Kris Kolesnik
Sailors perform maintenance on one of the new Advanced Weapons Elevators (AWE) on the flight deck of the USS Gerald Ford in the Atlantic Ocean off the coast of the US on October 6, 2022. – The USS Gerald Ford is the first new aircraft carrier to be designed in 40 years and and is the worlds largest and most expensive warship ever built. The Ford took 14 years to build and test and is fitted with 23 new technologies including an Electromagnetic Aircraft Launch System (EMALS) and Advance Weapons Elevators (AWEs).Samuel Corum/AFP via Getty Images
America’s attention has been tsunamied by media coverage of Donald Trump’s legal troubles. As the former president’s supporters in Congress jockey with Democrats to score points and turn the narrative, much of the people’s important business is being neglected.
As if to slap Washington back to reality, Fitch Ratings downgraded the U.S. credit rating a critical notch, citing “a high and growing general government debt burden,” as if to scream, “Hey, America! While your government is fiddling, your future is burning!”
Indeed, the nation’s public debt is rapidly nearing a staggering $33 trillion. Interest payments on the debt are a whopping $475 billion last year, an increase of 35% over the previous year. Next year will add another 35%! Interest payments are quickly crowding out other spending priorities.
The last time I can remember such a fiscal crisis was in the early years of the Reagan administration, when a recession created a string of future deficits — an at-the-time unheard-of $200 billion a year or more — for as far as the eye could see. In his election, President Reagan was given a mandate to raise defense spending.
He was also given one to balance the budget. Nonetheless, Reagan pushed for an unprecedented peacetime defense budget build-up. That scenario compelled Congress to put all federal spending under a microscope, including defense.
Until that time, the debate against larger defense budgets was dominated by the liberal nuclear freeze movement, which argued for strategic arms control — or they used a guns vs. butter argument to avoid cuts in social programs. Those liberal arguments didn’t cut it against Reagan’s “Peace Through Strength” slogan.
Enter a new coalition that rejected those arguments in favor of conservative effectiveness and efficiency arguments driven by the Pentagon’s own data. That coalition was led by Republicans — dubbed “The Great Plains Rebels” — plus a few moderate Democrats, with the help of Defense Department insiders and whistleblowers.
To simplify: the excessive Reagan budget increases were creating higher weapons costs and overhead rather than more defense capability. The force structure was shrinking as was readiness, and too often weapons didn’t work as planned. That’s because the defense industry/Pentagon complex couldn’t effectively manage such huge increases. The defense budget was a fiscal and defense capability nightmare. The bureaucracy hid these failures from Congress and the public.
A then-little-known non-profit called The Project on Military Procurement (PMP) began to collect information from Pentagon insiders and whistleblowers that exposed all aspects of the budget mess. Members of Congress also developed confidential Pentagon sources. We learned that the vaunted five-year defense plan (FYDP) was only loosely wired to a military strategy; rather, it reflected chaotic planning, cost overruns, and politically engineered weapons purchases doled out to “strategic” congressional districts.
Using an old farm term, we called the defense budget a “blivet” — 10 pounds of manure in a five-pound sack, full of overpriced, underfunded, and outdated-before-completed weapons.
We learned about decades-old bureaucratic schemes at DOD that brought this all about. Live-fire weapons tests were falsified to avoid production stoppages. Contractors conspired with defense insiders to detect budget amounts before negotiating contracts; with that knowledge, they could absorb it all with contract change orders to add new bells and whistles to weapons. Only 6% of total defense dollars were let competitively. Contractors had the taxpayers over a barrel, often with help from department and congressional officials who needed jobs after retirement. DOD had turned the defense budget into an entitlement program.
We passed laws to stop them.
In 1985 we froze the defense budget after just two years of publicly airing these flaws. The public grew outraged over exorbitant spare parts prices, like a $640 toilet seat, a $435 hammer and the like. That was in the middle of the Cold War. The defense budget mandate was squandered. But the department was more transparent and had more oversight checks built in.
Fast-forward to this spring — 30 years removed from that defense debate — and I was shocked to learn, while watching CBS’s 60 Minutes, that some of those pathologies have resurfaced.
Contractors are denying DOD access to cost and design data that we pay for. Exorbitant price-gouging, a problem we thought we addressed by mandating more competition and better access to cost-and-pricing data, has returned.
More than 50% of the $800 billion-plus defense budget goes to contractors, so competition is crucial for a robust defense industry and for taxpayers.
Doing online research to get caught up — and re-connecting with the non-profit PMP, now called Project on Government Oversight (POGO) — I learned that consolidation within the defense industrial base since the mid-1990s has caused the number of competing companies to shrink considerably. The number of prime contractors went from 51 to just five, a 90% drop. Without the ability to foster competition, contractors once again have taxpayers over a barrel — only worse now.
That shouldn’t happen in a monopsony, in which a single buyer has leverage to control suppliers’ costs. Not so with a shrinking defense industrial base. I can’t imagine what present-day spare parts cost under a monopoly supplier.
It's safe to say that Washington failed to learn from the 1980s.
All over again, DOD is trying to hide the FYDP from Congress; the blivet is back; they’re once again stuffing that same 5-pound sack, with unprioritized programs having questionable links to the threat strategy; price-gouging has returned triumphantly; cost-and-pricing and tech-and-design data is being withheld.
In a haunting déjà vu, the defense budget is back to the same old mess.
Given the Fitch wake-up call, our weapons supply build-up for Ukraine, China’s rising threat in the Taiwan strait, and our shrinking industrial base, the U.S. is playing ball with its hands tied, fiscally and militarily. It’ll take an all-of-government effort with the same kind of conservative approach we used in the Reagan years to fix the problem — and with similar energy and passion currently being channeled into the polarizing distractions of today.
Kris Kolesnik is an expert on federal government oversight. He spent nearly 20 years as senior counselor and director of investigations for Sen. Chuck Grassley (R-Iowa). He then served as executive director of the National Whistleblower Center, after which, he spent 10 years working with the Department of the Interior’s Office of Inspector General as the associate inspector general for external affairs.
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