Join host Steve Ellis, president of Taxpayers for Common Sense, and policy analyst Gabe Murphy as they dive deep into the murky waters of Pentagon budgeting on the latest episode of Budget Watchdog All Federal. Steve and Gabe expose the partisan gridlock threatening to derail the NDAA and shine a light on the Senate’s misguided $25 billion Pentagon budget increase. They’ll arm you with the facts to resist calls for tying military spending to GDP and reveal the hidden influence of Pentagon contractors. Hit play for an eye-opening look at the high stakes of the appropriations process!

Transcript

Announcer:

Welcome to Budget Watchdog All Federal, the podcast dedicated to making sense of the budget spending and tax issues facing the nation. Cut through the partisan rhetoric and talking points for the facts about what’s being talked about, bandied about and pushed to Washington, brought to you by taxpayers for common sense. And now the host of Budget Watchdog AF TCS President Steve Ellis.

Steve Ellis:

Welcome to All American Taxpayers Seeking Common Sense. You’ve made it to the right place for nearly 30 years. TCS that’s taxpayers for common sense, has served as an independent nonpartisan budget watchdog group based in Washington DC We believe in fiscal policy for America that is based on facts. We believe in transparency and accountability because no matter where you are in the political spectrum, no one wants to see their tax dollars wasted. And in the case of today’s episode, dear listeners, the inescapable reality slapping us budget watchdogs in the face is that our tax dollars are being wasted. And here with a certified fresh example is your friend in mine, TCS policy analyst Gabe Murphy.

Gabe Murphy:

Great to be here. Steve.

Steve Ellis:

We’re lucky to have you Gabe. So let’s start with an overview of where things are at in the Pentagon budgeting process right now. A lot happened just this week, right?

Gabe Murphy:

That’s right Steve. It was a very busy week if not a particularly productive one for Pentagon budgeting. The House just passed the NDAA, the National Defense Authorization Act in a near party line vote and House appropriators also worked on the Pentagon spending bill and passed that out of committee. That’s the bill that theoretically appropriates the funds that are authorized in the NDAA

Steve Ellis:

And theoretically because they don’t always match, but the spending is coming out of the approaches. Alright, that is a lot. So are they going to get it done, Gabe?

Gabe Murphy:

It passed the house floor and I think that the Senate also just passed their version in committee. So my 30,000 foot takeaway here is that while these bills are out now, there are some big differences between the Senate and the House version. House Republicans are essentially doing what they did last year, which is to load up the Pentagon’s policy and spending bills with partisan provisions that stand virtually no chance of passage in the Democrat controlled Senate or being signed into law by a Democrat in the White House. Things involving hot button issues, social issues, or blocking the president’s efforts to address the growing costs of climate change. Whatever you think about those provisions themselves, and I certainly have a lot of opinions. This was an exercise in futility for Republicans and worse, it risks a repeat of last year when the government nearly shut down on several occasions and the spending bill itself ended up passing six months late,

Steve Ellis:

Right? I’m feeling that deja vu too. And this is not just futile. Government shutdowns are bad for taxpayers and long delayed Pentagon budgets are unsurprisingly a major headache for the Pentagon, which understandably prefers to have a clear picture of its budget before they begin implementing it. So how did we get here, Gabe? What did the process look like this week?

Gabe Murphy:

Well, Steve, we talked about the base text of the NDA couple episodes ago on this podcast, but things move forward this week when the House Rules Committee took the astounding 1,387 amendments that lawmakers submitted and paired them down to 350. Now while the rules committee doesn’t actually vote on whether or not to pass these amendments, they exercise an enormous amount of power over what issues receive debates and votes when the bill actually moves to the house floor.

Steve Ellis:

The rules committee doesn’t get talked about a lot, but it’s an incredibly powerful tool. It’s also called often the Speakers Committee, and it’s one of the only ones where it actually, and no matter who’s in the majority, whether it’s the Democrats or the Republicans, they basically have a two to one, at least two to one majority on that committee because they don’t ever want to lose a rule. Things have gotten kind of crazy for the listeners this Congress because of some of the deals that Speaker McCarthy made to the far right Freedom Caucus members to put them on the rules committee and so they’ve had less control over what’s coming out of that product. So enough about the rules committee, and I guess the other thing I would flag is they pick the amendments in a way that they’re pretty much sure that what’s going to happen with them.

