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Defense Contractors Are Raking It In

Despite all of the hype coming from defense contractors  and others that Pentagon spending reductions would devastate the industry and lead to mass lay-offs, economic ruin and the collapse of our fighting forces, these companies managed to take in a pretty penny this last quarter.

Both Lockheed Martin (maker of the $1.5 trillion F-35 debacle) and Northrop Grumman posted huge profits, with Northrop’s shares rising 56%. Even F-22 Crashcompanies that didn’t do as well posted profit increases over last year – before spending reductions went into effect.

Though defense contractors are doing just fine financially (thank you very much), the CEOs plan to “up the volume” on efforts to pad their bank accounts the Pentagon’s budget with new tales of doom and gloom.  

But it’s not just defense contractors sounding the alarm; the Joint Chiefs of Staff are also making the case for increased Pentagon spending, going so far as to understate their own troops’ combat-readiness. And of course, the defense hawks in Congress are more than happy to go along for the ride – even suggesting that lawmakers take money away from the elderly, disabled and small children so the Pentagon can have more funds to spend on things like this.

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Gunning for Social Security – Republicans Want to Cut Entitlement Programs to Pay for More Pentagon Spending

Now that the government shutdown and debt-ceiling crises have been averted for a few months, Republican “defense hawks” like Sen. John McCain and Rep. Buck McKeon will be looking for ways to remove spending caps on the Pentagon that were mandated by the Budget Control Act (BCA). Seniors and the disabled better watch out.

The BCA was passed by Congress in 2011 to prevent another debt-ceiling crisis (sound familiar?). It instituted mandatory caps on discretionary government spending – defense (the Pentagon) and non-defense. Non-defense spending includes everything from education and housing assistance to infrastructure improvements and NASA.  

RamboMost Republicans now insist that Congressional budget agreements stay within the BCA spending caps. So the only way “defense hawks” will be able to boost the Pentagon’s budget is by taking funds from other places, in this case entitlement programs like Social Security, Medicare and Medicaid – which were not included in the BCA.

While many Democrats have scoffed at the idea, there is reason to worry. Some Democratic lawmakers, including President Obama, have suggested they are willing to make a deal with Republicans in return for new tax revenue or funds for other programs. This is bad news.

Republicans have long sought to increase Pentagon spending at the expense of domestic spending. And cutting entitlement programs is always at the top of their to-do list. The upcoming budget conference, which is being chaired by Rep. Paul Ryan and Sen. Patty Murray, is where they will likely try to cut a deal.

Everyone knows that the Pentagon has a long history of waste and financial mismanagement (like this, and this, and don’t forget this).  For these “defense hawks” to say that the Pentagon needs more money is deceitful at best; but to try and steal that money from the elderly and disabled is downright disgusting.  

Read the story here.

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Doing More With Less

It’s time for the Pentagon to face budget reality and enact common sense reforms.  Over a decade of blank checks have left the Pentagon bloated and rudderless, and Strategic_Agility_report_cover-thumbnailwithout a strategy for how to operate efficiently.  Even though sequestration will leave the Pentagon budget above the Cold War average, military and congressional leaders claim we have a stark choice between a smaller and more modern force or a larger and outdated one.  On top of this, the Pentagon claims sequestration has lessened some army training, while a few planes and ships have been idled, cutting into “military readiness”.

Of course this is a false narrative.  The Pentagon is weighed down by historic levels of costly overhead that do not add to the military’s fighting capabilities.  The civilian workforce numbers some 750,000 employees with a roughly equal number of civilian contractors, even though each contractor costs 3 times as much their civilian counterpart.  The non-partisan Stimson Center has released a report with 27 recommendations totaling $50 billion a year from management reforms, overhead cuts, and compensation policy changes. If we are to have the money to invest in a Middle Class economy, than military and Congressional leaders need to step up and these enact common sense reforms.

To read the report, click here.

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Vermont Pushes Back

When it comes to the overpriced and underperforming boondoggle known as the F-35 Joint Strike Fighter, local communities are taking action even as the Congressional-Military-Industrial Complex perpetuates the myth that the JSF is a job creator and an advanced fighter that will ensure American air superiority well into the 21st century.  The F-35 is neither, and we applaud the efforts of the citizens of Vermont in pushing back against this turkey.

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Syria Strike or No, The Last Thing We Need Is a Bigger US Military Budget

By Ruth Flower, Friends Committee on National Legislation

General Martin Dempsey makes a point to the Senate armed services committee

General Martin Dempsey makes a point to US the Senate armed services committee. Photograph: J Scott Applewhite/AP

As soon as the debate began on military intervention in Syria, some members of Congress stood up to demand a bigger Pentagon budget. Without even knowing how much the “limited strike” might cost – from $100 million to $500 million, these representatives were immediately sure that the Pentagon would need more dollars.

