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Washington and Kabul have, for endless months, been performing a strange pas de deux over the issue of American withdrawal.  Initially, the Obama  administration insisted that if, by December 31, 2013, Afghan President  Hamid Karzai didn't sign a bilateral security agreement the two sides  had negotiated, the U.S. would have to commit to “the zero option”; that  is, a total withdrawal from his country -- not just of American and  NATO “combat troops” but of the works by the end of 2014.  Getting out  completely was too complicated a process, so the story went, for such a  decision to wait any longer than that.  Senior officials, including  National Security Adviser Susan Rice, directly threatened the Afghan president: sign or else. When Karzai refused and the December deadline passed, however, they began to hedge.  Still, whatever happened, one thing was made clear: Karzai must sign on the dotted line “in weeks, and not months,” or else.  Washington couldn’t possibly wait for the upcoming presidential elections in April followed by possible  run-offs before a new Afghan leader could agree to the same terms.   When, however, it became clear that Karzai simply would not sign -- not  then, not ever -- it turned out that, if necessary, they could wait.

And so it goes.  At stake has been leaving a residual force of U.S.  and NATO trainers, advisors, and special operations types behind for  years to come, perhaps (the figures varied with the moment) 3,000-12,000 of them.  With time, things only got curiouser and curiouser.  The less  Karzai complied, the more Obama administration and Pentagon officials  betrayed an overwhelming need to stay.   In the 13th year of a war that just wouldn’t go right, this strange  dance between the most powerful state on the planet and one of the least  powerful heads of state anywhere, to say the least, puzzling.  Why  didn't the Americans just follow through on their zero-option threats  and pull the plug on Karzai and the war?  Obviously, fear that the  Taliban might gain ground in a major way after such a departure was one reason.

In January, David Sanger and Eric Schmitt of the New York Times provided another.  They reported that a paramount issue for Washington was  “concerns inside the American intelligence agencies that they could lose  their [Afghan] air bases used for drone strikes against al-Qaeda in  Pakistan.” It might, it turned out, be difficult to find other regimes in the region willing to lend bases in support of  the U.S. drone campaigns in the Pakistani tribal areas and possibly  Afghanistan as well.

Today, TomDispatch regular Mattea Kramer provides a third potential reason in her striking  explanation of just how the Pentagon has been managing to avoid serious  sequestration cuts.  It turns out that billions of dollars in extra  funding are being salted away in a supplementary war-fighting budget  that Congress grants the U.S. military, which is subject to neither cuts  nor caps.  But here’s a potential problem: that budget relies on the  existence of an Afghan War.  What if, after 2014, there isn’t even a  residual American component to that war?  Not that the Pentagon wouldn't  try to keep "war budget" funding alive, but it's clearly a harder, more embarrassing task without a war to fund.

That's just one of the questions that emerges from Kramer’s  clear-eyed look at what -- once you’ve read her piece -- can only be  considered the Pentagon’s sequestration con game.  It’s a shocking tale  largely because, while the budget figures are clear enough, you can’t  read about them anywhere except here at TomDispatch. Tom

The Pentagon’s Phony Budget War
Or How the U.S. Military Avoided Budget Cuts, Lied About Doing So, Then Asked for Billions More
By Mattea Kramer

Washington is pushing the panic button, claiming austerity is  hollowing out our armed forces and our national security is at risk. That was the message Secretary of Defense Chuck Hagel delivered last  week when he announced that the Army would shrink to levels not seen  since before World War II. Headlines about this crisis followed in papers like the New York Times and members of Congress issued statements swearing that they would  never allow our security to be held hostage to the budget-cutting  process.

Yet a careful look at budget figures for the U.S. military -- a bureaucratic juggernaut accounting for 57% of the federal discretionary budget and nearly 40% of all military spending on this planet -- shows that such claims have been largely fictional. Despite cries of doom since the across-the-board cuts known as sequestration surfaced in  Washington in 2011, the Pentagon has seen few actual reductions, and  there is no indication that will change any time soon.

This piece of potentially explosive news has, however, gone missing  in action -- and the “news” that replaced it could prove to be one of  the great bait-and-switch stories of our time.

The Pentagon Cries Wolf, Round One

As sequestration first approached, the Pentagon issued deafening cries of despair. Looming cuts would “inflict lasting damage on our national defense and hurt the very men and women who protect this country,” said Secretary Hagel in December 2012.

Sequestration went into effect in March 2013 and was slated to slice $54.6 billion from the Pentagon’s $550 billion larger-than-the-economy-of-Sweden budget. But Congress didn’t have the stomach for it, so lawmakers knocked the cuts down to $37 billion. (Domestic programs like Head Start and cancer research received no such special dispensation.)

