While primarily being talked about in the context of the individual’s pocketbook and corporate earnings, the tax cuts that Congress is considering could have grave consequences for national security. With the United States’ ever-growing debt at $20 trillion, these cuts are predicted to add at least $1.5 trillion to the debt and will likely lead us down the path to another set of crippling budget caps — otherwise known as sequestration — while we are still grappling with the first one.
While it is famously stated those who cannot remember the past are condemned to repeat it, Congress is looking to repeat history while we are still living under its consequences. Between 2001 and 2003, Congress passed a series of unpaid-for tax cuts commonly described as the “Bush tax cuts” that have contributed $5 trillion, or 25 percent, to our national debt. By growing our debt so significantly, the Bush tax cuts became a proximate cause of ongoing statutorily mandated budget caps put in place to address deficit concerns.
These caps, which are indiscriminate and draconian, have done damage throughout government, including to an area Republicans and Democrats both prioritize: our military and national security. This includes undermining military readiness to meet existing and potential demands, and limiting investment in equipment modernization at a time when the United States is losing its military technological advantage. They have also, due to the continuing high demand on our military (as Sen. John McCain has identified), likely contributed to the recent spate of tragic military accidents.
Despite these facts and pushes to overturn the budget caps, Congress is considering doubling down on this strategy via another set of large, unpaid-for tax cuts that will raise our massive and growing national debt. Making matters worse, proponents of the cuts are trying to hide the tax cuts’ debt impact by falling back on Arthur Laffer’s napkin to claim that the resulting offsetting economic growth will make up for lost revenues. Such a claim, however, as shown by the Bush tax cuts, is a dangerous myth.
These tax cuts — and the reliance on a false hope of growth to offset them — will eventually put defense spending back in deficits hawks’ crosshairs. When it once again becomes impossible to ignore our growing deficit, Republican anti-tax orthodoxy — and the popularity of avoiding a tax hike — will likely lead to a new drive for spending cuts to address deficit concerns. While defense spending may have previously been protected from such cuts, sequestration and current budget caps show that is no longer the case. Moreover, domestic discretionary spending is at and likely will remain near historic lows, and the aging baby boomer population will continue to protect the entitlements that protect them. This leaves defense spending, which is half of discretionary spending, to take a significant portion of future spending cuts.
Sen. Rand Paul previewed this future conflict in opposing the recent Republican budget because it paired tax cuts, which he supported, with increased defense spending that he opposed. In combining fiscal restraint and anti-tax orthodoxy, Paul’s position exposes the fact that shrinking the government to a size in which it can be drowned in a bathtub includes shrinking defense spending.
Supporters of tax cuts are merely pushing future defense spending cuts to the future by eliminating revenues to pay for them.
The likely future cuts will be especially damaging as pre- and post-budget-cap reductions and stagnation have already led to significant reductions in cut-able fat within the Defense Department. As a result, when national debt concerns rear their head again, the department will have no choice but to hack away at bone and muscle. This challenge will further be exacerbated by the department likely needing to grow — not cut — its budget due to current investments to address much-needed modernization solutions expected to bear fruit in those years to come.
The national security impact of lower tax revenues will not be limited to the Defense Department: The State Department, the United States Agency for International Development and other parts of the government essential to our security will also find themselves on the chopping block. Such has already been the case due to the current administration’s efforts to find budgetary savings; an effort that Republicans and Democrats came together to oppose. Moreover, damage to domestic agencies, which play essential roles in our country’s growth, maintenance and stability, will likely worsen due to their already low budgets.
In reality, given shortfalls in the defense budget and demands on our military, tax increases rather than cuts should likely be on the table. Where previous wars have been funded via war taxes, since 9/11, the country has primarily seen tax cuts and fought our wars “on credit.”
Additionally, while we have maintained a steady demand on our military — both for continuing operations and to recover and retrain from the past decade and a half — we are forcing them to live under capped budgets.
Moreover, we live in an uncertain security environment with one of the broadest range of threats in recent history, requiring a large, expensive military and national security apparatus and range of capabilities to address such threats.
The military commonly defines strategy in terms of ends, ways and means. A strategy without the necessary means (i.e., a budget) is a dangerous endeavor. Recent budgets have created a dangerous mismatch between what we are asking our military to do and what we are funding it to do. Further reductions in revenues would increase that mismatch.
While Congress should take action to increase growth and help those left behind by our current economy — including considering truly revenue-neutral tax reform, growing defense manufacturing and job retraining around key areas of growth — it must do so while accounting for our revenue demands.
Few like paying taxes. However, accepting sufficient taxes to secure our country is not just patriotic — it is also necessary.
Justin S. Rubin is a former appointee for the Department of the Army under the Obama administration. He is a member of the Truman National Security Project’s Defense Council and an associate at Kasowitz Benson Torres LLP. The views expressed here are his own and do not necessarily reflect the views of his employer or the Truman National Security Project.