Breaking News

Germany October Manufacturing PMI Rises to 51.8, Beating Forecast of 49.5
Tweet TWEET

Romney Wouldn’t Meet Defense Spending Pledge for Years

Mitt Romney’s pledge to spend at least 4 percent of the U.S. gross domestic product on the military isn’t an immediate goal or even one he is sure to meet in a first term as president, according to a defense adviser.

“The goal of 4 percent of GDP remains and is unchanged,” Dov Zakheim, a former Pentagon comptroller who advises Romney, said in an e-mail. “But that goal is not going to be achieved overnight or perhaps even by the end of the first term.”

The comments only add to the uncertainty about how much a President Romney might add to the Pentagon’s budget and when, what the additional spending would buy other than more warships and how he’d propose to pay for what analysts say may be as much as $2 trillion in added spending while also whittling down the federal deficit as he’s promised.

President Barack Obama’s administration has resisted demands from Republicans to spell out in advance exactly how spending would be curtailed if $500 billion in automatic defense reductions over a decade take effect starting in January, saying Congress should find a way to avert the deficit-cutting process called sequestration.

The fight over defense spending and the refusal of both sides to offer specifics about their plans have made the Pentagon budget a campaign issue, especially in Virginia. That closely contested state is the one most dependent on defense spending, according to a Bloomberg Government study. The presidential candidates may tangle over their defense policies tonight when they meet in their final 90-minute debate, devoted to foreign policy, at Lynn University in Boca Raton, Florida.

Confusing Industry

Compounding the uncertainty over sequestration, the absence of a clear plan for how Romney would increase defense spending “is confusing the defense industry and others,” Byron Callan, a defense industry analyst in Washington with Capital Alpha Partners LLC, said an interview. “It’s peculiar why they can’t agree” with the $2 trillion estimate “or come up with a different number,” Callan said.

Placing a price tag on Romney’s defense plan may be difficult because the 4 percent target isn’t “a firm goal of their campaign,” Michael O’Hanlon, a national security analyst at the Brookings Institution, a policy group in Washington, said in an interview. “They use it as an aspirational goal. Hell would have to freeze over and deficits would have to disappear for this to be even conceivable.”

Setting Floor

The Romney campaign said in a white paper published last October that the Republican presidential candidate would “begin by reversing Obama-era defense cuts and return to the budget baseline established by Secretary Robert Gates in 2010.” It said Romney would set a “floor of 4 percent of GDP” as a goal for the defense budget, not counting war costs. The campaign’s website recounts the support of former Defense Secretary Gates and top military officials for that spending standard, saying, “Mitt Romney agrees with that pragmatic aspiration.”

Romney said in a foreign policy speech in Virginia on Oct. 8 that he would “roll back President Obama’s deep and arbitrary cuts to our national defense that would devastate our military.”

The Defense Department proposed $487 billion in defense- spending cuts over 10 years under a plan Obama and Congress backed to reduce the federal deficit. That’s separate from the $500 billion in cuts that will start taking effect in January unless Obama and Congress agree to an alternative.

Obama said in an Oct. 16 debate with Romney that the Republican “wants to spend $2 trillion on additional military programs even though the military’s not asking for them.” He said that, plus trillions of dollars in tax cuts pledged by Romney, would worsen the federal deficit or require higher taxes on the middle class.

Criticizing Estimate

Representative Paul Ryan of Wisconsin, Romney’s running mate, and the candidate’s advisers and representatives have criticized the $2 trillion estimate without offering an alternative.

Travis Sharp, a defense analyst at the Center for a New American Security in Washington, in a projection for the CNNMoney website was among the first to estimate that it may cost an additional $2 trillion to maintain defense spending at 4 percent as Romney pledged. While Republicans have said the center has links to Democrats, the Heritage Foundation, a Washington-based policy group often cited by Republicans, has agreed with the $2 trillion figure.

