In 2010, the United States had 200,000 troops in Iraq and Afghanistan. The costs of keeping them there were mostly paid through something called the Overseas Contingency Operations Fund (OCO), which is supposed to pay for temporary expenditures like wars. Between FY 2010 and 2015, OCO spending went down from $163 billion to $63 billion, which makes sense when you realize that by 2015 the number of U.S. troops in Iraq and Afghanistan had dropped to only 10,000. Take away the OCO and look only at the Pentagon’s “base budget”—which covers everything except ongoing wars—and the gap between FY 2010 and the depth of the supposed defense spending “atrophy” in FY 2015 drops to only $28 billion.
But even that overstates the drop. Even as troop levels in Afghanistan and Iraq fell, the Pentagon kept spending $63 billion for what it claimed was war fighting. How did it do that? By shifting roughly $30 billion that should have been in its base budget into the OCO because the OCO was not subject to budget caps. By doing so, the Pentagon made it appear that the base budget was $28 billion lower in FY 2015 than it had been in FY 2010. But that was an accounting gimmick. Had the $30 billion been in the base budget, where it belonged, it would have been clear that—when you subtract actual war-fighting—the Pentagon’s budget in FY 2015 was almost exactly what it had been in FY 2010, before the budget caps began.
Ironically, one of the members of Congress who denounced this budget-busting accounting trick was Mick Mulvaney, who is now Trump’s director of Office of Management and Budget. But he couldn’t stop it. The Pentagon kept that $30 billion in the OCO for the rest of the Obama administration, even as the base budget began going back up. By Obama’s last year in office, notes Harrison, overall defense spending (including the OCO) was higher in inflation-adjusted terms that at any point since World War II.
Yes, that’s right. The supposedly atrophied defense budget from which Trump is rescuing America was itself higher in constant dollars than the defense budget at the height of the Vietnam War or the Reagan buildup. Which helps explain why in 2016, in an essay in Foreign Affairs, General David Petraeus and the Brookings Institution scholar Michael O’Hanlon declared that, “America’s awesome military” had “few, if any, weaknesses” and that “No radical changes or major buildups are needed.”
In fact, not only does the American military not require a “major buildup” to be “awesome,” it could probably be awesome for a lot less. In 2015, the Defense Review Board—a panel of corporate leaders and management consultants appointed by the Pentagon itself—looked at the Department’s “back office” activities: things like “accounting, human resources, logistics and property management.” The Board estimated that simply by making these non-battlefield functions more efficient, the Pentagon could save $25 billion per year, almost the entire budget of the State Department. But none of these savings occurred because, as Bob Woodward reported, “The Pentagon imposed secrecy restrictions on the data making up the study, which ensured no one could replicate the findings. A 77-page summary report that had been made public was removed from a Pentagon website.”