Government Spending

Bin Laden and the Budget Debate

Will the Al Qaeda leader's death impact the unfolding political battles over defense spending and the debt ceiling?


The demise of Osama bin Laden has impacted everything from oil prices to financial markets. And the ongoing congressional fights over the debt ceiling and defense spending are not about to be spared.

Congress returned this week from its Easter recess and is facing a ticking clock on debt and budget policy. The debt ceiling debate has already been contentious over the past few months and spending hawks have been sharpening their knives with an eye on defense spending, but the pot is about to be stirred by death of Al Qaeda's infamous leader.

The national unity moment following September 11, 2001 was strong and led to the swift passage of the PATRIOT Act. And just as that demagogic violation of civil liberties was a policy of passion rather than reason, so too could this week's spirit of national pride and bipartisanship lead to a bad deal on increasing the debt ceiling.

The Obama administration argues that the debt ceiling and the long-term debt problem should be dealt with as two separate issues, but during the recess some Senate Democrats were already indicating their desire to ditch the administration in support of a compromise. Meanwhile, the Republican leadership has clearly signalled its willingness to accept the Treasury Department's request to raise the debt ceiling—it is just a matter of what can they get for it in exchange.

So it takes no leap of imagination to see bin Laden's death inspiring various members of Congress to push for a grand bargain.

But standing in the way of this are Tea Party activists and their allies on Capitol Hill, who have already vowed to stop any increase in the debt ceiling. They are unlikely to be swayed.

The office of Sen. Jim DeMint (R-S.C.), a major player in the Tea party movement, emphatically stated yesterday that DeMint's position on the debt ceiling had not changed in the wake of bin Laden's death and that any desire for a unity deal because of bin Laden's demise would be "wishful thinking." 

In contrast, those in the Tea Party who want to cut defense spending may be emboldened by the killing of bin Laden to push for faster, deeper cuts. President Barack Obama has already proposed cutting $400 billion from the Pentagon's budget over the next 10 years, but with Al Qaeda's leader dead, the case for increasing that number will only get stronger.

Even before Sunday's news, outgoing CIA Director Leon Panetta had his work cut out for him in being tasked to find those cuts as he takes over as secretary of defense (assuming he is confirmed by the Senate). A push for additional cuts would certainly be a challenge. However, the death of bin Laden could also be a strong card to play in winning the behind the scenes budget battles and may prove extremely useful to Panetta in the public eye as well.

The death of Adolf Hitler, followed a few months later by the Japanese surrender, not only marked the end of World War II, but also represents the peak of military spending in 1940s. Panetta and other deficit hawks would do well to follow this historical model in arguing their case against those trying to protect defense spending.

Certainly, there were costs from the occupation of Germany and Japan following the war. But actual expenditures, both in nominal terms and as a percent of GDP, dropped nearly 50 percent from 1945 to 1946.

Also, in the two years following the Korean War, defense spending as a percentage of GDP fell over 30 percent. And it took just two years after the fall of the Berlin Wall for defense spending's portion of the federal budget to drop 25 percent.

Since 2001, military spending has gone from $300 billion to nearly $700 billion. President Obama's budget proposal for FY2012 not only recommends increasing defense spending to $737 billion next year, but also only reduces spending over the short-term to $680 billion annually by 2016—which is more than we spent in 2009 on defense. The death of bin Laden should provide an opportunity to reassess the speed of this approach in the coming budget debate.

The president may also feel pressure to speed up the drawdown of troops in the region, which would save money. And he is certain to feel pressure from his party's anti-war left to reduce other military-related spending, like overseas contingency operations, which cost well over $100 billion each year.

This will have to be balanced with the reality that bin Laden's death is not the eradication of Al Qaeda—though it might prove to be a fatal blow. American intelligence agencies will certainly continue going after the remaining components of Al Qaeda's leadership network, but there may be little need for brigades of soldiers outside of a peaceful transition of responsibilities to Afghan security forces.

On this front, the administration will likely have an ally in the Tea Party, which already broke ranks with the Republicans to shoot down an engine program for the F-35 Joint Strike Fighter.

There will likely never be a complete end to the threat posed by jihadists. But the vast military apparatus built up in the wake of 9/11 has accomplished its task.

The ultimate impact of bin Laden's death on the debt ceiling and defense spending debates will play out over the next several weeks as various bipartisan commissions present their proposals, with arguments then moving to the floor of the House and Senate. Meanwhile, Thursday's GOP debate will give us a preview of how bin Laden's death will impact the Republican presidential campaign. One thing, however, is certain: The high stakes game of budget management is about to heat up.

