Post midterms, Congress must focus on defense budget transparency

The first order of business for the post midterm elections lame-duck session of Congress should be an agreement on a budget framework and passage of fiscal year 2023 appropriations bills.

This critical task should be done before Congress adjourns at the end of the year. Most importantly, it must be completed prior to the Dec. 16 deadline of the current continuing resolution (CR). Under this CR, the Defense Department is losing up to $207 million in buying power per day. The new Congress should not have to start its first session with urgent old business hanging over its head and increasing damage to national security.

Defense needs at least $824 billion in fiscal year (FY) 2023 to mitigate inflation, modernize and support the force. As the process of reaching a budget agreement will, unfortunately, likely include discussions again about defense and non-defense budget parity, a better understanding of what is in the defense budget (the largest single piece of discretionary spending) can help.

This country has always, and will always, debate how to appropriately spend taxpayer dollars. It should. But what does, and should, guide our thinking about federal priorities? The Declaration of Independence asserts that the first duty of the government is security as it lays out self-evident truths, including the unalienable rights to life, liberty and the pursuit of happiness.

A strong national defense is the foundation for all three of these rights.

In addition, the U.S. Constitution makes clear that national defense is the only mandatory function of the national government and is exclusive to the national government.

Today’s federal government does many things. Defense, as the only mandatory and exclusive job of the federal government, should not be a priority. It should be the priority.

Budget transparency also matters. A clear and complete understanding of the budget is necessary to enable members of Congress to make wise decisions about a wide range of things with national and global implications, including the annual appropriation of funds to federal departments and agencies.

Today, the lack of defense budget transparency is particularly harmful given the politics of government funding overall. As national policymakers continue to insist on budget agreements that mandate parity between defense and non-defense accounts in discretionary spending, (appropriations other than entitlements and government debt service), they are looking at an inaccurate picture of that balance from the start. If the data underpinning a first assumption are incomplete or hidden, all the assumptions and decisions that follow will be flawed.

A new American Enterprise Institute report, “Defense Budget Transparency and the Cost of Military Capability,” takes the first shot in decades at highlighting what is in the defense budget that does not directly produce a more lethal force. The report also brings attention to the costs of the all-volunteer force, and the fact that Defense Department resources and attention are dispersed on programs and spending that should appropriately be managed by domestic departments and agencies. 

The definition of national security, and thereby defense, has expanded to include numerous non-defense federal functions and missions. As a result, the Pentagon and its budget have become an “easy button” to address problems that are not part of the defense core mission and function. Some of these activities may seem small in the scheme of the overall budget, and many are worthy efforts. However, they artificially inflate the defense budget and distract from true defense priorities.

The new report divides the defense budget into three categories: (1) military capability, direct support of military operations and nonmilitary support to the force and the National Defense Strategy; (2) compensation and personnel support to the all-volunteer force; and (3) non-defense programs and activities.

Using these three categories and a detailed examination of defense budget tables and justification documents, a thorough analysis reveals that the fiscal year 2023 defense budget request of $773 billion contains close to $109 billion in programs and activities that do not directly contribute to military capability. 

This report is designed to shed light on the largest discretionary agency budget and inform important discussions about the definitions of national security and defense, the implications of decisions regarding what the Pentagon is asked to do and manage and the potential ramifications of blurring domestic and defense roles and missions. There is no doubt such light will also bring differing views and interpretations about how spending is categorized and portrayed. This is good.

As the public and Congress have better information about the defense budget, and can more clearly see what is in it, a more informed debate should take place enabling passage, before the end of the year, of a FY 2023 defense appropriations bill that supports the military capability required to carry out the nation’s strategic national security priorities.

Elaine McCusker is a senior fellow at the American Enterprise Institute. She previously served as acting undersecretary of defense (comptroller) at the U.S. Department of Defense.