The Pentagon’s Budgetary War on Accountability

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Yves here. I was planning to write on the Overseas Contingency Operations, which is why there’s never any doubt we can find the next billion to fund another bombing run in Iraq and other military-industrial complex boondoggles. But this post beat me to the punch.

By William D. Hartung, the director of the Arms and Security Project at the Center for International Policy and a senior adviser to the Security Assistance Monitor. He is the author of, among other books, Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex. Originally published at TomDispatch

Now you see it, now you don’t. Think of it as the Department of Defense’s version of the street con game, three-card monte, or maybe simply as the Pentagon shuffle.  In any case, the Pentagon’s budget is as close to a work of art as you’re likely to find in the U.S. government — if, that is, by work of art you mean scam.  

The United States is on track to spend more than $600 billion on the military this year — more, that is, than was spent at the height of President Ronald Reagan’s Cold War military buildup, and more than the military budgets of at least the next seven nations in the world combined.  And keep in mind that that’s just a partial total.  As an analysis by the Straus Military Reform Project has shown, if we count related activities like homeland security, veterans’ affairs, nuclear warhead production at the Department of Energy, military aid to other countries, and interest on the military-related national debt, that figure reaches a cool $1 trillion.

The more that’s spent on “defense,” however, the less the Pentagon wants us to know about how those mountains of money are actually being used.  As the only major federal agency that can’t pass an audit, the Department of Defense (DoD) is the poster child for irresponsible budgeting. 

It’s not just that its books don’t add up, however.  The DoD is taking active measures to disguise how it is spending the hundreds of billions of taxpayer dollars it receives every year — from using the separate “war budget” as a slush fund to pay for pet projects that have nothing to do with fighting wars to keeping the cost of its new nuclear bomber a secret.  Add in dozens of other secret projects hidden in the department’s budget and the Pentagon’s poorly documented military aid programs, and it’s clear that the DoD believes it has something to hide.

Don’t for a moment imagine that the Pentagon’s growing list of secret programs and evasive budgetary maneuvers is accidental or simply a matter of sloppy bookkeeping.  Much of it is remarkably purposeful.  By keeping us in the dark about how it spends our money, the Pentagon has made it virtually impossible for anyone to hold it accountable for just about anything.  An entrenched bureaucracy is determined not to provide information that might be used to bring its sprawling budget — and so the institution itself — under control. That’s why budgetary deception has become such a standard operating procedure at the Department of Defense. 

The audit problem is a case in point.  The Pentagon along with all other major federal agencies was first required to make its books auditable in the Chief Financial Officers Act of 1990.  More than 25 years later, there is no evidence to suggest that the Pentagon will ever be able to pass an audit.  In fact, the one limited instance in which success seemed to be within reach — an audit of a portion of the books of a single service, the Marine Corps — turned out, upon closer inspection, to be a case study in bureaucratic resistance.

In April 2014, when it appeared that the Corps had come back with a clean audit, Secretary of Defense Chuck Hagel was so elated that he held a special ceremony in the “Hall of Heroes” at the Pentagon. “It might seem a bit unusual to be in the Hall of Heroes to honor a bookkeeping accomplishment,” he acknowledged, “but damn, this is an accomplishment.”  

In March 2015, however, that “accomplishment” vanished into thin air.  The Pentagon’s Office of Inspector General (OIG), which had overseen the work of Grant Thornton, the private firm that conducted the audit, denied that it had been successful (allegedly in response to “new information”).  In fact, in late 2013, as Reuters reported, auditors at the OIG had argued for months against green-lighting Grant Thornton’s work, believing that it was full of obvious holes.  They were, however, overruled by the deputy inspector general for auditing, who had what Reuters described as a “longstanding professional relationship” with the Grant Thornton executive supervising the audit. 

The Pentagon and the firm deny that there was any conflict of interest, but the bottom line is clear enough: there was far more interest in promoting the idea that the Marine Corps could pass an audit than in seeing it actually do so, even if inconvenient facts had to be swept under the rug. This sort of behavior is hardly surprising once you consider all the benefits from an undisturbed status quo that accrue to Pentagon bureaucrats and cash-hungry contractors. 

Without a reliable paper trail, there is no systematic way to track waste, fraud, and abuse in Pentagon contracting, or even to figure out how many contractors the Pentagon employs, though a conservative estimate puts the number at well over 600,000.  The result is easy money with minimal accountability.