There’s not a lot of surprises. So if they don’t want an amendment to pass, they’ll pick a more extreme version that they know will probably fail. And so anyway, it’s a very powerful but little paid attention committee. I’d also note that it’s the only committee that actually has its hearing room in the Capitol. It’s not actually in either the House or the Senate office. Well, in the Haas office buildings there is a Senate rules committee, but it’s very different. Alright, enough about that. That’s not why you came to listen here dear listeners. So Gabe, please continue.

Gabe Murphy:

Right. So yeah, I mean thanks for that explanation, Steve. I mean the rules committee really is very powerful, and so we reached out to this committee in a coalition letter with some other taxpayer interest and government accountability groups about an issue of particular concern to taxpayers that our listeners have probably heard us talk about before the Pentagon’s. So-called unfunded priority lists or ups.

Steve Ellis:

Geez, the oxymoronic nature of the term unfunded priorities always blows me away. But when Congress hears unfunded priorities, it sounds to them like the hook of a pop song. They can’t help but stand up and dance to. The problem is the way Congress uses UPS is not in fact what the Pentagon really, really wants.

Gabe Murphy:

Couldn’t have said it better myself, Steven. In 2017, Congress decided to require military service leaders and combatant commanders to submit these extra budgetary wishlists to Congress. Last year, defense Lloyd Austin and Pentagon Comptroller Mike McCord both came out in favor of repealing that requirement. As Mike McCord explained at the time, UPS are not an effective way to illustrate our top joint priorities. That’s because these wishlists don’t go through the same justification process as the rest of the budget, and they really aren’t considered holistically in the context of the entire military’s needs.

Steve Ellis:

Right. I mean this is basically an effort by Congress to look for ways to add even more money to an already bloated Pentagon budget and not a serious effort to budget for our true national security needs.

Gabe Murphy:

Exactly. And in fact, some of the Pentagon’s actual priorities can end up getting acts to make room for these unfunded priorities. Some of the military service leaders who submitted these lists, including the chief of staff for the Army and the chief of Naval operations explicitly asked Congress not to cut anything from the budget request to pay for ups, and yet Congress did just that almost immediately. So ahead of the rules committee hearing, we sent our letter to the committee highlighting these concerns and just encouraging them to include a bipartisan amendment that would simply repeal the requirement for these lists.

Steve Ellis:

Did they listen?

Gabe Murphy:

No. No, they didn’t. They decided to deprive the American people of an actual debate and vote on this issue. Maybe they were scared it would’ve passed or maybe they were too focused on advancing a partisan package of amendments for this bipartisan priority to make the cut. Either way we’ll be pushing the Senate to do what the House couldn’t or wouldn’t.

Steve Ellis:

Yeah, it’s just what I was talking about, how they pick and choose these amendments. So they have kind of a for ordained conclusion and probably were concerned that it was going to actually pass. So as you said, the rules committee made some disappointing choices. What about the 350 amendments that did make it to the house floor? Was there anything good for taxpayers in there?

Gabe Murphy:

Yeah, there were actually a couple of good things. One positive amendment, bipartisan passed by voice vote and block meaning as part of a package of amendments that received a single vote. If that’s signed into law, this measure would require any Pentagon department that fails an audit to forfeit 0.5% of its budget to the Treasury for deficit reduction. Though it does exempt personnel accounts and the defense health program account, this is a big step, Steve, for holding the Pentagon accountable for its ongoing failure to pass an audit. It’s the only branch of government that has not succeeded in doing so. Another positive amendment offered by representatives Norman, a Republican of South Carolina and Doggett, a Democrat of Texas, would establish a panel of experts to review contracts for major weapon systems, spare parts and services to figure out whether the Pentagon paid excess prices and make recommendations to make sure that the Pentagon pays fair and reasonable prices in future contracts that passed by voice vote with no actual opposition.

Steve Ellis:

Okay, well that’s something we’ll be grateful for. We also post some amendments, right? What happened there?

