U.S.S. Ronald Reagan sails into uncharted fiscal waters.

Photographer: Dylan McCord/U.S. Navy via Getty Images

Needed: 'Tax-and-Defend' Republicans

James Gibney writes editorials on international affairs for Bloomberg View. He was features editor at the Atlantic, deputy editor at the New York Times op-ed page and executive editor at Foreign Policy magazine. He was a foreign service officer and a speechwriter for Secretary of State Warren Christopher, National Security Adviser Anthony Lake and President Bill Clinton.
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Support for higher defense spending is axiomatic for the nine declared Republican presidential candidates, even the libertarian Rand Paul.

Yet few of these candidates have been as forthright about how they would get more bucks for the bang while keeping the deficit in check, also a key part of the Republican catechism.

Consider Senator Marco Rubio's recent speech to the Council on Foreign Relations in which he laid out the "Rubio Doctrine." He called for undoing the mandatory cuts to defense spending under sequestration and returning outlays to the budget guidelines established by Defense Secretary Robert Gates in 2011. Although the National Defense Panel called those levels just "the minimum required to … set the military on a more stable footing," they would still restore several hundred billion dollars in expenditures by 2021. But here's how Rubio deflected fiscal critics of this idea:

Some will argue that with all the fiscal challenges facing our nation, we simply cannot afford to invest in our military. The truth is we cannot afford not to invest in it. We must remember that the defense budget is not the primary driver of our debt, and every time we try to cut a dollar from our military it seems to cost us several more just to make up for it. 

There is a strong case for increasing the defense budget, whether in terms of meeting the threats and challenges the U.S. faces or addressing the strains on its military after more than a decade of fighting. (The fact that the U.S. already spends more on defense than the next seven countries combined is mostly irrelevant.) But that strategic case also has to be grounded in political and economic reality, and U.S. voters must be presented with a clear idea of the choices involved.

 Yet most Republican candidates seem unwilling to do just that. They want to talk about what they’d do to increase the defense budget, not what they’d sacrifice to pay for it. Their patron saint is Ronald Reagan, whose military build-up marks the halcyon years of American might. Or as Senator Lindsey Graham told the crowd on Monday when he announced his candidacy, “Ronald Reagan's policy of peace through strength kept America safe during the Cold War. Remember those times?”

But a look back at the Reagan years suggests that, in fiscal terms at least, they might not be a great model for President Barack Obama’s successor.  

During Reagan's eight years in office, according to the historical tables of the 2015 U.S. budget, national defense accounted for an average of 26 percent of all federal spending, and 5.7 percent of gross domestic product. By contrast, the Obama administration's national defense spending over the last six years seems anemic: an average of 18.8 percent of federal outlays, equal to 4.25 percent of GDP.

But here's the rub: During the Reagan years, the U.S. government was also taking in an average of 17.6 percent of GDP a year in tax revenue; the Obama administration has taken in an average of 15.6 percent a year. Even so, thanks to a combination of tax cuts and defense spending increases, Reagan oversaw a ballooning of U.S. debt from 25 percent of GDP in 1981 to 40 percent in 1988.

Whoever becomes budgeter-in-chief in 2017 will have to take into account debt at 74 percent of GDP -- a hangover from the enormous and mostly successful efforts to jumpstart the U.S economy out of recession. (Even so, Obama increased the debt less in proportional terms than did Reagan.) She or he will also have to contend with the swelling cost of entitlements. When Reagan took office in 1981, interest payments and mandatory spending on Social Security and the like accounted for 55 percent of the budget. Last year, they consumed 68 percent. That won't go down as interest rates rise and more aging baby boomers drink more deeply from the government trough.

Rubio is right to argue (albeit elliptically) that entitlements have been a bigger driver of deficits than defense. He at least deserves credit for putting out a proposal for Social Security reform. But he’s also flip-flopped on how he’d “adequately fund our military.” Predicating your defense spending plans on deep cuts in social spending and unprecedented entitlement reforms seems like an exercise in wishful thinking rather than strategic budgeting. For the sake of voters, Republican candidates need not only to be explicit about the trade-offs they'd accept to fund the Pentagon -- as Rand Paul was in his proposed amendment increasing the defense budget -– but also more realistic about whether such compromises are politically achievable.

Maybe the net result of such an intellectual effort would be fewer ritualistic invocations of the Reagan years. Maybe we would have a more sober assessment of the fiscal limits on American power. Maybe entitlement reform would acquire new urgency. Or maybe a new breed of "tax-and-defend" Republicans might emerge. Alright, that last one's a reach -- I'd settle for a slightly more grounded debate about the strategic choices America faces. 

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
James Gibney at jgibney5@bloomberg.net

To contact the editor on this story:
Max Berley at mberley@bloomberg.net