Important Choices: Foreign Policy and Defense Spending

September 27, 2013

DAVID SPEEDIE: I'm David Speedie, director of the program on U.S. Global Engagement here at the Carnegie Council.

I'm delighted to have today at our office an old friend, Dr. Lawrence Korb. Larry is a senior fellow at the Center for American Progress and a senior advisor to the Center for Defense Information, both in Washington.

He served on active duty for four years as a naval flight officer in the Navy Reserve and retired with the rank of captain. He then served as an advisor to the Reagan-Bush election committee in 1980 and was appointed assistant secretary of defense from 1981 to 1985. In that position, he administered about 70 percent of the defense budget. He was then a senior fellow and director of national security studies and, subsequently, vice president at the Council on Foreign Relations here in New York. He's the author of 20 books. He has made over 1,000 television appearances.

Larry, we're delighted to welcome you to the Council for what I hope will be a fairly free-ranging discussion on items of vital national interest.

LAWRENCE KORB: Thanks for having me. I appreciate it. It's good to be back in New York.

DAVID SPEEDIE: Likewise, it's good to have you.

You have really developed a reputation, and, I would say, a nonpareil reputation, as someone who monitors and reports on defense budget issues. Recently you commented on a remark by a Defense Department official. The remark was: "There is no easy way to identify savings in the defense budget. We will have a military that is smaller, less technologically advanced, and much less ready in the future."

That's an ominous kind of portent, as it were. Especially the idea of being less ready seems to be a bit of a buzzword.

What were your reactions to that?

LAWRENCE KORB: Basically, that was an article by Christine Fox, who headed the office of cost evaluation—really, the person who decides where to spend the money in the Department of Defense. She says—and I agree with her—there are no easy ways to cut the defense budget.

Everybody says, "Oh, my goodness, get rid of fraud, waste, and abuse. You've got too many generals and admirals, and your staffs are too big." Really, what you have to do is, you've got to make a choice about what your role in the world is, what kinds of weapons you want to buy, where you want to keep your deployment. Those are tough issues.

Now, she claims that, with the amount under sequestration—the budget for 2013 will be about $475 billion—that that would cause these problems that would make us worse than we have been in the last 30 years. No, it won't.

If you take a look at the amount of money, $475 billion, if I control for inflation, that's more than we spent, on average, in the Cold War, when we had an existential threat, and it only takes us back to 2007 [levels of defense spending]. And this—in addition to our base budget, we have a separate budget for the war. When you add that, we're spending close to $600 billion, which is pretty high. If you go back, it's more than we were spending at the height of the wars in Vietnam and Korea.

DAVID SPEEDIE: So it's a matter of sensible choices.

LAWRENCE KORB: It's a matter of making tough choices.

Now, what happened after 9/11—the country panicked and we went into this crisis mode. The defense budget, the base one, nearly doubled. So they didn't have to make hard choices. They could have everything.

In addition to not making the hard choices, they didn't manage the process very well. When I wrote a response to Ms. Fox's article, I pointed out something John McCain said. He said our procurement system is a mess. Things are late. They're over-budget. Sometimes they don't even come at all. We spent $30 billion on weapons that we didn't get anything for.

So, really, what you need to do is get back and run it the way it has been in the past. If you take a look, in the post-Vietnam drawdown, you had a great secretary of defense, Melvin Laird, and he brought in David Packard, from Hewlett-Packard, to be his manager.

I'll tell you something that may surprise you. You know who was a very good secretary of defense? Dick Cheney, because the White House brought in Don Atwood from General Motors. They managed the post-Cold War drawdown. Again, if you put that in constant dollars, that got down to $375 billion. So you're way above where you were after Korea, Vietnam, and the end of the Cold War.

DAVID SPEEDIE: And as I think you also pointed out, in this article or elsewhere—and, of course, it's known, I think, by people who observe the Pentagon, but not by the public at-large—we spend more than China, Russia, the UK, France, Japan, India, Saudi Arabia, Germany, Brazil, Italy, South Korea, Canada, and Australia combined.

LAWRENCE KORB: A lot of them are our allies.

