Research: Commentary

Misleading Job Claims Cloud Defense Spending Debate

The Hill, October 6, 2011 | Article

By William D. Hartung

Secretary of Defense Leon Panetta, Boeing Corporation Vice-President James Albaugh, and House Armed Services Committee Chair Howard P. “Buck” McKeon have something in common: they are all arguing that scaling back the Pentagon’s spending plans will cost large numbers of jobs. Specifically, they suggest that if the budget “super committee” fails and automatic cuts in defense spending are triggered, unemployment could rise by as much as one percent.

Secretary Panetta has been making these claims in calls to members of Congress, and McKeon’s committee staff has made similar assertions in a memo whose findings will be submitted to the super committee.

These claims are misleading and irresponsible. They inject an economic fear factor into the defense budget debate that stands in the way of clear thinking about what level of spending is needed to protect the country and our interests.

Changes in Pentagon spending will displace some workers simply because the continuation of current projects was premised on unsustainable rates of growth in the Department of Defense’s budget. But contrary to the claims of Panetta, Albaugh, and McKeon, bloated Pentagon budgets are more likely to be job killers than job creators. That’s because military spending is an especially poor way to create jobs. A 2009 study by economists at the University of Massachusetts demonstrates that a billion dollars spent on education creates two and one-half times as many jobs as military spending; energy efficiency, one and one-half times as many; and a tax cut, 25 percent more jobs.

In a budgetary climate in which a dollar in unnecessary Pentagon spending is likely to come at the expense of a dollar in cuts in other programs, large numbers of jobs of police, firefighters, nurses, and other vital service providers will be eliminated. Jobs will also be lost among construction workers engaged in state and local projects. The net result will be job losses, not job gains.

The arms lobby also falsely implies that all job dislocations resulting from reductions in the Pentagon’s spending plans will happen immediately. In fact, they will be gradual, kicking in over a five to ten year period. This is true for several reasons.

First, there will be little or no jobs impact next year, since cuts flowing from the super committee process are not scheduled to take effect until 2013.

Second, the nature of weapons procurement guarantees that any reduction in budget authority imposed in 2013 will take effect over several years. That’s because for all major weapons programs there is enough budget authority already in the pipeline to sustain current projects for two to three years beyond any decision to terminate or reduce funding. For example, there is still work being done on the F-22 combat aircraft, which was “ended” by the administration and the Congress in mid-2009.

Third, reductions in military personnel can be done by attrition, tied in part to the speed at which U.S. combat troops are removed from Iraq and Afghanistan.

It should also be noted that a significant number of the jobs impacted by adjustments in military spending will be civilians at the Pentagon. Is Secretary Panetta suggesting that he can’t or won’t make real reductions in the Pentagon’s bloated bureaucracy?

Rather than trying to scare Congress and the public with exaggerated claims about job losses that could result from bringing Pentagon spending back to earth, our political and industrial leaders should be putting their heads together to figure out how to jump start our economy and create more jobs across the board.

And the Defense Department should stop dabbling in economics and stick to worrying about how to address the real security threats we face. What is the best strategy for fighting terrorism? Do we really need to plan for more large-scale, “boots on the ground” conflicts of the kind we are extricating ourselves from in Iraq and Afghanistan? What is the best way to deal with China’s rise as a global power? Why do we need to maintain far more nuclear weapons than are required to deter adversaries from attacking us? These should be the issues under discussion when Secretary of Defense Panetta goes to Capitol Hill, not false economic claims that cloud our ability to think strategically.

William D. Hartung is the director of the Arms and Security Project at the Center for International Policy.


Copyright 2011, The Hill. Read original article here.

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