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Reversing a $146B military buildup
Speaking Security Newsletter | Note n°211 | 17 July 2023
On Friday, the House approved its controversial version of the FY2024 National Defense Authorization Act by a narrow margin (rare for NDAA votes) and largely along party lines (also rare). Controversy ensued after several GOP amendments of ‘culture war’ flavor were added on the House floor. Once those provisions were adopted, Democratic support for the bill plummeted.
The Senate NDAA won’t have any of that hot-button stuff in it. Neither will the final version. What they’ll share with the House iteration is the same, record-breaking $886.3 billion authorization for the Pentagon — an amount that seems to be considered controversial everywhere except Washington.
Biden’s military buildup
The Pentagon budget was $740 billion when Joe Biden entered office. So while Trump increased annual military spending by an astounding 20% in four years, Biden’s poised to accomplish the same feat in just three.
Contrary to popular belief, this isn’t because of the war in Ukraine — Biden’s military buildup is independent of that. For example, his $886 billion Pentagon budget proposal didn't include funding for another aid package for Ukraine (the House NDAA doesn’t either). Instead, Biden left it up to Congress to fund one through a supplemental military spending bill on top of the Pentagon’s regular budget.
This has been the case all along. Less than 1 percent of US military aid to Ukraine since February 2022 has come from the Pentagon’s regular budget. The other 99 percent originates from supplemental legislation. These supplemental bills also include funding to replenish US stockpiles, by the way. The most recent one had nearly $12 billion for this purpose.
Other justifications for Biden’s buildup vary, but at a fundamental level, they all promise security. That the additional spending somehow enhances safety, prevents catastrophe, or both. Because this claim is both extremely suspect and quite expensive, the burden of proof should be on the White House, congressional leadership, and whoever else pushes this narrative to prove that a methamphetamic surge in military spending is, in fact, worth it. I don’t think they could — especially compared to the known security dividends of simply undoing the increase and returning the money to the public instead.
Reversing Biden’s military buildup
Annual US military spending is set to be $146 billion higher next year than when Biden entered office. The cost of the $600 tax rebates distributed late-Dec 2020/mid-Jan 2021 was $141 billion. Are you thinking what I’m thinking?
Setting FY2024 military spending at FY2021 levels and using the difference to fund another round of $600 payments is, in my mind, the purest way to reverse the military buildup. After all, the payments were technically advanced refundable credits against eligible people’s income tax and income taxes are what the military budget is made of.
Consider the security dividends the White House and Congress are leaving on the table by not doing this. The Census Bureau’s Household Pulse Survey collected data about a week before and about a week after the payments were issued. What does the data show? A dramatic and nearly instant improvement in human security: After the $600 tax rebates, economic and food insecurity both fell 2.4 percent, meaning nine million fewer US adults faced financial hardship and six million fewer were food insecure.
^Alt text for screen readers: The $600 tax rebates immediately reduced financial hardship and food insecurity. This table compares the number of financially insecure and food insecure U.S. adults before and after the $600 tax rebates were issued. The financially insecure population was 90 million in December 2020 and 81 million in January 2021, a 9.2 million-person improvement. The food insecure population went from 30 million to 24 million, a 5.9 million-person improvement. Data comes from the Census Bureau’s Household Pulse Survey. Data collection periods were December 9 – 21, 2020 and January 6 – 18. Read more at stephensemler.substack.com. Chart and analysis is by Stephen Semler (@stephensemler).
Technical details for crafting legislation
The intent of this legislative proposal is to fund another round of $600 tax rebates, offset by a commensurate reduction in military spending. By “military spending” I mean the amount authorized to be appropriated for Budget Function 050 for fiscal year 2024. By “$600 tax rebates” I’m referring to Section 272(a) of the COVID-related Tax Relief Act of 2020, enacted in Division N of Title II of the Consolidated Appropriations Act, 2021 (Public Law 116-260), 134 Stat. 1182, 1965-1971 (December 27, 2020), which added §6428A (“Additional 2020 recovery rebates for individuals”) to the Internal Revenue Code. Section 6428A(a) provided an eligible individual a refundable tax credit against the eligible individual’s Federal income tax liability for the eligible individual’s first taxable year beginning in 2020 of up to $600 ($1,200 for eligible individuals filing a joint tax return), plus $600 per qualifying child of the eligible individual(s). Eligibility for and the amount of this recovery rebate was based on an individual’s Tax Year 2019 return. Rebates phased out at a rate of 5% of the taxpayer’s adjusted gross income in excess of a threshold. The threshold is $150,000 in the case of a joint return or qualifying widow or widower, $112,500 in the case of a head of household, and $75,000 otherwise. Section 6428A(f)(3)(A) instructed the Secretary of the Treasury to make advance refunds of these credits “as rapidly as possible.”
Theoretically speaking. The money that’s needed for the military budget is printed, then whatever amount of income taxes are collected and incinerated/taken out of the money supply. My point is that the military budget isn’t funded through the payroll taxes that pay into the Social Security and Medicare trust funds.