You see, what happens is, when we had the Budget Control Act of 2011, as the first part of it, all agencies in what we call the discretionary budget—not the entitlements like Medicare, Social Security—basically were told, over 10 years, to cut roughly $480 billion from your budget. But it was from your existing budget. The defense budget was still scheduled to go up for another 10 years. So they took that cut, and the growth slowed. Then, under sequestration, you took roughly another $500 billion. That's a real cut.

What basically people hear—"Oh, my goodness, you're cutting the defense budget by a trillion dollars." Well, yes, but it's over 10 years, and the first half was from projected growth. That's why, when all is said and done, you're back to where you were in 2007, the last year of the Bush administration. You don't ever hear anybody saying, "Oh, my goodness, we don't have enough." Again, this is the base budget. The war budget is separate.

DAVID SPEEDIE: You mentioned there in passing that some of these countries are our allies. How does this play out in terms of the quite substantial, if not draconian, budget cuts that are taking place, especially in Europe—the UK, France, other allied countries? This has caused some strains and stresses within the NATO alliance, I know, the operational readiness, of course. When the last secretary of defense left, he gave this warning to the Europeans, a pretty stark warning. How does that play out in our defense budget?

LAWRENCE KORB: Well, you've got two issues here. One is, the Europeans become free riders. They say, "Well, you know, the United States is spending all this. They can take care of any threats. We don't have to. We want to focus on other priorities."

The other is that I think this is something Europe is going to have to determine: What role do they want to play in the world? During the Cold War, it was us and the Europeans to prevent Soviet communist expansion. Now what is the threat to Europe? How do they see themselves?

I applaud the French for what they did in Mali. They are going to have to decide, do they want to do this? They've got ties to a lot of these countries where you're having problems and you've having offshoots of al-Qaeda showing up. If they want to do it, they are going to have to spend more and be more ready.

DAVID SPEEDIE: Is NATO obsolete?

LAWRENCE KORB: I think, if NATO didn't exist, we wouldn't invent it. But it's there—

DAVID SPEEDIE: We wouldn't invent it?

LAWRENCE KORB: No. Basically it was there during the Cold War. It served a useful purpose. It achieved its objective. The question became, what now?

It doesn't hurt anything, because you get the countries together and they talk, and it provides a forum. But I argued, when the Cold War ended over 20 years ago, don't expand NATO, because it would send the wrong signal to Russia, which, of course, we did—

DAVID SPEEDIE: Many of us did, yes.

LAWRENCE KORB: —and now, of course, you have Putin saying, "See, they're trying to surround us." President George W. Bush, was talking about bringing Georgia into NATO. My goodness, that would really—or Ukraine.

DAVID SPEEDIE: A final thought on the domestic debate over the budget. I remember back in the days of the Gingrich revolution there was this fascinating sort of pitting of the budget hawks against the Pentagon hawks. These were often bedfellows out there on the more conservative wing of the political spectrum. But there was this tension between those who were adamant about cutting the budget and those who said everything but the Pentagon. Is there any of that today?

LAWRENCE KORB: Most of the people wanted to cut things like welfare spending. That was what they were pushing for. The Republican Party back then basically said, "Well, government doesn't do much, except for defense, so we've got to provide for that."

But it's changed. It's completely different now. When we came up with sequestration and when we said, "Okay, you've got a year. You put this super committee together to come up with a trillion dollars in cuts or tax increases . . . " Everybody figured that the Republicans would never let sequestration hit the Pentagon, because they like it. But this is a different Republican Party. It's going back, in many ways, to the Republican Party of Robert Taft.

DAVID SPEEDIE: Never mind Gingrich; back to Taft.

LAWRENCE KORB: Newt Gingrich is still pretty much a defense hawk. But you get people like Rand Paul, for example. They don't want to see America fighting the world. Mike Coffman from Colorado, a former Marine, said, "Why do we want to save the world? Let's focus here at home."

So what happened is, they didn't care about sequestration hitting the Pentagon. That's why we have it for both the Pentagon and the other agencies that have an annual discretionary budget.

DAVID SPEEDIE: A final thought on this where two sort of aspects of current debate really come into play, and that is the Pentagon, the budget, and the health care issue. I read recently some amazing statistics about the percentage of the Pentagon budget that will eventually have to go to health care of survivors and their families. In fact, someone, I think, once said something about, it's going to become a health care provider with defense on the side—obviously, a bit of an exaggeration. But do you know much about that?

