On November 15, the Pentagon revealed that it had failed yet another audit. The Defense Department only managed to account for 39 percent of its $3.5 trillion in assets, leaving more than $2.1 trillion unaccounted for.
The news came as no surprise to seasoned Pentagon watchers. Indeed, the Defense Department is the only U.S. government agency to have never passed a comprehensive audit. But what did raise some eyebrows was the fact that the Pentagon made almost no progress in this year’s bookkeeping, unlike the slow progress it made over the prior 4 years. Of the 27 areas investigated, only seven earned a clean bill of financial health, which Pentagon Comptroller Mike McCord described as “basically the same picture as last year.”
This accounting disaster echoes the Pentagon’s bad math. It is very bad at estimating the cost of weapons programs.
The Pentagon’s most famous recent boondoggle is the F-35 program, which has exceeded its original budget by $165 billion. Such overruns are far from unique: As Sens. Jim Inhofe (R-Okla.) and Jack Reed (D-RI) noted in 2020, the lead vessel for every one of the Navy’s last eight combatant ships cost at least 10 percent over budget, resulting in over $8 billion in additional costs.
And another major overrun is about to happen, according to a recent report from the Congressional Budget Office.
The Navy hopes to expand its ship production to preserve an edge over China, placing priority on a new attack submarine and destroyer ship. The Defense Department has proposed three versions of this plan at an average cost of $27 billion per year between 2023 and 2052, a 10 percent increase from current annual shipbuilding costs.
But the CBO says that’s a significant underestimate. It predicts the average annual cost of this shipbuilding plan will exceed $31 billion, so the Navy is underestimating costs by $120 billion over the program’s existence.
The Project on Government Oversight says these overruns “shouldn’t come as a shock” to anyone following Pentagon procurement in recent years, “but it does suggest a continuing, and stunning, inability by the Navy to get its ducks, and dollars, in a row.”
Are we getting our money’s worth? Chris Preble, a former Navy officer, noted that “the United States spends more than twice as much on its military as China and Russia combined, and is clearly the world’s ‘preeminent military power,’ but it isn’t obvious that we’re getting the biggest bang for our bucks, nor that this additional spending will be critical to sustaining our edge.”
As Preble observed, President Trump himself has called this level of spending excessive in the past. Indeed:
This latest proposed increase comes after [Trump] had gone back and forth on what he wanted to spend, initially telling all departments to prepare for a 5 percent cut, then back-tracking and saying the defense budget would not only be exempt from such reductions, but would actually increase. On another occasion, he blurted out on Twitter that it was “crazy” to spend $716 billion on the military, but then reversed himself a week later.
Trump probably wanted to cut Pentagon waste, but decided that he couldn’t get Congress to approve new weapon systems or other things he wanted if he tried to cut wasteful spending that other people want, like powerful members of Congress and lobbyists.
A think-tank identified $17-20 billion in readily-achievable savings to the 2013 military budget, but Congress adopted none of them.
As Fareed Zakaria noted in a 2011 Washington Post op-ed, the United States spends more on defense than every other country in the world combined, and commissions and former Pentagon officials have proposed various cuts:
The Bowles-Simpson commission’s plan proposed $750 billion in defense cuts over 10 years. Lawrence Korb, who worked at the Pentagon for Ronald Reagan, believes that a $1 trillion cut over 10 to 12 years is feasible without compromising national security.
Serious conservatives should examine the defense budget … [which includes] a cradle-to-grave system of housing, subsidies, cost-plus procurement, early retirement and lifetime pension and health-care guarantees. There is so much overlap among the military services, so much duplication and so much waste that no one bothers to defend it anymore. Today, the U.S. defense establishment is the world’s largest socialist economy.
Zakaria quotes former defense secretary Robert Gates observing that “there are more members of military marching bands than make up the entire U.S. foreign service.”
But instead of cutting wasteful spending, our politicians want to spend trillions of dollars we don’t have on new programs, like the Green New Deal backed by leading Democrats. The Green New Deal has been variously estimated by think-tanks to cost up to $65,000 per household per year, or at least $50 trillion and possibly over $90 trillion (four times the size of the entire U.S. economy). Leading Democratic Senators have supported the Green New Deal, such as Bernie Sanders, Kamala Harris, Cory Booker, and Elizabeth Warren. The Green New Deal blueprint is so ill-conceived that it would harm the stability of America’s power grid, close many low-carbon power plants, and increase construction-related pollution. Several of these progressive politicians also support race-based reparations, which the New York Times says could cost trillions of dollars. Reparations policies harmed the economies of countries that pursued them, such as Zimbabwe.