Gabe Murphy:

Right. There were several that we really took issue with which budget Watchdog AF Faithful can take a close look at on our website. For brevity’s sake though, I’ll just highlight one. Representative Marjorie Taylor Green of Georgia offered an amendment to prevent the Pentagon from spending money on electric vehicles or the charging infrastructure for them. Not only would this have been really bad for taxpayers, it would also harm the Pentagon’s efforts to reduce its operational fuel consumption. That’s a serious concern for the Pentagon as getting fuel to where it’s needed is a major undertaking. Thankfully, this absurd amendment failed in a vote of 173 to 241.

Steve Ellis:

Well, even though 173 is a lot of votes for a bad policy, we’ll take the W on this one. When the voting on amendments was all said and done, what was the end result of the House NDA this week, Gabe?

Gabe Murphy:

Well, this morning they passed the bill on a nearly party line vote of 217 to a hundred ninety nine six Democrats voted for the bill and three Republicans vote against it while four Republicans and 11 Democrats did not vote.

Steve Ellis:

Okay. So it looks like the Senate will once again be dealing with the House Bill that they have no interest in passing in its current form, but turning to the Senate, while all this was unfolding in the House, the Senate had a different approach to the NDAA, right?

Gabe Murphy:

That’s right, Steven. In some ways it was more measured in other ways it was worse on the bright side. Unlike Republicans in the House, the Democrats did not use their majority in the Senate to ram through a bunch of partisan policies that risk delaying the entire process. On the other hand, three of the five subcommittee markups were held behind closed doors as was the full committee markup. So taxpayers really didn’t have much of an opportunity to see the Senate’s thought process here.

Steve Ellis:

There’s no reason for that. The whole bill isn’t classified. You can have closed door sessions for any part that is classified. Alright, enough of that. What was in the final big reveal, Gabe,

Gabe Murphy:

While the house NDA adhered to the budget cap agreed to last year, the Senate NDA, which passed out a committee in a vote of 22 to three, authorized a $25 billion increase to the Pentagon’s budget request, bringing the total national security spending and the bill to $923 billion.

Steve Ellis:

Well, I know Ranking Member Wicker has been singing that song and it’s decidedly off budgetary key. Our nation’s debt is so huge, we’re about to be spending more on servicing that debt than on the military and we’re rapidly approaching the day when the Pentagon is going to be asking taxpayers to sign a trillion dollar check to pay for them. How did this increase come about? I may have tipped your hand a little bit, but who’s to blame?

Gabe Murphy:

Well, technically all 22 Senate Armed Services Committee members who voted to advance this bill are to blame. But as you mentioned, Steve Senator Wicker probably bears the brunt of the responsibility on this one.

Steve Ellis:

So Gabe, what is Senator Wicker’s argument here?

Gabe Murphy:

Well, Steve, he put forward a plan for a $55 billion increase to the Pentagon budget that made a number of off kilter points in my opinion. One key argument of his was around GDP. Basically he was making the case that 5% of GDP should be spent on the military. This is kind of an absurd case. A strong economy does not increase the need for national security spending any more than a struggling economy lowers it. Champions of this approach tying military spending to GDP know that and that’s why you’re never going to hear them calling for Pentagon spending cuts during a recession.

Steve Ellis:

Yeah, it used to be the Hawks, particularly Heritage Foundation, we’re calling it 4% for freedom. And now Senator Wicker wants to get his 5% of GDP and as you point out Gabe, it’s a ridiculous argument. The country should spend what is necessary to defend the nation in our interest. It was more than a decade ago, but then chairman of Joint Chiefs, Admiral Mullin said, if you can’t defend the nation on half a billion dollars, you’re doing something wrong.

Gabe Murphy:

Right Steve? And in reality, military spending has in fact grown significantly since the Cold War after adjusting for inflation. Pentagon spending rose from 506 billion in 1980 to $820 billion in 2023. That’s a 62% increase. The bottom line is national security spending should reflect national security needs, not GDP.

Steve Ellis:

Alright, Gabe, what are some of their other bogus arguments?

