How Rummy hid $40 billion.

How Rummy hid $40 billion.

How Rummy hid $40 billion.

Military analysis.
Feb. 8 2005 5:43 PM

Rummy's Got a Secret

He's hiding up to $40 billion in defense spending. Let's find it.

Sleight of hand?
Sleight of hand?

Two things are striking about next year's military budget, which President Bush sent to Congress Monday. First, it's a lot larger than the published numbers show—at least $20 billion and possibly as much as $40 billion larger, not including the hidden costs of the war in Iraq—and the undercounting seems to be a deliberate ploy to make the deficit look smaller and the budget less weighed down with armaments than they really are.

Second, whatever the budget totals, tens of billions in defense spending could be slashed if the president followed the principle he laid down in his State of the Union Address last week—to "substantially reduce or eliminate" all programs that "do not fulfill essential priorities."

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According to the Pentagon's press release (and the many news stories taken from it), the Bush administration is requesting a military budget of $419.3 billion for Fiscal Year 2006, which amounts to a 4.8 percent increase over the $400.1 billion of FY 2005.

But this isn't quite right, in three ways. First, $419.3 billion is the budget for the Department of Defense. The military budget, as the Office of Management and Budget (to say nothing of common sense) defines it, also includes money allotted to the Department of Energy for the research, production, and maintenance of nuclear bombs and warheads. The request for this "weapons activity," as the DoE's budget calls it, totals $9.6 billion.

So, as a first revised look, the true military budget is $428.9 billion. This doesn't change the level of growth in the budget, as the DoE's share stays roughly the same. (Actually, its share is scheduled for a slight reduction in FY06—the '05 figure was $10.2 billion—so, the increase in the overall military budget, at this point in the analysis, comes to 4.5 percent.)

Nearly every administration engages in this kind of undercounting. The deeper deception appears when you examine the section of the Pentagon's budget titled "Army Operations & Maintenance." Tens of billions of dollars for Army O&M—which includes food, fuel, spare parts, all the perishables that keep an army functioning—are being hidden. The Pentagon is subjecting these billions to a clever bookkeeping trick, taking them out of the FY06 budget and putting them in the "supplemental request" for FY06—or perhaps even for FY05—which will be requested several weeks or months from now.

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Now, some of this money-laundering is legitimate, or at least traditional. But some of it absolutely is not. Some parsing is vital to see what's going on here.

A supplemental budget request is an accepted way to deal with the uncertainties of military operations. A year goes by between the time a budget is proposed and the time it goes into effect. If a war is going on, no one can predict a year ahead of time how many bullets will be fired, bombs dropped, fuel consumed, wheels replaced, tank-treads patched, and so forth. So, at some point, the Pentagon might request an extra sum of money—a supplemental—to accommodate the extra requirements.

However, this year, the Pentagon is using the supplemental option for purposes that go way beyond standard practice. First, Donald Rumsfeld and his comptroller's office are not even taking an educated guess at how much the Army might need in Iraq next year. For the budget, they are requesting peacetime levels of funding and intend to put all war costs into the supplemental.

Here's proof. In February 2001, shortly after Bush and Rumsfeld entered office, the Pentagon's request for Army O&M came to $31.2 billion for FY 2002, with expectations of $30 billion in FY03 and $31 billion in FY04. It turned out they needed more in FY04; wars were on in Iraq and Afghanistan. The budget documents released Monday show that Army O&M actually amounted to $62.4 billion in FY04 and $45.4 billion in FY05. Yet for FY06, the Pentagon is requesting just $31.8 billion—the same sum it requested five years ago, as if there were no war. It is fair to surmise that at least another $15 billion will be requested in the supplemental.

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But this sort of low-balling is just the beginning. Rumsfeld is also putting into the supplemental items relating to the expansion of the U.S. Army—not to the war in Iraq.

It is well known, and widely reported, that the Pentagon plans to restructure the active Army's combat brigades and to expand their number from 33 to 43. This will require more soldiers, more equipment, more training, and more of everything that goes with such things. This isn't the unpredictable cost of war; this is the very predictable cost of restructuring the Army. And yet the FY06 military budget contains not a dime for any of this. It will all get shoved in the supplemental.

At Secretary Rumsfeld's news conference on the budget Monday, one reporter (unidentified in the transcript) caught on to this and the following exchange ensued:

QUESTION: "The budget shows that Army spending is going down by $300 million …"

RUMSFELD: "Which, as you know, is not the case."

QUESTION: "Well, that's what I see."

RUMSFELD: "Yeah. I should have mentioned that. … The only way you can look at this budget is to look at the supplementals with it …"

QUESTION: "Well, are you hiding—are you—are they, in fact, hiding non-combat costs in the supplemental—"

RUMSFELD: "No, of course not. … No, that would be wrong [laughter] and we wouldn't do that. … This is no—it's all right out in the open."

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True, the Defense Department's official press release on the budget states that restructuring the Army will involve "procurement of equipment plus added facilities and infrastructure," then adds, "In FY 2005 and FY 2006, the Department proposes to fund these restructured units through supplemental appropriations, and then in the baseline Army budget beginning in FY 2007."

But one line in a press release doesn't quite constitute "all right out in the open." Nor does it explain how anyone could possibly justify putting the "procurement of equipment … facilities and infrastructure" into a supplemental—especially since, next year, the Army plans to put such items back in the main budget, where they belong.

Here is the only possible explanation for this games-playing. President Bush is cutting, in some cases slashing, domestic programs. If he appears to be raising military spending by about 4 percent, well, some may think that's not excessive in a dangerous world. But if he seems to be raising it by 8 percent or 9 percent (again, not including the costs of the war in Iraq), that may seem a bit lopsided, warranting closer inspection.

If Congress decides to pursue this inspection, it might want to check out the following weapons programs, which seem particularly out of whack with the president's State of the Union wish to fund only "essential priorities":

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  • The F22 stealth fighter aircraft ($4.3 billion for 24 planes). Is this program really needed, given that we already have stealth planes and no other nation has an air force capable of shooting down many of our non-stealth planes? Rumsfeld has said he'll stop buying F22s in 2008. How about now?

  • The Trident II nuclear, submarine-launched ballistic missile ($1 billion for continued procurement of five missiles funded last year). Aren't 6,000 strategic nuclear warheads enough? The Trident II was built specifically to destroy hardened Soviet ICBM silos—not the mission of the day.

  • The Virginia-class nuclear submarine ($2.6 billion for one) and the DDX destroyer ($1.8 billion for continued research and development). Does our current fleet of submarines and destroyers face even the slightest threat?

  • The CVN-21 Aircraft-Carrier Replacement Project ($872 million for advanced procurement). A few months ago, Rumsfeld pretended to be efficient by announcing the decommissioning of the aircraft carrier John F. Kennedy. He didn't tell us, then, that he was planning to build a new one in its stead.