Budget choices // We can use our money to build weapons or to build a future

Published Feb. 25, 1990|Updated July 6, 2006

This year Congress can make history by drawing up the first post-Cold War budget. It can miss its chance, of course, and continue with business as usual; and with polls showing that more than 60 percent of Americans support the current level of defense spending, $291-billion, our politicians would not seem to have much political incentive to be statesmen. But the polls also show that growing numbers of Americans want this country to respond to world developments with something that matches them in scope.

The United States today faces no external threat from a rising "challenger state." The main threats to our international position are domestic; they are to be found in the debt-ridden condition of the economy and the deteriorating state of so much of our human capital.

This is the realm in which we must establish our strength, for it is here that we will be tested in the post-Cold War era. It is this new idea of strength that the White House and Congress have the chance to codify in the budget they are preparing now. What follows is an outline of some of the choices open to them _ and us.

Bombers or medical care?

We could build the Stealth Bomber. At nearly $600-million per plane, the Stealth is notoriously exorbitant. It represents the Air Force's attempt to keep the manned bomber alive in the age of the cruise missile, or pilotless flying bomb. As such, it is an exercise in nostalgia, one that could easily cost $79-billion _ the "if all goes well" cost of the 132 planes requested by the Air Force. So far, Congress has spent $22-billion on the Stealth. What has all this money been for? It's dismayingly hard to tell.

One mission for the Stealth is to hunt Soviet mobile missiles. Leaving aside whether that would be a mission impossible (it probably would), attacking the Soviet mobile missiles would be a mission undesirable. Each side needs an assured survivableforce to secure deterrence. We have one in our ballistic-missile-carrying submarines; the Soviets have one in their land-based mobile missiles. To threaten the other side's survivable force is to raise the specter of a successful first strike in which you will disarm his only means of retaliation, putting him under remorseless pressure to use his retaliatory weapons against you first or lose them.

Once you see the fallacy of this so-called counterforce strategy _ that putting your adversary's deterrent force at risk reduces your own security _ the responsible course is not just to stop a particular weapons system but to abolish a whole function for future weapons systems.

Or we could insure the medically uninsured. Some 30-million to 37-million Americans fall into that category, and approximately 15-million every year are denied medical care because they cannot pay for it. Most of them hold down the kind of low-wage, no-benefits jobs that burgeoned in the 1980s. They are the people who deliver our papers, pump our gas, grill our hamburgers, carry our luggage and care for our children. It is not their fault that they are trapped in sectors of the labor market that can't afford either to provide them with medical insurance as a fringe benefit or to pay them enough to insure themselves. And the work they do is socially necessary. Extending medical insurance to them as a form of social insurance would be a way of recognizing that.

It would be expensive _ estimates range from $25-billion to $50-billion a year. That sum would have to come out of taxes, but it would be only a small fraction of the $600-billion this society will spend on health care this year.

And though it would be a dreaded "new social program," in the long run it would cost less than the system we have today. Society now does nothing for the pregnant teen-age girl who avoids going to the doctor because she has no medical insurance. It patiently waits for her to present herself in the delivery room, and then spends $300,000 saving the life of her premature baby _ a tragically shortsighted and profoundly wasteful result. Insuring the uninsured thus would strike a blow not only for social justice but also for economic efficiency.

Submarines or education?

We could continue to build and deploy the Trident II submarine-based ballistic missile. Its combination of destructive power and accuracy, when added to the quality of near-invulnerability conferred on submarine-based weapons, makes the Trident II a potential first-strike threat, one that would put Soviet nuclear forces under even greater "use it or lose it" pressure than Stealth. Trident II would force the Soviets to put their retaliatory forces on hair-trigger alert, and that would increase the danger of the only kind of nuclear war imaginable between the superpowers: an accidental one.

Canceling Trident II would not only save $18-billion over 10 years; it would absolve future taxpayers from the painfully unnecessary task of paying for Trident III.

Or we could return federal aid to education to its 1980 level in percentage terms. Back before the advent of the Reagan administration the federal government devoted 2.5 percent of its total spending to education; in 1989 the amount was 2 percent. President Bush originally proposed increasing education spending by $441-million, which may sound like a lot of money but is $110-million short of what junk-bond king Michael Milken made in 1987. To return federal spending to the 1980 percentage, the president would have had to top Milken by $5.5-billion.

What could we accomplish in education by according it the same priority it enjoyed 10 years ago? We could, to begin with, fully finance Head Start, a program of enriched learning for poor pre-schoolers whose tonic effect on student achievement has been demonstrated in study after study for 20 years. Currently only 451,000 of the country's 1.7-million poor children are enrolled in Head Start. For about $1.2-billion more a year Head Start could be expanded to cover all eligible children for at least one year.

We could also serve every child eligible for aid under Chapter I of the Elementary and Secondary Education Act of 1965. For $700 per child per year children who are at risk of repeating their grades receive remedial teaching. Every time a child repeats a grade, it costs the taxpayer $3,500 on average. Thus Chapter I doesn't just pay for itself; it saves the taxpayers money. Expanding Chapter I would cost nearly $3-billion.

Finally, if the level of federal aid to education were returned to what it was in 1980, more poor and middle-income young people would go to college. In 1979 Pell grants paid for 50 percent of a poor recipient's college costs, on average; now they cover only 29 percent.

Missiles or a boost to democracy?

