Cuts to ‘Mandatory’ Spending May Not Be Mandatory—At the Moment
Choosing to continue down a path chosen long ago by other people is a choice, not a requirement.
With Elon Musk stating his goal is to cut federal spending by $2 trillion, and Musk and fellow entrepreneur Vivek Ramaswamy tasked with coming up with a plan for it at the forthcoming Department of Government Efficiency, the big question on everybody’s mind is, of course: How?
The major concern is that so much of the federal government’s annual spending is mandatory.
I use that word, mandatory, without scare quotes—though it is entirely justifiable to deploy them in this case. More on that, below.
Former Congressman David Stockman, who served as director of the Office of Management and Budget through most of President Ronald Reagan’s first term (1981-1985), has been doing a terrific job of identifying potential spending cuts and explaining them in detail. Stockman’s series of articles at his Substack, Contra Corner, now totals 11 installments, and each one is long. Stockman is taking this very seriously, and he is sparing no effort. His list of cuts is impressive. One assumes that Musk and Ramaswamy are deep into a similar effort.
Stockman’s latest installment deals with defense spending. The former OMB director bases his cuts on a fundamental principle: dismantling “America’s elephantine Warfare State” to conform with the principles of the nation’s founding: “Thomas Jefferson’s wise admonition urging, ‘… peace, commerce, and honest friendship with all nations, entangling alliances with none’” (emphasis by Stockman). This would return the nation’s defense apparatus to its proper goal of dealing with objective external threats, Stockman notes.
Controversially but plausibly (in fact persuasively, to my thinking), Stockman goes so far as to make the case that even the aggressive Cold War against Communism was unjustified:
[T]he Soviet archives are now open, but there’s absolutely nothing there to validate the cold war axiom that the Soviet Union—along with the affiliated menace of Maoist China—was hell-bent on world military domination, starting with western Europe, Japan and then extending to the lesser lands all around them.
In fact, the Soviet archives make clear that Moscow never had a plan or even faint aspiration to fortify and offensively unleash the Red Army toward Bonn, Paris and London. The closest thing to a plan for military mobilization westward was the “Seven Days to the Rhine” blueprint, but that was a defensive action plan explicitly formulated as a contingency plan to respond to a theoretical NATO first strike. …
Indeed, what the Soviet archives actually show is not the deliberations of a menacing Colossus, but the record of a chronic struggle to hold together with economic bailing-wire and bubble-gum a lumbering communist state that didn’t function and couldn’t last.
After the gigantic defense spending on U.S. involvement in World War II, Congress had returned defense spending to a more-normal course, Stockman notes:
Nevertheless, it was the false fear of a red tide descending over Europe and ultimately the Western Hemisphere, too, that enabled Empire First to trump the natural and proper tendency of Washington politicians and policy-makers to retreat behind America’s secure ocean moats after WWII. In fact, for a brief interlude a sweeping military demobilization did occur, when the peak $83 billion defense budget of 1945 plunged to just $9 billion by 1948.
Then, after the Soviet Union “got the A-bomb” and the Communists took over China, U.S. defense spending increased rapidly in response to an alleged existential threat from those two nations. That was foolish and self-destructive, Stockman states:
As the great Senator Robert Taft held at the time, the modest threat to homeland security presented by the war-ravaged corpus of the Soviet Union and the collectivist disaster imposed on China by Mao could have been readily handled with—
· An overwhelming strategic nuclear retaliatory capacity that would have deterred any possibility of nuclear attack or blackmail.
· A Fortress America conventional defense of the continental shorelines and air space that would have been exceedingly easy to stand up, given that the Soviet Union had no Navy worth speaking of and China had devolved into industrial and agricultural anarchy owing to Mao’s catastrophic experiments with collectivization.
That framework is what Stockman uses to decide what the United States should spend on defense, which is much less than what we have been shelling out over the decades:
[T]he case for a true America First policy—that is, returning to the 1948 status quo ante and a proper Fortress America military posture—has powerfully strengthened during the last three decades. That’s because in today’s world, the only theoretical military threat to America’s homeland security is the possibility of nuclear blackmail. That is to say, the threat of an adversary with a First Strike capacity so overwhelming, lethal and effective that it could simply call out checkmate and demand Washington’s surrender.
Fortunately, there is no nation on earth that has anything close to the First Strike force that would be needed to totally overwhelm America’s triad nuclear deterrent and thereby avoid a retaliatory annihilation of its own country and people if it attempted to strike first.
Certainly, Stockman is no military strategist, but the principle he lays out here is fully justifiable, especially in a time of massive and ever-increasing federal deficits and debt. After going into much detail on what current spending contributes to “a true America First policy” and “a proper Fortress America military posture,” and what does not, Stockman arrives at the following:
Fortress America Budget Savings:
· Army: $140 billion.
· Navy/Marine Corps: $96 billion.
· Airforce: $65 billion.
· DOD agencywide: $111 billion.
· UN contributions and foreign economic and humanitarian aid: $35 billion.
· International Security Assistance: $15 billion.
· Total Savings, FY 2025 basis: $462 billion.
· 8% inflation adjustment to FY 2029: +$38 billion.
· Total FY 2029 Budget Savings: $500 billion.
That, by itself, gets us to one-quarter of the hoped-for $$2 trillion cut in annual federal spending.
None of that spending, as Stockman’s essay notes, is “mandatory.” I use quotes there because I am using the term as the budget bureaucracy and their big-budget friends in the nation’s institutions use it. “A lot of U.S. government spending is considered mandatory—benefits that are paid without any annual vote by Congress,” as Justin Lahart and Rosie Ettenheim put it in The Wall Street Journal.
Correct: “is considered” mandatory, not “is” mandatory.
The writers present a pair of useful charts:
The WSJ writers mention the conventional term for discretionary spending: items “for which Congress votes every year.” The “mandatory” items are spending programs that are on autopilot, things decided decades ago by people nearly all of whom are long-dead.
Those items are “mandatory” only in the sense that nobody has the guts to touch them. I imagine that Musk and Ramaswamy will generally stay away from these programs as well. They might get to the $2 trillion in cuts without attending to any of this “mandatory” spending. It is entirely possible, given that the $2 trillion would be almost exactly a return to the pre-Covid spending trend, which I have been recommending for the past two years:
“Mandatory” spending has composed a good part of that increase, of course, which is why we will have to make real cuts to discretionary spending.
In the end, however, all government spending is discretionary. If the federal government loses its credibility with bond buyers and the economy crashes under the weight of large increases in interest rates, it will be through our own discretion.