The Real U.S. National Security Budget is $1.2 Trillion and the Real Price of U.S. Wars is $4.4 Trillion
March 3, 2011
What if you went to a restaurant and found it rather pricey? Still, you ordered your meal and, when done, picked up the check only to discover that it was almost twice the menu price.
Welcome to the world of the real U.S. national security budget. Normally, in media accounts, you hear about the Pentagon budget and the war-fighting supplementary funds passed by Congress for our conflicts in Iraq and Afghanistan. That already gets you into a startling price range — close to $700 billion for 2012 — but that’s barely more than half of it.
If Americans were ever presented with the real bill for the total U.S. national security budget, it would actually add up to more than $1.2 trillion a year.
Take that in for a moment. It’s true; you won’t find that figure in your daily newspaper or on your nightly newscast, but it’s no misprint. It may even be an underestimate. In any case, it’s the real thing when it comes to your tax dollars.
The simplest way to grasp just how Americans could pay such a staggering amount annually for “security” is to go through what we know about the U.S. national security budget, step by step, and add it all up.
So, here we go. Buckle your seat belt: it’s going to be a bumpy ride.
Fortunately for us, on February 14th the Obama administration officially released its Fiscal Year (FY) 2012 budget request. Of course, it hasn’t been passed by Congress — even the 2011 budget hasn’t made it through that august body yet — but at least we have the most recent figures available for our calculations.
For 2012, the White House has requested $558 billion for the Pentagon’s annual “base” budget, plus an additional $118 billion to fund military operations in Iraq and Afghanistan. At $676 billion, that’s already nothing to sneeze at, but it’s just the barest of beginnings when it comes to what American taxpayers will actually spend on national security. Think of it as the gigantic tip of a humongous iceberg.
To get closer to a real figure, it’s necessary to start peeking at other parts of the federal budget where so many other pots of security spending are squirreled away.
Missing from the Pentagon’s budget request, for example, is an additional $19.3 billion for nuclear-weapons-related activities like making sure our current stockpile of warheads will work as expected and cleaning up the waste created by seven decades of developing and producing them. That money, however, officially falls in the province of the Department of Energy. And then, don’t forget an additional $7.8 billion that the Pentagon lumps into a “miscellaneous” category — a kind of department of chump change — that is included in neither its base budget nor those war-fighting funds.
So, even though we’re barely started, we’ve already hit a total official FY 2012 Pentagon budget request of:
$703.1 billion dollars.
Not usually included in national security spending are hundreds of billions of dollars that American taxpayers are asked to spend to pay for past wars, and to support our current and future national security strategy.
For starters, that $117.8 billion war-funding request for the Department of Defense doesn’t include certain actual “war-related fighting” costs. Take, for instance, the counterterrorism activities of the State Department and the U.S. Agency for International Development.
For the first time, just as with the Pentagon budget, the FY 2012 request divides what’s called “International Affairs” in two: that is, into an annual “base” budget as well as funding for “Overseas Contingency Operations” related to Iraq and Afghanistan. (In the Bush years, these used to be called the Global War on Terror.) The State Department’s contribution? $8.7 billion. That brings the grand but very partial total so far to:
The White House has also requested $71.6 billion for a post-2001 category called “homeland security” — of which $18.1 billion is funded through the Department of Defense. The remaining $53.5 billion goes through various other federal accounts, including the Department of Homeland Security ($37 billion), the Department of Health and Human Services ($4.6 billion), and the Department of Justice ($4.6 billion).
All of it is, however, national security funding which brings our total to:
The U.S. intelligence budget was technically classified prior to 2007, although at roughly $40 billion annually, it was considered one of the worst-kept secrets in Washington. Since then, as a result of recommendations by the 9/11 Commission, Congress has required that the government reveal the total amount spent on intelligence work related to the National Intelligence Program (NIP).