Current defense spending, including war costs, is about 4.2 percent of GDP and is projected to fall to 2.7 percent of the economy by 2017, according to an estimate by Center for Strategic and Budgetary Assessments, a nonpartisan group based in Washington.

Depends on Economy

At an Oct. 18 event organized by the group Military Reporters & Editors, Zakheim, who was Pentagon comptroller under President George W. Bush, declined to offer details of how and when Romney would begin increasing defense spending.

“It will very much depend on the state of the economy and very much depends on the offsets you’ll be able to find within the defense budget,” Zakheim said. “Every effort will be made to ramp up as soon as possible.”

At a breakfast meeting with reporters on Oct. 11, Zakheim said the $2 trillion estimate cited by Obama “is essentially an assumption that we go to 4 percent of GDP from the get-go.” The Romney campaign doesn’t intend to “come in with a massive supplemental” to the current budget to boost defense spending, he said.

The Washington Post in an Oct. 18 fact-checking article, cited Romney advisers it didn’t identify as saying the 4 percent goal wasn’t likely to be reached until the end of a second Romney term in 2020.

‘Two Caveats’

Romney may be able to reach the goal of spending 4 percent of GDP on defense by the end of the first term and still cut deficits as he has promised “with two caveats,” according to James Carafano, a defense analyst at the Heritage Foundation.

The former Massachusetts governor would have to get “tax reform done and address long-term entitlement spending,” Carafano said in an interview.

The Romney campaign says its defense proposal is based on restoring spending levels anticipated by Obama’s proposed 2011 Pentagon budget, prepared when Gates was still defense secretary, which sought $708.2 billion, including $548.9 billion for the base budget and $159.3 billion for war-related costs.

Declining 9%

Based on a five-year plan presented to Congress in February 2010 as part of that budget, the Pentagon’s 2013 base budget, excluding war costs, would have been $585.7 billion. Subsequently, the Obama administration scaled back defense spending because of caps imposed under the deficit-cutting Budget Control Act, starting with a $45 billion cut in fiscal 2013 to produce what became a $525.4 billion request for the basic defense budget.

Even if sequestration is averted, defense spending will decline 9 percent over the next five years compared with previous plans because of requirements of the Budget Control Act.

If Romney achieved his goal of setting defense spending at 4 percent of GDP by 2017, the difference between his 10-year defense plan and Obama’s current decade-long plan would be $2.03 trillion, according to a study by Todd Harrison, a defense budget analyst at the Center for Strategic and Budgetary Assessments.

If the target is achieved gradually by the end of a second term, the additional expenditure would be about $1.75 trillion, Harrison said in an e-mail. The estimates are in current dollars.

Hardware, Troops

Michele Flournoy, an Obama campaign defense adviser who served until February as the Pentagon’s top policy official, said at the Oct. 18 event with editors and reporters that Romney’s defense spending plan isn’t backed by a strategy. Flournoy was a co-founder of the Center for a New American Security.

Zakheim responded that a bigger defense budget would pay for more military hardware and more troops, both of which he said are necessary to meet the Pentagon’s strategy that calls for a “rebalancing” toward Asia while also being able to deal with contingencies in the Middle East.

Romney has said he would reverse Obama’s plans to reduce the military’s headcount by 100,000 -- 80,000 from the Army and 20,000 from Marine Corps.

While the Romney campaign hasn’t estimated what that would cost, Harrison said every 100,000 troops added would cost about $12.5 billion a year.

Bigger Navy

Romney also would expand the the Navy and build as many as 15 ships a year. The Pentagon’s current plans call for buying 10 ships in 2013, and over the next 30 years the Navy’s ship purchases would average about 8.9 vessels a year.

The Republican hasn’t specified what mix of ships he’d build, although Zakheim has said Romney would back three Virginia-class submarines a year instead of the two now planned, as well as destroyers and possibly new cruisers.

Equipping the U.S. Navy with more ships would allow the Pentagon to increase the naval presence in the Asia Pacific even in the absence of permanent bases in the region, Zakheim said.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net.

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.