July 12, 2001

MEMORANDUM TO: OPINION LEADERS

FROM: WILLIAM KRISTOL & GARY SCHMITT

SUBJECT: Defense

We would like to draw your attention to an extraordinary passage in Deputy Secretary of Defense Paul Wolfowitz’s testimony yesterday before the House Budget Committee on President Bush’s 2002 amended budget request for the Defense Department.

Wolfowitz points out that in 1950, just prior to the Korean War, President Truman refused to request from Congress the increase in miliary spending his defense team thought was necessary. Today, we face a similar situation with the White House and OMB slashing the Secretary of Defense’s and the military services’ requests for increased defense expenditures. For example, Secretary Rumsfeld came to the White House several weeks ago saying he needed at least $35 billion as a supplement to the 2002 defense budget; the White House authorized only half that amount. Right now, the Bush White House is willing to hold defense spending below the total needed because it values tax cuts more and fears cutting domestic spending further. Moreover, with the president so lukewarm on fixing the shortfall in military spending, it is virtually certain that the Defense Department will not even get from Congress the additional $18 billion it has requested for FY2002.

In his testimony, Wolfowitz suggests a goal of setting defense spending at 3.5% of GDP. As he says, “To think we can’t afford an insurance policy of roughly 3.5% of GDP today to deter the adversaries of tomorrow and underpin our prosperity, and by extension, peace and stability around the globe, is simply wrong.” But this year’s budget request is barely 3% of GDP, and OMB is now telling the Defense Department not to expect any real increase for next year. So, the clear implication of the deputy secretary of defense’s testimony is that his president’s budget is woefully insufficient, and the White House is dangerously misguided, when it comes to providing for the nation’s security and its interests around the globe.


Excerpts from Deputy Secretary of Defense Wolfowitz’s
Prepared Testimony on the FY 2002 Defense Budget
to the House Budget Committee
July 11, 2001

“I’m reminded of another point in our history when it was a challenge to make a case for increased defense spending. In 1950, General Omar Bradley urged President Truman to spend at least $18 billion on defense. The Joint Chiefs gave an even higher estimate at $23 billion, and the services' estimate was higher still at $30 billion. But the President said we couldn’t afford that much - $15 billion was as much as we could afford.

“Six months later, we were suddenly in a war in Korea. Just as suddenly we found we had no choice other than to budget some $48 billion—a 300 percent increase. How much better it would have been to have made the investment earlier. If we had done so, Dean Acheson might not have been forced to define Korea as being outside the defense perimeter of the United States—on the grounds that we did not have the forces to defend it.

“We have spent an historical average of about 8% of GDP on defense, in part because we have not spent enough in peacetime to prepare for, and deter, war. We can’t know who may challenge us in the future, or where, or when. Today, we are more in the range of 3% of GDP. But it is reckless to press our luck or gamble with our children's future. To think we can’t afford an insurance policy of roughly 3.5% of GDP today to deter the adversaries of tomorrow and underpin our prosperity, and by extension, peace and stability around the globe, is simply wrong. When compared with the cost in dollars and human lives if we fail to do so, it is cheap at that price.

“It’s interesting here to consider once again the situation in 1950. President Truman’s bottom-line figure of $15 billion represented 32 percent of the federal budget, or just 5 percent of the GDP. The jump in spending to $48 billion the war necessitated represented more than 15 percent of the GDP. If history is our guide, it suggests strongly that we are much wiser to pay the premium now than to pay in blood and treasure later.”