Money Talks:
The Implications of U.S. Budget Priorities
by Robert L. Borosage
Foreign Policy in Focus
Special report from Institute for Policy Studies
and Interhemispheric Resource Center
According to a recent report by the Council on Foreign Relations,
"[T]be average American believes we spend 18% of the federal
budget on foreign affairs, while thinking we should spend only
6%. In reality, foreign affairs spending, the bully pulpit of
Americas strength overseas, is now only 1% of the federal budget-a
little more than one penny of every federal tax dollar. "
This argument has been the centerpiece of Secretary of State
Madeleine Albright's campaign for more funds for international
activities That 1%, she argues, "may well determine 50% of
the history that is written about the era. But although the secretary
s cause is a good one, her argument is profoundly misleading,
for it excludes the bulk of U.S. international spending-the military
budget Americans basically have it about right when the military
is included. The U.S. spends about 17% of its total budget on
national security and international activities, with the military
consuming 94% of the total sum. Indeed, the military captures
almost one-half of the entire federal discretionary budget-money
for everything the government does from the FBI to Head Start
and from education to healthcare, excluding only mandatory spending,
primarily interest on the national debt and entitlements like
Social Security and Medicare.
Facts, Ronald Reagan once said, are inconvenient things. And
numbers are easy to distort. But looking at how the U.S. spends
its money on international and national security affairs gives
a good sense of our priorities-what we invest in and what we choose
to neglect, and what the implications are for U.S. foreign policy.
THE COST OF THE MILITARY
In FY 1999, the United States spent over $276 billion on its
military. This figure includes outlays of the Pentagon and the
Department of Energy nuclear weapons programs plus more than $27
billion spent on the intelligence agencies-about half on tactical
military intelligence and half for intelligence agencies, including
the Central Intelligence Agency (CIA) and the National Security
Agency (NSA). With this budget, the Pentagon fields a military
force without rival in the world. It sustains over 1.4 million
men and women in active duty plus another 870,000 in the reserves.
Standing forces include 10 active Army divisions, three Marine
divisions, 13 active and seven reserve Air Force fighter wings,
and 12 aircraft carrier battle groups (11 active), plus around
7,200 deployed nuclear warheads capable of being launched from
the ground affixed to MX and Minuteman missiles, by sea from Trident
submarines, and by air from B-52 and B-2 bombers. The Pentagon
has basically completed its post-cold war drawdown and, with minor
reductions, plans to sustain this force structure indefinitely.
The Pentagon budget also includes over 770,000 civilian employees,
almost 40% of total executive branch civilian personnel.
The $276 billion does not include the cost of military pensions
or the Veteran's Administration-another $43 billion in FY 1999-nor
the military's share of the national debt, a good portion of which
was amassed either in active wars or in the massive Reagan military
buildup in the 1 980s. Loan guarantees offered by the Defense
Department to promote arms sales are also an obligation not included
in that national security figures.
When you think of big government, this is it. The military
establishment issues over half of all government paychecks. It
makes about two-thirds of government purchases of goods and services.
It sponsors 53% of all government research and development. It
is the nations second largest health care insurer and provider
and the largest day care provider. It runs the worlds largest
educational enterprise. It manages over 5,000 properties on lands
with a total land area about the size of the State of Ohio. Outside
of China, it is without rival as the worlds largest bureaucracy.
It is also without question the largest source of waste, fraud,
and abuse in the federal government. It employs over 4O,000 accountants
and budget analysts to manage over 250 accounting systems. In
1990s, the General Accounting Office reported that the Pentagon
was unable to account for $250 billion of more than $1.2 trillion
worth of property, equipment, inventory and supplies. Yet, it
continues to disburse billions of dollars without records of what
it is purchasing. As conservative Republican Senator Charles Grassley
has said: "We have financial chaos in the Pentagon. We have
meaningless accounting numbers....We have meaningless cost estimates.
The Pentagon also provides the pork, or pet projects, that both
conservatives and liberals can love. Senator John McCain estimates
that $5 billion in pork-barrel special interest projects-primarily
weapons or construction projects that the Pentagon did not ask
for- were larded into the FYI999 defense budget.
Each year, the General Accounting Office (GAO) publishes reports
on what it calls at risk agencies, where mismanagement raises
the risk of waste, fraud, and abuse. In 1999, the GAO reports
that after decades of neglect, the Pentagon has a financial management
system that: is unable to properly account for billions of dollars
in assets...is unable to make sound resource decisions...consistently
pays more and takes longer to develop [weapons] systems that do
not perform as anticipated...continues to make erroneous, fraudulent
and improper payments to contractors... [and whose| inventory
management system is ineffective and inefficient.
The GAO s auditors could not match about $22 billion in signed
checks, $9 billion in supplies and material could not be located,
and contractors received $19 million in overpayments. Defense
Week summarized "The Pentagon doesn't know what it can send
to troops, can't avoid buying more of something that the military
already owns, and cant tell how much its programs actually cost."
