Defense Budget 101: Reporting tips and mistakes to avoid

Reporting tips & mistakes to avoid

Authorizations v. appropriations

Make sure you know the difference between authorizations and appropriations, and make sure it comes through in your reporting. According to Lance Hampton, foreign policy specialist at the Office of the Secretary of Defense:

Appropriations are allocations of money for a specific purpose and can only come from the House and Senate appropriations committees. There are 13 appropriations bills each year, and they are often shoved together into one massive omnibus bill. There are “emergency” or “supplemental” appropriations for military construction and operations that are passed outside of the normal budget cycle.

Authorizations come from House and Senate committees, such as the House Armed Services Committee, and approve a sum of money to fund a certain program, but those dollars don’t become a reality until the appropriations committees sign off on the budget.

However, after appropriation bills are passed, congressional committees can pass authorization bills that impose additional limitations on the spending.

Reading budgets

Budget cuts can occur in a single fiscal year, across a couple of years or the entire Future Years Defense Program (FYDP) – the five-year financial plan for the Defense Department. Many budget cuts are spread out across the entire FYDP, although this detail often isn’t provided unless reporters ask. Often, congressional leaders will reserve budget cuts for the last year of the FYDP, when another Congress will be in office, Hampton said.

Like savings, spending can be limited to a fiscal year or exceed it. You have to look at the appropriations bills to find out if the spending for a defense program is for one year or across the entire FYDP. When funding spans the five-year FYDP, keep in mind that future appropriations bills can increase the spending.

The dollar amounts will grow because of inflation so it’s important to look at percentages in the defense budget if you’re trying to tell a trend story.

Be cognizant to use round numbers as little as possible to avoid reporting misleading figures. Round up or down only after you’ve done all of your calculations.

Savings and cost efficiencies

The Constitution requires that money left over from defense programs that come in under budget is automatically returned to the U.S. treasury. These dollars should not be considered savings, although they are often mistaken as such. To avoid confusing savings, which come from budget cuts, with leftover dollars from previously fiscal years, be sure to study the “actual” expenditures in the budget. The challenge is that these “actual” expenditures aren’t available until the following year.

If the government says it’s going to cut the defense budget by some enormous sum, it’s important to remember that some of that money will already be spent by the time the cuts happen. Once you account for the dollars that are not recoverable, the savings are considerably less than what Congress would have you believe, says Michael O’Hanlon of the Brookings Institution.

Estimates for Defense Department programs are almost always too low. The estimates often don’t include costs like research and development and end up drastically under the actual cost, O’Hanlon said. “You can almost always get fooled that way.”

Analyzing weapons costs is tricky, particularly because weapons with the same name may have different purposes and it would be erroneous to compare their price tags. One way to get a good critique of a weapons system is to call up a competing manufacturer, O’Hanlon says. You’ll have to filter out the bias, of course, but it’s a good starting point for understanding some of the potential problems with a weapons system.

Contracts

Know what the defense contract was supposed to be for and what it was really used for, because often there is a discrepancy.

Keep track of defense acquisition regulations, because at any time amendments may change the rules for weapon procurement and contracting services. Often, the rules will become more lax as the military tries to gain more flexibility and authority in a strategic area, Cohen said.

“Regulations are a gold mine, so don’t forget about them,” former Washington Post database editor Sarah Cohen of Duke University said.

Rhetoric and bias

Be aware of rhetoric used by people whose objective is to increase or maintain defense spending levels. These arguments often center on troops’ safety or vague notions of American security, but may not justify a specific expenditure.

Be careful not to compare U.S. defense budgets with other countries’ without considering factors like the difference in labor costs or construction materials. Also, be sure not to compare actual dollars of U.S. defense spending with estimates from other countries. Some officials who want to justify U.S. defense spending will compare the U.S. budget with estimates of China’s defense spending – numbers that may be based on faulty intelligence. It’s a tactic used at times to build up fear of China’s growing military power, Hampton says.

“That’s a very typical story out there,” Hampton says. “As long as they can whip up the fear, they can pretty much justify any cost factor in their budget.”