October 29, 1999

MEMORANDUM TO: OPINION LEADERS

FROM: THOMAS DONNELLY, Deputy Director

SUBJECT: Defense

As it enters the final phase of deliberations over the fiscal year 2000 federal budget, the Republican Congress is discovering a genius for creative accounting. The latest gimmick for staying within the spending limits specified in the balanced-budget law is to cut spending across the board by 1 percent and to hope for almost $1 billion in new revenues through better collection of delinquent student loans.

This is the brainstorm of Sen. Ted Stevens, the Republican from Alaska who chairs the Senate Appropriations Committee. Under heavy pressure from its leadership, the House is due to scale back its own planned 1.4 percent cut and approve the Stevens plan, with the Senate soon acting likewise.
One seeming advantage of the Stevens approach is that it is supposed to inoculate congressional Republicans against the charge that they are cutting defense spending. Indeed, over the past week, congressional Democrats -- not normally known for their commitment to American military strength -- have been wreaking rhetorical havoc by calling Republicans soft on defense.

Stevens' response is that this year's defense spending bill provides about $17 billion more than last year's law. But this underestimates FY 1999 spending and overlooks proposed cuts in FY 2000. In particular, it ignores:

• $7.7 billion in FY 1999 emergency supplemental appropriations approved by Congress in October 1998.
• $5.7 billion in FY 1999 emergency supplemental appropriations approved last summer.
• $2.6 billion in cuts from FY 2000 spending that would result from Stevens’ proposed reduction.

When the figures are totaled, there will be little or no new money for the Pentagon beyond what is needed to keep pace with inflation. Congress will buy about the same defense "program" (personnel, weapons, training, etc.) as it did last year, and virtually the same amount as the administration requested.

If Republicans persist in following the Stevens plan, they should not kid themselves that they have done much of anything to correct the long-term problems of America’s defenses.