Center for Arms Control and Non-Proliferation

Saxton’s Ill-Advised Proposal to Tie Defense Spending to GDP

by Travis Sharp [contact information]

Published in The Hill on July 17, 2008

I applaud Rep. Jim Saxton (R-N.J.) for carefully considering the defense challenges the United States will face in the years ahead (op-ed, "Shortchanging our defenses over budget problems creates more problems," July 15). I think he is asking the right questions, and I even agree with some of his solutions, particularly the sense of urgency he feels about controlling mandatory spending.

What I do not agree with, however, is Saxton's proposal that Congress should pass legislation declaring that it is official U.S. policy to spend 4 percent of gross domestic product on national defense.

First, it is important to point out that, when including Iraq and Afghanistan supplemental funding, the United States already devotes 4 percent of its GDP to national defense. Indeed, if the wars cost as much next year as they did this year, the United States will spend approximately 4.75 percent of GDP on defense in fiscal year 2009. Strangely, Saxton typically does not include war spending in his recommendations about defense budgets, as if current obligations were somehow separate from future strategy.

U.S. defense spending has increased markedly under the Bush administration and is now at its highest level, in inflation-adjusted terms, since World War II. If U.S. GDP continues its long-term upward trajectory, as it has done in remarkable fashion since the end of World War II, then tying defense spending to GDP basically amounts to using overall wealth creation to justify ever-increasing defense budgets. If the American economy triples in size, should our grandchildren spend three times more on defense than we do today just because they are three times richer?

Presidents Roosevelt, Eisenhower and Truman explicitly called for cuts in nonmilitary spending to make money available for war. During the War of 1812, the Civil War, World Wars I and II, and the Korean War, the treasury secretary decided on, and informed Congress about, the portions of wartime spending they proposed to cover through borrowing and taxation. The Bush administration has practiced no such budgetary restraint, choosing instead to pass on to future generations the debt accumulated through its combination of elevated defense spending and tax cuts.

Defense spending should be determined according to threat-based analysis and budgetary survival of the fittest, not GDP. If the Pentagon can make the case that the threats the country faces justify larger defense budgets, then larger budgets should be allocated. But pegging defense spending to 4 percent of GDP gives the Pentagon and defense contractors a free pass and curtails a much-needed transparent national debate.

TRAVIS SHARP
Military Policy Analyst
Center for Arms Control and Non-Proliferation
Washington

For more information about the pitfalls of tying defense spending to GDP, please see:

Tying U.S. Defense Spending to GDP: Bad Logic, Bad Policy
Tying Defense Spending to GDP is Not the Answer