Congress not only condones this endemic waste, it adds to
it. It has blocked additional rounds of base closings that Defense
Secretary Cohen estimates might save $2-3 billion per year. It
happily supports, without question, the Pentagons grossly inflated
estimates of readiness, weapons, and force needs. Between 1994,
when Republicans took control of Congress, and mid-1999, it has
added a total of $30 billion to the Pentagons own requests. Despite
the financial chaos, the Pentagon does not hesitate to demand
more money, which the Republican Congress and the Democratic president
rush to provide.
MEETING THE THREAT OF PEACE
Not surprisingly, with the end of the cold war and the collapse
of the Soviet Union, military spending began to wane-both in real
(inflation adjusted) dollars, as a percentage of the budget, and
as a percentage of the overall economy or gross national product
. But the cuts have been remarkably limited given the Soviet breakup:
1999 allocations, adjusted for inflation, are roughly 85% of the
average level spent on the military from 1976 to 1990.
However, because the economy has been growing, the relative
burden of sustaining this military establishment is less than
in the decades of the cold war. As advocates of more military
spending like to point out, we now spend a smaller percentage
of our budget and our gross national product (GNP) on the military
than at any time since before World War II. The bipartisan budget
agreement forged by President Clinton and the RepubIican Congress
projected that military spending (in inflation-adjusted dollars)
would continue to decline slowly through the year 2002. In response,
both the president and Congress have pledged to increase spending
in both nominal and real dollars.'
That we can more easily afford this level of military spending
does not address the question of whether we should support it-
whether we need to spend this amount-nor does it consider what
we forego at home and abroad in order to devote such resources
to the military
In reality, Washington is spending far more on its military
than is needed for defense. Alone, the U.S. accounts for about
one-third of the world's military expenditures and more than all
other NATO allies combined. We spend over three times as much
as the most exaggerated estimate of Russian spending, over four
times that of China. Indeed, with our allies and friends, we account
for about three-fourths of global military spending. Eight of
the world's ten largest military budgets are those of our allies.
Moreover, the decline in U.S. military spending is often exaggerated.
In dollar terms, the cutbacks have essentially succeeded in reversing
the Reagan buildup, which doubled the military budget in the early
1980s-the largest peacetime military buildup in recorded history.
In 1999, in constant dollars, the U.S. will spend more on its
military than it did during the cold war under Richard Nixon and
Gerald Ford and about as much as it did under Jimmy Carter in
1930 before Reagan was elected.'
No threat or potential threat justifies this spending. During
the cold war, often exaggerated estimates of Soviet and Chinese
military spending and arms buildups were used to conjure up readiness
scares and justify large military expenditures. Today, there is
no such external justification. The United States, as former Chair
of the Joint Chiefs of Staff Colin Powell noted in 1991, is running
out of demons. I'm down to Fidel Castro and Kim II Sung. The
Soviet Union is no more. The Russian military is literally disintegrating.
We are threatened far more by Russia's weakness- its fear of disintegration,
its peddling of weapons and knowledge in desperation- than by
its strength. The Chinese, for all the brouhaha about their buildup,
spend an estimated $40-65 billion on their military. They lack
a modern air force, a blue water navy, and any semblance of modern
communications. Russia and China together account for about 15%
of global military spending.
The so-called rogue nations that the Pentagon identifies as
potential adversaries-Iran, Iraq, Sudan, Libya, Syria, Cuba, North
Korea-collectively spend about $15 billion on their militaries
each year, under 2% of global spending. All of these relatively
small countries lack a modern industrial base, cannot produce
advanced weapons, are in economic crisis, and have been cutting
spending on their militaries in past years.
DIPLOMACY STARVED
In sharp contrast to its military spending, the U.S. devotes
comparatively few dollars to foreign diplomacy, international
assistance, and support for international institutions. The total
net outlays in FY 1999 will be around $15 billion, less than 1%
of the $1.66 trillion federal budget. This budget pays for the
vast majority of the U.S. civilian role abroad. It includes 150
different account funds, ranging from food aid to the State Departments
anti-terrorism programs to the U.S. contributions to multilateral
financial institutions like the World Bank and its affiliated
regional banks. Major items include the State Department, with
its worldwide infrastructure of embassies, missions, consulates,
and an overseas staff of more than 35,000. Also included are the
Agency for International Development (AID) and bilateral assistance
programs, the United States Information Agency (USIA) and a range
of activities called public diplomacy, the Commerce Department
s trade offices, as well as the Peace Corps and other humanitarian
programs. The funding encompasses assistance to the Newly independent
States (once part of the Soviet Union), U S. non-military aid
commitments to Bosnia, security aid to Israel and the Middle East,
and support for the Export-Import Bank and the Overseas Private
Investment Corporation. (The figure does not include the $14.5
billion U.S. quota increase for the International Monetary Fund
(IMF) nor the $3.4 billion credit commitment to the IMF's New
Arrangements to Borrow program, still pending before Congress.
IMF appropriations are considered monetary exchanges-with the
IMF providing the U.S. with Special Drawing Rights-and thus are
not considered budget outlays.
