What’s So Funny About War, Budget Bloat And Nomenklatura Self-Interest?

DoD propaganda against the Budget Control Act’s sequester is remarkably shameless even for them. First, the ‘draconian’ cuts are anything but. They return DoD to Bush’s 2007 defense budget. DoD will get funded at the same level as at the height of a two-failed war bubble adjusted for inflation. Second, Obama (Romney?) ‘war’ outlays are specifically exempted. Sequester is not a ‘stab in the back’ to the ‘warfighter’(although it will be sold as such). Third, even if sequester is triggered this year, no budget cuts take effect until 2013 and can be postponed.

Sequester is an assault on DoD and its contractors’ privileged socio-economic position. Sure, debate will be framed in terms of ‘national security’. The truth? It’s about rice bowls, careers and status. And thus all the more fierce.

The DoD 2010 budget marked the apotheosis of American mindless spending on ‘national security’. So in that sense, returning to 2007 means a little over 10% cut. This reveals how Obama merely tinkered with Bush’s war economy.

Sequester Cuts Are Not Historically ‘Unprecedented’

What do 2007 budgets (adjusted for inflation) mean? Bush DoD budgets marked a 31% increase over Clinton outlays plus the additional, off-the-books outlays for the two-failed wars in Iraq and Afghanistan.

Panetta and company claim sequester will cut this or that favorite weapons program. Not actually true. Sequester specifically permits DoD to move moneys among accounts (which it already does anyway). Thus, DoD can make priority allocations within the double-war 2007 budget (adjusted for inflation) for programs, agencies, etc. DoD naturally doesn’t want to choose.

Should sequester happen, how ‘unprecedented’ are the cuts? Not very. After 1991, a bi-partisan consensus reduced DoD demands on the American economy by almost 35% from the Reagan years. Post-Vietnam saw not dissimilar ratios. Sequester would not match those levels.

The problem for DoD is that people represent its largest long term cost. And the Force is not going to change in size much. No cost savings there. Thus, the cuts have to come from elsewhere.

It’s All About The Broken Process Buying Broken Toys

What did grow under Bush/Obama is procurement, R&D and contractor outsourcing. (Along with global mission creep). Under Bush/Obama, procurement outlays are up almost 100% since 2000. Some went to immediate war theater needs. Much of it squandered by a broken (deliberately by industry collusion with Rummy) oversight and procurement process.

We wrote years ago here about the Pentagon’s scissors crisis for procurement (one example of many). Reagan-era platforms predictably were burned out through increased OPTEMPO. DoD failed to field generational replacements. You, Dear Reader, know about cost overruns re the F-22, the Army’s Future Combat System, or the absurd $1.5 trillion F-35. The broken procurement system is endemic.

Sequester might force two important policy objectives. One: DoD and its parasites must acknowledge they’re not immune to American economic circumstances. And two: DoD will have no choice but to get serious about acquisition reform and accept oversight with consequences. DoD and industry both want neither beyond superficial gestures.

DoD prefers that we all talk about specific weapons programs and missions. That debate is on their turf, their threats of district job loss, their slight of hand. Sadly, they’re likely to succeed.

12 years of Bush/Obama have so thoroughly militarized us and enshrined the false image of ‘warfighter’/national security apparatchik as untouchable, sanctified nobility. A rational conversation about American geostrategic commitments and interests, and allocation of resources accordingly is laughable.

Normally, a mature great power and healthy liberal democracy should avoid a sequester process. It’s a blunt instrument cost shifting congressional institutional failure into national security frameworks. From 1949-2000, civilians and the military in conversation resolved strategic footprints and their associated political economies with varying success. It’s our preferred process and the reason we initially opposed sequester.

You decide – America 2012 – how mature or healthy?

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DoD On Jenny Craig With Fries On The Side

For all the talk about whether U.S. ‘defense cuts’ are insufficient or cataclysmic, almost all can agree finally the U.S. military enters the post 9/11 world. Overdue, but a good thing.

The political car wreck known as the August 2011 Budget Control Act mandated $487 billion in cuts mostly by reducing out year proposed DoD budget increases. DoD complied with a proposed budget that cut increases to avoid sequestration. Panetta’s Hill testimony argues for keeping things pretty much status quo. There are some losers and winners – especially C4ISR capability.

Defense budget, Defense Sector, Obama, Procurement

Panetta and DoD’s notional cuts are made possible by ‘cost savings’ via the hoary procurement stretch-out gambit, improved ‘processes’ and less spent on people. He even called on Congress to cut Medicare and raise taxes before touching defense.