LAWRENCE KORB: Oh, yes. In fact, Admiral Mullen, when he was chairman of the Joint Chiefs of Staff, and Secretary Gates said health care costs are eating us alive.

Here's what happened. Basically, back in 1995, they told military retirees, if you don't want to get the care we promised you at the base—you don't live near one or whatever—we're going to set up a program called TRICARE. It's kind of like a PPO [preferred provider organization] that a lot of us have in our civilian jobs. Because of your service, you're going to pay less than other folks. We're going to charge you $430 a year for this coverage for a family, but it's going to go up each year to reflect the growth in health care costs. They didn't raise it until 2013.

So what happened was, the first thing, the government would pick up 75 percent of the cost. It's down to 8 percent now. What happened were two things. One, the government has to spend more and more, and these are for working-age retirees. Remember, you can retire from the military at 40 years old. Less and less of them took the health care where they worked. They stayed on this because it was so much less expensive.

When you talk, as I have—"Hey, you have to do something"—people think, "Oh, my goodness, the people impacted are the wounded in Iraq or Afghanistan"—no, that's the VA [United States Department of Veteran Affairs]. It's a separate budget. It has nothing to do with this. These are healthy, working-age retirees.

When we did our study about it, we found out that a retired admiral, whose pension was close to $200,000, who was elected to Congress—the pay is almost $200,000—stayed on TRICARE, because it was so much less expensive. We found out retired colonels working for Booz Allen Hamilton making six figures stayed on TRICARE.

So you need to do that.

The next thing is that up until 2001, a person who retired in the military after 20 years of service, when they turn 65, they go into Medicare like the rest of us. They pick A, B, C, D. A lot of people said, "With Medicare, sometimes you have to pay something. We want a new program." So they came up with this idea called TRICARE For Life, in which, basically, you enroll in Medicare, but everything else is covered—no co-pays, no deductibles.

They used a lot more. There was no money put aside for that. It came in, and that program they don't charge anything for—that's another reason that that has gone up. Just like some of our automobile companies, you're paying for people who aren't there anymore, and it's taking more and more of your budget.

Also, when you get into compensation—General Odierno, chief of staff of the Army, said, "In 10 years, I will be spending all my money on people not there and people who are here." What happened was that we have a standard that you give people a raise each year. It's called the employment cost index. It looks at what people of comparable education and background in the private sector get. When the war started, we kind of had a guilt complex, so we kept raising and raising more. It's 20 percent over where it should be. Do you know what the unfunded liability of the military pension system is? A trillion dollars.

So you have all of these things coming together. Talk about the third rail of politics. You mentioned it. "My goodness," people say, "you don't appreciate what the men and women are doing." No. The VA takes care of them. You know, policemen and firemen also risk their lives, but you have a standard that you pay them.

DAVID SPEEDIE: We've gotten a little bit afield from foreign and defense policy, but the idea of a health provider with defense inside it may be not so far-fetched.

Let's shift gears for a moment, if I may, to Iran. You have written recently on Iran also. Of course, this is a hot topic. President Rouhani has spoken with the UN General Assembly and privately yesterday to a group of a couple of hundred people and so on. He seems to be conveying the message that he is his own person and he has a mandate to do what he can, in a very accelerated period, on the nuclear issue.

You've written, though, that it's not really so much of a question of whether he's a moderate and how the moderates are doing in Iran. After all, we had Khatami a few years ago, and that looked promising until the famous axis of evil speech. That kind of scuppered prospects there. But, as you said, it's more a question of the U.S. willingness to negotiate and where we will go from here.

Both presidents at the UN struck a measure of conciliatory and then harder-line stuff, essentially speaking, I think, to the folks back home in both places. What do you think Obama can achieve at this point? He is a second term president, with a fairly toxic environment in the Congress. Clearly Congress would be involved in lifting any sanctions. What can Obama do at this point?

LAWRENCE KORB: I think he has the same opportunity with President Rouhani of Iran that Ronald Reagan, whom I had the privilege of working for, had with Gorbachev.