Secretary Albright is surely right to suggest that this total
is shamefully inadequate. The U.S. is the worlds wealthiest nation-and
its largest scoflaw. As of mid- 1999, our debt to the United Nations
totals over $1.6 billion in back dues, and we owe more than $600
million to the international financial institutions (including
the Global Environmental Facility). The U.S. provides less of
its wealth to support the impoverished abroad than any other industrial
country. The U.S. spends less than one tenth of 1% of its GDP
on official development assistance, and about the same amount
on other aid related activities (including peacekeeping). The
Organization for Economic Cooperation and Developments Development
Assistance Committee (DAC) average is about four times as much
or four-tenths of 1%. And the official target of the United Nations
is that donors provide seven-tenths of I % in aid.
Despite having by far the worlds largest economy, the U.S.
is no longer the worlds largest aid provider. Economically troubled
Japan provides more aid in absolute dollar terms, giving $9 billion
in 1997; the U.S., Germany and France each provided around $6.5
billion. These numbers are falling rapidly: since 1995 aid from
these four countries has dropped 6% in real dollars and total
DAC support has dropped 18%.
Moreover, U.S. spending on international affairs when measured
in constant dollars has been declining steadily since 1980. From
1992 through 1998, funding dropped an average of about 6% annually.
Under the projected balanced budget agreements, international
affairs funding is slated to be cut another 13% by 2002, and U
S. overseas development assistance could drop to about one-tenth
of the global total. By 2002, international affairs spending will
be about half of its 1980-95 average in constant 1998 dollars
and at its lowest level since 1955.
At a time of dramatically increasing U.S. investment, trade,
travel, communications, and exchanges abroad, the State Department
has been forced to close diplomatic missions and AID programs,
to delay building consulates in the new states forming from the
former Soviet Union and Yugoslavia, and to postpone expansion
in China as provinces open up. Under President Clinton, the State
Department has cut more than 2000 employees, closed more than
30 embassies and consulates, and deferred long-overdue modernization
of computers and communications, to say nothing-as noted after
the bombings in Tanzania and Kenya-of recommended security improvements.
Foreign assistance programs have fallen 30% since 1991 in constant
dollars.
Of the funding that does exist, a striking portion is consumed
by security or military concerns and commitments. From 1992 to
1998, fully one-third of international affairs spending was devoted
to supporting international security and peacekeeping activities,
including security assistance to Egypt and Israel and U.N. peacekeeping
operations. Foreign military financing programs-grants, loans,
and loan guarantees to foreign governments to purchase U.S. military
weapons-continue to be the single largest component of security
assistance contained in the international affairs budget.
Similarly, our bilateral assistance programs are skewed toward
security concerns rather than economic development and social
needs. Support for Egypt and Israel consumes 82% of all security-related
costs and almost 25% of all international affairs spending. Assistance
to Bosnia, following the commitment of U.S. troops, is the single
largest program of U.S. aid in Eastern Europe and the former Soviet
Union. 'Hot spots-such as Somalia, Bosnia and Haiti-attract significant
portions of a declining pool of money, with AID shifting funds
from ongoing programs to meet demands essentially generated by
military commitments. The anomaly is apparent: Israel, with a
per capita GDP of over $1%,000, receives over $3 billion in bilateral
assistance each year, while all of sub-Saharan Africa, with a
per capita GDP of under $500, receives a total of about $165 million.
Even the State Department s budget reflects similar priorities:
funding will swell in the wake of events like the bombings of
the U.S. embassies in Kenya and Tanzania, but the increased funding
will largely be devoted to fortifications, rather than to modernizing
communications, increasing political reporting, or adding consulates
to help handle the burgeoning traffic of tourists and business
people.
Only about 30% of the total FY 1999 budget of $22.5 billion
for international affairs actually goes to bilateral assistance
programs, the foreign aid that is routinely criticized as excessive
and wasteful. Of the total $7.3 billion dollars requested in FY
1999 for the U.S. Agency for International Development (AID),
about $867 million went to Food for Peace programs, $1.4 billion
for aid to East Europe and the Newly Independent States (formerly
the Soviet Union), $205 million for International Disaster Assistance,
and $3.8 billion for programs included in such funding categories
as Child Survival and Disease, Development Assistance, and Economic
Support Funds. The remainder is allocated for AID operating expenses.
Were Washington to match the aid level of our allies, significant
additional resources would be available for international assistance.
If the U.S. spent, as our allies average, 0.4% of its GDP on overseas
development aid, it would quadruple its outlays from $6.8 billion
to over $27 billion per year. If it invested as generously as
Sweden does- nine-tenths of 1% of GDP-U.S. aid would rise to about
$76 billion a year.
IMPLICATIONS: THE GLOBOCOP
Whenever any politician speaks on the U.S. role in the world-
whether conservative or liberal, interventionist or isolationist-one
phrase recurs like a ritual mantra: Of course, the U.S. cannot
police the world. We are the 'indispensable nation, Secretary
Albright trumpets, but we cant police the world.