This work done by federal agencies like the CIA and the National Security Agency consists of keeping an eye on and trying to understand what other nations are doing and thinking, as well as a broad range of “covert operations” such as those being conducted in Pakistan. In this area, we won’t have figures until FY 2012 ends. The latest NIP funding figure we do have is $53.1 billion for FY 2010. There’s little question that the FY 2012 figure will be higher, but let’s be safe and stick with what we know. (Keep in mind that the government spends plenty more on “intelligence.”
Additional funds for the Military Intelligence Program (MIP), however, are already included in the Pentagon’s 2012 base budget and war-fighting supplemental, though we don’t know what they are. The FY 2010 funding for MIP, again the latest figure available, was $27 billion.) In any case, add that $53.1 billion and we’re at:
Veterans programs are an important part of the national security budget with the projected funding figure for 2012 being $129.3 billion. Of this, $59 billion is for veterans’ hospital and medical care, $70.3 billion for disability pensions and education programs. This category of national security funding has been growing rapidly in recent years because of the soaring medical-care needs of veterans of the Iraq and Afghan wars. According to an analysis by the Congressional Budget Office, by 2020 total funding for health-care services for veterans will have risen another 45%-75%. In the meantime, for 2012 we’ve reached:
If you include the part of the foreign affairs budget not directly related to U.S. military operations in Iraq and Afghanistan, as well as other counterterrorism operations, you have an additional $18 billion in direct security spending. Of this, $6.6 billion is for military aid to foreign countries, while almost $2 billion goes for “international peacekeeping” operations. A further $709 million has been designated for countering the proliferation of weapons of mass destruction, combating terrorism, and clearing landmines planted in regional conflicts around the globe. This leaves us at:
As with all federal retirees, U.S. military retirees and former civilian Department of Defense employees receive pension benefits from the government. The 2012 figure is $48.5 billion for military personnel, $20 billion for those civilian employees, which means we’ve now hit:
$1,034.2 billion. (Yes, that’s $1.03 trillion!)
When the federal government lacks sufficient funds to pay all of its obligations, it borrows. Each year, it must pay the interest on this debt which, for FY 2012, is projected at $474.1 billion. The National Priorities Project calculates that 39% of that, or $185 billion, comes from borrowing related to past Pentagon spending.
Add it all together and the grand total for the known national security budget of the United States is:
$1,219.2 billion. (That’s more than $1.2 trillion.)
A country with a gross domestic product of $1.2 trillion would have the 15th largest economy in the world, ranking between Canada and Indonesia, and ahead of Australia, Taiwan, the Netherlands, and Saudi Arabia. Still, don’t for a second think that $1.2 trillion is the actual grand total for what the U.S. government spends on national security.
Former Secretary of Defense Donald Rumsfeld once famously spoke of the world’s “known unknowns.” Explaining the phrase this way:
“That is to say there are things that we now know we don’t know.”It’s a concept that couldn’t apply better to the budget he once oversaw.
When it comes to U.S. national security spending, there are some relevant numbers we know are out there, even if we simply can’t calculate them.
To take one example, how much of NASA’s proposed $18.7 billion budget falls under national security spending? We know that the agency works closely with the Pentagon. NASA satellite launches often occur from the Air Force’s facilities at Vandenberg Air Force Base in California and Cape Canaveral Air Force Station in Florida. The Air Force has its own satellite launch capability, but how much of that comes as a result of NASA technology and support? In dollars terms, we just don’t know.
Other “known unknowns” would include portions of the State Department budget. One assumes that at least some of its diplomatic initiatives promote our security interests. Similarly, we have no figure for the pensions of non-Pentagon federal retirees who worked on security issues for the Department of Homeland Security, the State Department, or the Departments of Justice and Treasury. Nor do we have figures for the interest on moneys borrowed to fund veterans’ benefits, among other national security-related matters.
The bill for such known unknowns could easily run into the tens of billions of dollars annually, putting the full national security budget over the $1.3 trillion mark or even higher.