When Reagan started negotiating with Gorbachev, a lot of right wing Republicans called him Neville Chamberlain and said, "Well, he's going to be succeeded by a Stalinist. This is just all a ruse," and everything like that. I think Obama has this opportunity, and he has a great secretary of state. This is it for President Obama and John Kerry. John Kerry was born, in my view, to be secretary of state—as we saw in the 2004 campaign, not a great politician. But he wants to make a mark on history. I think we have to take this opportunity.

You have a chance, I think, not only to deal with the nuclear question, but the Syria question, because Iran is also involved there. I think, when Assad used the chemical weapons, that did not go over well in Iran, because Saddam used them against them. So I think you have a lot of things coming together.

As you mentioned early about back in 2001—remember after the attacks of 9/11? They had candlelight vigils in Tehran. The Iranians at the Bonn Conference persuaded the Northern Alliance to support Karzai. We wouldn't have had anything in Afghanistan. Then, of course, Bush put them on the axis of evil, which I will never understand, because they had been very, very, very, very helpful.

So I think you have one of these moments where everything is coming together. People say, "Well, can we trust them?" and all this. Let me tell you something. They already know how to make the nuclear weapons. It's up here [points to head]. You're never going to undo that. Yes, you can stop them in terms of more inspections and things like that. But my personal view is that they want to know that at some point they can do it if they have to. In my view, as General Cartwright mentioned once—he was a former vice chairman of the Joint Chiefs of Staff—it's already up here. They've got the scientists. You can't undo that.

When you deal with international politics, you need to remember Sir Harold Nicolson, the British man who negotiated at the Versailles conference: Nations don't have permanent friends or enemies; they have permanent interests.

DAVID SPEEDIE: Exactly.

Talking of interests, it has always seemed to me that one of the sad sort of roadblocks here is that we are focused exclusively on the nuclear issue. You said in passing that Iran is also involved in Syria, as it obviously is. Iran's also involved in Afghanistan. Rouhani spoke yesterday about the narcotics problem, the fact that there are many addicts in Iran because of the narcotics trade, that members of the security forces are killed in large numbers across the border with Afghanistan. So there are other areas in which we must engage Iran.

The other interesting analogy is China, going back to what I think was the Shanghai Communiqué, where we sort of agreed that we have very grave and significant differences. This was Nixon, obviously.

LAWRENCE KORB: Nixon in China, yes.

DAVID SPEEDIE: We have grave and significant differences. We will work closely on the things that we can discuss and then, in the longer term, try to lower the temperature of the thing.

Is that possible with Iran?

LAWRENCE KORB: Sure. I think it is. One of the issues with China was Taiwan. Is it part of China or not? We just kind of pushed that aside.

I think the Iranians are very practical. If I can give you an incident from my own past when I was up here in New York, we were talking at lunch about the late Arthur Helton. He came to me one day and said, "The Iranian ambassador to the UN wants us to come over for dinner"—this was right after the attacks of 2001—"to talk about Afghanistan."

So we went over. He told us, "We're willing to help you." They didn't like the narcotics. They didn't like that incident. They didn't like the Taliban. "Make sure your government knows."

We conveyed that message to the folks in Washington.

They have common interests with us. They don't want to see an unstable Afghanistan. Basically, yes, we can do it. The same way with Iraq. A lot of countries don't want to see that become unstable either. So you need to work together. In Afghanistan, our ability to influence events there is declining. But the other powers that surround it all have an interest. Russia, China, India all have an interest.

DAVID SPEEDIE: Let's mention Syria for a minute. You said that attacking Syria would be a war of choice, not necessity. You pointed to three historical precedents, beginning with Vietnam. What constitutes a war of choice, not necessity? And how do we avoid it?

LAWRENCE KORB: I think if you have a war of necessity, like World War II—we were attacked at Pearl Harbor, Hitler declared war on us—you have to fight to the finish. I mean, there was just no way. A war of choice is, you take a look at the situation and you say, "We would like to influence the outcome, using military force if we have to, because there are certain benefits to us and the international community."

But then you've got to look at the cost of doing it. Would Vietnam have been better off not coming under the control of Ho Chi Minh and the communists? Probably. But if you had told Americans you were going to lose 60,000 lives, you're going to spend, in today's dollars, close to a trillion dollars, people would have said it's just not worth it.