He didn’t have a choice adopting this aggressive stance. As new SecDef he has only a CIA tour behind him. His first job is to secure the loyalty of the building and services. And he’s carrying their water well. His grip is still formative; the defense sector is in a panic. He knows what happened to Les Aspin. Or Rummy before 9/11. He won’t make their mistakes.

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The DoD Sham Budget Dog And Pony Show

The Obama Administration’s apparent agreement to shield current DoD bloat at essentially a 1% annual level while proclaiming dramatic cuts is chutzpah even for them. Given our general fiscal collapse, Obama’s proposed budget is actually just a pre-emptive token for political optics. This budget preserves intact the perpetual militarization launched by Bush, Cheney and Rumsfeld. Obama ironically really *is* Sovietizing America in this regard.

Smoke, Mirrors And The Out Year Fiscal Fantasies

It’s a proposal. So we shouldn’t get too worked up just yet. Why? Whenever anyone talks about ‘out year savings’ or ‘projected fiscal year savings’ they’re babbling for political cover. DoD budgets are approved annually, as you know. Authorizers and appropriators alike always have rejected budget reform proposals like two-year budgets to improve management and savings. This Tea Party crowd reading Gilberts ConLaw to each other won’t cede any of that annual power to the illegitimate Obama. Plus, neither party got worked up over running two wars off the books. Out year projections like statistics are often fibs.

Second, a rational government would link DoD budgets to U.S foreign policy and security goals. Obama’s vaunted new look foreign policy? Offers tone and tenor differences from Bush. Welcome. What’s jarring — but predictable — about this Administration DoD proposed budget? It enshrines the essential irrational global militarization of 2001-2008. Obama also doesn’t threaten any major rice bowls. Existing political-economic constituencies may complain but they escape largely unscathed. Bush Lite. It’s classic Obama Goldilocks Syndrome — go for lukewarm pudding. Adams in the NYT may say ‘I think the floor under defense spending has now gone soft’. If he means unchecked irrational growth is over, he might have a point. Nonetheless, when we cut through all the smoke and mirrors, Obama proposes an aggregate overall package concealing about 1% actual real growth or at worse a steady state. Some floor.

How ‘Republicans’ and the Movement factions reconcile their fiscal and security memes among themselves remains unknown. 2008-2010 tells us that Obama and Democrats are incapable of bold conceptual initiatives. The worst outcome for America and the world? To fudge the hard questions and ‘muddle through’ on tactical politics of the moment. The Tweetyverse applauds Obama for saying tax reform will regain his mojo. That’s our point. The responsible play for America and history (what Obama claims to value) is to do the hard work and re-evaluate American strategic interests first in our new incarnation. Then reconfigure the purpose of American power and its budget accordingly.

Consider the British experience post-1918. Seemingly a victor of the Great War, Great Britain was already no longer ‘great’ even by 1920. Nonetheless, successive governments left unchanged her Imperial commitments. Meanwhile, her actual outlays fluctuated according to disassociated tactical domestic and internal political-economic logic. Her ‘ends means gap’ between her global commitments and what she was able to do? A significant contributor to 50 million people dying 1939-45.

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Shoot To Thrill, Way To Kill

One symbolic skeet shoot is a success.

Since 2005 we here have together been talking at great length about the inevitable procurement scissors crisis. So it begins. And as we’ve been talking for some time, this is only the cusp. The milporn national security bloggers (including the usual rah rahs like Arianna), etc. are reveling in their new playground of defense planning, budgets, defense-Statist-industrial planning and — GASP — congressional complicity.

That Should Do The Trick

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DoD Acquisition — A Bad Joke

There is broad agreement on the need for acquisition and contracting reform in the Department of Defense. There have been enough studies. Enough hand-wringing. Enough rhetoric. Now it’s the time for action.

Secretary of Defense Robert Gates

If only, as Hunter mentioned, there was more to it. And how sad to see Obama shills like Center for American Progress and former Reagan DoD minion Larry Korb herald Gates’ proposed budget increases and ancillary measures as real reform.

Much of this conversation is old hat for our merry band here. Together we’ve anticipated this procurement scissors crisis for the better part of 4 and 1/2 years or so. The defense industrial apparat’s inertial divorce from any reasonably coherent American strategy premised on both goals *and* means continues. We’re all adults here. We know how the game is played. Ramp up huge budget proposals before a new administration arrives to either box them in or force them to eat ‘soft on defense’.