Pentagon staffers routinely referred to General John Shalikashvili,
the now-retired chair of the Joint Chiefs, as globocop, even while
President Clinton proclaimed, We cannot and should not try to
be the worlds policeman. 26 The president s incantation pays tribute
to public sentiment, for poll after poll shows that large majorities
of Americans oppose the notion of the U.S. policing the globe,
but the generals sobriquet is closer to the truth.
Pentagon planners say that U.S. force structure is determined
primarily by the self-assigned mission of being ready to fight
two regional conflicts at the same time- without allies and on
opposite sides of the world-with North Korea and Iraq as the central
examples. But we fought only three major wars throughout the cold
war, and we face North Korea and Iraq-the designated adversaries
for Pentagon planning-with the support of allies. North Korea
now has difficulty feeding its troops. Iraqi military strength
was decimated in the Gulf War and after, and U.S. air patrols
erased one-fifth of the Iraqi air defense system in early 1999
without anyone paying much attention. The two-war mission-an inconceivable
response to an implausible threat-is used to justify a force still
girded for the cold war, laden with the tanks, heavy armor divisions,
nuclear warheads, and baroque weaponry designed for another age.
No wonder Pentagon analyst Franklin Spinney has described this
strategy as a "marketing device for a high Pentagon budget.
The two-war theory-confirmed and reconfirmed in official mission
and enshrined in Pentagon planning-is perhaps an understatement
of the Pentagons actual role of a permanent world police force.
In day-to-day operations, the U s. military spans the world. The
scope of its activity is staggering. The Pentagon maintains 100,000
troops in Asia (primarily in Japan and South Korea) and another
100,000 in Europe, with the capacity to reinforce them immediately
The troops in Asia, the administration has now announced, will
stay even if the two Koreas unite. The Pentagon sustains 15,000
troops in rotating station in the Persian Gulf, a direct contradiction
to the pledge made by President George Bush before the war that
no U.S. forces would stay in the region. The Pentagon also rotates
over 50,000 active-duty and reserve personnel through Latin America
every year.
And the forces permanently deployed abroad are but a small
portion of the U.S. presence. The United States, as Secretary
of Defense William Cohen reported in his 1999 annual report to
Congress, is 'the only nation in the world able to project overwhelming
military power worldwide. 29 He further stated, it is the 'only
country in the world that can organize effective military responses
to large-scale regional threats while "participating in smaller-scale
contingencies and dealing with asymmetric threats like terrorism.
The Defense Secretary says the U.S. is committed to the unilateral
use of military power to do whatever it takes to defend vital
interests. Vital interests, he reports, include not simply defense
of the United States but also preventing the emergence of hostile
regional coalitions or hegemons, ensuring uninhibited access to
key markets, energy supplies and strategic resources, deterring...aggression
against U.S. allies and friends, and ensuring freedom of the seas,
airways and space. The writ extends to every continent and every
ocean.
The annual reports of the various military branches give some
indication of the pace and scope of the U.S. effort to police
the globe. The Secretary of the Army reports that in 1997 the
Army averaged 31,000 active and reserve soldiers deployed in over
70 countries, not counting those in Europe and Asia. In May 1997,
worldwide deployments reached the 100-country mark for the first
time in history.
The Secretary of the Navy reports that each day of the year
more than 50,000 sailors and Marines and over 100 ships are deployed
around the world. Naval forces provide near continuous presence
in four major regions-the Mediterranean Sea, the Arabian Gulf/Indian
Ocean, the Western Pacific and the Caribbean. Naval carrier battle
groups also police sea lanes, with what the Department of Defense
(DOD) calls "operational assertions", challenging other
nation's claims to territorial seas. In FY 1998, these operations
challenged the claims of 27 countries from Albania to Yemen.
The Air Force secretary reports that its total force is designed
to protect people and facilities anywhere in the world. A snapshot
of its actions include continued sorties over Bosnia; Operation
Southern Watch and Northern Watch over Iraq; counter-drug operations
in South America; disaster relief in North Dakota and Minnesota,
Italy and Indonesia; evacuations of civilians in Cambodia, Albania,
and former Zaire; support for West African states; Cuban Flotilla
operations; medical evacuation of the President of Ghana; and
support for Kurdish refugees, as well as 20 exercises with 25
Partnership for Peace countries in Europe, including CENRAZBAT
97, a combined exercise with forces from the United States, Kazakhstan,
Uzbekistan, Kyrgyzstan, Russia, and Turkey
The arms of U.S. training reach far beyond these Air Force
joint exercises. In 199S, the DOD contributed to the training
of over 8,000 foreign military members from about 100 countries
through the International Military Education and Training (IMET)
program.
In addition, more than a dozen intelligence agencies maintain
plumbing in place -a network of agents and assets that spans the
globe, particularly in less developed nations-as well as managing
covert actions large and small focused on varying targets across
the world. Given that the intelligence agencies failed to predict
either the collapse of the Soviet Union or the Indian nuclear
tests, complaints about the quality of their intelligence are
well founded. But our commitment to surveillance is unparalleled
the U.S. spends more on its intelligence budget alone-over $27
billion in 1999-than all but five countries in the world spend
on their entire military establishments.
