Congress Needs to Take On Cost Overruns

Too often, the lawmakers can't agree on where there is waste in government. The problem is that everything in Washington, D.C. seems to have an army of lobbyists and powerful lawmakers playing defense at the slightest hint of trouble. But we think a recent report by the Government Accountability Office (GAO) can break the impasse. 
 
The report found that 95 Department of Defense (DoD) weapons programs worth $1.6 trillion had a total of $300 billion in cost overruns. The GAO has been doing this analysis of programs annually since 2000 and cost overruns and delays are actually worse than when they first started tracking. 
 
The study also found that: 
-- Total research and development costs for programs jumped by 40 percent from first estimates, up from 27 percent in 2000. 

-- Some 44 percent of major defense weapons programs are paying at least 25 percent more per unit than initially expected. 

-- Programs now run an average of 21 months behind schedule; they were running 16 months behind in 2000. 

-- $300 billion, just in cost overruns. To put it in perspective, $300 billion is enough to run the operations in Iraq and Afghanistan for two years, or double annual public spending on water and transportation infrastructure. 
 
Defense is a critical function of any government—"provide for the common defence" is right in the preamble of the Constitution, after all—but keeping it streamlined and accountable is an enormous challenge. The 2009 defense authorization bill currently making its way through Congress proposes to tackle this challenge, by creating steering boards to review new requirements for weapons programs and "business transformation offices" for each military department. 
 
But past reforms have clearly done nothing to reverse the upward trend in cost overruns. Making them stick, says the GAO, will require a radical change in Pentagon "environment and incentives." 
 
The Pentagon's legendary resistance to change is already on display. A defense department budget official testified at the House Government Oversight Committee hearing that the big takeaway from more than 130 acquisition studies and panels conducted over the past two decades is that successful weapons procurement depends on program stability and funding predictability—or, keep the funding faucets flowing so program managers can plan better. 
 
But as the GAO pointed out, the larger problem is that there are currently "too many programs chasing available dollars" at the Pentagon, where the "definition of success is usually to become a program of record with a funding stream attached to it." This means that DoD's various fiefdoms have an incentive to propose programs with unrealistically high goals and low cost estimates in order to hook political and financial support early on. 
 
Instead of demanding greater budget accountability and fiscal prudence, some in Congress want to establish five percent of GDP as the floor for defense spending. Locking in annual defense budget increases is an abdication of responsibility. Instead, Congress needs to force the Defense Department to rein in procurement excesses. 
 
Start with the $300 billion in cost overruns. It's not just about the lost money for our men and women in harm's way. With a $400 billion budget deficit and a $9 trillion national debt, we simply can't afford an unaccountable Pentagon any more. 

Taxpayers for Common Sense