Ignore The Strategic Bankruptcy Behind The Curtain

For all of that, Obama is Warlord-lite once again. Agitprop spinners and gullible U.S.-we-canners aside, the defense industry quite rightfully breathes a sigh of relief — as their stocks soar on the news. Indeed:

For one, defense spending is going up next year, by at least 4%, as Gates is proposing, to $534 billion (not counting $130 billion for Iraq and Afghanistan). That’s more than half of all spending Congress has a hand in deciding. The Pentagon budget is not being gutted, despite loud criticism to the contrary.

Long time readers know our take on specific programs i.e. ‘Jedi Knight’ platforms like the F-22, the still touted ‘economical’ (with more importantly stronger international political support) F-35, BMD, the Army’s ‘hey we can be as high-tech as the fly boys’ FCS boondoogle, etc. Over at STSOZ 1.0 we shared at length our general, safe for public/non-sensitive observations on the LCS and the catastrophe of *that* program from Art Cebrowki’s original vision. And let’s not even mention the absurd Zumwalts.

The alleged Gates “cutbacks” are merely a piece with the Potemkin nature of Obama’s budget and TARP/financial rescue plan. Essentially to anyone not still drunk from the Inaugural buzz, the Obama Administration’s claim to fame so far is ‘hey we’re slightly less whacked than those other guys’. Change yes, but less than meets the eye. The ‘vital’ Obama federal budget delivered less than a month ago is blown into vapor by their sudden admission (DOH! – as everyone outside the Administration knew) that the economy in fact wouldn’t grow and begin recovery this June as they claimed. Much less reachg 3.3. GDP next year.

If Obama can present such blatantly delusional, nay, knowingly outright deceptive ‘national priorities’ in a joint address to Congress then one can understand that Gates’ proposed but unsustainable ‘floor’ (read still massively bloated and making permanent as a benchmark the staggering increase since 2002) is similarly a chimera. Let’s just say it out loud: after a couple trillion dollars of printing non-existing money on a meaningless, fictional ‘national budget’ and half assed bank plan, why should the Pentagon be held to a different standard?

Oh there is the usual this-or-that about this-or-that system, platform, etc. True, long overdue outsourced contractor-trimming is *proposed* from insanely out of control to merely dangerously crazed, etc. It’s a real step forward to push out some of the 40% (yes, 40%) of the Pentagon workforce that the Warlord turned over to private contractors. The proposed reforms? To hire real government employees as full time program managers. To hire real auditors. For possible – one hopes – additional (but illusory) savings in 10 years.

All well and good. And we can talk about specifics on any of those issues if people here wish. As long time readers know, the Stiftung has represented about every single major defense industrial/technological/contracting entity at the VP/retired two star, retired three star level across Congress, in OSD, at OMB, HLS and OEOB. We’ve spent time on the Pol/Mil analytical side if that interests people.

___________________________

To recap 4 years of our conversations here, the U.S. is stumbling oblivious into the gaping razor blade jaws of procurement impossibilities without the financial-economic means (or even pretense to means) to paper over all the rampaging irrationality. And with a decadent political process to boot. A defense budget one can rightfully argue, like a CVN, doesn’t turn on the dime. But Obama unfortunately is far more status quo than his Kool Aid contingent will allow. (And would someone rid us please of that nauseatingly naive and smug Maddow? Her usefulness as an Oppositionist came and went long ago).

We’re still waiting for the Harvard-Larry Summers types and other whiz kidz there to glom on the fact we can’t afford any of it. Really. It is that bad. We’ll be waiting a long while. We maintain their ineptitude, American historical immaturity, financial illiteracy and obtuseness will require something like gaiatsu (Japanese for shock, usually a foreign imposed circumstance ala the Arab 1973 oil embargo or Baker at the 1985 Plaza Accords) to impose even a dazed recognition of empirical truth.

In the interim, we commend again to all the Obama drinking game. At every event each time he proclaims ‘Let me be clear’, ‘I can’t say this more clearly’ etc. — do a shot. Pretty soon he will start to sound clear if the proof is high enough. Maybe one day he really gets clear about reality, U.S. power and the cruelly inexorable, undeniable audit of means. If you think Obama’s hair is turning white now, just wait for that moment. As John Madden would say — “Boom!”

What’s worse? Scenario One — Bartlett et al. proclaiming they can make up reality and force the rest of us to chase after them; or Scenario Two — a bunch of self-convinced, complicit, financially self-dealing poseurs jury rigging an economic house of cards, grasping for a toe hold on any reality, trying to convince *themselves* they get it by constantly reminding *us* how clear they are?

A Psych 101 major at any junior college already knows what that means. And rightly so.

