Opinion Editorial | |
| Monday, February 9, 1998 | |
Defense Spending Cuts Helped Balance Budget |
Last week, President Bill Clinton presented his budget for fiscal year
1999, which begins on October 1st. He pointed with great pride to the projection
of a balanced budget next year, the first since 1969. Following are some
points Clinton chose not to emphasize. Higher federal taxes account for half of the decline in the deficit.
To his credit, Clinton has also reduced spending significantly. Federal
outlays in 1999 will have fallen from 22.5 percent of GDP in 1992 to 20
percent. However, three-quarters of this decline is due to solely lower
defense spending, which will have fallen from 4.9 percent of GDP in 1992
to 3.1 percent next year
(see figure). Most of the rest of the decline
results from lower interest payments. Domestic spending, both discretionary and entitlements, has been virtually
untouched. Domestic discretionary spending was 3.5 percent of GDP in 1992
and is estimated at 3.2 percent in 1999. Entitlements were 11.2 percent
of GDP in 1992 and will be 11.1 percent next year. In short, the budget has been balanced almost entirely on the backs of
taxpayers and at the expense of our national security. Although a sharp
cut in defense spending was justified by the collapse of the Soviet Union,
the Clinton Administration has cut disproportionately into the "investment"
side of the defense budget: procurement and research and development. Real
procurement spending is down about 50 percent in real terms during the Clinton
Administration. As a result, by early next century some 70 percent of all
military aircraft will be more than 40 years old. By contrast, the administration has cut far less out of the "consumption"
portion of the defense budget: personnel and operations and maintenance.
Indeed, his foreign adventures in Haiti and Bosnia forced larger cuts in
procurement than initially planned. Thus, as defense expert Loren Thompson
of the Alexis de Tocqueville Institution notes, it is ironic that an administration
that came into office preaching the necessity of long-term investment has
consistently sacrificed investment in defense to maintain consumption. It is too soon to say what price we will pay for Clinton's shift in budgetary
priorities. But it is worth noting that the nation's last balanced budget
was closely followed by a sharp recession. Home | Support Us | All Issues | Social Security Debate Central | Contact Us |
