I have been startled by the Pentagon's silence over the Gramm/Rudman legislation to force a balanced budget by 1991. Repeated efforts to get you or someone else from the Defense Department to testify before the House Armed Services Committee have met with refusals. Apparently, since the White House has given its imprimatur to Gramm/Rudman, no one in the Pentagon wants to speak up on how Gramm/Rudman could foul up defense. Although I respect this tremendous loyalty to your commander in chief, I question whether silence demonstrates good stewardship by the political leadership in the Pentagon.
Let me divide the issue into two parts. The first part is the argument I would expect you to be making. The second part is a compendium of facts that disturbs me greatly and that I think ought to disturb all citizens, regardless of ideology.
As you know, Gramm/Rudman establishes deficit ceilings, starting with $180 billion in 1986. In each successive year, the ceiling is reduced by $36 billion until we reach zero -- that is, a balanced budget -- in 1991. To enforce the ceiling, the legislation orders cuts if the deficit is expected to exceed the ceiling.
The first cuts would be non-Social Security cost-of-living allowances. After that, the remaining cuts would be determined by a formula. That formula is skewed to impose disproportionate cuts on defense. Defense makes up less than one-third of total federal spending. But if Gramm-Rudman is enacted and the formula kicks in for fiscal year 1986, the formula ensures that half the cuts will come out of defense -- at the absolute minimum. The larger the amount by which the deficit exceeds the $180 billion ceiling, the larger will be the slice cut from defense. The defense portion could rise to almost two-thirds, or double the share one would expect defense to contribute.
One reason for this skew is the decision to exclude such programs as Social Security from any cutbacks at all. But the hit on defense is further ballooned by the decision to include existing defense contracts in the pool of funding to be cut, while excluding most existing contracts for domestic programs.
Many liberals can and will argue that this is a fair distribution of cuts. In truth, this formula will save many domestic programs from meat-ax cuts, though many will still be badly chewed up. But what startles me is the Defense Department's silence in the face of this formula. For years, I have been hearing from you about the crucial significance of a major defense buildup. In recent months, we've been told how devastating it would be if defense budgets were held to only 3 percent annual growth in the next five years. Now, everyone is talking about a proposal that would not only force huge cuts in defense, but disproportionate cuts as well, and the word from the Pentagon is . . . silence.
I would observe, Cap, that you are painting yourself into a corner from which it will be almost impossible to argue for further defense increases. If the administration is going to worship at the altar of Gramm/Rudman, it is going to have to kiss the defense buildup goodbye. In fact, with Gramm/Rudman in place, you are going to preside over the largest peacetime defense cutback in history.
In your only public comment on Gramm/Rudman to date, you responded to a direct question from Human Events as to whether Gramm/Rudman could "impinge on defense outlays" by acknowledging, "Yes, it could" -- but then promptly shifted into neutral gear. You said the president "would not feel required to make reductions in defense." What are you guys smoking over there? Is anyone over there reading this document? Such a statement makes sense only if the president intends to violate his oath of office and ignore the Gramm/Rudman statute.
There are other, less ideological problems with Gramm/Rudman that are causing me to lose sleep. If I were to try to sum it up in one sentence without resort to unnecessary, emotion-laden terms, I would have to say that it is just about the dumbest piece of legislation I have seen in my 15 years on Capitol Hill. Certainly, it is the dumbest piece of legislation to be given serious consideration by Congress.
There is a fundamental flaw in Gramm/Rudman that results from the conflicting concerns of Congress. Congress wants the deficit cut, but it doesn't want to give the president the opportunity to reshape national priorities -- since that would effectively rewrite the Constitution by removing the legislative branch from the priority-setting process.
To make budget cuts rationally, you want to make them in lower-priority programs -- and determining priorities is part of the political process. If you give the president the authority to choose where the ax will fall, you let him set priorities -- and you give him the option of taking punitive action, like closing military bases in the districts of congressmen who don't support his programs.
To forestall such problems, Gramm/Rudman has laced together a legislative straitjacket that denies the president any priority-setting authority and instead imposes a strict formula for sequestering funds. It's ironic: in order to make sure the president cannot make cuts we dislike, Congress is prepared blindly to put in place a formula that forces cuts nobody wants.
Perhaps most astounding is that a 10 percent cut, which is quite possible in the fourth year of Gramm/Rudman, could force the firing of almost one- third of all those in uniform. Yes, one-third: 674,000 of the 2,150,000 persons in uniform. That's the equivalent of eliminating the Marine Corps -- three times.