Gabe Murphy:

Well, Steve, Senator Wicker likes to point to the unfunded priority list, which we talked about earlier, particularly Indo-Pacific commands unfunded priority list to justify his claim that the combatant command was shortchanged a whopping 11 billion as he put it. But as we explained earlier, these ups are wishlist, not a reflection of real needs.

Steve Ellis:

He also beats the drum of a new Cold War, right?

Gabe Murphy:

That’s right Steve. I mean, he’s trying to say that we’re in a new threat environment that demands a generational investment in Pentagon spending. The reality is, while clearly Russia has been more aggressive, but the war in Ukraine being a prime example, and it’s also true that China has been expanding its military capabilities. These are things causes for concern, not causes for panic. The US military is still the dominant fighting force in the world and we really do not need another 55 billion on top of the 850 billion request to keep that going. I think the war in Ukraine has demonstrated for one, the Russian government’s expansionist agenda, but it’s also showcased some of the limits of its power. And unlike the US and the Soviet Union during the Cold War, the US and China are economically intertwined in some really expansive ways that would make conflict incredibly costly for both nations and that incentivizes both sides to avoid it. We’re not saying there’s no risk here, we’re just saying we don’t need a massive increase in Pentagon spending to keep up with these threats.

Steve Ellis:

So if it’s not this new Cold War or short-changing combatant commands, who are the real beneficiaries here? Who is Senator Wicker really touting this on behalf of whom?

Gabe Murphy:

Well, I think it’s really the Pentagon contractors driving this. They’re paying for the privilege of Senator Wicker’s support as evidenced the fact that he is the top recipient of campaign contributions from the military industry raking in over $340,000 so far in the 2024 cycle

Steve Ellis:

And he’s going to be poised to be the chairman of the Armed Services Committee next Congress if the Republicans flip the Senate, which has been predicted.

Gabe Murphy:

That’s right. Yeah. And so anyway, stepping back a little bit and just looking at this Senate NDAA while, we’re disappointed with the results. I will say that we are grateful to Chairman Reed of Rhode Island for being one of the three on the committee to oppose this bill because of the spending hike. That was a good move on his part.

Steve Ellis:

That is kind of crazy. I don’t think I can recall a time in my years of working on Capitol Hill that the chairman is opposing a bill that he’s reporting to the floor. Wow. Alright, stepping back, what does this all portend for? The budget process for the rest of the year? I mean it’s an election year and with their drastically different approaches to the NDA house and the Senate have their work cut out for them? Is there any hope of getting an agreement on the budget authorization before the end of the fiscal year on September 30th?

Gabe Murphy:

I wouldn’t be any good at this jab, Steve, if I wasn’t eternally hopeful. But the left side of my brain is crunching the numbers and I don’t think the odds are good. That’s largely because a lot of lawmakers want to be seen by their constituents ahead of the election as pushing for their parties principles, even if that approach risks shutting down the government and delivering a national security budget months behind schedule. In short its politics and politics don’t always align with good policy.

Steve Ellis:

That is certainly the case. Alright, let’s get you out of here on this. We’ve talked about the authorization, the NDAA. What’s the deal with the appropriations where the spending rubber meets the road?

Gabe Murphy:

On Thursday, the House Appropriations Committee marked up its version of the fiscal year 2025 Pentagon spending bill and essentially they took the same approach as the NDA passing it out of committee in a largely party line vote that includes a bunch of partisan policy provisions that stand little to no chance of advancing in the Senate. I think at the end of the day, we’re going to see a similar battle unfolding on the appropriation side and it does run the risk just like the NDA of further government shutdowns of just not getting a budget on time, which is a big problem for the military.

Steve Ellis:

Ain’t that the truth? It’s true for the whole government too. Gabe Murphy TCS policy analyst, great job on keeping us all informed.

Gabe Murphy:

Thanks Steve. Great to be here.

Steve Ellis:

Well, there you have at podcast listeners, when everything is a priority, nothing is a priority, especially when it comes to protecting taxpayer dollars. This is the frequency market on your dial, subscribe and share and know this taxpayers for common sense has your back America. We read the bills, monitor the earmarks, and highlight those wasteful programs that poorly spent our money and ship long-term risk to taxpayers. We’ll be back with a new episode soon. I hope you’ll meet us right here to learn more.