Should We Question $1.5 Trillion For National Defense?

Recently, Secretary of War Pete Hegseth and Chairman of the Joint Chiefs General Dan Caine went before Congress to discuss and justify a ramp-up in defense spending that would take this fiscal year’s total budget to the stratospheric level of $1.5 trillion. The leaders are claiming that the supplement is needed to replenish weapons stockpiles depleted by the current war in Iran. This seems like an incredible amount to be spending on our military, even considering the ongoing conflict with Iran. How can we assure ourselves that this level of funding is necessary and appropriate for our times, in light of a national debt racing to and beyond a $40 trillion threshold?

According to a recent study by usafacts.org, defense spending as a percentage of the total federal budget has fluctuated between 11% and 28% since 1980, depending on what was going on military commitment-wise and otherwise in any given year. The high of 28% was in 1987, representing the height of the Reagan buildup. On the other hand, the low of 11% was during the Covid-19 era (2020-21). The current request for close to a half a billion-dollar increase, if approved, would increase the percentage of the federal budget this year from about 14% to 20%. 

The study also stated that, after adjusting for inflation, defense spending increased by 62% between 1980 and 2023. However, total federal spending, again adjusted for inflation, increased by 175% during the same period. The main drivers, as you could probably guess, were Social Security and Medicare.

Another measure that President Trump has used at least indirectly, is the fact that U.S. defense spending annually exceeds the total of the next-ranked 11 countries in the world. When you consider that China and Russia are among the 11, that’s a pretty significant indicator of how high our budgeted spending is compared to other countries.

There’s no doubt that as weaponry becomes more sophisticated and the need for us to keep up with the latest technological threats increases, it’s going to cost a lot of money – potentially far more than in the past. Added to this conundrum is the military procurement process, which by its nature is “no-win” for the government and taxpayers. That is, although competition for major contracts is almost always a staple of the initial procurement, future purchases are with a sole source, since the “winner” is the only one who has the contract and ongoing capability to produce a very expensive system. Further, there are always modifications and upgrades that the contractor develops and has the singular expertise and patents to produce over many years of useful life and many millions of dollars. This problem can “trickle down” to key subcontractors as well. 

For instance, the Airborne Warning & Control System (AWACS, also known as the E-3), which has been a key airborne battle management weapon since the 1970s, has undergone significant changes and upgrades over the last 50 years to its fleet, which includes both U.S. Air Force and NATO versions. Two of its major subsystems are produced by subcontractors - the incredible 30-foot-span rotating radar, and the on-board computer system, produced by Westinghouse and IBM, respectively. Thus, there is not just one but at least three significant sole sources churning out new systems, subsystems, and upgrades over a lengthy period.

Boeing, the prime contractor that built the AWACS on a Boeing 707 platform, has been the sole source for the production of the E-3 AWACS since the initial contract award in 1970. Although the AWACS has been an outstanding performer over the last 50 years, including current service in directing air battle management in the Middle East, it’s approaching its limits as a viable and maintainable system. The E-7 “Wedgetail,” already used by the Australian Air Force, is the presumed replacement for the E-3. If approved for use by the U.S. Air Force, this will lock in another sole-source contract for Boeing, since the Wedgetail is built on a B-737 platform. Since each Wedgetail is estimated to cost up to $700 million, this alone will be a tremendously expensive but necessary addition to Air Force capabilities.

With all the recent discussion around fraud in government spending, especially in the area of Medicaid, it would seem prudent to exercise a similar degree of oversight regarding the massive defense budget. Rest assured, there are legions of auditors from several agencies that are committed to auditing expenditures on military procurements. The problem in finding potential excess spending may lie with both the auditors’ ability to support recommended reductions and getting contractors to concur, and their ability to convince program managers to challenge contractors the managers have worked with collegially over time. Frequent rotation of program managers can alleviate the risk of too-cozy relationships, but the downside is a new manager who must quickly get “up-to-speed” on the many complexities of managing a multi-million-dollar program.

Although the “$600 toilet seat” controversy in the 1980s was overblown, when it comes to spending boatloads of dollars on weapon systems, there are many legitimate arguments about requirements versus “nice-to-haves.” Recruiting and training sharp, professional, and assertive individuals for government auditor positions is therefore paramount to assure the public that defense spending is providing the “bang for the buck” that taxpayers expect.