Anthony Randazzo is director of economic research at Reason Foundation.

NEXT: Richard Cornuelle, R.I.P.

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  1. I predict current military spending will remain pretty much the same. Except for Special Forces of all kinds.

    The SEAL’s are the pretty-boys right now picking off Osama. But the Army has their version, even the Air Force has their Resuce bunch which is just more Special Forces. I predict JSOC’s budget will be several billion a year by end of Obama’s term, and there will be a couple more orgs associated to JSOC.

    And another thing, the paramilitarization of entities in the State Dept., Homeland Security (bet they get Special Forces something), and the entire CIA to commence at all haste.

    1. They are letting members of the Coast Guard train and deploy with the SEALs now. So you can say the DHS has “special forces something” now.

    2. Homeland security should be ended, and the necessary agencies dolled out to the DoD and DoT. Lets see:

      Citizenship and Immigration services–State department

      Customs and Border Protection–State


      Coast Guard–Defense

      Secret Service–State or Defense, maybe Treasury


      1. Coast Guard doesn’t belong under defense. They have a heavy presence on interior waterways. They claim the ability to board any boat at any time for “safety inspections”. Keep them under Transportation or Justice.

        1. Defense ought to be renamed what it once was called: Dept of War.

          And then much of DHS can be renamed the Dept of Defense.

          1. Or maybe they should just call the Dept of Defense the Dept or Offense? Right, I forgot we were trying to implement doublethink right here.

            1. Already beat you to that one. But it’s not a bad idea…

            2. Only if the Department of Offense runs the single wing.

        2. They shouldn’t be given such powers. Then they can be defense. Defense can be interior, too. Offutt AFB is in Omaha, not near any borders.

          Or we could scrap the Coast Guard entirely.

  2. Good article.

    Since 2001, military spending has gone from $300 billion to nearly $700 billion.


    1. Sadder still that your god and master Obama isn’t going to reduce it one bit and will probably raise it, right, shriek, you partisan monkey?

      Tell us about gold, shriek!

      1. I told you to quit sniffing my ass, you perverted freak.

        I post on-topic and you follow me around with insults in your hate-everyone misanthrope repetitive style.

        I told you I won’t be intimidated – go work on that cock you like, boy.

        1. I will NOT be intimidated, BOY! Go work that that white, fascist cock of yours.

        2. Don’t cry, shrieky. More homophobia and projection, please. It’s endlessly amusing that the douchebag who calls people “Christfag” and “Bushpig” is whining about my “insults in your hate-everyone misanthrope repetitive style”. Do you even get the irony in that, you fucking dumbass?

          Tell us about the market, shriek!

          1. You trail me around you dickhound – I don’t give a fuck about following on to your inane posts.

            I wrote 3 words – NICE ARTICLE SAD.

            Ok – lets just fill the fucking board with your shitty nonsense.

            Fuck off and stay off.

            1. Oh shriek, are you getting upset, you fucking pussy ass douchebag?

              You don’t like it? Don’t fucking post here, moron.

              1. Oh – that is your real objective?

                Fuck you in your forever dilated mouthhole.

                1. shriek, tell me about what you’ve made in the market! Show us how unbelievably dense and stupid you are for the umpteenth time.

                  You will, of course.

                  1. Eat it raw, bitch.

                  2. Dude, he’s made a killing shorting gold. Don’t doubt it.

                    1. I’ve shorted twice and lost – BFD. Gold is in a bubble and everyone knows it.

                      But bubbles are impossible to gauge.

                      So you have the truth. God I am so ashamed!

                    2. Tell us to eat it raw, shriek! Uh…eat what raw? I just had some sashimi; does that count?

                      Oh wait, you’re just being a homophobic scumbag again. Well, I said you would and you did.

            2. Technically, you only wrote two of those three words. RYOFC.

              1. Why does “Episiarch” stalk “shrike” and say mean things to him? Does “Episiarch” not believe that “shrike” has a right to post his inane commentary too? That doesn’t seem fair. And why does “Episiarch” swear so much? Is it an attempt to make himself appear bigger and more powerful than the other monkeys? Why don’t the monkeys groom each other and just get along?

        3. Where’s your outrage over Obama increasing our military budget, shrike?

          Yeah… that’s what we thought you’d say.

