Sen. Roger Wicker (R-MS), the top Republican on the Senate Armed Services Committee, is calling for the defense budget to grow to 5% of gross domestic product, a proposal that would require either steep cuts elsewhere in the federal budget or cause the debt to soar.
Defense spending is currently under 3% of the GDP. Defense hawks have long advocated an increase in that percentage, especially as the United States stares down China in the Indo-Pacific, Russia in Europe, and various threats emanating from the Middle East.
President Joe Biden submitted to Congress a fiscal 2025 budget request that included $849.8 billion for the Department of Defense last month, but Wicker’s plan would add roughly $55 billion in defense spending over the cap in fiscal 2025 alone, and then significantly more in future years.
Wicker unveiled his plan as a 52-page proposal at the end of last month. As of now, it is just that — a plan. But Wicker announced Wednesday that he is going to introduce an amendment to the National Defense Authorization Act to add funding to the fiscal 2025 bill. The goal of spending 5% of GDP on defense would be aspirational for the years ahead.
The move to massively ramp up defense spending would further complicate the government’s fiscal situation, which has become more precarious in recent years.
Other conservatives say the added military funding cannot be squared with fiscal responsibility.
“It is absolutely the case that our defense budget is being squeezed, we are falling behind China, and right now, our own military does not think we could defeat China in a military conflict related to Taiwan,” Brian Riedl, a budget expert at the Manhattan Institute, told the Washington Examiner. “It is dire.”
Still, Riedl said, Wicker’s proposal is “just not remotely realistic.”
Paying for the proposal would require major spending cuts or tax hikes. Republicans, though, are aiming for a significant tax cut in the form of extending provisions of the 2017 Tax Cuts and Jobs Act when they expire in 2025. Extending the tax cuts, commonly referred to as the Trump tax cuts, and increasing defense spending to Wicker’s level without some form of tax increase would massively add to the country’s fiscal woes.
Permanently extending the Trump tax cuts would cost some $4 trillion over the next 10 years, according to the Congressional Budget Office, Congress’s nonpartisan group of budget experts.
“The idea that we can increase defense spending by $5 trillion over the decade and extend the tax cuts by $4 trillion, on top of a $20 trillion baseline debt, is just economic fantasyland,” Riedl said.
The estimated $5 trillion to $6 trillion cost dwarfs Build Back Better, President Joe Biden’s sweeping proposal for climate and social spending — a failed plan that would have been the biggest public investment in infrastructure and social spending since the New Deal. The Committee for a Responsible Federal Budget’s estimate of the cost of the Build Back Better plan was $4.8 trillion.
Bryan Clark, senior fellow and director of the Center for Defense Concepts and Technology at Hudson Institute, told the Washington Examiner that he thinks defense spending should be increased to between 3% and 5% of GDP, adding that 5% is likely on the high end of what is needed.
“So I think 5% is probably that, you know, kind of aspirational goal to get to,” Clark said. “I think it’s probably, to me, I don’t know that it’s necessary.”
But he said that by borrowing money with interest rates of 4% or 5%, it will be difficult to get that increased defense spending because servicing the debt will be more expensive.
“So now, national defense is going to be increasingly competing with servicing the debt in terms of a budget line item, which is not a place that defense needs to be or should be,” Clark said.
This year, the U.S. will be shackled with $870 billion in payments on net interest, according to the CBO, a sum comparable to defense spending.
Justin Logan, the director of defense and foreign policy studies at the libertarian Cato Institute, pointed out that the U.S. is adding about $1 trillion to the national debt every 100 days, and it is now pushing $35 trillion.
He told the Washington Examiner that the fundamental problem is that the U.S. has a massive debt and the costliest budget items, Medicare, Medicaid, Social Security, and interest on the debt, are “politically radioactive,” meaning that lawmakers cannot suggest cutting them.
In fact, Logan said, pressure is cutting in the opposite direction of Wicker’s proposal — that the Defense Department budget may look like an appetizing target for cuts to help right the country’s fiscal ship.
And the fiscal situation is getting increasingly dire.
The federal debt held by the public will balloon to 107% of the country’s GDP by 2029, the highest level on record, according to a March update from the CBO. It will then grow to a whopping 166% by 2053.
The CBO cautioned in its report that the risk of a “fiscal crisis” will increase as debt rises and investors begin to doubt the government’s fiscal footing.
In February, the CBO predicted the federal budget deficit would be $1.6 trillion in fiscal 2024, down slightly from fiscal 2023’s deficit of $1.7 trillion.
If the defense budget were given such a big infusion of cash, the budget deficit would go to between $4 trillion and $5 trillion within a decade, depending on interest rates, according to Riedl, who said interest costs would end up crowding out the entire budget and “a debt crisis would be all but guaranteed.”
Riedl also said that while he thinks defense is underfunded, he does not think setting a target such as 5% of GDP is helpful because the budget should be based more on national security needs rather than beginning with a target amount and then filling in the expenditures.
“In the past when we’ve done this, when we have significantly ramped up defense spending during peacetime to meet a spending target, much of the money has ultimately been wasted because the budget increased faster than their ability to spend it well,” he said.
In terms of details about Wicker’s plan, roughly a quarter of the $55 billion he wants to add to this year’s NDAA, about $13.8 billion, would be allocated for building up the U.S. defense industrial base and related infrastructure. Within that, nearly $8 billion would be allocated for Army, Navy, Marine Corps, and Air Force building maintenance, which he argues is desperately needed.
“Our people are the lifeblood of the armed services, but the DOD’s physical infrastructure is the foundation for power projection,” Wicker’s plan reads. “However, DOD has only done one consistent thing as it relates to infrastructure: underfund it. Both deployed service members, as well as their families back home, have been the ones bearing the brunt of failing buildings and lackluster leadership. From barracks and housing to shipyards and training ranges, we must treat our defense infrastructure as a key enabling capability for competition and conflict.”
The plan would also include roughly a $10 billion increase in funding for the Navy and Air Force, which would include $1.5 billion for large and small combatant shipyard infrastructure and workforce development, more than $3 billion for two Virginia-class submarines per year, and $1.5 billion for classified Air Force programs, among many other items.
Wicker’s GOP colleagues on the Armed Services Committee support his effort to increase defense spending, though none specifically endorsed his plan to raise it up to 5% of GDP.
“We face the most complex threat environment since WWII, and the United States is woefully unprepared,” Sen. Deb Fischer (R-NE) told the Washington Examiner in a statement. “As I’ve said for months, the president’s budget request for defense is grossly inadequate. Senator Wicker is right — we need more, sustained investments in munitions, strategic systems, space capabilities, and across the board.”
Similarly, Sen. Eric Schmitt’s (R-MO) press secretary, Will O’Grady, told the Washington Examiner in a statement that the senator is reviewing Wicker’s plan “as the Senate Armed Services Committee prepares to markup the National Defense Authorization Act.”
“In general, Senator Schmitt believes it’s critical that we work to improve our military’s lethality and preparedness to counter China as our chief adversary,” he added.
Experts have stressed the need for the country’s defense capabilities to be up to snuff given the threat posed by China and other global adversaries.
When it comes to areas of improvement, Clark said unmanned systems are important to focus on areas such as the Taiwan Strait. He said the U.S. could do a lot in that area with relatively modest amounts of funding.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
He also said another area of improvement would be missile defense capabilities in the Middle East.
“Coming up with some more innovative approach than destroyers that we’re supposed to be husbanding for the China fight, getting used up guarding against Houthi attacks in the Red Sea,” he said. “There’s got to be a more efficient way to address that challenge that doesn’t consume our force structure that we might need for a China fight.”
