“Governor Romney then also wants to spend $2 trillion on additional military programs, even though the military’s not asking for them.”
— President Obama, in the second presidential debate, Oct. 16, 2012
The assertion that Mitt Romney wants to boost defense spending by $2 trillion over 10 years, even though the military does not want it, has been a key claim by President Obama in presidential debates and Vice President Biden in the vice presidential debate.
It is such a large sum that it is probably difficult for most readers to grasp. But, as we often warn about big budget numbers, it is also a figure subject to so many variables that it should be treated with skepticism. It is certainly not a number that the Romney campaign accepts, though for some reason Romney has not tried hard to rebut it in the debates. (GOP vice presidential nominee Paul Ryan disputed the number in his debate with Biden.)
There are two parts to this statement we will examine — the $2 trillion number and the claim that the military has not asked for this budget. We obviously take no position on the proper size of the U.S. military or the right defense policy. We just want to explain the numbers. Warning: It’s complicated.
The $2 trillion figure stems from a statement in Romney’s National Security White Paper:
“Romney will begin by reversing Obama-era defense cuts and return to the budget baseline established by Secretary Robert Gates in 2010, with the goal of setting core defense spending — meaning funds devoted to the fundamental military components of personnel, operations and maintenance, procurement, and research and development — at a floor of 4 percent of GDP [gross domestic product].”
Currently, including war spending, the United States is spending about 4.3 percent of GDP on defense. As war spending decreases, Romney would like to transition those funds to the military’s base budget.
In interviews, Romney campaign officials emphasized that four percent of GDP was a goal, not likely to be reached until the end of a second Romney term, or 2020. That makes a difference in terms of the budget numbers, because most of the $2 trillion comes in the later years. (Some $700 billion of the $2 trillion comes in years 2021 and 2022, after Romney would no longer be president.)
The Center on Budget and Policy Priorities, for instance, assumed that Romney would hit the 4 percent target in 2016. Travis Sharp, a defense analyst affiliated with the Center for a New American Security who the Obama campaign cites as a source, assumed the target would be hit in 2018. Sharp compared the numbers against Obama’s fiscal 2013 budget to reach his estimate.
From the Romney camp’s perspective, the more relevant comparison is the Pentagon’s fiscal 2011 plan, before Obama ordered nearly $500 billion in defense cuts. That’s because Romney wants to return to that spending path, which officials argue the military wanted before Obama decided to reduce defense spending.
Another factor to consider is the impact of inflation over 10 years. We have previously noted that Obama’s defense budget over 10 years is virtually flat, when inflation is taken into account, even though it grows from $525 billion in 2013 to $634 billion in 2022. In inflation-adjusted dollars, 2022 is just slightly larger than the budget for 2012.
Here’s our favorite example of the impact of inflation: Defense spending technically remained constant from 1987 to 1994 — $282 billion a year. But look what happened to the military during those seven years: The number of troops fell from 2.2 million to 1.6 million, the number of Army divisions was slashed from 28 to 20, Air Force fighter wings dropped from 36 to 22 and Navy fighting ships declined from 568 to 387. That’s because inflation over time ate away at the value of those dollars. By most measures, defense spending was trimmed in that period, though in theory, not a penny was cut.
So that also puts that $2 trillion figure into perspective. Still, from a budget standpoint, any increase in defense spending must be met with decreases in domestic spending, or else the deficit will rise.
Finally, it is important to remember that because the calculations are based on a percentage of GDP, the outcome depends on predictions of the size of the nation’s economy far in the future. Sharp and other analysts rely on the forecasts of the Congressional Budget Office, but even so, the numbers are not etched in stone.
By the Romney campaign’s accounting, the difference over 10 years between Obama’s 2013 budget and Romney’s budget would be a maximum of $1.57 trillion, or $1.35 trillion in constant 2005 dollars. But the comparison to Obama’s 2011 budget would be $988 billion, or $790 billion in inflation-adjusted dollars.
Sharp believes the gap between his calculation and the Romney campaign stems from subtracting savings from reduced war spending.
