The colossal waste in the Pentagon budget

Matt Taibbi has a blistering expose of the massive boondoggle that is the US military budget. He says that it is deliberately designed to be obscure and prevent any proper auditing so that no one really knows how much money is being spent on what. They thumb their noses at any requests for accountability. There is not proper inventory of what they have and what they spend, allowing for massive amounts of fraud and waste.

US politicians are always eager to claim that there is massive waste and fraud in the federal budgets but they only look at the programs that benefit ordinary people. When it comes to the Pentagon, they simply give whatever is asked for.

Despite being the taxpayers’ greatest investment — more than $700 billion a year — the Department of Defense has remained an organizational black box throughout its history. It’s repelled generations of official inquiries, the latest being an audit three decades in the making, mainly by scrambling its accounting into such a mess that it may never be untangled.

Ahead of misappropriation, fraud, theft, overruns, contracting corruption and other abuses that are almost certainly still going on, the Pentagon’s first problem is its books. It’s the world’s largest producer of wrong numbers, an ingenious bureaucratic defense system that hides all the other rats’ nests underneath. Meet the Gordian knot of legend, brought to life in modern America.

AT THE TAIL end of last year, the Department of Defense finally completed an audit. At a cost of $400 million, some 1,200 auditors charged into the jungle of military finance, but returned in defeat. They were unable to pass the Pentagon or flunk it. They could only offer no opinion, explaining the military’s empire of hundreds of acronymic accounting silos was too illogical to penetrate.

In a supreme irony, the auditors’ search for boondoggles has itself become a boondoggle. In the early Nineties and 2000s, the Defense Department spent billions hiring private firms in preparation for last year. In many cases, those new outside accountants simply repeated recommendations that had already been raised and ignored by past government auditors like the Defense inspector general.

After last year’s debacle, the services are now spending even more on outside advice to prepare for the next expected flop. The Air Force alone just awarded Deloitte up to $800 million to help the service with future “audit preparation.” The Navy countered with a $980 million audit-readiness contract spread across four companies (Deloitte, Booz Allen Hamilton, Accenture and KPMG).

Taxpayers, in other words, are paying gargantuan sums to private accounting firms to write reports about how previous recommendations were ignored.

How the Pentagon arrives at its budgets is a fraud from the get-go, all covered up in multiple layers of impenetrable bureaucracy and accounting tricks.

The Pentagon every year employs an accounting shortcut that should make more sense to civilians at this time of year, because it’s similar to what the roughly six percent of Americans who cheat on taxes do annually.

Taxpayers who think they’re owed deductions, but don’t have the receipts to back up their expenses, will sometimes take a rough guess, maybe based on what their prior-year deductions were. Then they file returns infected with guesses, “plugged” in to look like deductions counted up honestly.

The Pentagon does basically the same thing, only on a galactic scale. At the end of every year, it submits a “Budget execution request” that includes complete month-by-month statements of that year’s spending.

The White House will then take these numbers and use them to project a defense budget for the following year. The president submits that budget to Congress, which in turn will actually appropriate the money. Almost without exception, the Pentagon ends up getting a raise. For 2019, Donald Trump submitted a budget that asked for $716 billion, or $82 billion more than the Department of Defense received the previous fiscal year.

The system makes sense, except for one problem: The financial reports the Pentagon submits are faked.

Taibbi says that the only way to reform the Pentagon budgets is to threaten to withhold funds until there is proper accounting but the campaign financing system prevents that.

Ask Hill staffers why it’s hard to pass any bill that even contemplates withholding funding for the Pentagon, and they say you’ll run smack into a bipartisan batch of refuseniks who’ve been gorging on defense-sector campaign contributions, thanks to their status on committees like Armed Services or Appropriations.

“You can’t get the Pentagon to take an audit seriously unless you threaten to stop funding, and you can’t stop funding without campaign finance reform,” says one Hill staffer.

[Bernie] Sanders last year introduced an amendment to ding the Pentagon for 0.5 percent of its funding until it passes (not takes, but passes) an audit. He failed, but is going to keep trying. For his office, the Pentagon audit issue is as much about misplaced social priorities as it is about waste and mismanagement.

“Over and over again, we’ve been told we cannot afford to guarantee health care as a right, make public colleges tuition-free, or seriously address any of the needs of the working class,” Sanders says. “When it comes to the massive waste, fraud and abuse at the Pentagon, there’s a deafening silence.”

It is a long article but worth reading about how the Pentagon is sucking the life out of the rest of the country. The glorification of the military combined with the massive lobbying of Congress by the military-industrial complex makes them immune from the normal scrutiny given to other government agencies.


  1. Lassi Hippeläinen says

    The military budget is the grandmother of all Keynesian market interventions.

  2. says

    “fiscally conservative but socially liberal” ‘conservatives’ are just a bunch of liars. Nobody who takes money seriously can look at the pentagon and not recoil in horror.

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