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Blog No. 12: Can We Still Afford to “Pay Any Price?”

Since the new administration is in the process of rethinking America’s Foreign Policy, here’s an idea that would roll back not one, but the two previous administration’s expensive undertakings --- bring the troops home from Iraq and Afghanistan.

The argument in Washington since 9/11 is that by taking the war to the bad guys, on their own turf, we have deflected Islamic Terrorism from coming to our shores. Whether you agree or disagree with the premise, we all can agree that it has been very expensive.

Mr. Trump has been vocal on the “costly, costly wars” and his views of the mistakes we’ve made in not bringing home the spoils of war. And, I agree with him.

But don’t kid yourself; plenty of bacon has been brought home as a result of these multi-national wars. And there’s plenty more spending in the pipeline. In fact, the Defense Contracting Community has worked hard to develop new solutions to ensure Uncle Sam will keep on spending in defense of our nation.

In short, the business of K Street is booming. The Defense budget is a major reason why.

Take a look at Defense spending derived from war-zone consulting and weapons systems deployments since 9/11. Expenditures, to support Mr. Trump’s agenda, that could have been spent on US domestic infrastructure projects --- has instead been spent on supporting the wars in the Middle East.

According to the Congressional Budget Office, over the last 15 years, the Pentagon has spent approximately $2.2 Trillion on overall war efforts in Afghanistan and Iraq, not to mention Syria, Yemen, Pakistan and in support of allies Eqypt, Israel and Jordan, the latter three in the form of foreign aid.

That’s $2.2 Trillion with a T. No, that is not a typo.

“You don’t know what you’re talking about,” a hawkish friend of mine who lives in North Florida told me five years ago. “There are bad guys over there. We had no choice. After 9/11, we had to stop them.”

All of which only further stokes the fires of debate.

In reality there is some utility value in a tank, or a rifle, or a drone, once it has been utilized and deployed in the harsh climate of Afghanistan or Iraq.

Though we aren’t going to repatriate the vast majority of these deployed weapons, many will be dismantled and left behind, or sold as scrap, or worse, stolen by our enemies may eventually show up again in some other war theater.

Re-purposing in-theater equipment remains a big business. So is maintaining vehicles and equipment. I visited a company in Alabama that is selling spare rocket parts to American allies, including maintenance and training, for older systems. Repairs of tanks remain a major priority for currently deployed personnel. You get the idea. As systems get older, and more heavily utilized, costs continue to escalate.

And then there are key new DoD strategic weapon systems being contemplated.

The new F-35 Joint Strike Fighter, which will cost at latest estimates, $85 million per plane, is going ahead according to three different consulting firms currently working for the DoD, McKinsey, Booz Allen and Accenture.

“Despite expenses far exceeding original estimates, the F-35 will continue to be built and fully funded,” Senator John McCain told the Senate armed services committee last week, according to Reuters. “Make no mistake, we need this aircraft.”

The Pentagon has contracted with Lockheed Martin to build 2,437 F-35 jets over the life of the program. Costs will reportedly be reduced as more planes are built. So far, 15 have been assembled in Texas. As production increases, the price per plane is expected to drop to $50 mm. Still, estimated overall cost of the F-35 program will be $1.472 Trillion according to the CBO. This does not include maintenance, pilot support or training.

The US Navy is also pushing hard for expansion of its 273-ship fleet, asking Mr. McCain and his committee for 82 additional ships. This would increase the size of the most powerful Navy the world has ever seen to a total of 355 ships, including a new Aircraft Carrier and a new submarine class. Estimated cost of increasing the size of our Naval Fleet is now estimated at $4 Trillion over the next 10 years, according to CNN and The Washington Post.

That’s $6.1 Trillion just for new planes and ships by 2027. And, again that doesn’t include the training, facilities, parts, and maintenance personnel needed to support these weapons.

The DoD community is gearing up for these and other new systems. Hiring for Cyber warriors, aerospace technology experts, drone maintenance personnel and a host of new mobile warrior equipment is quickly moving off the drawing boards and into production.

Mobile technologies utilized in War Theater have become more and more important. Encryption technologies protecting commanders from the bad guys are all the rage inside the beltway right now. Our soldiers, rightfully so, want all the advantages our advanced technology can offer. They want better-detailed online maps, intel and other elements to execute more efficiently.

