How America’s Bloated Defense Budget Leaves Us Defenseless…and Broke

We’re spending billions on the military at the expense of health care and schools.

Photo Credit: Orlok / Shutterstock.com

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.”

It has been over six decades since Dwight D. Eisenhower uttered these words in a broadcast announcement from the Statler Hotel in Washington D.C. And while circumstances in America have undoubtedly changed, his words remain accurate.

Since the late 19th century, the United States has acted as the world’s policeman, the one that keeps order and makes sure everyone else sticks to the rules. Occupying this role evidently has had repercussions, both good and bad. Yet, it seems as of late the bad outweighs the good. The U.S.’s mission to police the world has led to massive overspending abroad and subsequently growing negligence at home. In an attempt to address this problem, the U.S. continues to do what it does best—throw money at it.

On September 18th, as Democrats fell in line with Republicans to fund the $692 billion National Defense Authorization Act (NDAA), Congress proved they would continue to fund a system that does little to protect the American people. The act passed with a sweeping 89-8 vote—with only five Democrats voting against the act. The figure is a significant $80 billion annual increase from last year and a $28.5 billion more than President Trump asked for. It does not include the $12.9 billion of continued investment in nuclear security or $186 billion for the Veterans Administration Budget. Nor does it include the interest the United States has accumulated by putting their wars on a credit card. The total cost of military-related expenditures is over a trillion dollars and over 70% of all federal discretionary spending.

Speaking at Westminster College just three days after the NDAA passed, Senator Bernie Sanders, one of just five Democrats who voted against the bill, dismantled the case that progressives don’t have big ideas on foreign policy and set forth a template for future democratic positions on national security.

Standing where Eisenhower delivered his famous “Cross of Iron” speech nearly 70 years ago, Sanders rightly recognized the irony between a colossal Pentagon budget and Republican attempts to take health care away from tens of millions of Americans in the name of fiscal responsibility. He made clear that “we cannot convincingly promote democracy abroad if we do not live it vigorously here at home” and in a reliable Sanders-like fashion demanded we address our growing domestic issues.

He is right to wonder how asking a fraction of the price for domestic issues such as health care and education funding is criticized as a nonstarter, yet when it comes to our military, there is no number too high.

Earlier this year, Trump submitted a budget proposal in which he cut social spending dramatically to fund a $54 billion increase in defense spending. Democrats criticized it as a nonstarter. However, at September’s NDAA hearing, 41 Democrats raised little to no concern about this military spending—even at the cost of social spending.

Currently, the U.S. is $20.4 trillion in debt and we spend almost as much as the rest of the world combined on defense. While we are authorizing $692 billion, China, our closest follower is spending $102 billion while Russia spends $59 billion. The argument for America’s excessive defense spending is synonymous with the argument that America is and must remain the strongest military on the planet. However, the cost necessary to maintain American power and protect our troops is small in comparison to the amount we spend, primarily because most of the defense budget does not directly impact our military standing or the safety of our troops.

First, there is fraud. A report prepared for Bernie Sanders by the Department of Defense showed that hundreds of defense contractors that defrauded the U.S. military received more than $1.1 trillion in Pentagon contracts during the past decade. Yes, that’s trillion with a “T.” For example, Northrop Grumman paid $62 million in 2005 to settle charges that it “engaged in a fraud scheme by routinely submitting false contract proposals,” and “concealed basic problems in its handling of inventory, scrap and attrition.”

Second, there is waste. As an example, July 2013, the Pentagon decided to build a 64,000 square foot command headquarters in Afghanistan for the U.S. military that is and will remain unoccupied. The project is estimated to have cost the Pentagon $34 million. We then supplied $771 million worth of aircraft for Afghan use. However, Afghanistan obtains only one-quarter of the trained personnel necessary to use them and in 2015, the Pentagon suppressed a study that reported $125 billion in waste.

Third, whether it is paying $8,000 for a $500 helicopter part, $425 million in wrongful travel reimbursements or the illustrative $640 toilet seat, the Pentagon has a history of overpaying. According to the Federal Procurement Data System’s top 100 contractors report for 2016, the CEO’s of the top five Pentagon contractors—Lockheed Martin, Boeing, Raytheon, General Dynamics, and Northrop Grumman—paid themselves a cumulative $96 million in 2016, more than a fair cut.

