http://www.informationclearinghouse.info/article34300.htm
Don’t Fall For Pentagon Spin
Never mind what you heard about massive new cuts to the defense
industry. Here's how contractors avoided calamity
By Ben Freeman
March 14, 2013 "Information Clearing House" -"Salon" - If you believe
the hype, sequestration is going to deal a catastrophic blow to the
politically powerful defense industry.
It’s a “doomsday mechanism,” former Secretary of Defense Leon Panetta
declared. The Aerospace Industries Association (AIA) – the leading
advocacy group for Pentagon contractors – has also warned of the
allegedly dire consequences of sequestration for their industry (which
receives nearly $1 billion a day from the Pentagon), expressing “extreme
disappointment that sequestration was not averted.”
The political implications for the contractor lobby are just as
calamitous, we’re told. Roll Call’s Eliza Newlin Carney says the
enactment of sequestration “marks a moment of truth for an industry that
has lost clout and allies on Capitol Hill, probably for good.”
And, of course, sequestration’s plan to reduce Pentagon spending by $492
billion over the next nine years was the reason Democrats mistakenly
believed Republicans would seek to avoid it at all costs.
Don’t believe the hype
The truth? We’re watching a political magic trick. Right now, we’re at
the part of the show where it appears Congress and the President sawed
through Pentagon contractors. They’re moaning and complaining – giving
the audience a good show – but fear not, contracts will be just fine.
This is largely because of the rock solid foundation the industry is
standing on. Every year for the last five years the Pentagon has doled
out at least $360 billion to contractors. In fact, every year since the
war in Afghanistan began contractors have received more than half of the
Pentagon’s total budget. In other words, contractors have received more
taxpayer money than the Department of Defense’s civilian employees and
nearly 1.4 million active duty military personnel combined.
All that money has really added up. So much so that Pentagon contractors
are sitting on a backlog of contracts worth nearly as much as the
entirety of Pentagon sequestration.
In other words, even if contractors absorbed all of the Pentagon
sequestration cuts, they’d still be on track to receive more than $300
billion a year in new contracts, which is more than double what any
other country in the world spends on its military.
Does any of this sound catastrophic?
Behind the Curtain
We, the naïve audience of taxpayers (who are, of course, paying for this
whole show), are supposed to believe the victim has been eviscerated.
Once we pull the curtain back, however, we’ll see the truth behind the
trick: contractors may have been a target of sequestration, but they’re
still winning the war for the Pentagon’s budget.
To be clear, the contractor lobby didn’t take the hit from sequestration
on March 1, but on August 2, 2011 when the Budget Control Act of 2011
was enacted and included cuts to Pentagon spending as a punishment for
Congressional inaction. Unfortunately for the contractor lobby, inertia
is the norm for a Congress that hasn’t passed an actual budget in nearly
four years. For many policymakers sequestration became the best, worst
option. Most Members of Congress got at least something they wanted by
doing what Congress does best – nothing.
But, even with the enactment of sequestration, contractors can rest
assured of their preeminent role in the Pentagon’s budget. They’re being
protected as much as possible from all sides – the Secretary of Defense,
Hawks on the Hill, the Department of Defense Comptroller, and the White
House.
Secretary of Defense Chuck Hagel said during his confirmation hearing,
“The continuing health of the industrial base will be a high priority
for me.”
And despite sequestration, hawks are far from an endangered species on
Capitol Hill. John McCain (R-AZ), for example, remained an especially
ardent opponent of Pentagon cuts, arguing that it would “significantly
impact our industrial capabilities.”
Then there’s Pentagon Comptroller Robert Hale, who said in a
sequestration briefing on February 20, “I don’t anticipate that we will
cancel many, if any, contracts…And, I would like to say to reassure them
[contractors], if you’ve got a contract with us, we’re going to pay you.”
But to truly understand the situation, consider that the White House
recently issued sequestration guidance which allows agencies to award
new contracts for “high-priority initiatives.” Given that, among other
boondoggles, the Pentagon recently spent taxpayer money on an app that
lets you know when it’s time for a coffee break (how would you possibly
know otherwise?) and $1.5 million to develop its own brand of beef jerky
(99 cents Slim-Jim’s just weren’t cutting it), the bar for qualifying as
a “high priority initiative” may be pretty low.