Will someone over there please read the fine print in Gramm/Rudman? The 10 percent cut would be imposed on each line item. The payroll for each service is a line item. Gramm/Rudman does not allow cuts in salary -- so you have to lay people off. But a 10 percent cut in funds doesn't equate to a 10 percent cut in people. First, the firings won't take place until a month into the fiscal year. Then you have to pay to move these people and their furnishings home. And you have to pay them accrued leave. And there's a provision that prevents you from touching much of the money that has to be paid into the retirement fund. The synergism of this small print forces you to reduce the armed forces by almost a third to meet a 10 percent spending reduction. Ridiculous?
The straitjacket approach means that cuts have to be made even when they are plain bad management -- even if they are patently ridiculous. You can see that in the weapons area, where Gramm/Rudman mandates that you shave equal amounts off every weapon system -- not 20 percent off a low-priority program and none off a higer-priority program.
For example, let's say that Weapon A has been in production for several years and Weapon B is due to start production this year. The logical decision in a resource cutback is generally to take the entire cut out of Weapon B -- by simply not starting production this year -- and leave Weapon A untouched. But the Gramm/Rudman language forces you to produce both weapons and, probably, to produce both at uneconomic rates. You could well end up cutting the budgets for Weapon A and B by 10 percent, but cutting the numbers produced by 20 percent.
Take the example of the E-6A TACAMO aircraft. There are two of them in this year's budget for $402 million. But because of all the overhead costs, one aircraft would cost only about $40 million less than two. Thus, a cut of 10 percent in funding would cut protion by 50 percent.
Another example is the infamous DIVAD air defense weapon, which was recently killed by the Pentagon as a flop. Under the Gramm/Rudman formula, an across-the- board cut of 10 percent would mean the Pentagon would only get credit for 10 percent of the savings from killing DIVAD. In other words, there would be no incentive to kill it. We couldn't even use the drastic budget-cutting formula of Gramm/Rudman to get rid of dogs like DIVAD.
Look at construction projects. The legislation says the president must make equal cuts out of each program listed in Appropriations Committee reports. Each construction project is listed in those reports. If we have funded 100 dams and must cut 10 percent, we can't just build 90 dams, we have to build 90 percent of each of the 100 dams. For military construction, we list individual buildings. Gramm/Rudman forbids that any project be killed. This presumably means that we will have to eliminate pieces of buildings -- skip the top floor, don't put in air-conditioning, cut the number of restrooms. It's anyone's guess how it will be done. One possibility that worries me is that cheaper materials will be used so that the structures will simply deteriorate more quickly and we will face huge maintenance bills in the out-years.
Another anomaly is in shipbuilding. If Gramm/Rudman were to be triggered in fiscal year 1986, the minimum amount of spending that would have to be cut from each program would come to 2.6 percent. But to stop that amount of spending in the shipbuilding account -- where appropriated funds spend out slowly -- would require the president to sequester 51 percent of the new budget authority for each ship program. This is budget arcana that is difficult to understand even if you are born with a green eyeshade. But the effect is easy to comprehend. Many FY '86 programs provide for only one ship. If you cut budget authority in a one-ship program by 51 percent, you can't build that ship. Applying that to the 26-ship plan in the 1986 budget, you would only be able to build 12 ships -- at most.
One of the strangest impacts of Gramm/Rudman would fall on the M-1 tank. The legislative formula, run through all its permutations, would require that at least 112 percent of the 1986 funds authorized for the tank be sequestered if Gramm/Rudman were to kick in. That is admittedly an extreme case. As near as can be calculated, out of the few thousand line items in the defense budget, at least 53 would require the sequestration of more than 100 percent of the 1986 funds appropriated.
In outlining how Emperor Gramm/Rudman has no clothes, I have tried to be as precise as possible. There are many ways in which this legislation might be even more damaging than I have outlined, but the vagueness of the language prevents an analysis of the impact. Even the sponsors of some of the provisions are often unclear. One amendment to Gramm/Rudman that passed the Senate had Lawton Chiles of Florida declaring to the Senate three times, "There is no mechanism that would allow the president to cut Medicaid or AFDC (Aid to Families with Dependent Children)." Only minutes later, fellow sponsor Pete Domenici of New Mexico told the Senate, ''They (Medicaid and AFDC) may be sequestered." There is an imprecision here that looks all too much like we are spinning a wheel of misfortune on some television game show.
The litany of ridiculous effects that I have outlined begs a question: Why is no one speaking up for defense? And in particular, what about you? In the Nixon administration, you were called Cap the Knife. Later in the Pentagon, it was Cap the Ladle. If Gramm/Rudman goes into effect with your acquiesence, it will be Cap the Meat Ax.