lindsey Graham (R-SC) have been at the forefront in trying to scare the public into thinking the automatic military spending cuts set to take effect in January will decimate the military (they won’t).
Republican member of the House Armed Services Committee (HASC) Roscoe Bartlett (MD), in an interview with Politico, called the hyperventilating about the alleged dangers of the looming military spending sequester “a hysteria parade.”
After experts (and a non-partisan government report) debunked claims that automatic military spending cuts set to take effect next year won’t decimate the military and leave America defenseless, Republicans and their allies trotted out a new bugaboo: reducing the defense budget will crash the economy. But experts said that isn’t true either. And now a new study from the libertarian CATO Institute piles on, finding that the cuts are unlikely to have a crippling effect on the broader U.S. economy. “The defense sector is too small a part of the economy for changes in defense spending to have large aggregate effects on [gross domestic product],” said CATO’s Benjamin Zycher.
With sequestration set to happen in early 2013 if Congress fails to make a deal on deficit reduction, the defense industry has mobilized in a major way to stop the cuts to the Pentagon budget. The main thrust of the offensive has been a huge public relations campaign aimed at convincing Americans that the cuts would devastate defense contractors and the broader economy, causing the loss of about a million jobs. To be fair, the cuts that would be made under sequestration are far from trivial. But, when viewed in their proper historical context, they start to look much less threatening –- and the largest contractors appear to be well positioned to weather them.
A new poll released by the Hill newspaper has found that more voters favor slashing military spending versus cutting spending on domestic programs like Medicare and Social Security in order to reduce the debt and deficit.
Sequestration will cut $472 billion from the Pentagon over the next decade, or less than $50 billion a year, but to be clear: the sequestration cuts are the first real cuts to the military budget in over a decade. Even with the cuts in effect (a reduction of $47 billion this fiscal year), we will still be spending more in real terms on our military in 2013 than we did in 2006. While the method of the sequestration cuts is certifiably terrible, the actual amount to be cut is not unreasonable.
Facing deep spending cuts, the Department of Defense, including Secretary Leon Panetta, and military-industrial trade associations have complained that tightening the U.S. security budget will cause greater unemployment. And even while toeing the (dubious) conservative line that government spending cannot create jobs, right wingers like Rep. Buck McKeon (R-CA) insist that military spending must stay high to keep unemployment from increasing.
But a new study (PDF) from the University of Massachusetts, Amherst, highlighted by economist Dean Baker shows that, contra the conservative talking point, non-military spending can create more jobs than money going to defense programs.
[D]iverting federal dollars to defense and other military spending actually results in a net job-loss. The War Costs project points to a 2009 study from economics professors at the University of Massachusetts to make that case.
Panetta and others have said Congress should not take from the Pentagon’s coffers because of threats from Iran, North Korea, and China. Indeed all of these countries have shown a commitment to military spending and U.S. forces are often seen as balancing Chinese and North Korean regional ambitions.
But absolute defense spending for the U.S., China, Iran, and North Korea reveals that U.S. expenditures are dramatically more than any of its rivals combined.
[T]he Defense Department could easily make reductions beyond $350 billion over the next decade. Last year, the Sustainable Defense Task Force (SDTF) — which was chaired by Rep. Barney Frank (D-MA) and staffed by “scholars from a broad ideological spectrum” — identified nearly $1 trillion in military spending cuts. Even Republican Senator Tom Coburn said last month that cutting $1 trillion from the Pentagon budget over the next 10 years would not be “super hard.” And CAP’s Larry Korb, Laura Conley and Alex Rothman identified $400 billion in cuts over the next 4 years.