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High, Flying Adored

The U.S. under the Warlord may be a Rogue Power; or perhaps a beefy, almost naked and sweaty mora standing at the Hot Gates; or just an incompetent Outsourcer. For sake of discussion, offer any political science (or snarky, if you prefer) template that comes to mind. Let’s just call it (noun). We’ll skip bomb threats at campaign HQs, planted questions at farcical debates or Russian withdrawal from treaties in Europe. Tonight we note that the (noun) is finally visiting the eye doctor.

I’m the NRO, and always will be

We’ve mentioned serveral times the catastrophically delusional NRO (National Reconnaissance Office) Future Imagery Architecture program and its inevitable collapse. The new NRO Director, Scott F. Large is scrambling to recover from that Charlie Fox (note the program name).

The new system, known as Basic, would be launched by 2011 and is expected to cost $2 billion to $4 billion, according to U.S. officials familiar with the program. They discussed details on condition of anonymity because the information is classified . . . Officials said the Pentagon is considering a range of options, but the new program is expected to be significantly less ambitious than the one it is meant to replace. Options include developing an entirely new photo-imagery satellite or a derivative of a commercial imagery satellite, buying a commercial satellite or leasing existing satellite capacity.

U.S. commercial satellites currently can make out the outline of a two-foot- long object from space. In April, a satellite will be launched with the ability to see a 16-inch object. By 2011, that capability is expected to narrow to nearly 10 inches.

Industry officials said the contract probably will be for a commercial or commercially derived spacecraft because of the time and budget constraints and the government’s apparent desire to maintain control of the satellite.

This minor story highlights a growing paradox for the noun’s Permanent National Security State (PNSS). The apparat always seeks its own power maximization; by definition that means developing internal solutions. Surveillance platforms — airborne and space-based — historically are the epitome of this maxim. Who else (besides the PNSS) could fund and command bending metal to push beyond the state of the art? Yet, even here, the PNSS finds the sand eroding beneath it. Its ability to develop solutions internally is in disarray. Commercial satellites are not new, the original being SPOT. But the almost holy sanctum of KeyHoles and Coronas is now busted open.

One could argue that more commercial satellite alternatives give the NRO leverage against the same failed Iron Triangle contractors. Yet, this diffusion of technology is a two edged alternative — those same capabilities are available to the unwashed. You know, news organizations, foreign powers, ad hoc groups. Perhaps one day bloggers. This is both a psychic blow to the PNSS and new operational burden.

The operational and security issues go significantly deeper than the obvious need for the U.S. to develop more multifaceted maskirovka techniques. A few years ago (say circa 2003), we had a number of conversations with senior level DARPA personnel about their growing alarm over the U.S. reliance on COTS (commercial off the shelf) or even custom chips from Asia or elsewhere. Who could vouch for the security of the design? Imagine the time it takes to understand one single chip? For example, we know the Russians didn’t bother, they just copied ours, including mistakes and test markers we placed there to verify the Russian copying. Imagery, of course, is above all a system of systems — the complexity and security aspects raised to the nth degree. And we are not just talking about hardware. Just recently, DoD started voicing concern that the U.S. is simply importing chunks of software code without the means of knowing exactly what it is. We have reason to think about it. After all, the U.S. in the 1980s slipped the Sovs defective tech and sabotaged the Siberian pipeline: big boom.

A noun’s PNSS ultimately is overcome by societal trends and designated opponents (foreign and domestic) when its internal host economy loses the capacity, means and will to maintain world class capabilities. The Soviets and their empire are the most recent examples. Are we at a tipping point? Can a society dedicated to (reckless) financial arbitrage be a (noun) for long with a functioning PNSS? History shows us no example.

Signs of twilight here would be the increasing importance of State capital to identify and fund critical technologies that are more advanced commercially elsewhere. Something to watch closely will be the tropism of these commercial vendors to NRO solicitations. The PNSS and Mil-Spec often distort market forces and technological pathways with baroque requirements. In that sense, we have had some heated exchanges with DARPA personnel in the past. The DARPA people asserted that they are identical in function and operate in the exact same way as a venture capital firm. Sadly, no. PNSS capital, no matter how creative for government it may be, can not be a replacement for market forces, particularly for the discipline of capital demanding return on investments in the neighborhood of 30%. And often sitting on the board and owning a major portion of equity. (The less said about the Agency’s foray to seeking cultural pollution pollination *from* Silicon Valley the better).

Noun at least is getting an eye exam. We’ve been looking at the world askew in more ways than one the last few years. Here’s to hoping that, to quote Buck Turgidson, “it would be unfair to condemn the entire program because of a single slip up.”

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