So much for the peace dividend: Pentagon is winning the battle for a $400bn budget

By: The Guardian | Date: May 22, 2003

Despite huge military inefficiency, Republicans return US defence spending to cold war levels to buy cold war weaponry

The biggest US defence budget since the cold war is being rammed through Congress by the Republican majority this week despite persistent questions over waste and the Pentagon's own admission that it cannot account for more than a trillion dollars.

The 2004 military spending request of over $400bn (£244bn) does not include the occupation of Iraq, which will be covered by a later, supplemental bill of up to $35bn. Very little of the money will go towards the war on terrorism or homeland security, which are principally paid for by other agencies like the FBI and the CIA.

The threat of more terrorist attacks has created public and congressional support for a ballooning defence budget, but the lion's share of the money is being spent on traditional weapons such as the jet fighters and submarines originally designed to fight the Soviet Union.

The last time the US spent this much on defence was in 1991. In fact the current budget is bigger in real terms than the average during the cold war, when US force levels were considerably higher.

The 2004 budget also represents a bonanza for big military contractors, some of whom had faced significant losses from the Bush administration's initial plans to axe some cold war-era programmes to pay for "transformational" new technology like unmanned drones, to make the US military more agile.

After intense lobbying from the defence industry and its allies in the Pentagon and Congress, known as the Iron Triangle, the new spending bill represents a decision to pay for both the old and the new.

"There's a lot of stuff for everybody," Christopher Helman, a military analyst at the Centre for Arms Control and Non-Proliferation, said. "A couple of years ago we were looking at a situation which would force some hard choices. But this is a no-choice budget."

Only $25bn of the $400bn could be described as "transformational", aimed at modernising, he said, and of that $10bn will be spent on the controversial national missile defence "star wars" scheme.

Defence contractors have been celebrating the budget's generosity. Ronald Sugar, the chief executive of Los Angeles-based defence company Northrup Grumman, recently said he saw "very significant growth in sales and earnings" as a result of the hikes in budgets.

The budget is being accompanied by a Pentagon bill entitled "Defence Transformation for the 21st Century" which would significantly reduce congressional oversight on military spending, by cutting scores of cost-benefit reports the defence department supplies to the legislature.

Some Democrats in Congress have vigorously objected to the bill, at a time of unbridled Pentagon waste. In an open letter to leaders of both parties, they said: "To date, no major part of the department of defence has passed the test of an independent audit."

The Pentagon's own inspector general recently admitted that the department could not account for more than a trillion dollars of past spending. A congressional investigation reported that inventory management in the army was so weak it had lost track of 56 airplanes, 32 tanks, and 36 missile launchers.

"There's no accountability," said Danielle Brian, head of the Washington budget watchdog, Project on Government Oversight. "Any other agency would be closed down but the Pentagon is Teflon. Any challenge to the Pentagon is seen as unpatriotic."

The budget and the transformation bill is being voted through the chain of congressional committees by disciplined Republican majorities. Most Democrats have been reluctant to delay the process for fear of appearing soft on defence.

The share of national income that the US spends on defence has risen steadily from 3.0% to 3.5% of GDP since President Bush took office. It is also increasingly displacing expenditure on public services like schools and hospitals, which are facing cuts across the country.

The Pentagon budget currently accounts for half of all the US government's discretionary expenditure, and is nearly twice the defence spending of the next 15 of the world's military powers combined.

Since the end of the cold war, the US air force has faced no serious competition to its main warplanes, the F-15 Strike Eagle and the F-16 Fighting Falcon. Moreover, America's last three opponents, al-Qaida, the Taliban and Iraq have had no serious air force. Nevertheless the 2004 budget includes $4bn for a new fighter-bomber, the F-22, $3bn for a new navy fighter, the Super Hornet and $4bn for research on an experimental Joint Strike Fighter.

The F-22, made by Lockheed Martin and Boeing, has been dogged by technical problems and huge cost over-runs . Each plane is now priced at $257m, more than $50m above estimates only a few years ago. The marines' V-22 Osprey, an experimental tilt-rotor plane made by Boeing, also gets a further $1bn, despite a series of fatal crashes and delays that have put the project 10 years behind schedule.

The 'something for everyone' budget suggests that the Pentagon's close ties with the defence industry have outweighed the reforming zeal the new administration brought to office. As a recent New York Times article pointed out, James Roche, the outgoing air force secretary (now taking over the army) is a former president of Northrop Grumman; his assistant secretary Nelson Gibbs is another Northrop alumni. An under secretary at the air force, Peter Teets, was chief operating officer at Lockheed while Michael Wynne, a defence department under secretary, was a former senior vice-president at General Dynamics.

The defence secretary himself, Donald Rumsfeld, is an ex-director of a General Dynamics subsidiary and Paul Wolfowitz, deputy defence secretary, acted as a consultant to Northrop.