Pegging defense to GDP is a dumb idea

Last night in the debate, Joe Biden said Mitt Romney’s defense plan would add $2 trillion to the defense budgets projected over the next decade. Paul Ryan denied it, but it is the consequence of Romney’s promise to devote 4 percent of Gross Domestic Product (GDP) to defense. The promise was made in their first White Paper on defense. The goal was "setting core defense spending — meaning funds devoted to the fundamental military components of personnel, operations and maintenance, procurement, and research and development — at a floor of 4 percent of GDP."

There is almost nothing dumber in defense planning than justifying your defense budget by making reference to the share of GDP it consumes. But that doesn’t stop people from trying. Romney advisor Dov Zakheim and his son Roger reiterated the commitment this week .

The Zakheims weasel a little, saying there is no way this will happen right away (although, including the war costs, which is the right thing to do, the budget for national defense, including nuclear weapons, has been well above 4 percent of GDP for the last eight years). It will be a ramp, of course, and there is no way, they say, it will add $2 trillion to the currently projected defense budgets over the next ten years.

Except that it would. By tying defense to GDP, even if you use a slope to get to 4 percent in the projections, it would easily add $2 trillion to current projections, as pointed out by Travis Sharp of the Center for a New American Security.

There are three problems with Romney’s proposal. First, it has nothing to do with national security.The only reason to talk about the share of GDP that defense consumes is to answer the question: Can the economy afford it? As GDP grows, defense budgets become more economically affordable, as long as they grow more slowly than overall production. The share actually fell to less than 3 percent of GDP at the end of the 1990s. It tells you no other useful information in talking about defense or national security.

Second, the only thing the GDP share measures is the growth of GDP, not the growth of defense budgets. The number doesn’t tell you anything about what we actually spend on defense, what missions we spend it to be able to perform, and whether it is enough or not. For all of its rhetoric about the Middle East, the Romney speech at the Virginia Military Institute offered no strategic view that would drive a requirement to spend more than $7 trillion on defense over the next ten years. Fear and uncertainty — even American "exceptionalism" — are not a policy, and they certainly do not tell us how much to spend on defense.

Third, and most important in the current budgetary dilemma, Romney’s defense advisors cannot get there from here. Not without draconian cuts to entitlements (which require legislative changes he cannot get through Congress) and the termination of virtually everything that remains of domestic spending. And he certainly cannot get there and reduce the deficit or debt as a share of GDP. A magic asterisk of growth, stimulated by unspecified tax cuts, is unsound, and certainly a budgetary dodge of the first order.

The litmus test of all those who would tie defense to a share of GDP is to ask them if they would agree to cut the defense budget if GDP declined. Of course not; defense budgets need to be driven by two things: the limits on resources and the demands of national security strategy (and not just one of them — strategy never drives budgets independent of available resources unless you are at war, and that is virtually over). But maybe, in an election year, it is too much to ask to expect that kind of realism in the defense budget debate.