Penta-GONE: $5 billion slashed from defense budget

Michael Bastasch | Energy Editor

President Barack Obama’s recently submitted 2013 budget proposal sharply reduces the Defense Department’s base budget by more than $5 billion, a move that Republicans argue may compromise national security. Arizona Republican Sen. John McCain said Obama’s proposal, which allocates more than $530 billion for that base budget, puts “short-term political considerations over our long-term national security interests.”

Obama even drew criticism from Connecticut independent Sen. Joe Lieberman, who said the budget poses an “unacceptable risk” to national security.

The precise effects of the budget cut are unclear because, according to a recent report from iWatch News, the true costs of new weapons programs are often hidden from the public. The long-term costs of these weapons systems are routinely misstated, ignored or combined with other expenses to hide the costs of individual programs, the report found.

Military services and the officers who purchase these new weapons have frequently ignored long-term costs like operations, maintenance and repair expenses, despite a longstanding Pentagon requirement that they “tally and carefully forecast all operating and support costs, track changes in those costs and compare the results to similar tallies for existing or older weapon systems.”

The Government Accountability Office estimated that 70 percent of the cost of major armaments has been obscured because of the military’s fuzzy accounting. The GAO examined three years of Pentagon weapons reports and concluded that the accounting for weapons system operations and support costs was “inconsistent and sometimes unreliable, limiting visibility needed for effective oversight of these costs.”

“Of the 84 programs that furnished these reports, eleven omitted the long-term cost data altogether; more than half failed to explain in a useful way how they calculated it; and 57 percent failed to compare the costs to those incurred by older programs,” the GAO concluded. “These omissions flouted a law Congress enacted in 1985 and expanded in 1991 and 1994 requiring comprehensive reporting and analysis of life cycle costs.”

Auditors looked particularly closely at 15 programs, including the F-35 fighter jet program and the Air Force/Marine Corps V-22 hybrid helicopter–aircraft program, and concluded that seven of them had misstated operations and support expenses over the course of all three years that the GAO examined.

The Air Force was the worst offender. Eight of the ten programs in 2010 that ignored the requirement to report operations and support costs were “major modifications to, or subsystems of, Air Force weapon systems.” These modifications included two changes to the C-5 transport plane that will cost $8.6 billion.

The Air Force has also misreported the true cost of the F-35 fighter jet program, which is now projected to be the single most expensive weapons program in military history. The service had projected that the average hourly flying cost of each of the several thousands of F-35s that it planned to build would be approximately $16,425. But it included in that estimate 528 so-called “ghost” planes — which the military knew would never be built — in order to reduce the average hourly flying cost.

iWatch reported that the problem of calculating the average flying cost of new aircraft is systemic, noting that “there are numerous formulas used [in] the Pentagon for calculating costs per flying hour, and no apparent effort to make them uniform.”

The GAO determined that the true hourly cost of the aircraft would be $23,557 in 2002 dollars, which represents a 43-percent increase from the Air Force’s estimate. That cost is still underestimated due to inflation.

Despite these problems, President Obama’s 2013 budget allocates $9.1 billion to purchase 29 new F-35 aircraft.

The GAO also pointed out that the farther away weapons systems budgeters were from a program’s main office, the more accurate the budgets tended to be. Program managers may be deliberately hiding issues that could result in a program’s termination before it even begins. Additionally, officials repeatedly failed to compare costs of weapons systems with those of previous weapons systems on the grounds that the new systems had unprecedented capabilities.

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