Debunking three myths about the debt deal

Myth #1: The Budget Control Act Has Already Cut Defense Spending

When the Budget Control Act was signed into law earlier this year, the White House’s “Fact Sheet” created the myth that the act includes $350 billion in savings from the base defense budget. Secretary of Defense Leon Panetta has taken this and the $100 billion in already planned savings from his predecessor’s “Efficiency Initiatives” to argue that defense spending has already been cut by $450 billion.

Fortunately, in its first public hearing, the Joint Select Committee on Deficit Reduction (commonly known as the Super Committee) debunked this myth. In his written testimony, Congressional Budget Office (CBO) Director Doug Elmendorf confirmed what we have known since the debt talks began – there is no guarantee that any DoD spending will be cut.
Elmendorf presents a scenario where “Defense funding could grow at the rate of inflation, and all reductions needed to meet the [discretionary spending] caps could come from nondefense programs.” Under this possibility there would be absolutely no reduction in Defense outlays in any year from 2011 to 2021.

Myth #2: Defense Spending is a Jobs Program

The “Second To None” campaign to keep hundreds of billions of taxpayer dollars flowing to defense contractors released a report on Tuesday which claims that a million jobs will be lost if defense spending is cut by $1 trillion over the next ten years.

The analysis begins and ends with a laundry list of flawed assumptions, which completely undermine the validity of its conclusions. Chief amongst these is the implicit assumption that defense spending is the best means for the government to create jobs. The report, however, fails to consider what would happen if the government chose to take money away from other programs or chose to raise taxes instead of cutting defense. Fortunately, an analysis by the Political Economy Research Institute at the University of Massachusetts does. According to the study, for every $1 billion spent on the military 11,600 jobs are created. By contrast, spending $1 billion on clean energy, health care, or education creates 17,100, 19,600, or 29,100 jobs, respectively. Similarly, granting $1 billion worth of tax cuts will generate more jobs than $1 billion spent on the military. Of all the options tested, the researchers find that the military is the least effective means for the government to create jobs.

Myth #3: The Chinese are Coming!

On Wednesday, the House Armed Service Committee held a hearing on “The Economic Consequences of Defense Sequestration,” where panelists stressed that, “Without a strong economy and military capable of meeting the emerging challenge posed by China in the Pacific, American values and the U.S. economy cannot succeed,” and “if we keep cutting defense budgets, the Chinese will see this as an indication of U.S. weakness now and in the future.”

The simple fact is that the Chinese military is not even close to rivaling the U.S. military and they know it. After a recent trip to the U.S., Chinese General Chen Bingde, said, “To be honest, I feel very sad after visiting (the United States), because I think, I feel and I know, how poor our equipments [sic] are and how underdeveloped we remain.”
Chen has ample justification for being downtrodden. The U.S. spends more than five times as much on defense as China and nearly as much as the rest of the world combined. The U.S. also has the largest air force and navy in the world, both of which are more than four times the size of China’s forces.

Even if the “Doomsday” sequestration lever kicks in, according to Elmendorf, the Defense budget in 2021 will be $589 billion, which is $37 billion higher than in 2011, and still more than double China’s military spending, even accounting for inflation.

The Facts

Our greatest threat isn’t China, it’s continuing to waste hundreds of billions of dollars on corrupt contractors, overpriced and underperforming weapons systems, and the DoD’s top-heavy force structure. By using myths and half-truths to conceal these very real problems, opponents of reductions in defense spending condone military inefficiencies that threaten our economic and national security.

In the words of my organization’s namesake, “We have met the enemy, and he is us.”

Ben Freeman is the national security fellow at the Project On Government Oversight.


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