Conveniently enough, the Department of Defense can’t tell us how much equipment it has purchased, or how often it has been overcharged, or even how many contractors it employs. The Pentagon can only approximate that they employ more than 600,000 private contractors, yet these costs account for the majority of their tax spending dollars. The Government Accountability Office (GAO) has announced they cannot even audit the Pentagon. To illuminate the utter disorder of the United States military finances, in 2015 in a rush to close its books, the army made $6.5 trillion in wrongful adjustments to accounting entries. A law in effect since 1992 requires annual audits of all federal agencies—and of all the federal agencies, the Pentagon alone has never complied. The NDAA is asking the American public to pay for huge expenditures that the Pentagon cannot even document.

What we do know of this year’s bill offers little in the way of consoling the American public that the money will be well spent. The defense authorization bill contains a number of provisions that increase the risk of cost overruns for the F-35 Joint Strike Fighter program and undermine the ability of Pentagon officials and Congress to assess the combat suitability of new weapon systems in the future. Both the House and Senate versions of the National Defense Authorization Act authorizes a block purchase of 440 F-35s through a procurement process called “Economic Order Quantity,” even though the planes are still being developed and the testing necessary to prove they are operationally effective won’t be completed for years. Until that testing is done, all the American people will get for their money is a pile of parts for an unproven prototype, a $1.4 trillion pile of uncertainty. A recent test of six of the new, stealthy fighters revealed that only one of them was capable of a rapid, ready alert launch. The F-35 program has come to symbolize all that’s wrong with American defense spending: a bloated budget, greedy manufacturers, and an impenetrable Pentagon culture that cannot adequately track its own spending.

To add concern, the NDAA requested $8.5 billion for the Missile Defense Agency, a $630 million boost above what Trump requested. It would add up to 28 ground-based interceptors as well as put $28 million into developing space-based missile sensors. Despite the fact that up to today the U.S. has spent nearly $320 billion, most analysts have little confidence that the U.S. can destroy any intercontinental missiles launched against them once they get off the ground. After the most recent failed interceptor test Philip E. Coyle III, who previously ran the Pentagon’s weapons-testing program, stated that the system “is something the U.S. military, and the American people, cannot depend upon.” Why add more money to an expensive system that has been compared to hitting a bullet with a bullet, that doesn’t work after over 20 years of trying?

Senate Republicans are concurrently proposing to cut billions from Medicare and $1 trillion from Medicaid, in addition to big federal spending cuts that would likely decimate federal housing and education programs.

There exists a massive blind spot as senators fight tooth and nail to ensure no one is abusing food stamps, while dropping trillions on an unreliable, unaccountable defense strategy.

In the 2016 presidential campaign, Senator Bernie Sanders pledged to make tuition free at public colleges and universities. This proposal was met with dismissal as though the notion belonged solely in Arcadia. The proposed plan was estimated to cost the federal government a mere $47 billion.

More recently, Sanders continued his Medicare-for-All plea with a health care system estimated to cost $1.4 trillion a year. This was treated as unrealistic although our current private insurance-based health care system will cost $3.35 trillion this year.

If America were to spend even double as much as China, four times as much as Russia on defense spending, we could potentially create an America where young people can attend college with little to no out of pocket cost and the millions of people with health issues can get the help they need without the financial burden.

Why is it that only six out of 47 Democratic senators can see the potential of cutting defense spending and instead funding domestic programs?

The notion of a healthy and educated America should not be the stuff of dreamers when it could be a tangible reality. America should not spend more on defense. America should spend smarter on defense and more on pressing domestic issues. And Democratic senators should realign their vote to match their supposed politics.

The Only Good Option For Health Care is a Public Option

The United States has the most expensive, least efficient and, in many ways, most ineffective healthcare system in the world. But you wouldn’t know it if you listened to Republicans talk about the private health care insurance system or Democratic Blue Dogs whine about costs of reform and complain about how unfair it would be to have private health insurance companies compete with a public health care option.

Despite being the most expensive health care system in the world, in terms of medical outcomes, the private U.S. health care system is the most ineffective. In fact, the World Health Organization ranks health care systems based on objective measures of medical outcomes and the United States’ health care system currently ranks 37th in the world, behind Colombia and Portugal [which both spend far less on health care than the U.S. The United States ranks 44th in the world in infant mortality, behind many impoverished Latin American countries. While infant mortality in the United States is skewed toward poor people, who have rates double the wealthy, the top quintile of the U.S. population has infant mortality rates higher than Canadians in the lowest quintile of wealth.

