National Defense: Bloated Contracts They Won't Kill
Policy + Politics

National Defense: Bloated Contracts They Won't Kill

U.S. Marine Corps photo by Lance Cpl. James B. Purschwitz

Across Capitol Hill and down Pennsylvania Avenue, Democrats and Republicans are embroiled in bitter clashes over lifting the debt ceiling, reducing the deficit and slashing domestic spending and entitlements. But there is still one area of government activity where bipartisan bonhomie and Congress’s traditional free-spending ways prevail: national defense.

Defense spending has more than doubled since 2001, and is now nearly 5 percent of the nation’s economy – the highest level since 1990. While overall spending on the wars in Iraq and Afghanistan will decline next year, according to the authorization bill slated for a vote on the House floor this week, much of those savings will be spread around to preserve programs and defense industry jobs that are threatened with sharp cuts or extinction. 

A good case in point is the effort to salvage the rehabilitation program for the MIA2 Abrams tank, a heavily-armored and mobile tank first introduced during the 1980s and a stalwart during the first Gulf War. On May 6, a bipartisan group of 138 House members led by Reps. Jim Jordan, R-Ohio,  and Marcy Kaptur, D-Ohio,  sent a letter to Army Secretary John McHugh protesting the planned closing of the tank manufacturing plant in Lima, Ohio.

The $400 million-a-year program for retrofitting more than 1,000 of the tanks is winding down. Just $181 million was put in the Pentagon’s 2012 request for the last 20 rehabs, which involves replacing the engines and drive trains, treads, suspension systems and installing the latest electronic gear on durable tank frames. In 2013, for the first time since 1941, no factory in America will be building or rebuilding tanks, according to Pentagon plans.

The House Armed Services Committee
stuffed an additional $272 million in
the bill...It passed by a vote of 60 to 1.

Over 1,000 good-paying, jobs with well-funded pensions and benefits will be eliminated by the move. But that will only be for a few years. The Army in 2017 expects to begin building its next generation of tanks, which is already on the drawing boards.

While job loss explains the protest, the issue was never mentioned in the letter. “The end of Abrams production would shut down the unique national asset that is the U.S. tank industrial base,” the members said. To avoid that outcome, the House Armed Services Committee, where Kaptur plays a leading role, stuffed an additional $272 million in the defense authorization bill for retrofitting tanks, which essentially maintains full production at the facility. It passed by a vote of 60 to 1.

The $672 billion Defense Department authorization bill that goes to the House floor this week includes $553 billion for the Pentagon’s base budget, which will pay for everything from personnel costs to military hardware procurement to research and development. That’s a $24 billion or 5 percent increase over this year’s appropriation, which passed Congress in February, according to a Congressional Budget Office analysis released Monday. CBO said the new spending programs in the bill also require increasing budgets by $24 billion between 2013 and 2016.
Overall Pentagon spending next year is projected to be virtually unchanged, since spending on the wars in Afghanistan and Iraq is slated to drop to $119 billion from $157 billion this year. In other words, virtually the entire “peace dividend,” which could be shifted to deficit reduction if President Obama succeeds in his plan to draw down troops, will be siphoned off to other military programs under both the House and president’s proposed spending plans.

In a commencement speech delivered Sunday at Notre Dame University, Defense Secretary Robert Gates warned against sharp cuts in defense spending, whether in the name of balancing the budget or in response to the death of Osama bin Laden. “Our military credibility, commitment and presence are required to sustain alliances, to protect trade routes and energy supplies, and to deter would-be adversaries, he said. “The lessons of history tell us we must not diminish our ability or our determination to deal with the threats and challenges on the horizon.”

Critics say the decision making is based
on threats to jobs in individual districts, and
not any calculations of military or strategic need.

House Armed Services Committee chairman Buck McKeon, R-Calif., in endorsing the Pentagon’s spending plan, said “we should not jeopardize the security of the nation by accepting across-the-board cuts to national defense without regard to the inherent strategic risks.”

But it was far from clear what strategic risks were involved in the way this new pot of military pork was spread around in the authorization bill.  Critics say the decision making is based on threats to jobs in individual districts, and not any calculations of military or strategic need.

“Our military contractors are now the equivalent of state-owned enterprises in the former Soviet Union,” said Douglas A. Macgregor, a retired military officer and Pentagon critic. “They hold people on the Hill hostage to jobs.”