The U.S. is engaged militarily across the world every day,
in areas most Americans can't find on the map. As former Senator
Richard Russell once said, " [T] he more ability we have
to go someplace to do something, the more likely it is that we
will go there and do it. Americas military currently has both
the ability and the fiat to go anywhere and to do almost anything.
President Clinton came to office at the end of the cold war,
the first baby-boom president, a product of the anti-Vietnam War
sentiment, and a skeptic of U S. intervention. Yet, in his administration
alone, in a time of relative peace and prosperity, U.S. forces
have been engaged in more strikes and interventions-Somalia, Haiti,
Bosnia, Kosovo, Iraq, Afghanistan, and Sudan- than most presidents
would have dared at the height of the cold war. In fact, by March
1999 when NATO air strikes against Yugoslavia began, Clinton had
notified Congress 46 times that he was deploying U.S. troops abroad
to face "imminent hostilities,' as required by the 1973 War
Powers Act. In contrast, President Ford notified Congress that
he was sending troops only four times, Carter once, Reagan fourteen,
and Bush just seven times.
This behavior reflects the post cold war elite conceit-shared
widely among national security managers and within the Pentagon-that
the U.S. is, as Secretary Albright puts it, the "indispensable
nation.
Whatever sentiment existed for giving the Europeans more responsibility
for policing Europe ended with their failure in Bosnia. The U.S.
chose to expand NATO's membership and mission and to reassert
its role as commander of NATO forces rather than dismantle that
structure at the end of the cold war. In Asia, as well, the 1998
face-off against China in the Taiwan Straits was graphic demonstration
of an increasing U.S. commitment to global policing. In Latin
America, the U.S. military has expanded its drug interdiction
roles, revived its arms sales and training programs, lifted the
ban on the sale of high-tech weaponry, and increased its police
aid and training programs. The military complains that it is strained
by the surging tempo of peacekeeping, peace enforcement, drug
interdiction, and other missions, since it considers these as
extra tasks beyond its existing commitment to be ready to fight
two major regional conflicts at once.
Although most Americans oppose the notion of the U.S. patrolling
the world, and tend to be appalled when U.S. soldiers are slain
in conflict in obscure nations, the interventionist temper of
U.S. policy has support across partisan and ideological lines
in establishment political and foreign policy circles. In the
late 1990s, the Republican leadership in Congress insisted on
more money for the military and criticized the Clinton administration
for being too passive toward Iraq, North Korea, China, terrorists,
and drug peddlers. Liberal human rights advocates criticized the
administration for its ignominious withdrawal from Somalia, its
failure to intervene against genocide in Rwanda, and its unwillingness
to move earlier to stop the violence in Bosnia. Secretary Albright
helped advance her career by publicizing her criticism of General
Colin Powell for his caution regarding intervention-his Vietnam-grounded
reluctance to send men into peacekeeping missions of indeterminate
nature and indefinite duration. The gulf between popular and elite
opinion often tempers the tactics of U.S. policy (prompting a
reliance on high-tech weaponry rather than troops and placing
an emphasis on avoiding casualties) but it has no effect on the
tempo of routine, global policing.
THE PRIVATIZATION OF U.S. DIPLOMACY
Given Americas global military presence and economic prowess,
the impoverishment of U.S. public diplomacy and aid budgets has
not greatly eroded Washington's influence around the world. In
essence, the U.S. has privatized its "soft powers."
Corporate communications and computer capacity outstrip that of
the State Department. Private economic data and reporting is often
far more current than U.S. intelligence agency information. U.S.
culture is spread less through cultural exchanges than through
Big Macs and Hollywood movies.
Given the dearth of public assistance, needy countries are
consigned to wooing private investment from private banks, corporations,
and speculators. Most poor countries have meager natural resources,
small internal markets, inadequately educated populations, rudimentary
infrastructures, and suffer from political instability-limiting
their commercial attractiveness. For the handful of developing
countries that can entice external private investment, private
capital flows-and private debts-far exceed pubic flows. But burdened
by debt and policed by the IMF and the World Bank, they must focus
on exports to service their debts. U.S. public economic assistance
merely reinforces the model. Thus, the great bulk of U.S.-backed
resources are disbursed not in grants through the public assistance
budget but in loans via the IMF (and to a lesser extent the World
Bank and other international banks) at times of crisis, to reassure
foreign investors by insuring that foreign debts are repaid. Washington's
assistance budget is dominated not by AID but by what has been
labeled the Wall Street -Treasury Department complex.
With limited resources, bilateral assistance programs have
increasingly either been subordinated to security concerns or
provided as a carrot to spur export-led development models. As
Benjamin Nelson of the General Accounting Office noted in the
careful language of official reports, "AID appears to have
established as a priority the importance of influencing domestic
policy in the recipient countries. U.S. foreign aid is concerned
less with serving basic needs in desperate countries than with
cheerleading the market-based reforms that we export.
The starvation of U.S. diplomatic and aid budgets contributes
to and reflects the U.S. default after the cold war regarding
the development of innovative public aid programs and strong,
multilateral institutions. Any hope that the United Nations might
develop into a truly multinational peacekeeping force has been
frustrated. Instead UN activities have been cribbed by the U.S.
failure to pay its debts.