Not only are 47 million Americans uninsured (approximately 18.5 percent of the insurable market), 41 percent of Americans with incomes of $20,000 to $40,000 did not have health insurance for at least part of 2007, up from 28 percent in 2001; 53 percent with incomes under $20,000 lack health insurance.

There are additional costs to the haphazard U.S. health care system: More than 50 percent of the U.S. population has medical debt problems; between 1981 and 2001, medical-related bankruptcies increased an astounding 2,200 percent and 55 percent of personal bankruptcies are now caused by illness or medical debts, despite the fact that over 75 percent of the bankrupts had health insurance at the onset of bankruptcy and illness.

Contrary to popular conceptions, the average medical bankrupt was a 41-year old woman with children, some college education; over half owned homes and over 80 percent were in the middle or working classes.

The number of people without health insurance rose 18 percent from 2001 to 2007; average health insurance premiums for a family of four are more than $13,000, which exceeds the annual gross income of a full-time, minimum-wage worker. Lack of insurance causes 18,000 excess deaths a year; people without health insurance have 25 percent higher mortality rates; and, 59 percent of uninsured people with chronic conditions such as asthma or diabetes skip medicine or go without care — and get sicker.

Out of 30 developed nations, life expectancy in the United States ranks 21st: Life expectancy in the United States is 4.6 years less than Japan, 2.1 years less than France and 2.6 years less than Canada. The United States has fewer physicians, nurses and hospital beds than most developed nations. In the United States, 28 percent say it is “difficult to get care”; in most European countries, Japan, Australia and New Zealand, 15 percent say that. In terms of continuity of care (i.e., five-plus years with the same doctor), the United States is the worst of all developed nations.

By every objective measure, the United States has a second-rate health care system.

The Truth About Healthcare Costs

Even including the 47 million uninsured, the bloated, inefficient U.S. healthcare system costs more than double per capita what single-payer healthcare systems in Europe, Japan and Canada cost.

In the United States, healthcare costs were $6,001 per person in 2007. By contrast, in Japan, with life expectancy 4.6 years more than the United States (presumably a cost-increasing factor), healthcare costs were $2,139 per person; in the United Kingdom, $2,232; Sweden (the ultimate “welfare state”), $2,520; France, $2,903; and, Canada, $3,001.

And, this is not just an individual problem; this is a national problem. Health care system costs in the United States are 17 percent of GNP (and currently increasing 12 percent per year). No other country in the world has healthcare costs which exceed 11 percent of GNP and the average among developed nations is 9 percent. These high costs are making the U.S. uncompetitive in many areas. For example, U.S. car-makers spend $1,500 per car on health care—-more than the cost of the steel in cars — and are competing against European and Japanese car makers who spend nothing for health care.

Administrative costs of the U.S. private health care system consume $300 billion; profits and advertising consume another $300 billion [the CEO of Cigma insurance company made $23 million last year]. Compare those numbers to the $100 billion Republicans and Democratic Blue Dogs complain is too high a cost to reform the system and deliver care to 47 million uninsured. And compare the high overhead costs of the private health care insurance system to the 3 percent overhead of Medicare and single-payer health care systems in Europe, Canada and Japan.

Two years ago, one of my adult sons went to a medical office for testing. On completing the tests, he was handed a bill. The bill had two prices: One was the insurance price, $969.25, the second was the “cash pay price,” $678.00 — exactly 30 percent less than the insurance price. What more do you need to know about the excessive cost and inefficiency of the American private health insurance system than that it costs 30 percent more than the underlying medical services are worth?

This is the costly, inefficient system — and the profits — that Republicans and Democratic Blue Dogs [bought off by health insurance money] are seeking to protect.

In America’s for-profit private insurance health care system, medical technicians must contend with hundreds of different forms, billing procedures, regulations and requirements from hundreds of insurance companies; U.S. health care companies spend money for advertising and marketing; and, the U.S. health care system is based on profit. Since 1970, the number of medical doctors in the United States has increased 40 percent, while the number of medical administrators has increased almost 3,000 percent.

