Elena Popova

Don’t Overinflate the Pentagon Budget

There are plenty of perennial problems draining the military’s coffers that need attention.

Defense hawks like Sen. James Inhofe, R-Okla., and Rep. Mike Rogers, R-Ala., who have long called for major increases in the Pentagon’s already-massive budget, are now using the issue of inflation to press for the addition of up to $100 billion to the administration’s $773 billion defense-spending plan for fiscal 2023. This is an astonishing proposal when one considers that the administration’s budget request is already more than $100 billion higher than U.S. military spending at the peak of the Cold War.

Inflation is an issue, to be sure, but it should not be addressed by simply locking in an increase tied to the rise in the consumer price index, now running at over 8 percent. The CPI measures the costs of entirely different items than those purchased by the military. It is not a useful gauge of what is needed to maintain the Pentagon’s buying power. Any adjustment for inflation should be based on a specific tracking of things the Pentagon and weapons makers actually buy, ideally vetted by an independent body such as the Government Accountability Office.

Another point, made regularly by the Biden administration, is that the funds provided for fiscal 2023 will not be spent until October 1, and will only be spent through Sept. 30, 2023. If inflation adjustments are needed, they should be made according to the prices of goods and services when the Pentagon buys them, not earlier and based on estimates of what inflation might or might not be.

If Congress really wants to ensure that the U.S. military has access to its full buying power, it might tackle more perennial problems, like the Pentagon’s habit of overpaying for basic items. A few months ago, for example, DOD’s inspector general reported that the Transdigm corporation had sold a small sampling of spare parts to the government for 10 to 100 times its own costs, overcharging a total of $20.8 million. A full assessment would find untold millions or billions more in overcharges. Until Pentagon negotiators are allowed to have accurate data on the costs of key items before negotiating for new ones, this kind of fraud and abuse will continue unchecked. 

In addition to spare parts, the Pentagon overpays for major weapons, from $13 billion aircraft carriers to F-35 combat aircraft that could cost $1.7 trillion to purchase and operate over the life of the program. Getting weapons costs under control should be a top priority. At the moment, that is clearly not the case.

The Pentagon could also save billions by capping its use of private contractors. It currently employs more than half a million contractor personnel, many of whom provide services that can be done better and more cheaply by government employees, if they are needed at all. Cutting spending on contractors by just 15 percent would save $26 billion per year.

As Sen. Elizabeth Warren, D-Mass., noted in a recent Congressional hearing, blindly adding funds to the Pentagon’s already enormous budget based on questionable inflation arguments “invites defense contractors to pick taxpayers' pockets…The American people are willing to pay to defend this country but they're not going to sit still for being gouged by hugely profitable defense companies.”

All of the above doesn’t even address the question of whether America’s costly “cover the globe” military strategy—with more than 750 military bases and counterterror operations in 85 countries—is the best way to make the country safe.

Before tacking on an arbitrary amount to the Pentagon budget based on flawed inflation estimates, the department should be required to show that it will effectively manage the funds it is already receiving.

William D. Hartung is a senior research fellow at the Quincy Institute for Responsible Statecraft. Ben Freeman, Ph.D., is a research fellow at the Quincy Institute. They were the co-chairs of the Sustainable Defense Task Force at the Center for International Policy