How not to end a bad government program

It’s finally happening: after nearly 20 years of political games, poor output, and cost overruns, the Pentagon is taking steps toward withdrawing from the wasteful Medium Extended Air Defense System (MEADS).

MEADS, an international missile development program, was originally designed to replace older missile systems in the US and Europe, has been riddled with cost overruns and delayed timetables, making it a poster child for misplaced priorities and mismatched incentives in America’s budgeting process.

The flaws with MEADS are numerous, including annual cost overruns of more than $2 billion, the sluggish pace of production (the program didn’t begin in earnest until 2005), and the tri-nation acknowledgement that the system was about technology harvesting and would never actually be deployed. For years, public pressure and advocacy revealed that at best, MEADS was an expensive R&D program that provided a few hundred jobs to a couple of states.

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During the course of the program’s development, the United States has borne the brunt of the cost, contributing 58 percent while Germany paid 25 percent and Italy only 17 percent. In March 2010, the Army itself acknowledged that MEADS lacked practical utility and requested an end to the program. Despite this recommendation and a congressional consensus to the same effect, President Obama requested an extra $400 million in MEADS funding for 2013.

Despite this additional funding, the Pentagon has finally decided to follow through on the Army’s recommendation and terminate US involvement in the program. But as is so often the case, this decision does not mean that American taxpayers will no longer incur costs: an upcoming event, dubbed a “graduation exercise,” will take place next month at White Sands Missile Range in New Mexico to demonstrate MEADS’ ability to counter missiles.

That’s right: in November, the United States will officially end involvement in a program that is an empirical failure, yet will still contribute the lion’s share of funding to a test of how well the system works. Why is the US having a taxpayer-funded goodbye party even after the Pentagon’s wise decision not to continue the program?

It all comes down to incentives. Certain Members of Congress have consistently rebuked efforts to terminate MEADS. Some of this resistance is likely because Lockheed Martin builds parts of the program in their districts, in addition to a generally mistaken belief that military technology can be harvested from the dead-end project.

To that end, the National Defense Authorization Bill of FY 2014 stipulated that the Army must explain what will be fulfilled by harvesting MEADS technology to Congress, but the Army has not put forward any objectives or strategy related to harvesting, showing how far-fetched Congressional notions to that end are.

The taxpayer-funded test, however, is an absurd little reminder of how difficult it is to phase out even clearly misguided programs. While a $2 billion dollar boondoggle is certainly more bearable than a $20 billion or $200 billion fiasco, it is a wake-up call that a program that is universally criticized and that lacks all utility takes twenty years to phrase out – and not without an expensive goodbye party. Ending MEADS is certainly a step in the right direction, but also a sobering reminder of how far there is left to go at ending waste at the Pentagon.

Bydlak is the president of the Coalition to Reduce Spending, a non-partisan advocacy organization dedicated to limiting federal spending.