Pentagon windfall
IF only every American had the Pentagon's financial problem! It's difficult enough for Pentagon procurement officials when Congress appropriates all those billions of dollars for weapons systems, payrolls, pensions, and the like -- well over $1 trillion since the Reagan defense buildup began back in 1981. The defense pipeline can spend only so much money at any one time. Production and procurement bottlenecks are a special problem when the economy is growing and there are competing commercial demands on factories and for raw materials, as has been the case in past months.
Add to that equation the billions of dollars resulting from inflation estimates that proved too high, and the US military establishment is faced with a series of financial riddles that would prove difficult for the most diligent accountant, let alone a defense expert on logistics.
To paraphrase those TV commercials of some months back, ``Where's the beef?'' According to House Armed Services Committee chairman Les Aspin, the Pentagon has absorbed somewhere between $18 billion and $50 billion in unplanned funds during the past four years because its inflation predictions were too high. The inflation overestimates, according to Mr. Aspin, have resulted in a ``trackless tangle of vast and vanishing funds'' for the US defense establishment.
The administration, for its part, contends that the surpluses, whatever their exact amount, represent an achievement, since some of the funds come from purported savings in defense costs that are the result of better management practices, while other funds are the admitted result of surpluses stemming from lower-than-expected inflation rates.
And, in fairness to the Pentagon, some outside budget analysts note that the inflation pattern for the 1980s is the reverse of the pattern for the late 1970s.
During the '70s, inflation estimates tended to lag behind actual inflation rates -- leaving, in some cases, budget shortfalls for a number of federal programs. By the early 1980s, many private economists were playing down Reagan administration projections of dwindling inflation rates, assuming that the higher rates of the late 1970s would continue to prevail. So in that sense, Washington as a whole tended to build higher inflation estimates into defense budgets.
Still, the cumulative extent of the surpluses -- involving billions of dollars -- must be considered significant at a time when social programs are being trimmed back to bare minimums, or, in some cases, eliminated. For just such reasons, the charges made by Mr. Aspin -- who came to the defense of the administration on the MX missile during the past year -- deserve detailed investigation by lawmakers.
How much in surplus funds did the Pentagon get? Where are the dollars? Did they go to defense contractors? Are they tucked away in Pentagon computers? Have they been spent elsewhere, such as Central America?
The American people have a right to know how their tax dollars have been used at the Pentagon.
Meanwhile, two conclusions seem inescapable from the current uproar over the purported inflation windfall:
Legislation approved by the Senate tightening up Pentagon procurement practices is long overdue. Congress should reform procurement policies as quickly as possible.
The House approach toward the fiscal 1986 defense budget seems preferable to the Senate-passed measure. The Senate bill would allow defense spending to grow at the rate of inflation. The measure moving through the House, by contrast, would hold next year's defense spending at current levels. Why not do just that? The backlog of billions of dollars of funds appropriated in earlier years -- but not yet actually spent on defense programs -- will ensure that current defense spending levels continue right into the early 1990s.
In other words, the Pentagon spending pipeline is already to a large extent clogged -- with dollars.
