Saturday, February 27, 2016

Beating swords into plowshares: If you could cut the Pentagon's budget, what would you spend it on?

So with the usual amount of depressing news circulating through, I set myself a happier task, which nicely dovetails with this piece by Daily Kos' Meteor Blades on military spending:

How much could I cut the U.S defense budget and what would I spend the proceeds on?

The rules were designed to make this somewhat realistic. I'm not trying to eliminate the Pentagon's budget entirely, unilaterally disarm, or make the Air Force hold a bake sale to buy necessary equipment. The idea here is simply to identify some reasonable spending limits for the American military machine (kind of like the discussions we have for regulatory agencies, health care funding research and infrastructure spending), and then think about what sorts of programs (or tax cuts, or deficit reduction) we could implement with the savings.

Figure 1 shows U.S. military spending as a percentage of national GDP between 1962 and 2015, based on GDP figures from the Bureau of Economic Advisors and spending figures from the White House's Office for Management and Budget. This number represents military expenditures, but doesn't represent veteran services or health care (i.e. funding for activities under the Department for Veterans' Affairs.) Notice how the figure generally steadily declines, though it does ramp up during the Vietnam War, the 1980s Reagan build-up and the Iraq and Afghanistan wars. The 1990s peace dividend is clearly visible as well, reflecting the end of the Cold War.

In 2015, according to GDP figures, from military spending represented about 3.16 percent of GDP. In a world in which we made decisions that maintained a reasonable military investment, what might defense spending look like? I came up with plausible three candidates.

Scenario 1: We reduce military spending to the lowest level of spending (Fiscal Year 1999) in which we spent about 2.7 percent of GDP on military spending.  This scenario would give us roughly $82 billion (all peace dividends will be rounded down) in funding to allocate elsewhere.

Scenario 2:  We reduce military spending to levels of the Republic of Korea (South Korea), which is about 2.6 percent of GDP, according to the Stockholm Institute for Peace Research in 2014. I thought this seemed reasonable, since the ROK is an advanced industrialized democracy, participates at a reasonably high level in international operations and faces a clear and presents military danger from North Korea, both of which necessitate large investments in the armed forces. Cutting to this level leaves us with a annual peace dividend of about $101 billion.

Scenario 3: We could really give into the hippies and spend only the percentage of our GDP that an average country spends on the military: 2.3 percent of GDP.  This would leave us with a cool $155 billion to spend.

Note that all three of these scenarios would leave use spending at least double any other country in the world in absolute amounts of defense spending.

Head below the fold to see what I came up with to spend my peace dividend under each scenario. Some funding proposals are fairly detailed, but most (e.g. the preschool and parental leave are rough back-of-the-envelope calculations at best) Let me know in the comments what you would do with your surplus.

As I mentioned above, each of these figures are rounded down to the nearest billion. So just assume a few hundred million in deficit reduction under every scenario. (I'd also be fine if you want to toss an extra $100 million each to the National Endowment for the Arts and the National Endowment for the Humanities).

Scenario 1: $82 billion

General Government: $20 billion. Let's make government work again. You know all those domestic agencies that have been under some form of spending freeze or another since roughly 1995? Let's do what the stimulus did and hire some employees so they can do their jobs effectively. This makes government run better for citizens, catches cheaters, cracks down on

Priority 1: Enhancing revenue collection and eliminating waste, fraud and abuse

IRS: $3.2 billion:
This would restore all the cuts since 2010 and a bit more to improve enforcement (which not only catches rich people cheating on their taxes, but also is a windfall to the treasury), customer service and improvements to recording systems.

GAO: $300 million:
This is about a 60 percent increase in budget for the people in green eyeshades who ferret out waste, fraud and abuse all over government, yet keep getting their budget cut. Let's give them some more power.

HHS:  $2 billion. 
You know the Governor of Florida Rick Scott? His company had to pay $1.7 billion in fines for Medicare fraud. This $2 billion goes to HHS to beef up their investigative capacity. The Affordable Care Act did some of this, but this will do more. This allocation also pays off by redirecting health care dollars from hookers and blow going to the C-Suite to actual health care spent on patients.

Priority 2: Improving workplace safety and conditions, regulating polluters

Department of Labor/ related: $5.5 billion

We'll split this among the Wages and Hours Division, the Equal Opportunity Commission, the National Labor Relations Board and the Occupational Safety and Health Administration.  Let's provide enough inspectors and hotline staffers to actually inspect dangerous workplaces and crack down on violators to stop things like this. Ditto for Wages and Hours to protect workers from wage theft.

EPA: $ 6 billion:
Half of this would fund the Superfund to clean up toxic waste sites. The other half would go toward staff, research and administration to work more effectively to develop and enforce regulations.

Priority 3: Protecting Civil Rights:

FBI:  $1 billion 
One quarter to improving infrastructure (computer systems) one quarter to Civil Rights Division, one quarter to white collar crime, one quarter to domestic terrorism.

DOJ grants: $500 million
To clean up local police departments, get them real training, develop real community policing strategies, budget support for reasonable capital projects develop national database to conduct background checks for cops.