Currently, we are drowning in a massive, inefficient private health insurance bureaucracy. The increasing cost of prescription drugs also is increasing the health care bill, and U.S. drug costs are the highest in the world. Americans pay 30 percent to 80 percent more for prescription drugs than citizens of any other country largely because Republican legislation enacted under George W. Bush prohibits Medicare and private insurance companies from negotiating lower drug prices from Canadian and European suppliers, even of American pharmaceuticals. So American patients pay double and triple the cost of the same drugs, in the same bottles, made by the same companies in the same plants as Canadian patients. Profit in the present U.S. system has been exalted over good care, health and cost considerations.

You might think that this excess money goes into developing new drugs, but you would be wrong: Only 13 percent of drug costs go to research and development, and little of that goes for pioneering new drugs to deal with life-threatening conditions; 51 percent goes to marketing, administration and profits.

And when considering costs of health care, remember that the U.S. taxpayer already pays for more than 60 percent of the American health care bill. It does this by allowing businesses to deduct the cost of health care for employees as a business expense, thus reducing taxes on businesses, which puts a greater burden on individual taxpayers, as well as paying for government supported health care such as Medicare and the Veteran’s Administration health programs. Being the payer of 60+ percent of existing health care costs, you would think the U.S. government would have a right to demand a more efficient system [President Obama thinks it does], but not if you listen to Republicans and Democratic Blue Dogs complain about change [i.e., less profits for their insurance company donors].

The Public Option

The most logical correction to the costly inefficiencies of the American private health insurance system would be a single-payer system — such as Medicare, a popular and successful single-payer system. But single-payer has proven to be too radical a change for Congress even to consider this time around, so we are left with the possibility of a “public option,” which would allow individuals and employer plans to buy into a public system modeled on Medicare. While this “public option” may not be the perfect solution, the perfect should not be the enemy of the good. Moreover, if the public option is robust, over time it would out-compete the costly, inefficient private health insurance system and you would find not only individuals choosing the public option, but also employer health plans concerned about costs. And precisely because the private insurance companies fear competition from a more efficient public health care system, it is using every weapon in its arsenal to spread fears of “a government takeover” of health care, distort the debate and, of course, buy off members of Congress [Republican and Democratic Blue Dog members of the Senate Finance Committee, for example, have received an average of more than $2 million each in donations from private health insurers].

While single-payer will not be legislated this time, what would be unacceptable would be for health care legislation not to include a robust public option, or to so weaken the public option that it could not compete effectively with private insurers, such as prohibiting use of Medicare rates for medical services, prohibiting negotiation with drug companies for lower prices and/or breaking up the public plan into regional, state or local “coops” which would be too small to compete against national insurance companies. This is the current fault-line in Congress and is why the public option is being attacked by conservatives as “socialized medicine.” Of course, neither the public option or even single-payer systems are socialized medicine.

Medicare is a single-payer system and single-payer systems such as Medicare do not employ any doctors or own any hospitals or medical facilities, let alone create bureaucracies like the bloated, inefficient bureaucracy the private insurance model has created in America. The Veterans Administration health system is a socialized system, as is the military health system, as they both employ doctors and provide hospital facilities, but ironically none of the opponents of the public option ever mention the VA system or the military.

Rather than hundreds of payers (insurance companies) and thousands of different forms, regulations and procedures, a public option would have one payer and one set of forms and procedures. A public health care option, like Medicare, also would offer more choice of medical providers; unlike the current private insurance system, where patients are limited to panels of providers, a public plan would permit patients go to any doctor they want, submit a national health insurance card and the government would pay — just like Medicare. It is the simplest, most efficient plan of all.

There are many ironies in the debate about the need for a public option and one of them is that in one breath conservatives argue that the government is inherently inefficient and can’t run anything, and in the next breath argue that it would be fundamentally unfair to make private insurance companies compete against a public health care plan. Of course, the truth is that the inefficient private system probably can’t compete effectively, but why should we protect inefficiency in health care? We don’t run police and fire services privately or the Army, Navy and Air Force, so why should private for-profit insurance companies hold a virtual monopoly on health care, especially when the evidence is overwhelming that they don’t do a very good job at it?

Congress will be in summer recess next week. This is the time your Congress member and Senators need to hear loudly, clearly and repeatedly by email, phone and letters that you support a robust public health care option, one modeled on Medicare.