The disastrous defense cuts of the 1970s and 1990s


As the American people ponder the consequences of the pending defense cuts, including those mandated by the First Tier of the debt ceiling deal and those by sequestration, as well as those resulting from withdrawal from Afghanistan, let me offer a stern warning not to proceed with these cuts based on America’s historical experience. The US has made deep defense cuts many times before – gutting its military and inviting aggression and blackmail each time, which is inevitable, because deep cuts to one’s own defense only invite aggression. This is what happened after WW1, WW2, Vietnam, and the Cold War.

The defense cuts currently pending would have the same effect, but on a larger scale, because they would be deeper than the cuts that followed the Vietnam War and the end of the Cold War.

The currently-scheduled cuts would, in just a few years, cut the total military budget ($645 bn as of FY2012) by 29.79%:

  • The First Tier of the debt ceiling deal requires $487 bn in cuts over a decade, i.e. $48.7 bn a year.
  • Sequestration requires a further cut of $55 bn every year during the next decade (FY2013-FY2022), thus, the amount scheduled to be cut rises to $103.7 bn a year. All of these cuts must come out of both the core defense budget ($531 bn this FY) and the OCO supplemental ($88.5 bn). Contrary to the popular myth, OCO spending is not exempt
  • Withdrawal from Afghanistan, scheduled to be completed in December 2014 (i.e. in FY2015), would eliminate another $88.5 bn expenditure by FY2016. This means a total cut of $192.2 bn per year starting in FY2016. This amounts to 29.79% of the total military budget.
  • As a share of the economy, total military spending would come down from 4.41% of GDP now to 2.4% by FY2016.

These would be the deepest cuts in military spending since the end of the Korean War.

Mathematically, the post-Vietnam and post-Cold-War cuts were not as steep. Defense spending was cut from $494.13 bn (in 2011 dollars) in FY1969 to  a record low of $362 bn in FY1980. That’s a 26.73% reduction of $132.13 bn out of a $494.13 bn budget. After Ronald Reagan left the White House in 1989, defense spending was cut from $478.4 bn in FY1989 to $353.76 bn in FY2000. That’s a reduction of 26% – a deep one, to be sure, and it did gut the military (as detailed below), but even that one was not as deep as the cuts the Budget Control Act (including its sequester provision) mandates.

As a share of the economy, defense was cut from 8.7% of GDP in FY1969 to 4.9% of GDP in FY1980. It was cut again from 5.6% of GDP in FY1989 to 3.0% of GDP in FY2000.

There are also two other characteristics that distinguish those previous rounds of defense cuts – however deep they were – from the currently scheduled one.

Firstly, they both occurred over a long period of time – 11 years, to be exact. Defense was not cut by 26% overnight. The actual numbers, in 2011 real-term dollars and as a percentage of GDP, for the post-Vietnam cuts, were as follows:

For the post-1989 cuts, the numbers were as follows:

The second difference is that when these rounds of cuts began (and in the case of post-Vietnam slashing, when it ended), defense spending was at a higher level than it is now. As stated above, in FY1969, defense consumed 8.7% of GDP (9% in the previous FY). When the defense cuts of the 1970 ended in 1980, defense stood at 4.9% of GDP, compared to 4.41% for the entire military budget today and the 2.4% share of GDP it would be cut down to by the sequester (this would be the lowest share of GDP devoted by America to its defense since FY1940, i.e. since before WW2).

In FY1989, defense spending amounted to 5.6% of GDP. It did not decline to 4.40% of GDP until FY1993 – after 4 years of cuts under President Bush – and did not dip below 4% of GDP until FY1995 (when it came down to 3.7% of GDP – but that’s still larger, as a %age of GDP, than the current base defense budget).

By contrast, the base defense budget now consumes a microscopic 3.63% of GDP ($531 bn out of a $14.620 trillion economy), and the total military budget, $645 bn, consumes only 4.41%. That’s a bargain price to keep America safe.

Now, let us consider the consequences of the cuts of the 1970s and the 1990s. The fact is that these cuts gutted the military, and there are numerous witnesses and pieces of evidence to confirm that. During the 1970s, the US military had planes that couldn’t take off and ships that couldn’t even sail out of port for a lack of spare parts, while morale declined dramatically and crime, along with drug and alcohol abuse, became widespread in the military’s ranks. Even worse, these cuts made the military completely unable to fight and protect American citizens, as evidenced by the failure of the Tehran embassy rescue attempt, which showed the world that America had become a paper tiger and brought about scorn from Ayatollah Khomeini and new aggression from the Communist. After 1979, even Jimmy Carter recognized that he was wrong to cut defense spending and began to reverse these cuts (although not aggressively enough). It took Ronald Reagan eight years to rebuild the military from those ruins. As former Defense Secretary Robert Gates has repeatedly and rightly stated:

“I am determined that we not repeat the mistakes of the past, where the budget targets were met mostly by taking a percentage off the top of everything, the simplest and most politically expedient approach both inside the Pentagon and outside of it.  That kind of “salami-slicing” approach preserves overhead and maintains force structure on paper, but results in a hollowing-out of the force from a lack of proper training, maintenance and equipment – and manpower.  That’s what happened in the 1970s – a disastrous period for our military – and to a lesser extent during the late 1990s.”