The harsh contrast between the treatment accorded Russia after
the cold war and that provided Germany, Japan, and the European
allies after World War II reflects the starvation of public aid
commitments. Whereas Germany received assistance to rebuild, leeway
to control its markets, and cash to revive employment, Russia-facing
a far greater challenge-was bludgeoned into opening its markets
and making the ruble convertible immediately. Assistance was limited,
contingent, and parsimonious.
Russia was treated more like Germany after World War I than
Germany after World War II, and the devastating aftereffects reflect
this treatment. The U.S. devoted about 2% of its annual GDP to
the post-World War II Marshall Plan-far more than the entire U.S.
aid and international affairs budget now consumes.
Similarly, both Grenada and Haiti-the two microstates where
the U.S. directly intervened to change regimes-found that Washington
was afterwards unwilling to supply the kind of public assistance
needed to foster equitable development. Given Washington's indifference,
hopes for increased U.S. private investment evaporated. Honduras,
El Salvador, Costa Rica, and Nicaragua were virtually abandoned
once the frenzied focus of the cold war passed. Even after the
region was wracked in 1998 by hurricane Mitch in one of the worst
natural disasters of the century, U.S. assistance was slow and
limited. The president traveled through Africa to celebrate the
emerging democracies there, but he could offer them little more
than free advice: attract foreign investors. No wonder his agenda
received a public rebuke from then-South African President Nelson
Mandela, the one leader of sufficient global stature to speak
candidly.
The emphasis on deficit reduction and the continued high levels
of military spending have forestalled any major progress on the
domestic investment deficit.
As the Asian financial crisis spread to Russia, Brazil, and
elsewhere, the limits and perils of this strategy became clear.
"America has wanted global leadership on the cheap, Harvard
economist Jeffrey Sachs, an architect of the U.S. policy in Russia
argues.
It was desperate for the developing world and post-communist
economies to buy into its vision, in which globalization, private
capital flows and Washington advice would overcome the obstacles
to shared prosperity, so that pressures on the rich countries
to do more for the poorer countries could be contained. In this
way, the United States would not have to shell out real money
to help the peaceful reconstruction of Russia or to ameliorate
the desperate impoverishment and illness in Africa.
Sachs is surely right about the limits on U.S. aid. With an
expanded budget for international affairs and aid, the U.S. might
lead the way toward bolstering the UN and international peacekeeping
capacity, enlisting the industrial nations in providing poor nations
with debt relief, funding programs to eradicate unnecessary disease
and hunger, redressing global warming, and relieving Russia of
its misery. The effects would be both sweeping and vital in building
a more prosperous and peaceful world.
But Sachs is wrong about the money. The U S. is shelling out
real money on foreign affairs-but it is being spent on military
activity, not on diplomacy, institution building, or assistance.
Again the contrast to the Marshall Plan and the end of World War
II is instructive. Then, the U.S. demobilized and cut the military
budget by 90% in three years, freeing up resources for a major
commitment to the Marshall Plan. Ten years after the end of the
cold war, the U.S. budget remains close to its average cold war
level.
DOMESTIC INVESTMENT DEFICITS
The cold war ended with the U.S. running massive deficits,
largely the result of the lethal Reagan combination of cutting
taxes while doubling the military budget during peacetime, from
1981 to 1984. With the collapse of the Soviet Union, there was
widespread hope and a belief that reduced U.S. military spending
would enable America to begin to make long-deferred domestic investments
and to bring the budget into balance.
Deficit reduction took first priority, and the total discretionary
budget-all of government except entitlements and interest on the
debt-has been reduced both in real dollars and as a percentage
of GDP since the early 1 980s. But the emphasis on deficit reduction
and the continued high levels of military spending have forestalled
any major progress on the domestic investment deficit.
Most economists agree that public investment-spending on education
and training, physical infrastructure from roads and rail lines
to sewers, and nonmilitary research and development-is vital to
economic growth. But over the past two decades, federal support
for virtually all categories of public investment has declined.
Measured as a share of total economic output (GNP), federal spending
on public investment has fallen by more than a third and is slated
to shrink another third over the next ten years.
Moreover, social justice is a dream deferred, even in the
worlds richest nation. One in five children live in poverty in
the U S., the worst child poverty level of all the industrialized
nations. Four million U.S. children endure hunger or food shortages
on a daily basis. Clearly, food stamps do not cover all needy
children. One-fourth of mothers and infants eligible for nutrition
and health care are not covered. Head Start, the preschool program
for children from low- and moderate-income families, is universally
hailed as a success. Yet, despite the promises of both the Bush
and Clinton administrations, only one in three eligible children
is enrolled in the program.'
The General Accounting Office (GAO) estimates that one-third
of U s. schools, serving some 14 million students, are in need
of substantial repair or replacement. The GAO estimates that the
cost of bringing schools up to code would total $112 billion-ironically
the same figure that President Clinton announced he would add
to the $1.7 trillion military spending planned in 1998 for the
next six years.