We could build the mobile land-based missile known as Midgetman. The projected cost of Midgetman is a sobering $30-billion plus. This small mobile missile is supposed to remove from the minds of Soviet planners any idea of mounting a first strike. The question is, are we vulnerable to such a first strike? Joshua Epstein, a defense analyst at the Brookings Institution, has calculated that even if the Soviets mounted a "perfect first strike" _ one that destroyed all the 1,000 land-based missiles we have deployed, all the bombers on all our bases around the world, and all the missile-shooting submarines in port _ the 50 percent of our submarines that are always at sea and the 30 percent of our bombers that are always on alert could still unleash more than 4,000 warheads on the Soviet Union.

Or we could help to reinvigorate the Polish economy and give a fillip to Polish democracy. The Poles asked President Bush for $10-billion; he offered them $100-million. That pathetic response is a portent of America's decline as a great power. Poland, after all, is seeking to move from dictatorship to democracy, and from a command to a market economy. Two-billion dollars from the United States now, coupled with the $8-billion in loans from the West as a whole that such a grant would make possible, would allow the Solidarity government to put the Polish economy on the path to self-sustaining economic growth.

And we could cut cocaine production in Bolivia by 35 to 40 percent. That could be done with about $2-billion over three years, according to Jeffrey Sachs, a Harvard economist who has studied the problem. Three-hundred thousand Bolivian peasants work in the coca fields for their daily bread. The Bolivian government says that $2-billion from the United States, plus the loans thereby encouraged from others, would help it give those peasants a licit alternative to starvation.

And we could end the Third World debt crisis. That would take $5-billion, Jeffrey Sachs estimates. Under Sach's plan the United States would withdraw $5-billion from the Treasury and place it in an account to guarantee interest payments to banks willing to make new loans to countries like Mexico and Brazil. But no money would actually be lost to the Treasury unless those countries defaulted on their loans, an eventuality that Sachs contends is unlikely. Thirty-nine countries with a total population of 850-million could thus be put on the road to recovery.

Star wars or more police

We could build the Strategic Defense Initiative _ at a great price not only in dollars (the research and development costs alone of SDI could run to $50-billion in the 1990s) but also in peace. The Soviets have agreed to go ahead with START, an arms-reduction treaty that would cut the long-range nuclear-weapons arsenals of the superpowers by half. They are reserving the right to break out of that treaty, however, if the United States goes ahead with SDI testing or deployment that violates the antiballistic-missile treaty of 1972. Even so, the House voted to spend $3.1-billion on SDI research last year, while the Senate voted $4.3-billion.

Already SDI has absorbed $21-billion since Ronald Reagan launched the program in 1983. That is enough. SDI was originally supposed to protect the U.S. population from Soviet attack. No one believes that is possible anymore. Congress should continue to fund research into the feasibility of defensive systems, but a billion dollars a year should do it.

Or we could establish a national Police Corps. A Police Corps could add as many as 100,000 officers to overstretched police forces around the country. Enrollees would receive four years of guaranteed federal loans to cover college costs of up to $10,000 a year. In return, the 25,000 men and women selected each year, many of them members of minorities, would be expected to fulfill a four-year commitment to their local police force. When their term of service was over, the government would pay off their college loans. Since there are now 488,000 local police officers, the Police Corps would increase their ranks by an impressive 20 percent. The strategic defense initiative will not defend the citizens. The Police Corps will.

More troops or healthy babies?

We could continue to station 31,000 Army and 12,000 Air Force members in South Korea _ at an annual cost of $2.6-billion, 35 years after the end of the Korean War.

If we withdrew 10,000 of them, we would save $600-million every year. Sen. Dale Bumpers, D-Ark., has called for such a troop cut. Bumpers points out that South Korea now boasts a gross national product seven times as big as North Korea's, and a population twice as big. With the trade surplus it runs with the United States every year, South Korea can afford to pay more of the cost of its own defense.

Or we could expand WIC, the supplemental-food program for women, infants, and children. Currently 7.3-million women are eligible for food and medical care under this program, but only 4.4-million are served by it. They are served well. For $40 a month a poor pregnant woman enrolled in WIC is given access to nutritious food as a medical prescription _ in other words, to get the food, she has to see a health-care professional, who provides her with nutritional counseling and helps her find prenatal care.

The program works: It increases the birth weight of babies. It also saves taxpayers money. Studies have shown that every dollar spent on the prenatal component of WIC actually saves three dollars in that same

year, since caring for a low birth-weight baby in a neonatal clinic can run anywhere from $2,000 to $10,000 a day. WIC now costs $2.1-billion; for a billion more, it could be expanded to serve all the women eligible for it.

Lower corporate taxes or hope?

Legal loopholes in the corporate income tax could be closed. One study of 250 companies found that if they had not taken advantage of these loopholes and had paid at the post-tax reform rate of 34 percent of their income, the Treasury would have picked up $14-billion in new revenue in 1988 alone. Robert McIntyre, of Citizens for Tax Justice, calculates that closing tax loopholes, projected over all corporations, would raise $42-billion annually.

Then we could raise the hardest-working people in our society out of poverty. They are the working poor, and there are more than 8-million of them. The earned-income tax credit allows them to receive up to $950 in government aid, depending on the amount of their wages and the size of their families. An increase in that grant pegged to family size, along with the recent increase in the minimum wage, would raise most of the working poor out of poverty without placing an undue burden on small employers. Estimates are that this program of supplementing wages would cost $5-billion to $8-billion a year. Raising the earned-income tax credit would strengthen the work ethic and reinforce a message that must be got across to drug-ridden inner city neighborhoods: Work pays.

All that stands between us and the more evenly prosperous future made possible by the ending of the Cold War is the depressing machinery of electioneering and simplification that has gotten our political system in its mindless, suffocating grip. The Republic can survive its problems. The question is: Can it survive its politics?

1990 The Atlantic Monthly

Jack Beatty is a senior editor at The Atlantic Monthly. A longer version of this article appears in the February edition of the magazine.