Truman's War on Pentagon Waste
In his address to Congress Tuesday, Donald Trump pledged to eliminate the so-called “defense sequester,” a statutory limit on defense spending enacted in 2011, so that a $54 billion increase for the Pentagon would be possible. But that would require devastating cuts to other parts of the federal government, steep increases to the federal deficit, or both.
What if there was a way that Trump could get what that military bump without spending one more dime of taxpayer money? And what if this involved collaborating with Congress so that both sides could claim victory over big government?
This is not at all far-fetched; in fact, there’s a shining example to follow in U.S. history books. It was called the Truman Committee, and it offers a timely reminder that there are ways of getting things done in Washington that can redound to virtually everyone’s benefit -- save, perhaps, for military contractors accustomed to spending like drunken sailors.
In 1940, Harry S. Truman was the junior senator from Missouri. Fresh off a narrow re-election victory and without much of a reputation beyond his home state, no one would have said the Democrat was made of presidential material at this point in his career. But that year gave him an opportunity when Congress approved a massive increase in military spending to counter threats from abroad that would ultimately result in World War II.
Truman’s office began receiving now-familiar complaints about wasteful spending, pay-to-play contracts, and other signs of corruption. So he decided to investigate these claims -- personally. He got into his Dodge and hit the road, traveling thousands of miles to survey military installations throughout the country.
He came away with a conviction that corruption and waste were rampant, and had the evidence to back it up. Workers paid full wages for doing nothing; valuable building supplies left to spoil in the winter weather; and contracts given to unqualified, inexperienced suppliers. Enraged, Truman took to the floor of the Senate and delivered the speech that arguably launched him to political greatness.
Truman traced the ways that large contracts had been awarded to companies on the basis of personal connections. Though he was willing to concede “friendship should not be a handicap to anyone seeking work in the War Department,” he expressed concern about what was driving the choice of contractors. “When a friendship … dominates the selection of an inferior contractor, then that selection is wrong.”
At the end of his speech, he proposed that the Senate create a “special committee” to examine all the contracts given out under the new dispensation in order to “find out if the rumors rife in this city have any foundation in fact.” But Truman made it clear he was skeptical: “I have never found a contractor who, if not watched, would not leave the government holding the bag.”
Truman asked the Senate to vote on a resolution creating the Senate Special Committee to Investigate the National Defense Program. It passed unanimously, and Truman was installed at its head. Yet few senators expected the effort to succeed with its paltry budget of $15,000.
But Truman proved remarkably resourceful, promoting his investigation on radio and urging the public to help. His office was soon flooded with tips, which led to high-profile exposés, which created more media coverage, more tips, and more scrutiny. Truman was on a roll, and the Senate beefed up his budget. Twenty people were eventually hired.
Rather than make this a single-party issue, Truman managed to forge a bipartisan consensus within his committee that produced unanimous reports. Powerful defense contractors, called to testify, squirmed as they tried to account for inexplicable cost overruns, faulty and life-endangering products, and other malfeasance. But he also put labor leaders in the hot seat, too.
After the U.S. entered the war, the Roosevelt administration demanded the committee’s disbandment. Truman stood firm, arguing that it was “needed more than ever to ensure an efficient war effort.” He prevailed. In the process, he also revived the flagging reputation of Congress, turning it into an effective counterweight after years of rubber stamping New Deal programs for FDR.
The committee’s revelations had a salutary effect, forcing defense contractors to assume that they could be called to account for every penny given them. Truman shrewdly framed this in patriotic terms. “When people create delays for profit, when they sell poor products for defense use, when they cheat on price and quality," he declared, "they aren't any different from a draft dodger.”
Truman's remarkable balancing act blended populism, patriotism, and hard-nosed accounting. But Americans who yearned for leadership from Congress loved it, even as he taunted the military brass. “No military man knows anything about money," he said. "All they know to do is spend it.”
As Truman’s stock climbed, Roosevelt took notice, notwithstanding his earlier objections to the committee’s work. What began as a road trip in 1940 led to Truman’s nomination and election as vice president, and in 1945, to Truman becoming president upon FDR’s passing.
But the lasting contributions of the Truman Committee can be measured in blood and treasure. Over Truman’s four-year tenure, the Committee ran up bills totaling just under a million dollars. But it is estimated to have saved thousands of lives, thanks to in its endless investigations into everything from aircraft engines to landing craft.
More quantifiable was its effects on the bottom line. By some estimates, the Truman Committee saved approximately $15 billion ($230 billion in today’s money) by 1944; it amassed additional savings until it was disbanded in 1948.
Along the way, Congress learned how to stand up to a rather autocratic president, and restored American faith in the power of government to spend taxpayer money prudently. In our own post-9/11 era of massive defense increases, perhaps the president -- who prides himself on driving a hard bargain -- should partner with Congress and find himself a latter-day Harry Truman who could cut the fat from the military’s budget before writing yet another blank check.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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