“I don’t think war costs are the appropriate baseline because I don’t think Romney’s plan should get credit for not spending money that nobody plans to spend anyway,” Sharp said about the Romney campaign’s calculation. “Second, if Romney’s plan gets credit for war savings, then so should Obama’s because the candidates basically agree on what to do.” He also said it was more appropriate to measure the changes from Obama’s current budget, not his higher, earlier budgets.
Romney campaign officials note that no budget containing cuts from the Budget Control Act has been taken up by the Senate or signed by the president. From their perspective, then, stopping defense cuts is not the same as increasing spending. Moreover, they believe it is reasonable to convert money now allocated to wars into funds for a top-notch military down the road.
This brings us to the other part of Obama’s statement—that Romney wants to spend money on “additional military programs, even though the military’s not asking for them.”
When Biden tried to make this point in his debate with Ryan, the moderator, ABC’s Martha Raddatz, interjected that the military “answers to a civilian leader.” In other words, a president issues orders and the generals salute.
In the Bush administration, for instance, two men who later worked for Obama, Defense Secretary Robert Gates and the Chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, appeared to embrace the idea of keeping defense spending at 4 percent of GDP.
“Consider that, at about 4 percent of America’s gross domestic product, the amount of money the United States expects to spend on defense this year is actually slightly a smaller percentage of GDP than when I left the government 14 years ago, following the end of the Cold War — and a significantly smaller percentage of GDP than during previous times of war, such as Vietnam and Korea.”
— Gates, March 3, 2007
“We’re hovering I think right now at just under 4 percent of gross national product, of G.N.P., as the defense budget. And I would see that in the future as an absolute floor.... And I’m not arguing that it be as high as it was in Vietnam or as high as it was in World War II, but [so] that we can meet the challenges that we see, that I see, in the future [defense spending] at under 4 percent doesn’t make any sense to me.”
— Mullen, Oct. 22, 2007
Mullen continued to make that case as late as 2011:
“At about 4.5% of GDP, the return on U.S. defense spending has been immense and historic…if we are to continue to execute the missions set out by our strategy, we must recognize that returning from war and resetting the force is costly and will require several years of continued investment.”
— Mullen, prepared testimony, Feb. 16, 2011.
Of course, the current military leadership says the reduced Obama budget is just fine.
“This is a real strategy. It represents real choices. And I’m here today to assure you that it has real buy-in among our senior military and civilian leadership. This is not the strategy of a military in decline. This is a strategy — and a joint force — on which the nation can depend.”
— Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, Jan. 5, 2012
Note that in the debate, Obama carefully used the word “ask.” There may well be a difference between what the military asks for—and what it wants.
The Pinocchio Test
To sum up, the $2 trillion figure is not adjusted for inflation, is based on predictions of the size of the economy 10 years from now and makes assumptions about Romney’s policy that his campaign says are not correct.
Still, Romney is proposing a significant boost in defense spending. By the campaign’s own account, the budget increase is as high as nearly $1.6 trillion over the president’s current path — or at a minimum almost $1 trillion more than Obama’s budget two years ago.
We puzzled over the Pinocchio count here. It is important to remember that the $2 trillion is an outside estimate, not a Romney campaign figure, and that it is subject to all sorts of caveats. But the Romney campaign has not be especially transparent about its overall budget plan either. In any case, Obama might reasonably argue the defense increase is “nearly $2 trillion,” not adjusting for inflation, compared to his current budget.
We will leave it to readers to decide if the military would want budgets higher than currently ordered by the Obama administration. The president’s phrasing is certainly carefully parsed, but we will lay that aside and just focus on the question of the budget increase, which seems worthy of One Pinocchio.
(UPDATE: Peter Feaver on the ForeignPolicy.com Web site makes an interesting argument that we were too gentle here, because, he says, “in order to reach that [Obama] budget goal, the department had to cut many programs that just the year before they had asked for and defended as necessary for national security.”)
FURTHER UPDATE (Oct. 25): Upon reflection and some additional reporting, we are changing our Pinocchio rating to Two. While we originally left it to readers to decide if the military wanted higher budgets, the points made by Feaver in his FP column appear persuasive. Despite the president’s very careful parsing, it is fairly clear that the military would have wanted more funds in 2012--as they had the year before--before officials were ordered to cut the budget.
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