There’s a simple principle here. American taxpayers should know just what they are paying for. In a restaurant, a customer would be outraged to receive a check almost twice as high as the menu promised. We have no idea whether the same would be true in the world of national security spending, because Americans are never told what national security actually means at the cash register.
June 29, 2011
The final bill for U.S. military involvement in Iraq, Afghanistan and Pakistan could be as much as $4.4 trillion, according to a comprehensive report Tuesday.
In the 10 years since American troops were sent into Afghanistan, the federal government has already spent $2.3 trillion to $2.7 trillion, say the authors of the study by Brown University’s Watson Institute for International Studies.
The report calculates not only direct spending on the conflicts but also the long-term costs of caring for wounded veterans and projected war spending from 2012-20.
At a minimum, according to the authors of the study, the final cost for these military engagements will be $3.7 trillion. But the report also points out that their estimates do not include at least $1 trillion more in interest payments and other costs that cannot yet be quantified. Indeed, the report criticized the U.S. Congress and the Pentagon for poor accounting.
Although the number of U.S. soldiers killed in the wars in Afghanistan and Iraq have been made public, the report notes, it is not yet clear how many soldiers return to the United States with injuries and illnesses. New disability claims are submitted on an ongoing basis, and many injuries among U.S. contractors have not been reported publicly, further complicating calculations of the costs of war.
Even as President Barack Obama recently announced plans for a withdrawal of troops from Afghanistan, the report asserts that conflict in Iraq, Afghanistan and Pakistan will continue through the decade, adding to financial and human cost.
The report puts the number of civilian deaths to date at approximately 137,000, and the total number of deaths attributable to military conflict in these countries, in uniform or out of uniform, to around 225,000. The study also suggests that the number of war refugees and displaced persons now total about 7.8 million.
“Costs of War,” as the study was titled, was a joint project that involved the work of over twenty academics, including economists, anthropologists, political scientists, legal experts and a physician.
June 29, 2011
A new report out of Brown University estimates that the U.S. wars in Afghanistan and Iraq--together with the counterinsurgency efforts in Pakistan--will, all told, cost $4 trillion and leave 225,000 dead, both civilians and soldiers.
The group of economists, anthropologists, lawyers, humanitarian personnel, and political scientists involved in the project estimated that the cost of caring for the veterans injured in the wars will reach $1 trillion in 30 or 40 years. In estimating the $4 trillion total, they did not take into account the $5.3 billion in reconstruction spending the government has promised Afghanistan, state and local contributions to veteran care, interest payments on war debt, or the costs of Medicare for veterans when they reach 65.
The Congressional Budget Office, meanwhile, has assessed the federal price tag for the wars at $1.8 trillion through 2021. The report says that is a gross underestimate, predicting that the government has already paid $2.3 trillion to $2.7 trillion.
More than 6,000 U.S. troops and 2,300 contractors have died since the wars began after Sept. 11. A staggering 550,000 disability claims have been filed with the VA as of 2010. Meanwhile, 137,000 civilians in Afghanistan and Iraq have died in the conflict. (Injuries among U.S. contractors have also not yet been made public, further complicating the calculations of cost.) Nearly 8 million people have been displaced. Check out Reuters' factbox breaking down the costs and casualties here.
Perhaps the most sobering conclusion of the researchers is that it's unclear whether the human and economic costs are worth it. Saddam Hussein and Osama bin Laden are now dead, the Taliban is marginalized, and the dangerous terrorist network al-Qaeda has been all but destroyed. But Iraq and Afghanistan are far from being stable democracies.
Meanwhile, the half a percentage point a year in GDP growth the war has fueled has been offset by the enormous increase in the national deficit, the report says.
"We decided we needed to do this kind of rigorous assessment of what it cost to make those choices to go to war," study co-director Catherine Lutz told Reuters. "Politicians, we assumed, were not going to do that kind of assessment."
