TCS National Security Analyst Gabe Murphy joins Steve Ellis with an important update on America’s military budget and spending issues. Hit play for the latest on the defense budget, military aid to Ukraine, the F-35 fighter jet, the Marine Corps transformation plan, and the Federal Acquisition Regulation (FAR) rule, that guides the Pentagon’s role in addressing climate change.

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 over 25 years TCS that’s Taxpayers for Common Sense, has served as an independent non-partisan 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 on the political spectrum, no one wants to see their tax dollars wasted. And today we’re talking with Gabe Murphy, our newest policy analyst here at TCS. Gabe is focused on national security issues. Welcome to the podcast Gabe.

Gabe Murphy:

Thanks so much, Steve. Happy to be here.

Steve Ellis:

Today we’re going to have you bring all of us up to speed on the latest in the national security space. But first I want to take this opportunity to brief our listeners on your background. You earned a Master’s in Global Studies from the University of California at Berkeley, and prior to joining TCS, you worked at the Charity and Security Network, which works to defend the rights of civil society groups that run humanitarian peace building and human rights programs. Are you excited about being here in DC moving from the West Coast?

Gabe Murphy:

Absolutely. I’m very excited to be here. I’ve been wanting to move to DC for a while and I’m really enjoying it so far. Already played pickleball twice and that’s two more times than I ever had before. So I think I’m off to a good start.

Steve Ellis:

That sounds great. And I know where some good courts are. We can talk after the program.

Gabe Murphy:

Excellent.

Steve Ellis:

All right, so let’s start with the national security conversation with an update on the defense budget. So Gabe, that’s tied up in Congress right now, right?

Gabe Murphy:

Yeah, that’s right, Steve. The House passed the defense appropriations bill, but the bill hasn’t made it through the Senate or been conferenced yet because Congress essentially punted on that when they passed a continuing resolution to keep the government open. But the clock is ticking to pass a budget or another stopgap measure by midnight on November 17th to prevent a costly government shutdown. In fact, if you visit our webpage at taxpayer.net, you can see our countdown to shut down timer at the top of our homepage.

Steve Ellis:

And we had to tweak that a little bit because daylight savings times comes in the middle of that and so it appears to be an hour off, but it’s actually the correct, so just a little fun fact there for our podcast listeners. But back to the legislative process, Congress not actually getting the approaches done, that’s not the only thing in the way. Aren’t you forgetting an elephant in the room or in the House?

Gabe Murphy:

Or maybe several elephants? The speaker’s race is definitely gumming up the works both because the House may not be able to take up legislation without a new speaker. There are some differing opinions on that question, but also just because the Republicans aren’t likely to get in line behind a budget deal without some cajoling from the speaker. So as of this taping representative Jim Jordan has lost two votes garnering less support on the second round. So it’s unclear when the House may elect a new speaker at this point.

Steve Ellis:

Yeah, I mean it’s pretty clear to say it’s kind of a mess. And if he continues to hemorrhage votes, then I mean lost couple, but there’s going to be somebody else as speaker or there’s been talk about trying to further empower Speaker pro tem McHenry. And I saw some people arguing, well, giving the pro tem more powers is unprecedented. Of course, having a pro tem in the first place is unprecedented. So anyway, we don’t need to get into the capital intrigue. But back to that CR, I mean, one of the things that was left out of the CR, and I think then Speaker McCarthy thought this might save his bacon, was the aid to Ukraine. So what’s the status on military aid to Ukraine?

Gabe Murphy:

So the administration is very much still pursuing that, but now they’re looking to package it in a hundred billion aid package that includes military aid for Ukraine as well as military aid to Israel and to Indo-Pacific nations, including Taiwan. So it may also include funding for border security as well. And they’re trying to get a lot into this.

The aid package is, I think both a response to the terrible situation unfolding in Israel and Gaza right now, and also an effort by the administration to get Ukraine aid through Congress by lumping it together with some of these other aid packages. So Steve, just like we talked about before with Ukraine for TCS, the main concern with these aid packages is really ensuring that there’s strong oversight of how they’re being used so that the public debate around this aid can be an informed debate.

Steve Ellis:

Great. All right, Gabe, so now you’ve gotten us up to speed on current events. What else have you got cooking?