How to Arm the Planet

In recent years, keeping tabs on how the Pentagon spends its money has grown even more difficult thanks to the “war budget” — known in Pentagonese as the Overseas Contingency Operations (OCO) account — which has become a nearly bottomless pit for items that have nothing to do with fighting wars.  The use of the OCO as a slush fund began in earnest in the early years of the Bush administration’s war in Iraq and has continued ever since.  It’s hard to put a precise number on how much money has been slipped into that budget or taken out of it to pay for pet projects of every sort in the last decade-plus, but the total is certainly more than $100 billion and counting. 

The Pentagon’s routine use of the war budget as a way to fund whatever it wants has set an example for a Congress that’s seldom seen a military project it wasn’t eager to pay for.  Only recently, for instance, the House Armed Services Committee chair, Texas Republican Congressman Mac Thornberry, proposed taking $18 billion from the war budget to cover items like an extra 11 F-35 combat aircraft and 14 F-18 fighter-bombers that the Pentagon hadn’t even asked for. 

This was great news for Lockheed Martin, which needs a shot in the arm for its troubled F-35 program, already slated to be the most expensive weapons system in history, and for Boeing, which has been lobbying aggressively to keep its F-18 production line open in the face of declining orders from the Navy.  But it’s bad news for the troops because, as the Project on Government Oversight has demonstrated, the money used to pay for the unneeded planes will come at the expense of training and maintenance funds.

This is, by the way, the height of hypocrisy at a time when the House Armed Services Committee is routinely sending out hysterical missives about the country’s supposed lack of military readiness.  The money to adequately train military personnel and keep their equipment running is, in fact, there. Members of Congress like Thornberry would just have to stop raiding the operations budget to pay for big ticket weapons systems, while turning a blind eye on wasteful spending in other parts of the Pentagon budget.

Thornberry’s gambit may not carry the day, since both President Obama and Senate Armed Services Committee chair John McCain oppose it.  But as long as a separate war budget exists, the temptation to stuff it with unnecessary programs will persist as well. 

Of course, that war budget is just part of the problem.  The Pentagon has so many budding programs tucked away in so many different lines of its budget that even its officials have a hard time keeping track of what’s actually going on.  As for the rest of us, we’re essentially in the dark.

Consider, for instance, the proliferation of military aid programs.  The  Security Assistance Monitor, a nonprofit that tracks such programs, has identified more than two dozen of them worth about $10 billion annually.  Combine them with similar programs tucked away in the State Department’s budget, and the U.S. is contributing to the arming and training of security forces in 180 countries.  (To put that mind-boggling total in perspective, there are at most 196 countries on the planet.)  Who could possibly keep track of such programs, no less what effect they may be having on the countries and militaries involved, or on the complex politics of, and conflicts in, various regions? 

Best suggestion: don’t even think about it (which is exactly what the Pentagon and the military-industrial complex want you to do).  And no need for Congress to do so either.  After all, as Lora Lumpe and Jeremy Ravinsky of the Open Society Foundations noted earlier this year, the Pentagon is the only government agency providing foreign assistance that does not even have to submit to Congress an annual budget justification for what it does.  As a result, they write, “the public does not know how much the DoD is spending in a given country and why.”

Slush Funds Galore

If smokescreens and evasive maneuvers aren’t enough to hide the Pentagon’s actual priorities from the taxpaying public, there’s always secrecy.  The Secrecy Project at the Federation of American Scientists recently put the size of the intelligence portion of the national security state’s “black budget“ — its secret spending on everything from spying to developing high-tech weaponry — at more than $70 billion. That figure includes a wide variety of activities carried out through the CIA, the NSA, and other members of the intelligence community, but $16.8 billion of it was requested directly by the Department of Defense.  And that $70 billion is just the tip of the iceberg when it comes to secret spending programs, since billions more in secret financing for the development and acquisition of new weapons systems has been squirreled away elsewhere.

The largest recent project to have its total costs shrouded in secrecy is the B-21, the Air Force’s new nuclear bomber. Air Force officials claim that they need to keep the cost secret lest potential enemies “connect the dots” and learn too much about the plane’s key characteristics.  In a letter to Senator McCain, an advocate of making the cost of the plane public, Ronald Walden of the Air Force’s Rapid Capabilities Office claimed that there was “a strong correlation between the cost of an air vehicle and its total weight.” This, he suggested, might make it “decisively easier” for potential opponents to guess its range and payload. 

