Shortchanging our defenses over budget problems creates more problems

Throughout America’s history, sound financial practices and priorities proved essential for strong national security.

Starting with the American Revolution, major military conflicts have determined how the U.S. government funds the war effort and how it pays down the associated war debt. In his recently published book The Price of Liberty, Robert Hormats points out some interesting facts.

After America gained its independence from England it was faced with a critical decision on how to pay back its war debt to France and the Netherlands. The debate in the new Congress was fierce. Many representatives were reluctant to create any tax that would increase the federal government’s role over state sovereignty. A compromise was struck, and a tradition of addressing war debt through implementing strong economic policies was ingrained in the American values of governance.

The Civil War was not only a savage battle that left scars across the American landscape; it also completely emptied the U.S. treasury. The author notes that in 1861 President Lincoln signed the nation’s first federal tax, a 3 percent levy on income over $800 a year. While many taxpayers today would welcome such a rate, the debate and subsequent passage was arduous and controversial.

Hormats further points out that during World War I, the decision to reinstate the income tax reached the Supreme Court, and a graduated income tax was ultimately instituted. This tax was expanded to include more people during World War II, when the percentage of people who paid income tax rose from 13 percent to over 60 percent.

Today we are in the midst of a long and costly war on terrorism. Many believe we can just ignore the clear and present dangers facing our nation today, and cut military spending. I do not share this naïve approach. The underlying question we face is: How will we continue the tradition of paying down our war debt and maintain the military strength to continue to protect U.S. citizens and prepare for future contingencies?

This is a question we must address or we may soon look like the socialized governments of Europe that today meagerly fund their own defenses. Four areas can help us reduce our war debt and yet remain the most powerful military in the world.

First, we must continue to put pressure on NATO countries to increase their defense spending and be active participants in current military operations. NATO nations are required to spend at least 2 percent of gross national product on defense. Yet many members do not meet this mandate. Both Secretary of State Condoleezza Rice and Defense Secretary Robert Gates should continue to press NATO countries to meet their commitment.

Secondly, just as important as NATO’s contributions is our ability to provide our own Department of Defense with predictable and sustainable funding. One common (but shortsighted) approach used throughout U.S. history to pay down the wartime debt is to levy a “peace dividend” on the DoD by substantially cutting its budget. While this action may produce short-term additional revenue, it has proven costly later, when the nation steadily becomes less prepared for future contingencies.

Congress should pass legislation that sets the minimum of Defense spending at 4 percent of our gross domestic product. H.J.Res. 67 declares this as official, though not binding, policy. It is imperative for planning, acquisition and quality-of-life investments that the Department of Defense receives a predictable budget that shows consistent and real growth to offset inflation.

Third, the nation must also continue to pursue strong economic policies, to include trade and energy. A strong economy, not high taxes, is the best solution to increase revenues. Significant tax increases only stimulate Congress’s insatiable appetite for more domestic spending. Slower economic growth and more domestic spending lower American living standards — and put additional pressures on the defense budget.

Finally, we must continue to find ways to control mandatory spending. Increases in mandatory spending, as well as our necessary commitments to Medicare and Social Security, are squeezing our discretionary accounts, including defense. The projections are staggering. Between 2008 and 2018, mandatory spending is projected to jump from $1.6 trillion to $2.7 trillion, or 68.8 percent.

Hormats is right. Like generations before us, we must face the fiscal challenges of today. We must dismiss the false belief that raising taxes and cutting military spending will solve problems. In the long term, they weaken the nation. Our enemies are highly motivated and capable; we must continue to invest in a strong military to meet their threat.

We must find ways to increase the international partnership in the war on terror. Most importantly Congress must control mandatory spending. If we have the courage and conviction to follow this path, our nation will stay strong and continue to prosper.

Saxton is a senior member of the Joint Economic Committee, the Armed Services Committee and the Terrorism, Unconventional Threats and Capabilities Subcommittee.