Republican Control Of The House Will Have Little Impact On Military Spending
There doesn’t seem to be much doubt which political party will control the U.S. House of Representatives over the next two years. It will be the Republicans, generally considered to be stronger supporters of defense spending than the Democrats. In the run-up to election day, many Republican candidates said that they wanted to protect military outlays even as they moved to pare other types of spending. That sounds a lot different from what most Democrats were saying, so the prospect of a Republican majority in the lower chamber is being greeted by Pentagon supporters as a positive sign for national security.
However, the tangible impact of a Republican majority may be muted outside a few symbolic issue areas like missile defense. The reasons why are threefold. First of all, the Obama Administration has not followed the lead of other recent Democratic administrations in cutting defense spending. It has actually raised military outlays above the levels seen in the Bush years, and now plans to keep increasing Pentagon budgets by about one-percent above inflation in fiscal 2012 and beyond. That’s not what people expected when President Obama was elected given the huge federal budget deficit and his equally huge domestic ambitions, but the way things have worked out it’s hard to see how Republicans can find much more money for the military.
A second reason why having Republicans in charge of the House won’t make much difference for the military is that everybody in Congress knows entitlements are the “third rail” of American politics — you know, the electrified rail on the subway that kills you if you touch it. Social Security, Medicare and Medicaid make up roughly half of the federal budget, but Republicans realize they can’t tinker much with entitlements if they want to hold onto their majority beyond 2012. That leaves defense and domestic discretionary spending as the main pools of federal funding available for deficit reduction. They’ll never find the kind of money they need for meaningful deficit reduction in domestic discretionary accounts, which represent less than 20 percent of the budget and include such popular items as transportation, education and law enforcement. So no matter how much they want to preserve a strong defense posture, it will be difficult to avoid eyeing the defense budget as a source of savings for the Treasury, just like Democrats would.
A third consideration is that neither Democrats nor Republicans generally go after military pay and benefits when they decide to cut defense spending, because those create the same kind of political fallout as cutting entitlements. Instead, they go after weapons programs, where the political consequences are more muted. However, a study of weapons spending over the last 50 years by Ron Epstein of Bank of America Merrill Lynch found little correlation between which party controlled the House and how weapons spending fared. The correlation between partisan control and weapons outlays was very strong in the Senate, but almost non-existent in the House. There isn’t much reason to expect that will change in the next Congress. So if you were planning to make big bets on defense stocks based on the expected Republican takeover of the House of Representatives, you might want to hold off for a while. Things aren’t likely to change much on the military front no matter who controls the House.
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