Economist Dean Baker, of the Economic Policy Institute, estimates
the shortfall in core public investment areas at about $66 to
$95 billion a year. That sum would enable the government to provide
Pell grants for university education to all eligible college students
(only about half of the low-income students that qualify are currently
able to receive grants). It would match U.S. investment in training
with the average level that the other industrialized nations spend
as a percentage of their Gross Domestic Product.
It would extend Head Start to all eligible students and provide
federal education aid to qualified elementary students. It would
provide funds to improve U.S. roads and mass transit in conjunction
with a growing economy. The investments the Environmental Protection
Agency says are needed in sewage and drinking water treatment
could be afforded.
Where would the money come from? If the United States devoted
the same portion of its GDP to the military as the other NATO
allies do (on average) it would free up about $100 billion a year
to invest at home. And America would still retain, by far, an
unrivaled military force. Clearly, investing $100 billion each
year in education and training, research and development, infrastructure,
alleviating childhood poverty, and eliminating hunger and family
homelessness would produce remarkable benefits in both economic
growth and social decency
AN ACQUIESCENT PUBLIC
America is a rich country. If taxes or deficits were raised,
it could afford to police the world, sustain an active foreign
assistance program, and invest in vital social and economic needs
at home. But no leader of either political party has made the
case for doing this. Instead, U.S. Ieaders are forced to make
choices about priorities. And thus far they have chosen to sustain
a bloated military at the cost of starving both domestic infrastructure
and foreign assistance and diplomacy.
Many in the national security establishment blame these skewed
priorities on the provinciality and lurking isolationism of the
American people. In reality, opinion research suggests almost
the reverse. Most Americans are both more skeptical of global
intervention and more supportive of the United Nations than are
the foreign policy elites. U.S. citizens prefer multilateral over
unilateral action; they are uncomfortable with the U.S. policing
the world. Given the choice, the American people prefer aid to
the poorest of the world s poor over the high levels of assistance-mainly
military-that flow to Israel and Egypt.
Most Americans have confidence in the military as an institution,
particularly after the victory in the Gulf War. They want the
U.S. to have a strong military. According to a 1995 poll by the
Center for the Study of Policy Attitudes at the University of
Maryland, almost three-fourths of the country agrees that "because
the U.S. has global interests, i. is important for the U.S. to
maintain a large military with the capacity to project its forces
around the world.
But there is no driving demand for more spending on the military.
Indeed, when people are asked what spending should be devoted
to, military comes near the bottom of the list. In a November
1998 bipartisan poll, voters wanted to see more government investment
in education, health care, job training, and Social Security while
de-emphasizing military spending."
As Americans gain more information about federal spending-data
on how much other nations spend on their militaries and details
about the level of congressional pork barrel spending-the majorities
supporting cuts in defense spending will grow larger. Researcher
Steven Kull of the Center for the Study of Policy Attitudes found,
for example, that when told how federal spending was allocated,
80% of those polled favored reducing the military budget, urging
cuts averaging a whopping 42% of current spending.
The frustration for all reformers is that most Americans are
not prepared to stand up strongly on these issues, deferring to
the judgments made in Washington. While caring about domestic
concerns, such as violence and health care, the public does not
perceive the trade-off between military spending and domestic
investment. Only dramatic events and concerted effort-like the
Americans held hostage in Iran or the collapse of the Soviet Union
and the end of the cold war-are sufficient to move majorities
to demand either more or less spending for foreign affairs.
Given an acquiescent public, elite opinion and the military-industrial-intellectual
complex wield enormous clout. Bureaucratic inertia-reinforced
by the built-in lobby of military forces, veterans, contractors,
base-dependent communities, and conservative legislators-renders
either reform of the Pentagon or dramatic reductions in military
spending very difficult. The powerful military lobby makes it
easier to increase spending in the wake of an international crisis
such as the Kosovo war than to decrease it in the absence of any
serious threat.
THE ELITE DEFAULT
At the end of the 1 980s, with the breakup of the Soviet Union,
a broad elite consensus developed for a fundamental redefinition
of U.S. security, accompanied by dramatic cuts in military spending.
In. 1991, the Carnegie Endowment for International Peace convened
a select body-including conservatives like former Defense Secretary
James Schlesinger, Reagan defense planner Richard Perle, former
Joint Chiefs Chair Admiral William Crowe, and others. They endorsed
a document calling for a 'fundamental overhaul" of the "present
system, with greater emphasis on domestic renewal.
They called for further cuts in military spending to pay for
domestic reinvestment in education and training, an overhaul of
the international system of trade and finance, and a renewed "commitment
to help poor nations and to invest in the future of the former
Communist countries." In short, the Carnegie group urged
the U.S. to lead an effort to cut global defense expenditures
to half of their 1988 peak.
When President Clinton became the first president elected
after the cold war, he had a rare opportunity for proposing that
a change in priorities is vital to our national security. Having
campaigned on the economy, stupid, he was in a perfect position
to explain to the country that the nature of our true security
issues had changed with the end of the cold war, that economic
challenges pose greater concern than military threats, and that
political and diplomatic arrangements require more attention than
military alliances.
