With the economy in tatters, citizens and politicians alike are becoming increasingly concerned about federal deficits and the resulting debt. As recent as last week, apprehension over the deficit was cited by Republicans as the reason to deny the extension of unemployment benefits. Regardless of the fact that real unemployment still sets at 16.5%, and although the denial of the extension would severely impact those affected, the subsistence income for 2.5 million Americans was simply unaffordable. But Republican principles are complex, and where certain federal programs, like assistance for the unemployed or stimulus to create jobs must be sacrificed in deference to the deficit, other expenditures are the exception.
In a clear showing of priorities, Congress sent a message to the American public yesterday when the House approved a $60 billion war-funding bill. The bill was considered under a suspension of the rules, so it required a two-thirds vote. But even though the $10 billion in state aid to help prevent teacher layoffs was stripped, 148 Democrats joined the 160 Republicans voting in favor, and the opposition fell 30 votes short.
This latest event is sure to leave voters who are actually paying attention to wonder just how important the deficit really is. After all, the deficit is the excess of spending over revenue, yet in spite of the loss in federal revenue, Republicans unanimously support the extension of the Bush tax cuts for the upper 2%. And now we know that, when it comes to war spending, disregard for the deficit is evidently a rare bipartisan position. This all begs the question of what the criteria actually are for identifying the significance to be placed on the deficit.
Opinions abound when it comes to explaining the discrepancies apparent in the precedence of issues. Republicans contend that the tax cuts will actually pay for themselves. Of course, they do so in conflict with the near unanimous opinion of economists. They also posit that, so long as the cuts are given to the wealthy, they will create jobs — this too flying in the face of expert opinion and all empirical evidence.
But where the Democrats appear to be more versed and committed to common sense when it comes to tax cuts, the majority somehow seems to find funding of the wars to be compelling. This may present a bit of a dichotomy to many anti-war Democrats, but even many representatives who oppose the war find it difficult to vote against appropriations, feeling that, regardless of a person’s position on the wars, we must support the troops.
This position is understandable, even seemingly admirable, but is it really valid?
The Department of Defense budget for 2010 is $685 billion. Add to this the portions of defense spending carried under other departments: nuclear weapons, under the Department of Energy, counter terrorism, under the FBI, International Affairs, Veterans Affairs, Homeland Security, parts of NASA, and interest on the debt incurred from past wars — and overall defense spending is somewhere around $1 trillion per year. Of this number, the total cost for military personnel is $154 billion.
A closer look at the actual situation in Afghanistan reveals that only $19 billion of the appropriation was slated for “operations,” the bucket that covers the actual costs to deploy military personnel. Recent Pentagon estimates set that price tag at $875,000 per troop. And while military salaries have seen appreciable raises in recent years, it’s obvious that this money is not going to pay the salaries of deployed American military.
In actuality, the costs are just a part of the federal government’s funding of the Military Industrial Complex (MIC). A significant portion of the war funds will obviously be used to pay for support services contractors, the costs for which exceeded investments in equipment for the first time in 2007. In fact, where contractors numbered 1 for each 100 personnel on the battlefield during Desert Storm in 1991, they routinely now account for 50% or more and recently accounted for as much as 39% of the cost.
The fact is that the MIC is about big money, and as such has significant power in Washington. Escalated under President Obama, the MIC now consumes approximately 52% of federal tax revenues. There is obviously no bigger industry draw on the federal budget. And defense contractors get what they want from our Congress.
Military spending is actually a bit of a third-rail in American politics. It provides thousands of jobs and billions in profits for defense contractors, and as a result gains support from workers and corporate profiteers alike. But make no mistake about it, while the deficit is being used to squash investment in infrastructure, energy, education and other job creating programs, it being ignored as we continue to increase spending on defense.
The top seven defense contractors are certainly not hurting for the recession. L-3 Communications Holdings Inc., a contractor providing airborne and network communications recently reported an 11% increase in profits for the first quarter. Northrop Grumman, the nation’s third largest defense contractor, reported their profits up by 21%. General Dynamics, Raytheon, and Lockheed Martin all are all experiencing similar gains.
So, this much we know: the deficit is a grave concern when spending is in support of those most adversely affected by the recession, but it’s merely an inconvenience when it comes to funding the military industrial complex or providing tax relief for the wealthy. It’s sad to state, but given the anecdotal evidence, an impartial observer might conclude that the degree of concern for the deficit depends less on any real fiscal sensibility and more on who the deficit spending will actually benefit.