By law, the cuts were to be applied across the board. But that, too, didn’t go as planned. The Pentagon was able to do something hardly recognizable as a cut at all. Having the luxury of unspent funds from previous budgets -- known obscurely as “prior year unobligated balances” -- officials reallocated some of the cuts to those funds instead.

In the end, the Pentagon shaved about 5.7%, or $31 billion, from its 2013 budget. And just how painful did that turn out to be? Frank Kendall, who serves as the Undersecretary of Defense for Acquisition, Technology, and Logistics, has acknowledged that the Pentagon “cried wolf.” Those cuts caused no substantial damage, he admitted.

And that’s not where the story ends -- it’s where it begins.

Sequestration, the Phony Budget War, Round Two

A $54.6 billion slice was supposed to come out of the Pentagon budget in 2014. If that had actually happened, it would have amounted to around 10% of its budget. But after the hubbub over the supposedly devastating cuts of 2013, lawmakers set about softening the blow.

And this time they did a much better job.

In December 2013, a budget deal was brokered by Republican Congressman Paul Ryan and Democratic Senator Patty Murray.  In it they agreed to reduce sequestration. Cuts for the Pentagon soon shrank to $34 billion for 2014.

And that was just a start.

All the cuts discussed so far pertain to what’s called the Pentagon’s “base” budget -- its regular peacetime budget. That, however, doesn’t represent all of its funding.  It gets a whole different budget for making war, and for the 13th year, the U.S. is making war in Afghanistan. For that part of the budget, which falls into the Washington category of “Overseas Contingency Operations” (OCO), the Pentagon is getting an additional $85 billion in 2014.

And this is where something funny happens.

That war funding isn’t subject to caps or cuts or any restrictions at all. So imagine for a moment that you’re an official at the Pentagon -- or the White House -- and you’re committed to sparing the military from downsizing. Your budget has two parts: one that’s subject to caps and cuts, and one that isn’t. What do you do? When you hit a ceiling in the former, you stuff extra cash into the latter.

It takes a fine-toothed comb to discover how this is done. Todd Harrison, senior fellow for defense studies at the Center for Strategic and Budgetary Assessments, found that the Pentagon was stashing an estimated extra $20 billion worth of non-war funding in the “operation and maintenance” accounts of its proposed 2014 war budget. And since all federal agencies work in concert with the White House to craft their budget proposals, it’s safe to say that the Obama administration was in on the game.

Add the December budget deal to this $20 billion switcheroo and the sequester cuts for 2014 were now down to $14 billion, hardly a devastating sum given the roughly $550 billion in previously projected funding.

And the story’s still not over.

When it was time to write the Pentagon budget into law, appropriators in Congress wanted in on the fun. As Winslow Wheeler of the Project on Government Oversight discovered, lawmakers added a $10.8 billion slush fund to the war budget.

All told, that leaves $3.4 billion -- a cut of less than 1% from Pentagon funding this year. It’s hard to imagine that anyone in the sprawling bureaucracy of the Defense Department will even notice. Nonetheless, last week Secretary Hagel insisted that “[s]equestration requires cuts so deep, so abrupt, so quickly that... the only way to implement [them] is to sharply reduce spending on our readiness and modernization, which would almost certainly result in a hollow force.”

Yet this less than 1% cut comes from a budget that, at last count, was the size of the next 10 largest military budgets on the planet combined. If you can find a threat to our national security in this story, your sleuthing powers are greater than mine. Meanwhile, in the non-military part of the budget, sequestration has brought cuts that actually matter to everything from public education to the justice system.

Cashing in on the “Cuts,” Round Three and Beyond

After two years of uproar over mostly phantom cuts, 2015 isn’t likely to bring austerity to the Pentagon either. Last December’s budget deal already reduced the cuts projected for 2015, and President Obama is now asking for something he’s calling the “Opportunity, Growth, and Security Initiative.” It would deliver an extra $26 billion to the Pentagon next year. And that still leaves the war budget for officials to use as a cash cow.

And the president is proposing significant growth in military spending further down the road. In his 2015 budget plan, he’s asking Congress to approve an additional $115 billion in extra Pentagon funds for the years 2016-2019.

My guess is he’ll claim that our national security requires it after the years of austerity.

Mattea Kramer is a TomDispatch regular and Research Director at National Priorities Project, which is a 2014 nominee for the Nobel Peace Prize.  She is also the lead author of the book A People's Guide to the Federal Budget.

Copyright 2014 Mattea Kramer

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