Gabe Murphy:

Well, one of the first things I started working on here is what we like to call zero to hero, which some of our listeners may have heard of before. This is essentially a term we use to refer to funding for programs that Congress adds to the Pentagon budget that the Pentagon requested zero dollars for. And after sifting through the budget documents, I found over $15 billion, with a B, in zero to hero funding for procurement and for research development testing and evaluation, which is another pot of money in the House Appropriations Committee and Senate Appropriations Committee markups for the defense spending bill.

The thing about zero to hero adds, not all of these are necessarily bad ideas. For example, some of the adds are focused on renewable energy research that may help the Pentagon reduce some of the long-term costs of climate change. But at the end of the day, all of these adds are for programs the Pentagon didn’t fund at all in their budget requests. And when that’s being done behind closed doors, that’s just really not a recipe for fiscally responsible spending.

Steve Ellis:

And a lot of these would’ve been earmarks back in the day, but there’s even a little less disclosure because of some of the rules about where money can be directed and not going to private companies. And so the money’s still flowing, it’s just a little bit more obscured than it was before. Okay. So speaking of that and kind of questionable funding, you got some examples for our podcast listeners?

Gabe Murphy:

Absolutely. I mean, there’s literally hundreds of examples I think, but some that stood out to me. I found 90 million for a hypersonic test facility. This is for testing hypersonic weapons, and these are weapons that are relatively new and don’t have a military mission yet. So funding research on them that the Pentagon didn’t ask for doesn’t really seem necessary at this point.

Another example is 55 million for drone swarm research that’s swarms of smaller drones. And again, we’re talking about funding for research that the Pentagon didn’t ask for in its budget request. I think another point that I’ve been thinking about is with these relatively new weapons technologies like hypersonic weapons and drone swarms, there are some concerns that major investments could lead to new arms races, frankly, and history has shown that can be very expensive and don’t necessarily make us safer.

Steve Ellis:

Well, and I would interject there Gabe too. The other thing is even beyond that is that there’s somebody manufacturing this and there’s somebody representing the company that is manufacturing this. And so there’s certainly some people who have a vested interest and that’s part of it. The Pentagon has never been bashful about actually asking for new weapon systems and for getting new toys. And so clearly when Congress tries to insert this stuff into the bill, you have to wonder if there’s some other reason behind it, which is basically some parochial interest.

Gabe Murphy:

Yeah. That’s exactly right. And frankly, that’s one of our biggest issues with these zero to hero adds is that they’re happening behind closed doors. It’s oftentimes hard to tell exactly who is behind these funding requests, and it’s happening in a manner that frankly requires poring over hundreds of pages of spending tables in order to have a shot at deciphering the origin of these requests and their potential value to national security.

So our position here at TCS is that if members of Congress are going to add billions of dollars in military spending that the Pentagon didn’t ask for, then they should at least be required to put their name on those requests and offer some kind of justification in a publicly accessible manner.

Steve Ellis:

Great. Well, not great, but good work. How about that? So I look forward to hearing more about that as the defensive probes moves forward, assuming that it is going to move forward, which I certainly do.

Moving along, and this is something else that our budget watchdog faithful have heard us talk about before, let’s talk about our favorite platinum plated spork, the F35. And I call it that because it is trying to be all things to all services. There’s a model for the Air Force, model for the Marine Corps, model for the Navy. They’re all slightly different and it’s bad at that plus being expensive to boot.

Gabe Murphy:

That’s right. I mean, the F35 is projected to cost $1.7 trillion in sustainment costs over its lifetime. And there have been cost overruns, safety concerns for pilots and a range of mechanical issues over the course of this program’s development.

Steve Ellis:

Okay, Gabe, but that’s not news. What is the news?

Gabe Murphy:

That’s true. So the F35 made headlines in a really spectacular fashion last month when one of them went missing. A marine pilot ejected over South Carolina while the plane was on autopilot, and the pilot landed in someone’s backyard making for a pretty unusual 911 call. And interestingly, the Pentagon actually asked for the public’s help in finding the plane, which I thought was an interesting tactic, but they did eventually find it.

It ended up flying for another 60 miles before crashing into a field somewhere. And again, we’re talking about a jet that costs about a hundred million dollars to make, plus they just finished cleaning up the debris field last week, nearly a month after it crashed. So this was a costly cleanup as well.

Steve Ellis:

That’s not all the bad news for the F35, right? Gabe?

Gabe Murphy:

That’s right. Steve, yeah, just a week after that happened or so, the GAO released a report highlighting that the F35 is only mission capable 55% of the time. So when they’re talking about this mission capable rate, that refers to the percentage of time that an aircraft can fly and perform at least one of its missions.