Actually, money isn’t the problem. Within the Pentagon’s 2013 budget of $600bn – even under the requirements of sequester – there is plenty of room to fund the “limited strikes” or even a year-long action as described by General Dempsey, chair of the joint chiefs of staff. Even under the sequester law, and after accounting for inflation, the Pentagon now spends about what it spent at the height of the Vietnam war, and close to its peak spending on the Cold War. There is room for adjustments, re-programming, better choices, and savings, but we are hardly in a military budget crisis.

Congress and the Pentagon have choices. For Fiscal Year 2014, the sequester law allows appropriators and agencies to exercise flexibility within their allocations– Congress and the Pentagon can choose to fund the most important programs and projects, and delay or defund whatever is less important. For example:

The Pentagon could delay and divert some of its planned spending on the F-35 joint strike fighter (pdf), the most expensive weapons system in US history. The cost of one plane, at $162m, would likely be enough to fund the “limited strike” that the president originally described. In 2013, the Pentagon is spending $6.18bn on the joint strike fighter program – enough to allow for some flexibility.

Congress could agree not to push additional, unneeded funding on the Pentagon for the production of more M1 Abrams tanks, an investment that the Pentagon did not request and does not want. The extra $236m for these new tanks (in FY14) could easily cover the high estimate of the cost of the president’s “limited strike” proposal with $36bn left over to invest in creating new jobs in the city of Lima, Ohio where a General Dynamics plant produces the tanks.

Congress could save $14bn – enough to take on the entire job of removing chemical weapons from Syria – by foregoing a 12th aircraft carrier, commissioned to be built by Huntington Ingalls, which is still trying to finish the 11th carrier – already the most expensive warship ever built. Does the US need another aircraft carrier? The country already has 10.

Given the small cost of military action in Syria, relative to the impressively large costs of weapons and weapons systems, in addition to billions wasted on faulty contracting and bookkeeping practices in the Pentagon, there’s no need for Congress to consider adjusting or setting aside the modest limits imposed on Pentagon spending by the sequester.

What would be more effective and even less expensive? Don’t attack Syria. Work with the 189 other parties to the Chemical Weapons Convention to get the chemical weapons removed from Syria. Talk with Russia, Iran, and China – countries that expressed willingness to ensure accountability under international law. Explore a high-level strategy with the League of Arab States and the Organization for Islamic Cooperation, political entities that encompass all Muslim-and-Arab majority nations and have leverage over parties to the Syrian civil war. Broaden the debate with the UN General Assembly and the UN Security Council to engage with international partners to ensure that standards of international law are upheld.

The world does need to respond to the use of chemical weapons, but the world does not need another war.

Read the article here.

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There’s No Saving This Turkey

ACrippled by a fundamental design flaw that’s driven so many cost overruns and leaves American pilots vulnerable to abler foreign rivals, it’s time to admit the obvious: the F-35 needs to go.  Originally cast as a cheap all purpose fighter with a single frame usable by all three Service branches, the Joint Strike Fighter (JSF) has morphed into an ungainly boondoogle; it’s per unit cost has almost doubled, while the total lifetime program cost has soared to $1.5 trillion.  The heart of the F-35’s troubles lay with the Marine Corps’ insistence on a jump-jet variation of the JSF, whose uniquely wide architecture has comprised the capabilities of the Air Force and Army variations to the point where the F-35 is seriously outclassed by older Russian and Chinese jets, not to mention future fighter jets with air superiority missions in mind.

As recently admitted by the Marine Corps, the jump jet variation isn’t really necessary, and with so much treasure and American pilot’s lives on the line, it’s time to consider what the Service’s future will look like without the F-35.  The Pentagon could continue to invest in upgraded F-16’s and F-18’s whose capabilities are more than sufficient for the foreseeable future, while a new acquisition process can begin for an air-to-air and an air-to-ground fighter like the F-16 and A-10, rather than the jack of all trades but master of none, F-35.  After billions already spent on the JSF, it may seem like it’s too late to cancel, but with billions more yet to be wasted that could be spent investing in kids, education, and veterans, it’s time to consider alternatives.

To read the article, click here.

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Senate Committee Reveals Sloppy Bookkeeping at Pentagon

pentagon_tilt_shiftThe Senate’s Pentagon budget process has recently revealed just how bloated and disorganized the Pentagon really is.  The Senate Appropriations Committee called for a $2 billion reduction from the Pentagon’s budget request, without really even having to try.  $1.2 billion comes from the Pentagon overestimating how many civilians are under its employ by 11,660; $491 million comes from having more military personnel than it thought; and $294 million comes from cuts to the Permanent Change of Station program to move military personnel and their families.  If $2 billion can be cut due to personnel miscalculations at the Pentagon, imagine how much more savings are possible by taking a harder look at boondoggles like the F-35, LCS, MEADS, or the literally untold number of civilian contractors.  As 57,000 kids are set to loose access to Head Start from sequestration, this budget sloppiness not only betrays the taxpayers trust, but starves the least fortunate Americans from investments that promote social mobility and shared prosperity.