Clinton's central task was to make our budget priorities fit
the new realities. But burdened by questions about his avoidance
of the draft in Vietnam, and mortified by the clamor around gays
in the military, the president wanted to avoid a major debate
about national security and military spending. So Defense Secretary
Les Aspin's misnamed 1993 Bottom Up Review, designed to project
U.S. military needs and strategy, reaffirmed the basic outlines
of the military structure developed by George Bush-when the Soviet
Union was still intact. The two-war strategy was ratified as well
as the U.S. commitment to global policing. Overlapping roles and
missions were not challenged. Baroque weapons designed for the
cold war arms race went forward anyway With the approval of General
Colin Powell, chair of the Joint Chiefs, a small amount
was pared from the projected Bush defense budgets, but that
was it. Since that time, elite opinion has shifted, and the opportunity
for scaling back the military has vanished. Conservatives and
the Pentagon began lobbying for more military spending. Support
for any further reductions eroded among the national security
elite, editors, and columnists.
As a result, the current debate on global priorities is remarkably
circumscribed. Secretary of State Albright and the administration
have tried to make the case for greater spending on international
affairs. Yet, what is notable about their quest is its modesty,
not its ambition; liberal establishment voices are content with
pleading plaintively that international spending should be sustained
at current levels. In 1997, for instance, the Brookings Institution
and the Council on Foreign Relations convened another prestigious
commission to report on "Financing America's Leadership,'
making the case for greater investment in diplomacy and foreign
assistance. The task force called for an incremental increase
of funding for international affairs of one-tenth of one percent
of the federal budget, with spending rising from $19 to $21 billion
per year.
At the same time, the consensus both inside and outside the
administration has resolved that military spending must go up,
not down. The president has signed off on a commitment that spending
on new weapons will be increased to $60 billion a year by 2002
up from $49 in FY 1999. The U.S. will spend more money on research,
development, and purchase of new weapons each year than any other
country spends on its entire military. The Republican Congress
has invited the Joint Chiefs to lay out their wish list, with
a growing consensus that spending must rise by $15 to $25 billion
per year over the previously projected increases of the next several
years. Likewise, the president has called for adding $1 12 billion
over six years.
COMMON SENSE
The current course ought to be vulnerable to public criticism,
simply because Pentagon spending levels are ridiculously high.
The U.S. could save $100 billion a year and still maintain the
strongest military in the world. Experts like former Reagan defense
planner Lawrence Korb suggest the Pentagon could save $40 billion
a year and still maintain its current posture of being prepared
to fight two regional conflicts at once. Moreover, the Pentagon
will continue to provide reformers with scandals about weapons
that don't work, mismanaged finances, and contractors that are
ripping off taxpayers. And the Pentagon will continue to place
American soldiers in obscure corners of the world, with little
understanding or support among the broader U.S. public.
With currently projected budget surpluses certain to be consumed
by a combination of bolstering Social Security and Medicare and
cutting taxes, discretionary spending will remain under a tight
lid. In a world of constraints, the large and expanding Pentagon
budget should logically generate opposition. Environmentalists
concerned about sustainable development, global warming, and the
funding of alternative energy in poor nations find the Pentagon
budget an obstacle to their ability to obtain funding. Human rights
and development groups concerned with global advancement, health
care, and conflict prevention will compete with the Pentagon for
scarce funds. Domestic groups-teachers, parents, advocates of
children, the poor, the disabled- will find the rising military
budget a threat to their ability to gain investments vital to
the future health of U.S. society. A president could make a compelling
case to the American people for new priorities, but such leadership
is unlikely The military-industrial complex that Eisenhower warned
against is powerful and entrenched. A bipartisan conservative
congressional bloc seeks more, not less, military spending.
Thus, any movement to change priorities will have to come
from outside Washington. Some efforts are now under way to at
least begin the debate. Groups like Peace Action have started
to put greater emphasis on Pentagon spending. Ben Cohen, the founder
of Ben and Jerry's Ice Cream, has gathered hundreds of business
executives into a group entitled Business Leaders for Sensible
Priorities and has launched a multi-year campaign to arouse citizens
to the opportunity to change priorities. Global campaigns for
debt relief, disarmament, and curbing arms trafficking have begun
to gain some
momentum. The remarkable citizen victory culminating in a
land mine treaty despite the initial opposition of virtually every
national government and military shows the potential for independent
action.
But as the century ends, the opportunity posed by the end
of the cold war seems to be slipping away. The Clinton administration
has given a bipartisan cast to an international policy inevitably
skewed toward military engagement. Other priorities-at home and
abroad-remain starved of funds, attention, and momentum. In 1992,
the authors of the Carnegie Endowment report concluded that the
end of the cold war was a "rare opportunity, and above all,
a time to change the way we think about the world and the way
we conduct our affairs at home and abroad. 49 Tragically, that
challenge so c]early posed seven years ago, has not yet been fulfilled.
Robert L. Borosage is Co-Director of the Campaign for America's
Future and most recently directed the organization s Straight
Talk initiative. He writes widely on political, economic, and
national security issues.
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