Howling into the wind

It has been said that the definition of insanity is continuing to do the same failing thing, hoping the outcome will be different the next time. A good part of the U.S. defense industry is clearly stuck in this pattern.

CQ/Roll Call ran a piece over the weekend that lays bare the time warp some contractors and their trade associations are stuck in.

The headline talks about how the industry is facing its "moment of truth." The content makes it clear that the industry, and its spokesperson, the Aerospace Industry Association, is far, far from facing the truth about the defense budget.

If this piece is any indication, the industry continues to live in a hermetically sealed box, telling itself its own dream-like stories, and expecting to be "saved" by actors on the Hill who are in the box with them.

The reality is that sequester is now underway, not because the industry lobbying campaign failed in some technical way, as some in the industry seem to think. Millions of dollars ($27 million in campaign contributions alone), numerous road shows (McCain, Graham, and Ayotte visit carefully pre-selected friendly audiences), thousands of interviews (will Buck McKeon ever sit down?), factory-floor lobbying, visits to the Hill -- they were all done to a fare-thee-well. These are tried and true lobbying techniques, which I described at length in my 1980 study, The Iron Triangle.

But the techniques only work if the message is in tune with the voters at large and the majority of the members of Congress. The industry's problem is not technical, it is the failure to recognize we are in a defense drawdown. The budgetary party is over.

Defense budgets rise and fall in response to changing international and political conditions. And those have changed dramatically: The end of the war in Iraq and the coming end of the war in Afghanistan lower significantly the level of public and congressional attention and concern about national security.

And some in the industry seem not to have noticed that we are in a major budget battle, and have been for two years. It is a much bigger battle than the one over the defense budget; that smaller fight is a side show. And as long as some Democrats do not want to change entitlements and Republicans do not want to put tax expenditures on the table, the drive-by budgetary victim of that battle is discretionary spending.

Last time I looked, defense was about 55 percent of discretionary spending, and the third largest cause of the U.S. debt more than doubling since 2001. Of course it is on the table; does the industry still think it is going to get a pass?

The days of ever upwards on defense are over. Sequester or not, defense budgets are going down and sequester just accelerates the pace. The industry should be prepared for the projected defense budgets over the next 10 years to fall at least 20 percent in constant dollars, or roughly a trillion dollars from the current forecast of more than $5 trillion.

When the industry still tries to argue that Leon Panetta "cut" defense $487 billion over 10 years, when all he did was flatten the projected growth in defense, leaving it to grow with inflation, they are not being realistic.

When they think Rep. Harold Rogers, the appropriations chair in the House, is going to save their bacon by giving DOD flexibility on sequester, when that will never survive the Senate, they are not being realistic.

When they think just a little more money to the Aerospace Industries Association to fund more misleading studies about the jobs impact of sequester will be adequate to turn the public around, they are not being realistic.

The realistic companies have been coping for two years: attrition and layoffs, buying in capacity they used to contract out, selling divisions that are less strong in a declining market -- they know what to do. The rest of the industry seems to be howling into the wind.


National Security

The budgetary theater of the absurd

As we step onto the stage for the next act of the budgetary drama, things seem to make less and less sense. The budgetary solution shimmers on the road ahead, then evaporates as members of Congress repeatedly present legislation that either cannot pass or will not meet the needs of the other chamber.

Only the world of theater can provide the metaphors that describe where we are.

For the last two years I have been describing the budgetary point and counterpoint, the moments of high drama and unresolved outcomes, as an Indonesian shadow play. The budgetary players are actors manipulating two dimensional puppets, backlit through a white sheet. To the audience, the puppets seem real, the actions seem productive, but in the end it is a show.

Today, we have graduated from the shadow play and have entered a more surreal, or even nihilistic drama.

Might we be in a Pirandellian world, where six players (Boehner, Pelosi, Reid, McConnell, the president, and his veep) desperately try to figure out what the script is, what their roles are, and search for a playwright who can get them off the stage.

Or are we in the Sartrean world of No Exit, where nobody can get out of the room and the players all look smaller and smaller in each others' eyes?

Perhaps it is a Beckettian universe, an apparent Endgame which does not end, but is a series of meaningless interactions that end where they started, but actually went nowhere.

Or even the more nihilistic world of Macbeth, where the characters have become poor players who strut and fret their hour upon the stage and then are heard no more. Players who have been weaving a horror story in the sky that is, in the end, a "tale told by an idiot, full of sound and fury. Signifying nothing."

As John Boehner refuses to talk, the president shouts into the Learian wind about the storm to come, and senatorial fingers point at each other, we are, perhaps watching the surrealistic world described by Ionesco in the Bald Soprano. We can only exclaim, as his players do: "How curious! How bizarre, and what a coincidence."

How interesting to watch; how little to behold; how invisible the outcome. Only dramatists could improve on this "reality."