If such assessments sound ludicrous, it’s because they are.  As the histories of other major Pentagon acquisition programs have shown, the price of a system tells you just that — its price — and nothing more.  Otherwise, with its classic cost overruns, the F-35 would have a range beyond compare, possibly to Mars and back. Of course, the real rationale for keeping the full cost estimate for the B-21 secret is to avoid bad publicity.  Budget analyst Todd Harrison of the Center for Strategic and International Studies suggests that it’s an attempt to avoid “sticker shock” for a program that he estimates could cost more than $100 billion to develop and purchase. 

The bomber, in turn, is just part of a planned $1 trillion splurge over the next three decades on a new generation of bombers, ballistic missile submarines, and ground-based nuclear missiles, part of an updating of the vast U.S. nuclear arsenal.  And keep this in mind: that trillion dollars is simply an initial estimate before the usual Pentagon cost overruns even begin to come into play.  Financially, the nuclear plan is going to hit taxpayer wallets particularly hard in the mid-2020s when a number of wildly expensive non-nuclear systems like the F-35 combat aircraft will also be hitting peak production. 

Under the circumstances, it doesn’t take a genius to know that there’s only one way to avoid the budgetary equivalent of a 30-car pile up: increase the Pentagon’s already ample finances yet again.  Principal Deputy Undersecretary of Defense Brian McKeon was referring to the costs of building new nuclear delivery vehicles when he said that the administration was “wondering how the heck we’re going to pay for it, and probably thanking our lucky stars we won’t be here to answer the question.”  Of course, the rest of us will be stuck holding the bag when all those programs cloaked in secrecy suddenly come out of hiding and the bills come fully due. 

At this point, you may not be shocked to learn that, in response to McKeon’s uncomfortable question, the Pentagon has come up with yet another budgetary gimmick.  It’s known as the “National Sea-Based Deterrence Fund,” or as Taxpayers for Common Sense more accurately labels it, “the Navy’s submarine slush fund.” The idea — a longstanding darling of the submarine lobby (and yes, Virginia, there is a submarine lobby in Washington) — is to set up a separate slush fund outside the Navy’s normal shipbuilding budget. That’s where the money for the new ballistic missile submarine program, currently slated to cost $139 billion for 12 subs, would go. 

Establishing such a new slush fund would, in turn, finesse any direct budgetary competition between the submarine program and the new surface ships the Navy also wants, and so avoid a political battle that might end up substantially reducing the number of vessels the Navy is hoping to buy over the next 30 years.  Naturally, the money for the submarine fund will have to come from somewhere, either one of the other military services or that operations and maintenance budget so regularly raided to help pay for expensive weapons programs.  

Not to be outmaneuvered, Air Force Secretary Deborah Lee James has now asked Congress to set up a “strategic deterrence fund” to pay for its two newest nuclear delivery vehicles, the planned bomber and a long-range nuclear-armed ballistic missile.  In theory, this would take pressure off other major Air Force projects like the F-35, but as with the submarine fund, it only adds up if a future president and a future Congress can be persuaded to jack up the Pentagon budget to make room for these and other weapons systems.

In the end, however the specifics work out, any “fund” for such weaponry will be just another case of smoke and mirrors, a way of kicking the nuclear funding crisis down the road in hopes of fatter budgets to come. Why make choices now when the Pentagon and the military services can bet on blackmailing a future Trump or Clinton administration and a future Congress into ponying up the extra billions of dollars needed to make their latest ill-conceived plans add up?

If your head is spinning after this brief tour of the Pentagon’s budget labyrinth, it should be. That’s just what the Pentagon wants its painfully complicated budget practices to do: leave Congress, any administration, and the public too confused and exhausted to actually hold it accountable for how our tax dollars are being spent. So far, they’re getting away with it.

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  1. ke

    Even a cursory look at Senate operation tells you that the issues are inseparable, which is the point, a false choice between MAD social programs and MAD war, locked in only by energy dependence, which is a scam.

    Funny, they are choking on oil.

    Take another look at what plants do, and how the energy monopoly shorts the circuit.

    Do you want nutrition and energy, or do you want cardboard food and methylation?