The researchers recommend that the U.S. government be more transparent in disclosing the costs of its wars to taxpayers, by including the costs of future health care for veterans, the cost of paying interest on debt taken out to fund the wars, and estimating how much state and local governments take on in war costs. You can see their recommendations here.
Congress Approves Largest Military Budget Since World War II, Amounting to 19 Percent of All Federal Spending; Military Spending Has Increased 100 Percent Since 1998
With 2.25 million full-time civilian and military personnel, excluding part-time National Guard and Reserve members, the Defense Department is the U.S.’s largest employer, outstripping Walmart with 1.4 million employees and the U.S Post Office with 599,000.
"We must learn the lessons of history. The Roman Republic was the longest-standing republic in the history of mankind. The Roman Empire lasted over a thousand years. There were many people that said Rome was too big to fail. I am sure that most of the citizens of the Roman Empire felt that way. The simple facts of the matter are that Rome fell for at least four reasons, and please listen carefully: a decline in moral values and political civility at home; an overconfident and overextended military; fiscal irresponsibility by the central government; and an inability to control one’s borders. Does that sound familiar? It’s time to wake up, study history, learn from it, and take steps to make sure that we are the first republic to stand the test of time." - David Walker, Former Comptroller General of the Government Accounting Office, Transforming Government to Meet the Demands of the 21st Century, August 7, 2007
December 25, 2010
On December 22nd, both houses of the U.S. Congress unanimously passed a bill authorizing $725 billion for next year’s Defense Department budget.
The bill, the National Defense Authorization Act for Fiscal Year 2011, was approved by all 100 senators as required and by a voice vote in the House.
The House had approved the bill, now sent to President Barack Obama to sign into law, five days earlier in a 341-48 roll call, but needed to vote on it again after the Senate altered it in the interim.
The proposed figure for the Pentagon’s 2011 war chest includes, in addition to the base budget, $158.7 billion for what are now euphemistically referred to as overseas contingency operations: The military occupation of Iraq and the war in Afghanistan.
The $725 billion figure, although $17 billion more than the White House had requested, is not the final word on the subject, however, as supplements could be demanded as early as the beginning of next year, especially in regard to the Afghan war that will then be in its eleventh calendar year.
Even as it currently is, the amount is the highest in constant dollars (pegged at any given year’s dollar and adjusted for inflation) since 1945, the final year of the Second World War. With recent U.S. census figures at 308 million, next year the Pentagon will spend $2,354 for every citizen of the country at the $725 billion price tag alone.
Last year’s Pentagon budget, by way of comparison, was $680 billion, a base budget of $533.8 billion and the remainder for operations in Afghanistan and Iraq. In July of this year Congress approved the 2010 Supplemental Appropriations Act which contained an additional $37 billion for the wars in Afghanistan and Iraq.
Next year’s defense authorization of $725 billion compares to, according to the Center for Defense Information, a Pentagon budget of $444.6 billion in 1946; $460.4 billion in 1968, the highest yearly amount during the Vietnam War; and $443.4 billion in 1988, the highest during the eight years of the Ronald Reagan administration’s massive military buildup. (Numbers in 2004 constant dollars.)
The Stockholm International Peace Research Institute estimates American military spending for 2009 to have accounted for 43 percent of the world total. Carl Conetta, co-director of the Project on Defense Alternatives, earlier this year estimated the 2010 U.S. defense budget to constitute 47 percent of total worldwide military expenditures and to amount to 19 percent of all American federal spending.
In addition, Pentagon spending has increased by 100 percent since 1998 and “the Obama budget plans to spend more on the Pentagon over eight years than any administration has since World War II.”
With 2.25 million full-time civilian and military personnel, excluding part-time National Guard and Reserve members, the Defense Department is the U.S.’s largest employer, outstripping Walmart with 1.4 million employees and the U.S Post Office with 599,000.