To read the article, click here.

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About Those New F-35 Cost Estimates…

F-35B-CV

F-35B STOVL variant

Recent cost revisions have been released to the media trumpeting a $300 billion cost reduction over the life of the F-35 program from $1.5 trillion to a mere $1.2 trillion.  These new estimates should be taken with a grain of salt. The Pentagon has based these new estimates on revised assumptions about operations and maintenance, but given the 50 year time horizon for the program, there’s no basis to declare these new cost assumptions are any better or worse than those that informed the $1.5 trillion estimate.

The Pentagon is claiming that lifetime costs for fuel, spare parts, and repairs has decreased, but that’s impossible to project over this time horizon; and the Marines have made a major revision to how their jump jet version of the F-35 will operate.  The Marine Corps insisted on a STOVL version of the F-35, whose near $200 million price tag was justified on the grounds that the Marine Corps needed jump jet capability 80% of the time.  The Marine’s are now insisting that their F-35’s will fly in STOVL mode only 10% of the time.  This dramatic reversal calls into question not only the necessity of the expensive F-35B variant, but the frame modifications imposed on the Air Force and Navy versions that drive so many cost overruns and performance issues.

The revised Pentagon estimate makes another shocking assumption: that lifetime maintenance costs will decrease by bringing those operations in-house rather than contracted out through private vendors.  If the Pentagon can perform maintenance in-house for lower costs than private contractors, then what’s the Pentagon’s justification for spending billions on contractors to perform maintenance across the services right now?

And of course this news comes conveniently only a few days after South Korea balked at the idea of purchasing a fleet of F-35’s, citing high per unit costs, and instead favoring the tried and true F-15.  Given all this, we’re hard pressed to celebrate a cost reduction from the most expensive boondoggle in military history to…still the most expensive boondoggle in military history.

Read the article here.

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Leaner and Meaner

aghanistan-troops-usa1Last month Secretary of Defense Hagel laid out a vision for a sequestered Pentagon that included an either/or choice of a smaller but technologically advanced force,
or a larger, but outdated one.  According to the Secretary, shrinking the overall force size from 570,000 to 380,00 would allow for continued investments in high-end technologies, but a smaller force would require a drawdown from global responsibilities.  Alternatively, the Pentagon could retain its global force size, but reduced investments in equipment modernization would leave our forces vulnerable.

Of course this isn’t an either/or situation, the Pentagon can live with sequestration level budget cuts, so long as more thought is given to how we use the military to promote national security and not the Congressional-military-industrial complex.  As the largest recipient of discretionary dollars, the Pentagon should take the largest cut from sequestration, but a decade of wars and blank checks have the left the organization bloated and rudderless.  To protect federal investments in our future prosperity, new strategic choices need to be made, such as ridding ourselves of the assumption that our national security is advanced by military occupations of foreign lands that transform societies into something palatable to Western tastes, and a serious reorganization of fighting forces to produce a flatter and more efficient fighting structure.

To read the article, click here.

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Slush Fund’s Days May Be Numbered

mine_rollers1

$21 billion later, and the Marines use same mine roller technology invented in WWII

Founded in 2006 with the best of intentions, the Joint Improvised Explosive Device Defeat Organization (JIEDDO) has devolved into a $21 billion slush fund that hasn’t accomplished any of the goals it set out to.  The core mission of JIEDDO was to “focus (lead, advocate, coordinate) all Department of Defense actions in support of the Combatant Commanders’ and their respective Joint task forces’ efforts to defeat IEDs as weapons of strategic influence”, however investigation after investigation has found JIEDDO accomplishing none of those missions.  The mismanagement is so bad that a full accounting of their waste can’t even be compiled; GAO found only inconsistent records and data tracking.

Improvised Explosive Devices (IED’s) account for 64% of American wounds and fatalities in Iraq and Afghanistan, and after 7 years of operation, causalities only dropped for American’s as frontline operations have drawn to a close (only for civilian and domestic forces casualties to dramatically increase).  And what has $21 billion bought our troops?  The military has fought back against IED’s with decades old technologies like mine rollers, which have their origins in WWII; bomb sniffing dogs; metal detectors; and culvert covers.  Fortunately for our troops, this money pit might finally have an expiration date.  The latest NDAA bill contained language to end or drastically reduce the organization, although Congress punted the decision to the Pentagon, rather than making the decision themselves.

To read the article, click here.