Defense budget magic
February 10th, 2012
12:07 PM ET

Defense budget magic

By Libby Lewis (Listen to an audio version of the story here

Defense Secretary Leon Panetta hasn't revealed much so far about his department's budget proposal  for the next fiscal year. But he has offered a peek at some numbers, like this one: $88.4 billion for war funding.

When he shared that figure last month, a reporter asked: "Given that, a year ago, we had sizable numbers of troops in Iraq, and the numbers are coming down in Afghanistan ... why is it still so high?"

Panetta responded that it's partly due to the high cost of the war in Afghanistan.

The war is expensive, true, but some defense budget experts say there may be also be some defense budget magic going on. It's a magic made possible by two things.

The first is the fact that ever since the United States went to war with Iraq, it has kept separate defense budgets - one for war and one for the rest of defense spending.

And the second is that only one of those budgets is subject to the Budget Control Act, the law that laid out spending cuts to reduce the deficit.

"The military will tell you wars are unpredictable things," said Russell Rumbaugh, a former Army captain and a defense budget expert at the Stimson Center, a non-partisan public policy group that works for international peace and security.

"So to deal with that, Congress exempted war costs from the Budget Control Act. So war costs are basically free money - they're not subject to the (budget) caps."

They're not free, of course - taxpayers still pay for war funding. But there are no limits to what the Pentagon can ask for and receive, if Congress considers those requests separate from regular defense spending.

The budget magic comes from shifting costs from the regular budget, known as the base budget, to the war budget. Poof. Like the magician's coin, it seems to disappear.

When that happens, it's counted as a cut when it's really not.

That budget magic happened last year, the first year of the Budget Control Act.

In the final defense funding bill, a cool $7 billion in spending had moved from the base budget to the war budget.

That move helped the Pentagon meet the limit on its base budget with much less pain.

Some of those billions paid for unmanned drones, including ones not for the wars. Some paid for heavy equipment maintenance, also including non-war items.

Why does it matter? It's all defense spending, after all.

"Well, first of all, it's wrong," said Lawrence Korb, a top Pentagon official during the Reagan administration.

"These are the first wars we've funded through supplementals," he said. "And supplementals - or the war funding - don't get the same scrutiny as the regular budget. And it's supposed to be only for those things that have to be funded for the war."

Things like bullets, vests, armed vehicles and rifles.

But over the past decade, since the United States went to war with Iraq, the war budget has helped to modernize the U.S. military, Rumbaugh said.

He found that almost one out of every four dollars that went to buy new weapons and systems and equipment for the Defense Department came from war funding.

On one hand, Rumbaugh said, it could be argued that any defense dollar is a war dollar, in theory. But he's not sure the public would see it that way.  He says Americans have made clear they want to support the troops overseas, but now that support, in the form of the war budget, has gotten muddled with big-ticket items that don't have to do with the war.

"And that opaqueness, that confusion, means sometimes you have Americans supporting that war budget when it's not clear they would support buying the fighter jet that went with that war budget," Rumbaugh said. And, he reiterated, because it's designed as emergency funding for the war, it doesn't get the same oversight.

Korb said the Pentagon has used the war budget to buy tens of billions of dollars in weapons and systems that had nothing to do with the wars in Iraq and Afghanistan.

"If I had to guess, I'd guess it's $75 billion worth," he said.

A Pentagon representative said the department won't comment on the budget issue until it releases its proposed budget Monday.

With the threat of automatic cuts hanging over the Pentagon, Korb and Rumbaugh and other budget experts say the temptation will be great to shift more costs into the war budget.

Korb likens it to a shell game. "We're claiming we're cutting," he said, "when we're not."

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Filed under: Afghanistan • Budget • Military • Panetta
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  12. TheLastIndependent

    Can they make my school work disappear as well? Sure wish all our problems is that easy to fix.

    February 11, 2012 at 8:14 pm | Reply
  13. Church

    Yes, the warmongers are addicted to unsupervised and unlimited spending “to cover a good portion of the globe now.”
    I remember when Panetta was a Dove. Now he is as bad as McCain, the former poster boy for the Military Industrial Complex.

    February 11, 2012 at 6:56 pm | Reply
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  15. spyder

    when is the US actually gonna make a declaration of war under the genava convention. Who are we @ war with? Or are we just there to protect financial/political interests?

    February 10, 2012 at 10:31 pm | Reply
  16. True Jew

    Yes, we are smart, we make you work hard and sending large amount of it to Israel. yes baby come on.

    February 10, 2012 at 4:47 pm | Reply
  17. StuckInTX

    Got to agree w/ Ron Paul on this one... why DO we have 180 Military bases OUTSIDE the US?? Why can't we cut that in half? The economic impact to the impacted locales would be huge, as would the budget saving. But hey.. we're paying to keep them there anyway. So... figure out that HALF, yes HALF of the Federal Budget goes to Defense. The other half – the 50% that Congress gets to monkey with is for everything else including DEBT service, Social Security, Medicaid, Medicare, EARMARKS et al. DO you think that reducing Military spending might help?

    February 10, 2012 at 2:20 pm | Reply
    • Voice of Reason

      Because our planes don't run on hopes and dreams, that's why. they need to be in the general area. And as much as Mr. Paul doesn't like it, we are the mitigating force that keeps a lot of countries from doing something stupid. All these dollars help fund the operations to hunt down Al-qaeda, that expose leads to the US that help nab the rogues here, so it isn't so much "Afghanistan costs so much" as the fact that we're covering a good portion of the globe now

      February 10, 2012 at 3:20 pm | Reply
      • Thirsty

        And people think the North Koreans are brainwashed.

        February 10, 2012 at 7:43 pm |
      • Peter

        Sounds like more excuses to be the policemen of the world to me. Why us, US, again? where are all these people that said let GM fail? Why not let Israel fail?

        February 11, 2012 at 5:37 pm |
  18. My name is Jose Jimenez

    When there is this much money slooching around hanky panky will inevitably follow.

    February 10, 2012 at 2:15 pm | Reply
  19. The Woof

    I can remember a few years back that there was DoD money that was referred to as the "Black Hole". This was money that wasn't accounted for but yet was spent on various projects. It's nice to know now that they refer to it as "war funding". So how much of this "war funding" can they do without now that there is a winding down of both wars? Or will it be used to pay for military retirement, military healthcare & military pay, which it could and should be?

    February 10, 2012 at 1:48 pm | Reply
  20. Hiruu

    Well, let me TELL some of you folks who are clueless...these wars have been a SERIOUS addiction to the Pentagon leadership, and it will not be easy to turn off. For the past 10 years, trillions have been spent, and countless billions have been wasted for complete trial and error efforts, some yielding completely opposite results than expected. This continues even now, with a glossy overlook by the people who are suppose to be taking account of things to come. So sad, and the American people continue to float on, in a daze...

    February 10, 2012 at 1:05 pm | Reply
    • Thirsty

      The Pentagon runs the show. Has for quite some time. Anyone who doesn't realize or believe that, need look no further than JFK.

      February 10, 2012 at 1:39 pm | Reply
      • The Woof

        Actuakky during JFK's time in office the average military sepending was 358 billion per year, under Nixon it was 361.9 per year.

        February 10, 2012 at 1:57 pm |

    Wao $88 billion? Dats a huge amount of money lol

    February 10, 2012 at 12:49 pm | Reply
    • Hiruu

      And they will probably ask for more during the year...

      February 10, 2012 at 1:07 pm | Reply

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