In short, existing contracts aren’t likely to be cancelled, and new
contracts are only a “high priority initiative” rubber stamp away.
Sequestration will reduce the amount of money flowing to the industry.
But, even though the Pentagon pie will be smaller, all signs point to
contractors still getting most of it.
Who’s Actually Disappearing?
While contractors aren’t disappearing en masse in this magic trick, the
same can’t be said of the Defense Department’s civilian employees, who
are facing the economic impact of sequestration head-on.
Hale announced that the Pentagon will furlough most of its civilian
workforce – nearly 800,000 employees – beginning in April. This includes
approximately 15,000 military school teachers and staff. Employees are
expected to be furloughed one day per week, without pay, for the
remainder of the fiscal year.
The Defense Department is, by far, the largest employer of government
workers, so there’s likely plenty of waste in this bloated bureaucracy.
But, cutting civilian workers without taking meaningful steps to reduce
the Pentagon’s over-reliance on contractors may ultimately cost
taxpayers far more than it saves.
Furloughing civilians may create work vacuums where the Pentagon has no
choice but to hire contractors to complete essential tasks. From a
taxpayer’s perspective, this might not be problematic if they both cost
the same amount, but they don’t.
An analysis by my colleague, Scott Amey, of the Project On Government
Oversight has found that service contractors employed by the Pentagon
cost between two and eight times as much as civilian employees, on average.
Service contractors are not always the most expensive personnel option,
and may sometimes be a better option even when they are. But, when the
Pentagon spends more on contractors every year than it does on either
the troops or its civilian employees, and appears primed to keep
protecting contractors even under sequestration, taxpayers have a right
to know why.
Why Spare the Big Contractors?
While there is certainly a jobs argument to be made for protecting
contractors, economic analyses have found that Pentagon spending is
among the least effective means the government has to create jobs, and
in recent years the big Pentagon contractors have been receiving more
taxpayer money while employing fewer people.
There’s a more basic explanation for why Pentagon contractors are being
protected – money.
According to lobbying data from the Center for Responsive Politics, the
defense industry has spent more than $100 million on lobbying every year
since 2005.
The industry also doled out more than $26 million in campaign
contributions during the 2012 election cycle. $16 million of that went
to Republicans, and the money went disproportionately to representatives
with the greatest sway over the Pentagon’s budget. For example, House
Armed Services Committee Chairmen Buck McKeon (R-CA) received $566
thousand from the industry (more than 25% of all his campaign cash in
2012). The industry even went so far as to give nearly $20,000 to
McKeon’s wife in her campaign for a seat in the California state
legislature.
But, if you’re thinking that it’s just Republican hawks who are on the
take from Pentagon contractors, think again.
In 2012 the industry gave more than $10 million to Democrats. President
Obama, the Noble Peace Prize recipient, received more than a million
dollars in campaign contributions from Pentagon contractors during each
of his runs for President. Coincidentally (or not), U.S. overseas arms
sales have more than doubled while Obama has been President.
In stark contrast to the lavish contributions coming from Pentagon
contractors, the more than two million people employed by each of the
service branches and the DoD, combined, made just over $3 million in
contributions during the 2012 election cycle, and had nominal
expenditures on lobbying.
So, now that sequestration hit and it’s time to make cuts, the choice is
easy is for policymakers – don’t bite the hand that feeds.
Sequestration won’t upset the military industrial (Congressional)
complex that President Eisenhower warned the U.S. about more than 50
years ago. It will only ensure that taxpayers pay for a little less of it.
Dr. Ben Freeman is a National Security Investigator at the Project On
Government Oversight, specializing in Department of Defense personnel
issues, weapons procurement, and the impact of lobbying by foreign
governments on U.S. foreign policy.
--
Robert Luis Rabello
Adventure for Your Mind
http://www.newadventure.ca
Meet the People video:
http://www.youtube.com/watch?v=txsCdh1hZ6c
Crisis video:
http://www.youtube.com/watch?v=mZedNEXhTn4
The Long Journey video:
http://www.youtube.com/watch?v=vy4muxaksgk
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