Five Reasons Weapons Spending Won't Fall
(Source: Lexington Institute; issued October 14, 2008)

(© Lexington Institute; reproduced by permission)
The Reagan Revolution has collapsed. Over the next eight years a resurgent Democratic Party will raise taxes, re-regulate the economy and rethink free trade. Judging from the size of the nation's trade and budget deficits, these steps are overdue. But what about that other pillar of the Reagan agenda, national defense? Is it destined to suffer the same kind of decline seen under Carter and Clinton? Probably not, because both the Democrats and the times are different. In fact, there are at least five reasons why spending on weapons -- as opposed to operations and personnel -- might not decline at all.

First, economic forces don't drive defense spending. Demand for defense goods is driven mainly by overseas threats and domestic politics. Military spending always spikes when threats arise, regardless of economic or fiscal conditions. Domestic politics -- which party controls Congress and the White House -- also influences the scale and composition of defense spending, but threats usually trump politics. That's why Democrats presided over four of the five big weapons buildups in the last century.

Second, spending on operations and personnel will moderate. With the Iraq war winding down and Afghanistan claiming only a modest share of defense outlays, the cost of military operations is likely to ease. As operational tempo declines it will become apparent that the nation doesn't really need more ground troops, just better training and utilization of the ones it already has. So there will be greater downward pressure on readiness accounts than weapons accounts, especially given the need to replace worn-out combat systems.

Third, it takes a long time to change military spending priorities. The Pentagon is already putting the finishing touches on a fiscal 2010 budget request that will drive military spending for the rest of the decade. New administrations take the better part of a year to get staffed, and once appointees are confirmed they need to get up to speed on programs. One thing they find out pretty fast is that the business plans for big weapons programs like the Joint Strike Fighter are so tightly wound that any changes increase costs. So it will take years to adjust current weapons plans.

Fourth, weapons programs will be fiercely defended. Big weapons programs generate so many jobs that they spawn potent political constituencies. Look at what happened this year when the Pentagon tried to kill its next-generation destroyer and a second engine for the Joint Strike Fighter. Both initiatives were blocked by members of Congress. The military services are just as tenacious in defending signature weapons. Is President Obama really going to get in a fight with the Army over whether it needs the Future Combat Systems?

Fifth, weapons spending stimulates the economy. Critics of weapons spending have long argued that it is a drag on the economy, but the exact opposite is true. When the government cuts taxes, many consumers use the money to buy products from overseas. But when it funds weapons programs, almost all the money gets spent in places like Colorado, Ohio and Virginia. And guess who does the work? Members of organized labor who are a core component of the Democratic electoral base!

If the new administration wants to sustain high-paying jobs, stimulate high-tech skills, and bolster American manufacturing, spending money on weapons works amazingly well. It even improves our sagging balance of trade.

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