      2. Libertarians want war because the corporations, who act all corporationy, are out to rob the poor of the world to kill them in a vast fire fight of greed and the end of the drug war.


        1. I totally agree.

          1. Is that you, Marx?

  3. …so too could this week’s spirit of national pride and bipartisanship lead to a bad deal on increasing the debt ceiling.

    That was a once-in-half-a-century moment not likely to be recreated with bin Laden’s death, especially with the Obama Administration’s characteristically undisciplined mishandling of the message in its wake. Indeed, anyone invoking Osama’s offing for political advantage is going to get called on it pretty quickly.

    And they would be foolish to try it in the first place, as Americans will forget about bin Laden’s brine-bloated corpse when the news cycle brings about a new shiny object, just like the birth certificate was the distraction from Libya which was the distraction from Japan which was the distraction from who remembers what.

    It is highly unlikely this will impact budget negotiations in any meaningful way.

    1. I think Japan happened right at the same time a protests in Saudi Arabia.

      1. Connect the dots, my friend. Follow the money.

  4. You’d probably do well not to compare bin Laden’s death to Hitler’s and the end of World War II. Remember, defense spending escalated during the Cold War. Then it was the Soviets. I guess now it would be the Chinese.

    1. BUT…military expenditures still declined. The Cold War wouldn’t have happened if Truman had confronted the Soviets then and there, but 20-20 hindsight, you know?

  5. Can you buys do a review of Taibbi’s “Grifter Nation”?

    1. …*guys

    2. HaHahaha!

      Not here, pal.

      Grifters = free markets.

      These fuckers don’t even support the FDIC.

      1. You’re so fucking dumb, shriek. Did the lobotomy hurt?

        1. Don’t you have a nephew to go molest?

          1. Projecting again, shriek? Are you the molester or were you the molestee? Or…are you both?

            1. Blow it out your ass, you cum-gurgling jizz-freak.

              1. Have you ever assaulted a gay person, shriek? Because you sure seem to think calling someone one is a terrible insult. Why do you hate gay people, scumbag?

                1. I don’t hate gays. I just sense a deep shame in your own cock-worship and will exploit your own hatred of EVERYONE to insult you.


                  I take a stand, you asshole. You cannot.

                  You wallow in your meaninglessness.

                  1. I’m wallowing in the meaningless of your insults right now, shriek. Can’t you do better than homophobic insults and projection? You’re kind of a one trick pony, aren’t you, moron.

                    1. Guys, you understand there’s no winner in this, right?

                    2. The only winning move is not to play?

                    3. Don’t play then.

                      You hate a different opinion than yours.

                      I am a fucking classic liberal right down the line – so conservatives hate me.

                      Today, Ayn Rand would support Obama just like she hated Reagan and Buckley while alive.

                      Move the GOP toward freedom and we might have a draw.

                    4. HAHAHAHAHAHAHAHAHAHA

                      You truly do say the stupidest things, mongoloid. You’re about as classical liberal as Daily Kos, you utter imbecile.

                    5. By classical liberal, he meant the classic liberal of the modern Democratic Party.

                    6. You’re a fucking socialist, statist prick, shrike. Don’t fucking lie to us.

            2. It’s a vicious cycle…

  6. If Wikipedia is to be believed, then operations, personnel and procurement compose the bulk of military expenditures. These can all be lowered significantly by withdrawing from Afghanistan, Iraq, and Libya. Furthermore, the price of operations and maintenance in Europe, Japan, South Korea etc. is probably larger than that in the US, so by bringing those troops home and closing those bases (or requiring those countries to pay for our defending them), we can reduce expenses there.

    $250 billion seems like a good goal. $500 billion is probably more realistic.

  7. Congress … is facing a ticking clock on debt and budget policy.

    Until some, um, VIP details in a public forum what happens when the alarm clock goes off, nothing will be done.

    1. I mean the *real* SHTF alarm clock.

  8. Restoration of the Republic by 2030!

    1. Janet, I know you’re jubilant, but please quit horsing around.

  9. The Tea Party dimwits will soon be sucked into wingnut consporacy theories and believe either that Bin Laden is still alive, never existed, or has been dead and frozen in some CIA cellar somewhere. How do you think that nonsense will affect the budget debate?

    1. They should use carbonite. Much more reliable in case of a power outage.

    2. Max, would you please bring some ice cream from the freezer when you come up for dinner?

      1. Is this a spoof?

      2. Honey… did you forget to buy Astroglide?

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