Priority 4: Improving Policy Making and Oversight Abilities

Congressional Staff:  $450 million
Congress gave itself a lobotomy starting with the Gingrich Revolution by cutting staff and in-house expertise and outsourcing the thinking to lobbyists. This money will raise the pay of junior staffers to keep them on board and improve their quality, allow representatives and senators the ability to hire 2-3 more staffers for dedicated policy teams and beef up the committee staff as well.

CBO: $50 million. Give Congress's think tank the ability to actually be a think tank again instead of merely answering questions about conspiracy theories.

Priority 5:  Improving Parks and Recreation and federal lands

National Parks Service: $500 million.
Clean up the damn Washington Mall already. Help improve the overworked infrastructure and better staff and manage the national parks system for visitors and protect wildlife. Purchase and/or clean up a couple dozen more historical sites that need it.

Department of the Interior: $500 million
Better manage and protect federal lands.

Infrastructure Investment: $25 billion

Priority 6: Road repair (with complete streets): $5 billion

Fix-it First, No adding more lanes to rural freeways. Priority goes to road reconstruction that embraces complete streets policy.

Priority 7: Alternative forms of transportation:

Mass Transit: $5 billion
$5 billion will go to section 5309 programs for public transit capital projects, and programs to help bus systems (section 5339). This nearly triples spending on the two programs for 2016.
High Speed Rail: $5 billion
It won't fully fund the president's vision from 2011, but it would double the 2010 budget for high speed rail and would likely be enough to get California's basic plan in place over the next decade. It would also fund improvements on the NE Corridor to increase service and speed, and probably provide dozens of grants to expand medium range Amtrak routes in the Midwest, Northeast and Pacific Northwest from a few trains a day with a  79 mph top speed to a substantial number maxing out at 110 mph. (average speeds would likely increase from about 45 mph to 60 mph). That doesn't sound sexy, but it will make them competitive with driving and drastically increase Amtrak ridership. Maybe we could even electrify a few lines.
Dedicated Bicycle and Pedestrian projects $500 million.
Bikeways. Sidewalks. Pedestrian overpasses.  Protected bike lanes.
TIGER: $1 billion.
We should triple the size of this innovative and oversubscribed grant program, that competitively funds comprehensive transportation projects that would often get neglected in traditional siloed funding. Projects that help fund things like this.

Priority 8: Clean Water
Water and Sewer: $4 billion
Let's fix a bunch of sewer systems to reduce run-off. And maybe clean up some lead. In the first year, we can put half of this into the clean-water revolving credit fund to increase financing potential, after that, make it all grants.

Priority 9: Clean Energy
Electrical Grid/ Energy Storage: $4 billion. This will drastically improve grid security and help us integrate solar and wind into the grid.

Priority 10: Improving connections
$500 million for public broadband projects

Public Health:  $12 billion.

Priority 11: Public Health

The public health infrastructure in the United States is horrific for an industrialized democracy. Heck, let's just implement all of the Institute of Medicine recommendations, call it a day, and check back in five years to see how to build on the improvements.

Research:  $10 billion

Priority 12: Basic Research improvement

National Institutes of Health: $4.5 billion (there is going to be a lot of money coming into NIH through my public health recommendation above)
National Science Foundation: $5 billion
NASA: $500 million

Education: $8 billion

Priority 13: Universial Pre-K

This $8 billion will roughly double the budget for Head Start and get an additional 950,000 kids in preschool. Of the roughly 9 million 3- and 4-year olds, about half are in preschool. Putting Head Start on steroids would get us more than 20 percent of the way to universal preschool and give us a foundation to extend the program over time.

Foreign Aid: $2 billion

Priority 14: easing problems of conflict

Refugee relief: $300 million
Post-War UxO efforts : $100 million.  Help clean up all the mines and old bombs in Laos and other places recovering from civil wars, U.S. invasions etc.

Priority 15: Public health in developing countries

Clean Water: $400 million
Public Health: $400 million

Priority 16: Fighting Climate Change Abroad

Clean Energy $400 million
Climate Change Mitigation $400 million

Under Scenario 2: $101 billion to spend
All of the above plus

$19 billion more to Head Start. This should provide total funding for approximately 2.3 million more  3 and 4-year-olds kids to get preschool and get us extremely close to universial preschool.

Under Scenario 3: $155 billion to spend:
All of the above plus

$5 billion more to Headstart. Finish the job for universial Pre-K.

$40 billion to provie for eight weeks of paid leave (to be matched by at least four weeks of employer paid leave at similar terms) to every new parent. This would provides for 100 percent of salary up to $500 a week and 50 percent from $501 to $2,000. This rough guesstimate is based on 4 million babies being born in the United States every year and the most recent Bureau of Labor Statistics earnings report

$1 billion a year to shore up Post Office pensions over 10 years
$2 billion a year to shore up the Pension Guarantee Corporation (protecting retirees whose companies have declared bankruptcy) over 10 years
$1 billion for Trade Adjustment assistance
$4 billion for Affordable Housing Subsidies
$ 1 billion additional foreign aid, distributed in proportion to above.

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