Can Washington Tackle Its Sacred Deficit Cows?

As Washington argues about how to rein in a national debt headed for a crippling $20 trillion, here are three places to start. It won't be easy

By Michael Crowley Sunday, Dec. 19, 2010
    • William Thomas Cain / Getty Images

    (2 of 5)

    Choosing not to choose means the military power of the U.S. is unrivaled. Our defense budget now equals that of the rest of the world's nations combined. The Pentagon's $664 billion budget amounts to roughly $1 of every $5 the federal government spends. Adjusted for inflation, that's more than the U.S. has spent on defense at any time since World War II, including Ronald Reagan's aggressive Cold War arms buildup.

    That might seem reasonable, given the demands of two costly wars abroad. But even if you don't count the price tags for Iraq and Afghanistan, the defense budget has grown 80% since 2000. Why? One reason is that spending has exploded for big weapons systems designed for enemies now gone (the Soviets) or unlikely to threaten us soon (China). "We're spending more and more, and we're not getting more for it," says Todd Harrison of the Center for Strategic and Budgetary Assessments.

    But we are getting some extravagant weapons systems — systems that we don't really need. There's the Navy's new $600 million littoral combat ship (never mind that the U.S. already enjoys total supremacy at sea). Or the Marines' incoming fleet of amphibious landing vehicles, costing more than $13 billion, whose purpose even Defense Secretary Robert Gates has questioned. By contrast, the equipment it takes to fight terrorists is relatively cheap. A Predator drone, for instance, goes for about $10 million — pocket change compared with the price of big ships and planes.

    Then there are more mundane expenses. Even members of Congress who are critical of military policies love to show their support for "the troops," and so for years Congress has approved generous pay raises and health care benefits for service members. One result is that some 2 million military retirees are enrolled in the Pentagon's Tricare health program, whose $460 annual premium is unheard of in the private sector — in part because Congress hasn't raised it since 1995.

    By cutting big weapons programs and trimming things like health benefits (for higher earners and those who can be covered by a spouse's private-sector plan), Korb says, $100 billion in Pentagon spending could be saved annually "without hurting defense." It would come at a cost: an admission that the U.S. military can't do anything it likes, anywhere, at any time. Yes, that means we may not be prepared for every threat imaginable, however unlikely. "The part no one likes to discuss is, Where are we willing to take risks?" says Harrison.

    Politicians, especially, don't like such talk. The House Republicans' "Pledge to America" campaign platform promised to exempt the military from any cost-cutting. Nor do members of Congress like to kill off weapons systems that provide good jobs back home. Yet some budget experts are hopeful that growing alarm about the deficit might be thawing a long-frozen debate. Liberal Democrats are finding common ground with conservative Republicans in tackling the Pentagon budget, as Massachusetts Democrat Barney Frank and Texas Republican Ron Paul did when they commissioned a report on finding cuts. "Taking defense spending off the table is indefensible," Oklahoma Senator Tom Coburn, one of the Senate's most conservative members, wrote recently. "We need to protect our nation, not the Pentagon's sacred cows."

    II. Insecurity About Social Security

    Nothing swings a bigger wrecking ball through the budgetary future than entitlement programs such as Medicare and Social Security. Like all other major industrialized nations (including France, Britain and Japan), the U.S. is grappling with the looming costs of funding a retirement system for a population living longer than was expected when the programs were created.

    3. 1
    4. 2
    5. 3
    6. 4
    7. 5