    Energy is information, most of which is being discarded, to create artificial scarcity, to confirm false assumptions.

    1. ke

      Be the plant, but learn to fix those robots, to see their weakness.

      The robots and basic income are designed to replace the middle class, not labor, and the future is becoming the present far quicker than most will anticipate.

      1. ke

        The question of motive came up on the other thread after beddy by time.

        I think I have been quite clear…my wife, then my children, and then my work. As an open source consultant working out of the university system, Navy most of my life, since a wee little kid, I am of the opinion that this government has been bought and sold so many times that there is nothing left of it but an old you know what.

        I have a choice of what I do with my surplus as the powers and I hunt each other like submarines in the ocean, and I choose to give it to married people working to feed their children. Funny, there’s not a damn thing the morph in SV can do about it, now matter how many 1s and lopsided zeros it digitizes. I develop AC. It’s always a crapification economy, until the Austrian machine shows itself for what it really is, when it’s far too late for most.

        MMT may very well be a good thing, but it’s academic, itself held hostage to political mythology. It’s very best potential is to become the front end of the next bait and swap. Regardless, the middle class will be replaced, with the next, and so it goes.

        1. ke

          Questioning motive is a waste of time. No one else’s opinion is going to work for you and your family. It may very well be that SV works for you, and I am no stranger in the Bay Area, nor across most of this country. It takes all kinds, but sooner or later redundancy is eliminated.

  2. MikeNY

    One trillion dollars a year. One trillion, to blow people and things up. But we can’t afford Social Security.

    It’s insane.

    1. James Levy

      I had a unique window into the workings of a certain class of peoples’ minds on this subject not as a naval historian, but as an amateur astronomer. Although it is something of a class mix, most amateur astronomers are engineers, doctors, lawyers, teachers, and small businessmen. I was always at the lowest end, material-wise, of the group, because it’s an expensive undertaking. These men tend to be conservative (and they are predominantly men). They don’t like taxes. But they do “support’ the military and are big believers in high tech and large defense budgets (which they see, along with NASA, as a good investment in American jobs and prestige). They know enough about history to know that losing wars has awful consequences, and they are conservative, so they see everything in terms of a struggle for survival and power. It is virtually impossible to convince them that the chances of the United States being overrun by a foreign power are virtually zero. “They” will strike if we are weak. “They” want what we have and are determined to take it if “we” don’t defend it. The best way to avoid war is to overawe all “others” so that we are safe.

      These are very intelligent people. They are not evil, or particularly war-mongering. But they have drunk the koolaid and aren’t going to be convinced otherwise. And I’d bet they represent the deeply held beliefs of a solid majority of the citizenry.

      1. MikeNY

        I don’t take issue with much of what you say, except to point out that such distrust of the rest of the world, of all ‘foreign’ human beings, is in itself bellicosity, and a form of evil — and it is not wholly ‘objective’. To quote William Blake, as the eye, such the object.

        I repost MLK’s great sermon Why I Am Opposed to the Vietnam War. It’s as germane today as when he spoke it.

    2. sinbad66

      And single payer health care, free post secondary education and to fix up our crumbling roads, bridges and other infrastructure….

      Whenever you get into a discussion about “how broke we are”, just ask this question to yourself: when it came time to go to war, was the question of money or how much it will cost ever brought up, discussed or debated?

      Yeah, I thought so.

      1. Ivy

        The cost of war may be brought up, but the real problem is that it is not believed.
        When Cheney et al said that the little Iraq operation would cost $60B, they were just not credible. They we got to be inundated with stories about Freedom Fries.

  3. EndOfTheWorld

    Uncle Sam will eventually have to pull in his horns because of impending bankruptcy. Trying to get “fraud, waste, and abuse” out of the military is a doomed project. Been trying for years, and they have yet to put a dent in it.

  4. Whine Country

    Let’s not be too critical now. Undoubtedly there is a ton of money hidden in the budget for the helicopters that will soon be dropping money on all of us. Keep the faith folks!

  5. jfleni

    The “five-sided-nuthouse” has been doing all this for decades. It takes a fed-up electorate and president to stop it.

    That President is NOT anything like hrc, but maybe Bernie?

  6. Ishmael

    A friend of mine working at Lockheed Martin told me they have 40 people doing very poorly what they use to do with 2 people at her previous position.