Steve Ellis:

One or more of its missions. So only 55% of the time is it able to fly one of its missions?

Gabe Murphy:

That’s right. That’s right. And most of the time it’s about it not being able to get off the ground at all because it is missing parts. And frankly, 55%, that’s a failing grade by any rubric I’ve ever seen, including the Pentagon’s, which aims for an 85 to 90% mission capable rate depending on the variant of the F35. So this GAO report, it also highlighted some of the cause for this abysmal grade.

I looked at maintenance and sustainment issues. Basically, if you don’t have all the parts and maintenance operations in place to keep these aircraft operational, that’s going to impact it’s mission capable rate. The report also highlighted the F35’s concurrent development, procurement, and fielding as a driver of both the F35’s astronomical costs and some of these maintenance issues. Essentially, the Pentagon wanted the plane sooner, and so it put it in the field while still developing a whole host of components for it, which means that these planes need constant upgrading.

Just one example that the GAO pointed out, one of the maintenance depots that works on F35’s told them they were currently working on at least 14 different versions of the F35, which obviously creates some serious inefficiencies in their maintenance work.

Steve Ellis:

And I mean, the thing is that this isn’t just like the first F35’s are rolling off the production line, I mean they’re well into the production that’s supposed to end by the end of this decade. And we’re talking about nearly 2,500 aircraft. And so they’re really trying to manage and do this all, forgive the pun, on the fly and it’s costing taxpayers dearly.

Gabe Murphy:

Yeah, yeah, that’s right, Steve. It’s quite the boondoggle I would say.

Steve Ellis:

Okay. So we’re going to stick with the F35. And just a while ago, TCS, we were in a Wall Street Journal story talking about an old chestnut that GE, General Electric and actually and also Rolls-Royce, that they have this alternative engine for the Joint Strike Fighter then called the Joint Strike Fighter now the F35 Lightning II, and that they were trying to sneak its nose again under the budgetary tent.

Gabe Murphy:

That’s right. And they’re still trying and succeeding to some degree. Appropriators added $150 million in zero to hero funding to bring back the alternate engine program for the F35 from the dead just in time for Halloween. And this is a resurrection of a decade old battle between two R’s manufacturers for who would get to build the engine for the F35. Now, General Electric who lost that battle, managed to get Congress to fund research for a rebrand of the program, which they’re calling the Adaptive Engine Transition Program or AETP.

And this is coming at a cost of taxpayers of $150 million in the budget right now. So Congress was careful to say, thankfully, that this isn’t meant to incentivize the creation of an alternate F35 engine. Rather, it’s about supporting a robust manufacturing base of potential use in the next generation jets. So in our Halloween analogy, this isn’t a full-blown zombie yet, but there’s a decomposing hand reaching up out of the dirt of the grave that the F35’s alternate engine was buried in a decade ago.

Steve Ellis:

Spooky. But just Budget Watch, faithful, this is a legacy of a couple different things. This alternative engine, I mean, you had competing manufacturers, Lockheed Martin and McDonald Douglas who had competing airframes to build the then called Joint Strike Fighter now the F35 Lightning II. And so they had different engines. And so you had Pratt and Whitney developing the engine for what was the winning design. And then as we mentioned, GE and Rolls-Royce developing the engine for McDonald Douglas. And so when McDonald, Douglas lost, and you could argue GE lost, because it’s a single engine plane, there’ve been issues in the past with engine development. So then they had this alternate engine going along and it took a long time, two administrations to finally put the stake through the heart of the alternate engine.

I mean, you had the Bush administration towards the latter part of their term asking to cancel the program, requesting to cancel the program year after year. And it wasn’t until well into the Obama administration 2011 that it actually happened. So hopefully that withered hand coming out gets slapped down further in the appropriations process and we don’t have to deal with that again. Gabe, you were just in the news, the first time at TCS under your own byline and in an op-ed and Stars and Stripes, no less. So tell our Budget Watchdog faithful what that was all about.

Gabe Murphy:

Yeah, yeah. Very exciting. We are about to release a report the Marine Corps 2030 realignment without breaking the bank. And this op-ed was essentially a preview of that. Essentially the Marine Corps transformation is a military transformation that’s been underway for a couple of years now. It was initiated under former Marine Corps Commandant General David Berger, who had this vision for the military transformation that was maybe best enshrined in the term divest to invest. Meaning that the Marine Corps is divesting from older platforms and systems that it had in place in order to fund the transformation that it’s seeking, which is really about pivoting away from a focus on counter-terrorism missions and towards being prepared for the terrible eventuality of peer level conflict.