“Add in what Homeland Security, Veterans Affairs, and the Energy departments spend on defense and total US military spending will reach $861 billion in fiscal 2011, exceeding that of all other nations combined,” according to Todd Harrison, senior fellow for Defense Budget Studies at the Center for Strategic and Budgetary Assessments.In April Robert Higgs of The Independent Institute advocated that the budgets – in part or in whole – of the departments of Veterans Affairs, Homeland Security, Energy, State and Treasury and the National Aeronautics and Space Administration (NASA) should be calculated in the real military budget, which would in 2009 would have increased it to $901.5 billion.
“Adding [the] interest component to the previous all-agency total, the grand total comes to $1,027.8 billion, which is 61.5 percent greater than the Pentagon’s outlays alone.”
Taxpayers on the Hook for Retiree Costs for Not Just Federal Employees But Also Federal ContractorsAs with all federal retirees, U.S. military retirees and former civilian Department of Defense employees receive pension benefits from the government. The 2012 figure is $48.5 billion for military personnel, $20 billion for those civilian employees. We have no figure for the pensions of non-Pentagon federal retirees who worked on security issues for the Department of Homeland Security, the State Department, or the Departments of Justice and Treasury [The Real U.S. National Security Budget is $1.2 Trillion, Tomdispatch.com, March 3, 2011].
It is one thing for the taxpaying citizens of the United States to know that federal employees are being provided for (including matching deposits into all versions of the Civil Service Retirement), but now the General Accounting Office (GAO) has come out with a new report showing that taxpayers are providing retirement benefits, including pensions and health care, for independent/freelance (private) contractors not on the federal payroll. Taxpayers also cover these retiree costs for contractors' spouses, too. And, in some cases, if contractors want to retire early (at age 50), just like regular federal workers, many can then get taxpayer-funded coverage. A statistic from this GAO Report is as follows: "For the Department of Energy alone, overall this coverage cost taxpayers $6.8 billion over the last 10 years." Note that this situation is ongoing for years.
If private citizens cannot collect Social Security benefits until age 62, and if the maximum Social Security benefit is $21,636 per individual, then why are federal employees allowed to retire at age 50 and why aren't their pensions capped at $21,636 per individual. Many federal retirees have annual pensions of $40,000 or more.
Management of federal employees and buildings (1.4%) $47,980,000,000
Federal retirement and disability benefits (3.2%) $110,061,000,000
Federal employees and retirees health benefits (0.2%) $7,140,000,000
General Services Administration (0.0%) $861,000,000
Office of Personnel Management administration (0.0%) $253,000,000
Merit Systems Protection Board (0.0%) $38,000,000
Legal services for government employees and applicants (0.0%) $18,000,000
Office of Government Ethics (0.0%) $13,000,000
Administrative support for federal agencies (0.0%) $1,000,000
Government reports and information distribution (0.0%) -$7,000,000
Federal employee flexible spending account reserve fund (0.0%) -$15,000,000
Federal employee life insurance benefit (0.0%) -$1,455,000,000
Federal payment for employer share of Medicare taxes (-0.1%) -$4,042,000,000
Department of Defense Medicare-Eligible Retiree Health Care Fund (-0.2%) -$7,780,000,000
Fed payment for employer share of Social Security taxes (-0.4%) -$14,936,000,000
Fed payment for employer share of retirement & disability (-1.2%) -$42,170,000,000
Of course it comes out of our pockets... We not only are on the hook for the juicy unionized public servants' retirement payouts, but also for retirements of labor union third-party federal contractors...
June 10, 2011
A surprising new government report shows that taxpayers have been footing the bill for retiree benefits not just for federal workers, but for independent freelance contractors who do work for the government as well. And no one is watching the store to see if your tax dollars are being wasted.
Taxpayers for years have been covering private contractors' retiree costs for things like pensions and health care, even though these workers are not on the federal payroll.