    This is the nature of government bureaucracy! Yeah, the DOD is the worse of the worse. Imagine we have a ton more generals than we had during WW2. What do they all do except play golf. However, the same is true through out the whole Federal Govt. The Department of Education was established when the US education system was at its peak and has been on a slide ever since. How has the war on drugs and poverty worked out. Homeland Security what a joke. If you are not securing our borders than what are you doing.

    Maybe the biggest failure is the DOJ. We should call it the Department of Injustice. The DOJ is the enabler of crime. One of the reasons that things are so out of hand is the failure to prosecute crime in the upper echelons of this country. This leads to the corrupt system we currently have. Can someone please tell me what the FBI does except for spying on American citizens. Almost all so called terrorists that have been brought to triad have been shams and besides it must cost a billion dollars for every terrorist caught, not that I can think of one. CIA worthless. It causes more attacks on the US than prevents.

    Then there is the SEC which is about as useless as you can get. As I said yesterday, it should just be eliminated. Better no net than the sham of a net. I would also eliminate the need for annual audits. As we see above all of this is about relationships and not real auditing.

    For all of those who are for Bernie and read the above and think how really screwed up it would be if you grew the govt larger. Oh I know it is because we do not have the write people. No this is what happens when you have large govt. Govt is only very good at two things — killing people and throwing them into prison. It excels at both of these.

    1. Plenue

      You seem to have missed the part where Lockheed Martin is a private corporation, not part of the government. So citing bloat in its ranks doesn’t actually support your screed against government bureaucracy.

      And while it’s true that bureaucracy tends to breed more needless bureaucracy, history also shows its capable of genuine innovation and reform. I’m all for ‘big government’, provided it was transparent and used predominately for the benefit of the majority of the citizenry. The entire basis of the big vs small debate is inane and childish to begin with. As if one or the other is a magical one-size-fits-all solution to all problems.

      If you take an axe wholesale to ‘big government’, you may indeed slay the bloated military leviathan. But from what you said it’s clear you’d love to slaughter most or all other federal institutions as well. Okay, let’s get rid of the Department of Education. Now all schools are funded by local property taxes with zero chance of supplemental federal funding. Good job, you’ve now irrevocably solidified area class distinctions forever. Poor areas will have crappy schools in perpetuity. And now, completely free to set the curriculum, at least a third of the states will only teach abstinence and creationism. So skyrocketing teen pregnancy rates and scientific illiteracy. Brilliant.

      Get rid of the DOJ and you now have no outside entity able to investigate local corruption. And would you be in favor of axing medicare/medicaid, social security, and food stamps? Are you one of those types who imagines lazy people are living high on the hog and if only faced with the prospect of starvation they would get their shit together and work? Is the NPS big government as well? Screw national parks, let’s chop it all down, there’s money to be made!

      Let’s not actually try and solve the termite problem, let’s just burn the whole damn house down. Sure, no more termites but…crap, where are we supposed to live and sleep now?

  7. Chauncey Gardiner

    Wow! It’s worse than “[T[he only major federal agency that can’t pass an audit,” because they have been able to avoid being audited at all, leaving us all vulnerable to massive fraud, theft and waste. Seems that there is MMT for some.

    Of course, Congress controls the purse strings. So with respect to audits, there is clearly high level official support outside the DoD for the view that it’s better that “there are also unknown unknowns – the ones we don’t know we don’t know,” to paraphrase a former Defense Secretary. After all, a sizable portion of the department’s budget is domestic spending. And what congressional representative wants a major base closure or large military contractor layoffs in their district?

    Further, there are costs to empire; and in a broader context this obviously increases the difficulty of a cost-benefit analysis.

  8. ewmayer

    Hold on just a moment – I find it rather stunning that no one, at this site of all places, has challenged the article’s concluding paragraph, which states:

    That’s just what the Pentagon wants its painfully complicated budget practices to do: leave Congress, any administration, and the public too confused and exhausted to actually hold it accountable for how our tax dollars are being spent.

    As the MMT crowd so love to remind us at every opportunity, federal taxes don’t fund federal spending. If one holds that to be true, and MMT asserts that for a monetarily sovereign entity it is a truism, hence is indisputably so, the entire cause-for-worry premise of this piece vanishes. So why, given how late I got around to reading the article, is there not a whole raft of MMT-citing commentary above to this effect?

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