Silicon Valley and other tech markets like Austin, Huntsville (AL) and Los Alamos are hard at work on advanced communications systems to utilize narrower and narrower elements of the spectrum. The latest in laser-based targeting systems, advanced sonar and radar detection, better heat-sensors and night vision equipment are forthcoming, too. More advanced nuclear generation technologies are also being addressed for the Navy.

These costs continue to escalate. The CBO estimated last week that at current spending trends, US debt will jump to $10 Trillion within six years. While DoD spending is still less than entitlements and debt, it’s growing.

The 2016 Department of Defense Budget was 20 percent of the overall $3.8 Trillion Federal budget, or $760 billion. The VA is included in this spending. Linked here is data from various sources showing overall budget estimates:

Throw in the off-balance sheet war expenditures and the total American war budget is $150 million per day. That’s $6.5 million per hour.

It is estimated the US has spent $1.7 Trillion on the Middle East wars since 9/11 according to five different sources. That’s $1.7 Trillion not being spent at home. It is an important element in our overall economy, where now one in five Americans works with or for Uncle Sam. Many of these are good, high paying jobs.

Today, according to Kristina Wong of The Hill newspaper, there are between 8,400 and 10,500 US troops currently deployed in the Afghanistan and Iraq. This does not include the Defense Contracting community, which by some estimates is 2-3X the number of deployed combat soldiers.

Nor does this troop estimate include people deployed at various US-based facilities including Central Command in Tampa, and personnel at Drone Wing facilities in Nevada. Nor does it include ship-based sailors and fighter pilots deployed in both the Mediterranean and the Suez Canal and the Arabian Sea.

In fact, siting national security orders, nobody is willing to tell us exactly how many Americans are prosecuting the war efforts in the Middle East.

The residual costs of the war, in terms of spent munitions, wounded soldiers, and the ongoing medical support the VA will need to provide from PTSD and other post-war related injuries, are also a growing part of the defense budget.

Should we be in the Middle East 15 years after 9/11? Mr. Trump said he doesn’t think so, but he also told us he is going to eradicate Radical Islamic Terrorism. How will we do both?

The real question is, what can we afford? Some would argue, as President Kennedy said in his Inaugural address: “Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.”

With Defense at 20 percent of the overall Federal Budget, and projected to grow under Mr. Trump with new systems and efforts underway, can we afford any price?

Some would argue we couldn’t afford not to.

Roads and infrastructure, healthcare, social security, and an ever-increasing debt package are the key budget priorities America focused on in its last election. Better jobs and better social entitlements are also very high on the national agenda of the new administration.

At the current projected expenditure rate, and with new systems coming online, DoD spending will be $1 Trillion per year in less than five years. Perhaps more if cuts don’t start coming soon.

Should we cut defense spending, or allow it to further increase?

Meanwhile, the Pentagon is planning to deploy 60% of our Navy in the Pacific by 2025, including most of the new ships going into production, according to The Wall Street Journal. Pentagon sentiment is that as China’s growing Naval capability in the South China Sea becomes more worrisome, we will have little choice.

In fact, many military strategists think our distraction in the Middle East has cost us too much. Our real focus, they believe, shouldn’t be ISIS. It should be China and its satellite North Korea, whose nuclear threat is becoming larger and more belligerent.

Our new Defense Secretary, in his Senate Nomination Hearings, called China the single biggest long-term threat to American National interests. North Korea was clearly part of that threat analysis.

Should we spend more or less on Defense in the Middle East? Shouldn’t we begin the big pivot to the Pacific, where the population is exploding and the economic power of China and its 1.4 billion citizens is proliferating?

While we continue to be distracted by our elections and our war in the Middle East, China’s Premier was in Davos last week, talking to anybody and everybody who would meet with him. He told diplomats, business leaders and other “social elites” that “China is open for business.”

Meanwhile, as China pushes its global commerce, our Congress is discussing increasing import taxes and tariffs in an effort to increase manufacturing jobs in the US, and shift our international trade policies.

There are no easy answers. Any efforts to reduce taxpayer costs and increase American military prowess needs, more than ever, to be explored.

The real question is, what can we afford?

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