Taxpayers also cover these retiree costs for contractors' spouses, too, and in some cases if contractors want to retire early (at age 50), just like regular federal workers, many can then get taxpayer-funded coverage, says an official at the Government Accountability office.
For the Department of Energy alone, overall this coverage cost taxpayers $6.8 billion over the last 10 years, according to the new GAO report recently sent to Congress. Nine out of ten dollars spent on the DOE's annual budget goes towards contracts, including contractor retiree benefits.
The problem is, the GAO tells FOX Business it only knows about this problem at the DOE -- no one in government knows, or is tracking with regular, transparent reports to Congress, the tax money going out the door for these costs at other agencies, like the Pentagon, Homeland Security, the National Institutes of Health, or NASA.
The lion's share of the DOE’s workforce is private contractors, most of whom work in the nuclear energy sector. DOE has the largest private contractor workforce in the federal government.
“We can't speak for other contractors, but what we found at DOE is that these numbers were not transparent to Congress and recommended they be more transparent,” the GAO tells FOX Business.Also, no one in government is tracking whether taxpayers are double-covering retiree costs for workers employed at big companies that already cover them, like Boeing (BA: 73.85, -0.79, -1.06%) or Lockheed Martin (LMT: 79.63, -0.01, -0.01%). Moreover, the GAO says in a new report the DOE has to set aside "significantly" more funds for these costs "since the economic downturn."
The GAO adds that the DOE has "limited influence" over reining in contractor retiree benefit costs.
"By contract, DOE must reimburse these costs," the GAO says.The DOE reimburses the companies directly.
The GAO reports that the DOE says it is facing budget strains due to covering these costs.
"DOE will likely continue to face significant challenges managing the costs of those benefits and mitigating their impact on funding available for the department's mission activities," its report said.Most of DOE’s budget for contract work is to hire freelance companies that do things like cleanup work at nuclear sites, or do outsourcing work running the business operations of our nation’s laboratories.
DOE bears the responsibility, according to its contracts, for reimbursing contractors for retiree benefits for an estimated 200,000 people, including 100,000 current and former contractor employees, and 100,000 beneficiaries of those employees, such as spouses.
Taxpayer costs for federal contractors’ retiree benefits at the DOE has been volatile. They ranged from as little as $43 million in 2001 to as high as three quarters of a billion dollars in 2009, the GAO says. In fiscal 2008 to 2009, such costs more than doubled, the GAO adds, because of a drop in the interest rate used to calculate contractors’ pension plan liabilities, and because the pension assets plunged in value as the overall market dropped due to the financial crisis.
As is the case across the board, volatile investment returns can drastically impact pension contributions for government contractors, and in turn taxpayer costs to cover them.
"As a result, DOE ultimately bears the investment risk incurred by the contractor sponsoring the plan," the GAO said in its report.At the same time, federal refunds for contractors’ health care benefits grew by 10%, to $389 million. But all the DOE can do in the face of such funding problems, the GAO says, is to urge contractors to make appropriate investment choices that reduce volatility. It has no power to restructure these plans, the GAO says, as its role is limited to oversight, even though it could do so at the contract stage. The DOE also does not give guidance on how to pick the right coverage nor does it tell contractors how they should allocate plan assets, says the GAO.
The DOE is moving to advocate to contractors that they use 401(k) plans, instead of traditional pension plans that guarantee retirees get set payments each month.
The GAO also reported back in 2008 that the DOE has taken steps to tackle the cost of these benefits that contractors offer to new workers. But the GAO says those moves "were not expected to substantially affect the department's contractor pension and other post-retirement benefit costs for the next 20 to 30 years," since current employees would still earn benefits on their existing plans.
Each contractor negotiates its own pension benefits separately, so reimbursements vary widely among the 50 pension plans the DOE covers. The GAO said a dozen of the contractor pension plans make up 86% of the DOE's total contractor pension liabilities, with the three largest plans accounting for more than a third of all of the DOE's pension liabilities.