The American Interest
Analysis by Walter Russell Mead & Staff
Blue Meltdown Hits The Pentagon

Budgetary meltdowns in states and municipalities throughout 2011 have made one thing abundantly clear: the Blue Model is slowly bankrupting America at all levels of government. It isn’t just rust belt cities with public unions that are feeling the pain: not even the Pentagon is immune. From the New York Times:

Many who are more worried about cuts, including Mr. Panetta, acknowledge that Pentagon personnel costs are unsustainable and that generous retirement benefits may have to be scaled back to save crucial weapons programs.

“If we allow the current trend to continue,” said Arnold L. Punaro, a consultant on a Pentagon advisory group, the Defense Business Board, who has pushed for changes in the military retirement system, “we’re going to turn the Department of Defense into a benefits company that occasionally kills a terrorist.” [...]

One independent analyst, Todd Harrison of the Center for Strategic and Budgetary Assessments, a nonpartisan policy and research group in Washington, has calculated that if military personnel costs continue rising at the rate they have over the past decade, and overall Pentagon spending does not increase, by 2039 the entire defense budget would be consumed by personnel costs.

The answer, in the Pentagon and elsewhere, can’t just be to cut wages and benefits. There have to be productivity enhancements: municipal governments and the defense bureaucracy have got to get more done with fewer hands. In both kinds of organization the ‘teeth to tail’ ratio is part of the problem: how much of the workforce is getting the mission done as opposed to how much does support and supervision.

Automation also has a role to play.  Drones don’t need pensions, and neither do computers.  Learning how to replace bureaucrats with the appropriate software and hardware solutions is a big part of making government work.

Finding alternative ways to fund pensions is also part of the answer.  Defined contribution plans will have to replace defined benefit plans at all levels of government, as they have throughout private industry. The general prosperity of the country is the best and ultimately the only guarantee that retirees have that their pensions can be paid; generous programs that include employer matches and tax deferred accrual can give employees a stake in the general prosperity to see them through their golden years.

There is no magic bullet that will solve our cost problems in government, but the more the solutions can come from increased productivity, the less has to come from the toxic triangle of lower wages, lower services and higher taxes.

Published on January 3, 2012 10:35 am
  • Chase Crucil

    Well professor, I find it hard to accept the contention that the Pentagon is a “blue state” kind of place. The term “blue state” implies democrats, and I’ve known some folks who work in the military industrial complex, and I know some soldiers, and almost all of these people are ultra conservative; this is not a criticism, just a statement of fact. Furthermore, the reason the pay and benefits are so high is that, during the dark days of the Iraq War, generous compensation was necessary for the Army and Marines to fill their ranks. Yet, you do not mention this all important fact. Why?

    You constantly talk up the idea of replacing people with software. While I suppose this is probably inevitable at some point – after all, the computer technology can only get better – it is not clear that there are as many replaceable jobs as you say, at least right now. Can you cite any real studies on the number of jobs that can be replaced by computer programs and/or robots, or are you just offering boilerplate conventional wisdom? (I like most of your articles, but since you seem to talk about automation so much in the context of reforming what you call the blue state model, one would think that you be able to cite some strong studies to back up your recommendations)

  • Walter Sobchak

    I think we need an even more fundamental restructuring of the US military. I say this a believer in American Exceptionalism and that US military power has been the single most important factor in maintaining world peace in the post WWII era.

    However, it think we need to fit the tool to the times. There will not be a land war in Europe. There is no reason for American soldiers to be based there, and NATO should be dissolved. Further, I doubt very seriously if any future Congress could be talked into military involvement in the Muslim world, other than to defend Israel. As for the Persian Gulf, until we build the keystone Pipeline and drill offshore in California and Florida, it is criminally irresponsible to expend our resources there.

    Also, I think that technology will continue to transform warfare, as it has everything else. A Navy based on quarter-mile long aircraft carriers is like agriculture based on elephants. Smaller creatures are more manageable, and less risky and costly to deploy. The UAV opens an opportunity to replace the brontosauruses with mammals.

    We need to ask whether we need the Air Force as a separate command structure. Panetta has included ending bomber based nuclear deterrent on his list of savings. That is fine with me, but once that ends, the air force consists of combat air support, force protection, and continental air defense. We can save something by scraping the separate command structure.

    I also think we need to look at the force structure and our tooth to tail ratio. We have a lot of four stars, they are in overabundance at the end of every war. We should ensure that we have no more line officers than are needed to command the number of soldiers we actually have.

    We should separate staff officers from line officers with command responsibilities, and give them a separate ranking and pay scale commensurate with their risks, responsibilities, and duties. Those who get shot at deserve higher pay and better retirement. REMFs , not so much. And, while we are at it. Technical and skill positions, such as doctors, dentists, and UAV jockeys, should also get a separate pay and rank scale.

  • Kris

    Walter@2: “I doubt very seriously if any future Congress could be talked into military involvement in the Muslim world, other than to defend Israel.”

    While the likes of Luap Nor often raise the spectre of Americans dying for Israel, Israel has never asked for such help, and would be very uncomfortable with such help. As long as they’ve got American support off the battlefield, they’re very happy. (Not that you stated otherwise.)

  • Dave Moelling

    The old model of Military pay was to pay low pay compared to private sector jobs compensated by comprehensive job security, basic living benefits, and generous pensions. This combined with the high turnover of enlisted and junior officers kept personnel costs low. The Johnson/Nixon/Carter inflation years drastically reduced the value of Military pay, and transition to the all-volunteer force resulted in a considerable increase in pay.

    The current problem is not so much the pay/benefits of current service members but the legacy costs of a much larger military in the past. Splitting the earlier pensions into a separate “trust” might help focus attention on the current force. A hybrid pension program for non-career service, with some carryover to career long service types may provide flexibility.

  • Walter Sobchak

    3. Kris. I do not disagree. But, when it comes to Iran, they might appreciate a few B2 bomber runs.

  • Brian

    Where is the hard data. If you are going to make a statement like that put some numbers backing up your statement for goodness sake. Statements like this piss me off when someone can’t even due a few hours a research and put a few numbers to back up the arugment being made. Lazy Journalism which I will not belive untill someone can show me the data.