And:

“In recent weeks there have been calls from various quarters for major reductions in defense spending – to include substantial cuts in modernization, force structure, troop levels and overseas bases.  I consider such proposals risky at best and potentially calamitous.  For more than 60 years the United States, backed up by the strength, reach and unquestioned superiority of our military, has been the underwriter of security for most of the free world.  The benefits – in terms of stability, prosperity, and the steady expansion of political freedom and economic growth – have accrued not only to our allies and partners, but above all, to the American people.  We shrink from our global security responsibilities at our peril, as retrenchment brought about by short-sighted cuts could well lead to costlier and more tragic consequences later – indeed as they always have in the past.  Surely, we should learn from our national experience, since World War I, that drastic reductions in the size and strength of the U.S. military make armed conflict all the more likely – and with an unacceptably high cost in American blood and treasure.”

Indeed.

Ask any veteran who served in the military during the 1970s, Dear Reader, and they will tell you that it was a disastrous period for the military. (Gates was a CIA officer charged with analyzing Soviet military power at the time.)

Moreover, these cuts began in FY1969, when the US military was STILL at war in Vietnam, and they undercut the military so badly that, according to President Nixon, this made it impossible for America to win an otherwise winnable war. Monica Crowley heard that and more from Nixon and wrote it down here.

The defense cuts of the 1990s were just as disastrous. In 2000, President Clinton’s own Joint Chiefs of Staff testified unanimously in front of the Senate Armed Services Committee that these defense cuts “mortgaged the future of the military” and that they needed additional tens of billions of dollars (in 2000’s money!) to rebuild it. USAF Chief of Staff Gen. Michael Ryan alone said he needed an additional $20 bn per year.

This was widely recognized at the time. Even budget hawks unfriendly to the DOD, like John Kasich (R-OH), said that “we need to put more money into the Pentagon” and recommended a $50 bn defense budget increase, while the CSIS recommended a $100 bn budget boost (again, those figures are in CY2000 dollars). When Secretary of Defense Donald Rumsfeld arrived in 2001, he testified that he found the military in a much worse condition than he expected to [emphasis mine]:

“In discussing the budget, it seems to me it’s useful to begin by confronting some less than pleasant facts but important facts: that the U.S. armed forces have been underfunded in a number of respects over a sustained period of years. We have been living off the substantial investments made in the 1970s and the 1980s. Shortfalls exist today in a number of areas — shortfalls that I must say are considerably worse than I had anticipated when I arrived. (…)

Our country has many strengths. Indeed, in some ways it’s because our forces are so capable that we face the challenges that we do. Over much of the ’90s the U.S. has simultaneously underfunded and overused the force, and it has taken its toll. Asked to do more with less, they have saluted, done their best — but it has been at the cost of needed investment in infrastructure, in maintenance and in procurement.

With an end of the Cold War, there was an appropriate drawdown, a peace dividend, a well earned peace dividend. But it went too far in my view, overshooting the mark by a good margin, and we are certainly well past the time to take steps to arrest the decline and put the armed forces on a path to better health. For example, many of our facilities are dilapidated and need repair and replacement. There are shortfalls in spare parts, flying hours, training and personnel. Navy nondeployed force readiness is down some 40 — down to 43 percent — correction: down from 63 to 43 percent in 1991. Only 69 percent of the Air Force total combat units are mission ready, down from 91 percent in 1996. Seventy-five percent of the Army’s major air and ground combat systems are beyond their half life. And some 60 percent of all military housing is characterized as substandard.

While DOD was using its equipment at increased tempos, procurement of new equipment fell significantly below the levels necessary to sustain existing forces, leading to steady increases in the average age of the equipment. It was called a “procurement holiday.””

Also, during the 1970s, there was so little money to renovate military facilities that bases turned into slums, as reported by USA Today.

Those were the consequences of the defense cuts of the 1970s and the 1990s. Not enough money for training, and therefore, not enough tank miles, flight hours, or ship steaming days. Not enough money for procurement, and therefore, the US military was forced during the 1970s to use obsolete, unsurvivable equipment (in the 1990s it was lucky to still have all the gear bought by Ronald Reagan – but the procurement holiday of the 1990s, continued to this day, means that there have been no large weapon purchases since the Reagan years, so the military is STILL using the weapons procured by the Reagan Admin). Not funding money for equipment and base maintenance, so that equipment broke down and became unusable for a lack of spare parts, and bases turned into slums.

Those were the consequences of the defense cuts of the 1970s and the 1990s.

America will repeat the same, but on a larger scale, if defense budget sequestration proceeds, because the cuts that the debt ceiling deal demands, taken together with those resulting from withdrawal from Afghanistan, would be deeper and more widespread (the sequester would cut every account in the defense budget).

The defense cuts of the 1970s and the 1990s gutted the US military. How can one not expect the same result when the currently-scheduled cuts would be even deeper?

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