Some of the things that this plan has come up against over the course of its implementation thus far is some serious backlash from former Marine Corps generals. They were arguing that this plan would reduce the Marine Corps’s flexibility to respond to a range of challenges, and that the emphasis on cyber capabilities and other specialized programs would impact the Corps’s ability to carry out traditional military operations.

However, General Berger pointed out in response to these criticisms that the Marine Corps is under prepared for a peer level conflict and that the capabilities that the plan eliminates, like for example, they’re divesting from tanks, are covered by other military service branches. And that this plan is backed up by extensive research and war gaming that demonstrates a real need for change.

Steve Ellis:

And some of those changes that General Berger was pushing for even kind of go back to General Neller who was the commandant before him. And so this has been something that’s been long in the making. And as to underscore your point about the tanks, I mean they didn’t just put the tanks out in a used tank lot, they transferred them over to the Army. And so the Army has those 450, well, 400 of the 450 tanks in the other 50 are going to be migrating over there. And so it’s not like the United States is losing this capability. It is the Marines are transforming their force. And as you said, an amazing sort of approach I would say from the Pentagon. It’s like we are not asking for more cash to actually do this transformation. We’re going to do it, take care of it in-house, and we’re going to be ready whereas normally there’s always a handout.

I mean that seems like could be the Pentagon logo is a handout. And so certainly this is something that we appreciated even not getting into the strategy that they had leadership there that was saying, “Hey, look, we think this is important. We think it’s so important that we can do this by just reallocating our own resources and make it a more nimble, more effective fighting force.” Okay. Well, you mentioned some of the roadblocks, the former generals, the former Secretary of the Navy, James Webb was another naysayer, but there have been some other roadblocks to the transformation as well, haven’t there?

Gabe Murphy:

So yeah, Congress has definitely been another roadblock to this plan. Because the Marine Corps’s budget is housed under the Navy’s budget. When Congress gets in the way of the Navy retiring ships, that can be a problem from the Marine Corps budget too. And last year when the Pentagon requested to decommission certain ships, including the literal combat ship or the LCS, Congress blocked that decommission request. And this year it looks like they’re coming around on that. They allowed the Navy to decommission some of those LCSs, but they’re blocking decommission requests on other ships and accelerating procurement on a ship that the Navy paused purchasing on due to questions about cost.

Steve Ellis:

And just to underscore your point, Gabe, the Marine Corps, it’s its own separate military service has its own commandant, but it’s all under the Secretary of the Navy and the Navy’s budget. And so absolutely those are procurement dollars and operating dollars that are fighting amongst each other. And so by Congress blocking that, it’s effectively stymieing some of the Marine Corps’s transition that we’ve been talking about.

So just within the last month, we’ve got a new commandant, there’s no more Commandant Berger, he’s former Commandant Berger. And so now there’s a new commandant in the Marine Corps. And so what does he think about all this?

Gabe Murphy:

So this is general Eric Smith, who recently was confirmed after a long-term hold on military nominations by Senator Tuberville. He basically thinks that the Marine Corps transformation plan is excellent. He’s pushing it forward, but he’s also calling for an accelerated implementation. And he’s saying he wants more money to get that done.

And frankly, this is a transformation that doesn’t need to happen overnight. We’ve seen plenty of times before, the F35 being a prime example, where rushing through procurement can lead to the types of cost overruns and equipment issues that plague so many different Pentagon programs. There’s always a lot of ways to get around or to undermine a budget neutral plan, a lot of ways this could go off the rails and we’re concerned that this accelerated implementation could be one of those. So we’re definitely keeping an eye on this as it progresses.

Steve Ellis:

Yeah, I mean, General Smith was General Berger’s right-hand man. He was assistant commandant. And so it’s not surprising that he supports it. It is surprising though, that he’s taking, I mean it’s notable that we’ve just been calling it the transformation, but it’s force design 2030, and right now we’re in 2023. So it seems to me that we can kind of progress on this process and not try to get that hand back out from the Pentagon. And so that’s a disappointing start from General Smith and hopefully cooler heads prevail in Congress and we don’t end up spending more on this program that was promised to be basically budget neutral and divest to invest.