I think that's the same way with Iraq. Is it good that Saddam is gone? Sure, but at what cost, to us and to the people there? How many Vietnamese died when we were there? Four million. How many were displaced and died in Iraq after we went there? So it's not just the cost to us; it's the cost to the people there.

One of the things about international politics: You can't solve every problem. You've got to live with some.

Now, because we're so powerful, people think we can and should. No, we can't. I think the American people spoke up to their representatives on Syria—"Hey, wait a second. Do you really want to get involved in this?"

The other thing is, you have to keep in mind the Powell Doctrine: If you're willing to do it, you'd better be willing to go all in, and if you're not, don't do it. I keep hearing people say no boots on the ground. Well, basically that means you're not willing to go all in.

DAVID SPEEDIE: But you've also mentioned what you saw as limited successful interventions in Bosnia and Kosovo, where, as you put it, the strategy was to force parties to come to the negotiating table. Then you contrast that with Iraq and Afghanistan, with the use of force without, as I think you said, a clear vision as to what any kind of negotiating settlement might look like.

LAWRENCE KORB: The point I was trying to make in that article—okay, you look at the cost. You look at Kosovo—78 days of bombing. No American lives were lost. The same way in Bosnia. No American lives were lost. Or Libya—we spent a trillion dollars. We got rid of Qaddafi, if that was your thing. To stabilize them? That was a different objective. And so you have to ask yourself, is that an acceptable cost?

I think in the Balkans it was. Basically, you need to balance those. Are you always going to get it perfect? No. But I think you need to do that before you go in.

One of the things Colin Powell has quoted is the Pottery Barn rule, where he says if you break it, you own it. You go in and you overthrow Saddam Hussein; you've got the country. So you have to ask yourself, if you get rid of Assad, what are you going to do then?

DAVID SPEEDIE: On that, back to your point about it's not just a case of cost to us, but to the recipient country, so to speak, Kosovo is not exactly the model democratic polity at this point, especially in the north. There are still severe tensions. Iraq is a basket case—sectarian assassinations and so on and so forth. Libya—coming back to your point about the cost to the people in the affected country, it may be a limited intervention with no cost to us, but—

LAWRENCE KORB: The point I was trying to make in that article is that you can limit it if you want to. I think that's key. In Vietnam, we didn't. We kept doubling down and doubling down. The same way in Iraq and Afghanistan.

I've been very critical of some of the things President George W. Bush did, but I thought, in the beginning in Afghanistan, he was right. He told the Taliban, "Get rid of al-Qaeda. We don't want to overthrow you." And they said no. So we went in and got rid of them. Then the next thing you know, we're trying to remake Afghan society. Wow, that's a different type of thing. Ask the British and the Russians what happens when you do that.

If you're going to make it limited, you can. You need to be aware that you may not achieve your objectives if you keep it limited. But we have, and that's what I tried to point out in that article, certain cases where we did.

DAVID SPEEDIE: Let's talk about nukes for a minute. I don't mean just nukes in Iran, but nukes across the world, as it were.

Here we are in a situation where we have the new START agreement with Russia, the build-down to about 1,000. There's this really quite remarkable momentum toward a global zero. The four magi, Shultz, Kissinger, Nunn, and Perry, advise and inform us every year in The Wall Street Journal about working towards zero. It's remarkable. The president himself has said, "Perhaps not in my lifetime, but we ought to work towards this."

Why not build down well below that figure of new START?

LAWRENCE KORB: It's an interesting thing. You may have a confluence of a couple of events, going back to the budget. If the United States wants to maintain the number under new START, which I think is 1,550 operational nuclear weapons, it's going to have to spend a lot of money right now, because it's going to have to buy a whole new generation of ballistic missile submarines—at least $5 billion, $6 billion for each one. It's going to have to buy a new generation of bombers and fix up the land-based missiles. It's going to have to modernize or make sure its existing weapons are up to speed and safe. You're talking about hundreds of billions of dollars.

The Navy is saying, "Wait a second. If we want to build 'regular ships,' we can't pay for these ballistic missiles. That should be a national program."

So you might have people saying, do we really need all of these? The president, I know, is doing a nuclear review. He could easily go right down to 1,000 right now and say, "I'm going to go to 1,000. Russians, if you want to come, fine." I think they would. They don't want to spend the money either, and that's more than enough.