The Lima plant is a classic case where the symbiotic relationship between defense contractors, Congress and the military – what some have dubbed the Military-Industrial-Congressional complex – plays out. The expiring M1A2 rehab program will by the end of next year have refurbished every tank operated by soldiers on active duty. Now, if the full House and Senate go along with the proposal for rehabbing 70 instead of 21 tanks next year, tanks will have to be pulled for refurbishment from someplace else.

“We assume they’ll go to the National Guard, but that’s an Army decision,” said Kendall Pease, a spokesman for General Dynamics. “Every year is an adventure. The army is conducting a study that is due in December that will evaluate how best to maintain an industrial infrastructure” for building and rebuilding tanks. A company-funded study said it would cost more to shut and reopen the Lima plant than to simply keep it operating.

The Pentagon is concerned about the plant’s future since it has announced plans to cancel the Expeditionary Fighting Vehicle, a “next-generation” amphibious craft used by Marines to storm beaches. Large-scale amphibious assaults haven’t occurred since World War II. The EFV’s wildly escalating costs turned what had been a $9 billion program for 1,013 EFVs into a $14.4 billion program for 574 vehicles.

The EFVs, which never got beyond the prototypes because of technical glitches, were also slated for production in Lima. Instead of outright cancellation, the Armed Services Committee voted money for a study comparing the EFV to the Pentagon’s new plan to rebuild its existing fleet of amphibious vehicles.

The Air Force’s V-22 Osprey tilt-rotor aircraft – it can take off and land like a helicopter but fly like an airplane while carrying 24 troops into combat – is another program on the bubble. Congress has repeatedly refunded the program despite complaints from critics. The president’s bi-partisan deficit commission, for instance, called for ending future procurement of the Osprey, which would leave the military with 288 planes instead of the 458 in the military’s long-term plans.

“The V-22 has had a troubled history with many developmental and maintenance problems, including critical reports by the Government Accountability Office and others,” the final presidential deficit commission report said. It quoted Rep. Edolphus Towns, D-N.Y., who had commissioned a Congressional Research Service report on the program: “It’s time to put the Osprey out of its misery.”

But when the House earlier this year voted on the 2011 continuing resolution, it rejected by a 3-1 margin an amendment by Rep. Luis Gutierrez, D-Ill., that would have eliminated future funding for the program. “The success of this program has been validated by commanders in the field and the V-22 has been given high marks for the operational advantages it brings to combat operations,” Rep. Pat Meehan, R-Pa., wrote to his House colleagues. His suburban Philadelphia district is adjacent to the Boeing plant where the fuselage for the V-22 is built.

In fact, the program has been bumped up by Congress in recent years, with seven additional aircraft and $476 million tacked onto the original $10.4 billion contract signed in 2008, according Boeing spokesman Andy Lee.

Another major military procurement program benefiting from the prospective peace dividend is Lockheed-Martin’s C-130, the air freighter that has become the workhorse for long-range mobility and air-to-air refueling. Though it carries much smaller payloads of men and equipment than the older C-5, it is highly touted because of its ability to land on shorter airstrips and tougher terrains.

Built in Marietta, Georgia with a price tag of $70 million for the stripped down version, Lockheed has built more than 2,300 C-130s for every branch of the service and foreign customers since the original version rolled off the assembly line in the mid-1950s. It plans to deliver 33 this year, 16 of which will go to foreign customers like Israel, Kuwait, South Korea and Tunisia.

The Air Force in the process of replacing its entire fleet of 122 planes, which is 48 more than originally thought, bumping up the overall cost of the program 60 percent to over $14 billion. It has ordered 17 from Lockheed for $1.3 billion in 2011. Next year, the request is for just 12 C-130s, but the budget request is nearly the same -- $1.2 billion – because the Pentagon is ordering the more expensive versions (HCs and MCs). Also, the original request for 11 planes was bumped up by one in committee.

“The HC and MC fleets are the oldest in the Air Force, yet they have the highest utilization rate,” said Peter Simmons, a spokesman for Lockheed-Martin. It also doesn’t hurt that in addition to the 8,000 employees in Marietta (a sprawling 76-acre complex that also builds F-22s, modernizes C-5s and is scheduled to build the F-35 Joint Strike Fighter), the company spreads taxpayer wealth around to suppliers in 41 states and 14 countries.

“For decades, defense spending has been a way to redistribute income,” said Macgregor, a West Point graduate who spent 28 years in the military. “It takes money and sends it to states that otherwise wouldn’t get it.”

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