Moving along to another issue that has been a topic here on Budget Watchdog AF earlier this year, as a matter of fact, I think one of the first podcasts this year, this calendar year, we talked about the federal acquisition regulation, brought in a guest from a series an ally of ours on this fight. And so this was all talking about changing the federal acquisition regulations to have some climate impacts. And it’s something that obviously is a major buyer of goods and services would affect the Pentagon. So Gabe, let’s talk a little bit about the FAR rule.

Gabe Murphy:

So for our viewers who may not know, the FAR, the Federal Acquisition Regulation governs rules about purchasing for nearly $700 billion in goods and services each year. So that’s a lot of money to be keeping an eye on. The FAR Council, which is composed of GSA, NASA and DOD is responsible for administering and making changes to the FAR. So as far as this rule that we’ve been following, an executive order instructed the council to consider a rule to essentially keep track of and require Pentagon contractors, the largest Pentagon contractors, to report on climate emissions and set science-based targets for emissions reductions.

Steve Ellis:

So GSA, General Services Administration, NASA and the Pentagon, biggest purchasers for the government. I mean GSA purchases things for just about every other agency and so it really was trying to comprise all of that. And to underscore your point, you mentioned that it’s only the biggest contractors. I mean it’s a tiny percentage of the overall contractors, but a huge percentage of the overall spending on contracting. And that gets us into as one of the big spenders, what’s the Pentagon’s role in all of this, Gabe?

Gabe Murphy:

So the Pentagon is part of the FAR Council, and this rule is partly just about allowing the Pentagon to understand the risks that climate change posed to its own supply chains. So this is a very real national security issue. And unfortunately Congress has been, again, interfering with this. Some provisions were added to the National Defense Authorization Act, the Defense Policy Bill that would either block the rule entirely or give an extension to non-traditional contractors, which sounds like it may be a small portion, but we’re actually talking about major companies like Amazon, Microsoft, as well as some major oil companies.

So we’re of the belief that Congress shouldn’t stop the Pentagon from using its buying power to address national security concerns and growing costs related to climate change. Ignoring these risks to their supply chains, for example, does nothing to reduce those risks. Better that we understand them so we can respond rather than burying our head in the sand.

Steve Ellis:

Exactly. Exactly. I mean, you want to know where that is and then actually try to mitigate those risks. And we know that the Pentagon has huge climate risks, even besides its sort of goods and services purchasing. I mean, they’ve got $1.7 trillion worth of real estate around the world, they’ve got thousands of installations that are exposed to sea level rise, for instance, and other climate impacts. And so just knowing what may cause problems of getting our men and women in uniform, the goods and services they need to do their job to protect our country, then that’s a real issue and something that Congress shouldn’t be standing in the way of. It’s just understanding better what are some of these risks.

So Gabe, Budget Watchdog AF Faithful can totally tell that you’re worthy air in the national security space to the 28 years that we’ve been working on these issues. And so now that you’ve updated everybody on what’s going on, what is the National Security Program at TCS looking like here in the near future?

Gabe Murphy:

Well, for starters, we’re going to keep tracking the budget and calling out the most questionable spending at the Pentagon. That’s the bottom line. We’re also going to continue keeping an eye on emerging technology and its implications for taxpayers. I mean, I mentioned some of them, hypersonic missiles, drone swarms, artificial intelligence, cyber warfare, all of these deserve a lot of scrutiny. And finally, the costs related to climate change are continuing to rise. And so we’re going to be expanding on our past work to reduce the long-term cost of climate change to taxpayers and working to hold the Pentagon and as contractors accountable for their roles in both contributing to and responding to climate change.

Steve Ellis:

Great. And I know that you’ve got, looking at the sixth generation fighter you’ve got, and some of the questions around the F35, I mean the fact that Pentagon spends $800 billion a year, so there’s a lot of work on your plate, Gabe.

Gabe Murphy:

Yeah. Eight hundred billion and rising.

Steve Ellis:

Yes. Well, that’s kind of the constant, huh? Gabe Murphy, TCS policy analyst, thanks for joining us on the Budget Watchdog All Federal podcast.

Gabe Murphy:

Thanks so much, Steve.

Steve Ellis:

Well, there you have at podcast listeners, national Security remains a critical issue for taxpayers and one we’re always focused on here at TCS. This is the frequency, mark it 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 shift 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.