It would also enhance our reputation in the world. We tell Iran, "Don't you get nuclear weapons." Well, you're now a model. You're saying, "Hey, we're going to get them."

People forget, under the nonproliferation treaty, the existing powers were supposed to continue to cut theirs, if they really want other people to—

DAVID SPEEDIE: There were two parts to that treaty, absolutely.

LAWRENCE KORB: That's right.

I think it would make a great deal of sense. I think, as we call them, the four musketeers here—Gorbachev and Nunn and Perry and Kissinger—

DAVID SPEEDIE: Shultz, yes.

LAWRENCE KORB: —are saying that you really can move in that direction. I would like to see us just unilaterally say, "Look, let's go to 1,000." We don't have to spend so much money right now. We could spend more on dealing with the troops and their health care or the pay.

DAVID SPEEDIE: All the things we talked about.

On that, I keep coming back—and I don't remember who it was; you may remember—a general in the Cold War, I think, said, "All I know is that their 50th weapon's going to mean a hell of a lot more than our 5,000th." In other words, the damage that can be done by 50—what does 5,000 or 1,000 matter?

LAWRENCE KORB: I know. It's way overkill. If you go back and you look, the triad—nobody sat down and said, "Let's have three legs." The Navy—under Eisenhower, it was massive retaliation. They weren't getting their share of the budget. The Air Force was getting it all, because he was big on nukes. So they decided they would get into the nuke business. Then, of course—I mean, McNamara was the first one to say, "Wait a second. Where do we stop?" It was just, "Well, we'll just keep going and see how many we can get." He did put a limit on and say, "How many do you need to accomplish your objectives?"

Congress can't even see the plan that they have for the targets they would attack. I remember talking to Senator Bob Kerrey, asking for that. They can't see it. How are they going to make their decision? Give us the targets.

Admiral Stan Turner, who went on to become head of CIA, told me a story. I worked with him at the Navy War College. He said when he was in the Second Fleet, a couple of pilots came in who had a nuclear mission. He said, "Tell me what it is." They said, "No, we can't tell you." He said, "You tell me. I'm in charge." They were going to drop two nuclear weapons on some bridge in Bulgaria. In other words, when you decide, how many do you need?

DAVID SPEEDIE: At least it wasn't North Carolina, which came out last week, in the near-miss department.

LAWRENCE KORB: I saw that. So we really did go way, way over the top on that.

DAVID SPEEDIE: Stan Turner, I think, was the first to come up with the idea of nuclear escrow, wasn't he, sort of a global coalition of the willing with weapons in escrow. I remember we gave him a grant to help write that book [Caging the Nuclear Genie: An American Challenge for Global Security], in a prior life of mine.

You've written about the need for more American soft power. Joe Nye at Harvard, of course, kind of coined the term. [Editor's note: Check out Nye's 2004 Carnegie Council talk on soft power.]

In conjunction with that, if Secretary Hagel was to call you into his office tomorrow and say, "Larry, you're a former serving officer of the military. You've been thinking about these things as an academic and a think tank practitioner and scholar for 40-odd years. On the one hand, I get these cries that we're still the exceptional nation and the world still looks to us. On the other hand, we can't be," as you said a few minutes ago, "the world's policeman, and the American public are turning against that. How do I balance this? What do I advise the president, from the Pentagon's point of view?"

LAWRENCE KORB: I think there are two things that you want to do. One is, you want to say, if you want to use military force, make sure you're clear what your objectives are and how you know it's going to end, how this will end. The other is, as you decide where to spend your money, think of how you might use it.

Former Secretary of Defense Gates gave a speech at West Point, and he said any secretary of defense who recommends to the president to send large land armies into the Muslim world should have his head examined. Well, if you're not going to do that anymore, then maybe you ought to spend less on the Army, more on special forces, more on drones, the types of weapons that you might use, or ships. I think those are the things that you need to say.

No matter how much money you spend on defense, you can't buy perfect security. You've always got to balance or take risks.

DAVID SPEEDIE: Larry, it has been a great pleasure. We've covered a lot of territory. Thanks for your wisdom and insight.

LAWRENCE KORB: Thank you for having me.

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