AIDS TREATMENT NEWS #157, August 21, 1992
John S. James

Recently Congress has been sold on the idea that voters believe that military spending equals jobs -- as shown by the recent vote to build two nuclear submarines at two billion dollars each, after both the Pentagon and President Bush said that they did not want these ships, which are specialized for fighting high-tech submarines of the former Soviet Union. (By comparison, the money spent for each one of these submarines is more than the total annual Federal spending for cancer research; it is more than double the total for AIDS research.) The purpose of this project is to preserve 20,000 jobs in Groton, Connecticut; representatives from elsewhere also voted to spend the money, because they needed to trade votes to preserve similar wasteful projects in their districts. This kind of national mismanagement happens because of five-year legislation, sometimes called the "budget wall," which usually prevents Congress from using the money saved from military projects for any purpose other than deficit reduction. Deficit reduction seldom makes sense in a recession; therefore, irresistible pressures are created to continue to spend enormous amounts of money for projects which no longer serve any national purpose.

The Center for Economic Conversion has learned that military spending, which is highly capital intensive, is the least efficient way to create jobs; the same amount of money spent for infrastructure, civilian research, human services, or other national investments would create many more jobs, sometimes more than twice as many. CEC's information is a resource for letting the public know that irrational spending not only delays vital progress such as developing new treatments for AIDS and cancer, but also costs jobs compared to the same spending for civilian purposes, and generates massive inefficiency and waste which threaten our nation's future.

AIDS TREATMENT NEWS interviewed Marie Jones, who is a legislative specialist for the CEC and author of its new report, Converting the Cold War Economy: Sixty Four Companies Embrace the Future. Ms. Jones has a masters degree in city and regional planning; incidentally she has also worked in AIDS laboratory research, at the University of California in San Francisco. Below are excerpts from the interview, together with an overview of other information and assistance available from CEC.

Marie Jones: "The current defense budget is $287,000,000,000 per year; real spending has gone up fifty percent since 1980 when Ronald Reagan was elected, a rate of growth in peacetime which is unparalleled in our history. This amounts to a cost of $1,200 per person per year for the country (including infants, elderly persons, and the disabled, not only workers) that we spend on defense. Fifty percent of our national debt of $4,000,000,000,000 is due to the increase in defense spending which happened in the eighties and continues in the nineties.

"Now that the Soviet Union has fallen apart and the changes in Eastern Europe have happened, we need to ask whether we can afford to keep spending this kind of money or not. Some people argue that we need to keep spending money on defense to maintain jobs in a time of recession. There are three reasons this argument is false.

"The first is that money for defense comes from somewhere. When we borrow to spend on defense, we take the money out of the private sector, or out of other public programs. Otherwise, private businesses could borrow that money and create jobs, or the federal government could further develop our domestic programs and hire teachers, nurses, and bridge builders rather than weapons workers.

"Second, defense spending creates fewer jobs than any other kind of spending. For every billion dollars we spend on defense, we could get about twice as many jobs if we spent the money in the civilian sector. The defense industry creates fewer jobs because it has great overhead costs; it is one of the most profitable industries in the country. Defense contractors are guaranteed high profits by the Pentagon. And defense workers are highly skilled (40 percent are engineers, who earn high salaries), so we can employ relatively fewer people for the same dollars than in the civilian sector.

"The third major reason is that the end of the cold war means that we don't need this large a defense budget.

"We need to start thinking about security in a different way. Before, the money, technology, weapons and people in the armed forces were our national security. Now we have serious domestic problems: poverty, health problems like AIDS and cancer which are seriously underfunded, a housing shortage, crumbling infrastructure, and unemployment. For example, the three water tunnels that supply New York City are 30 years old; not even one can be turned off, and no one knows when any of them will fail. That's just one of the glaring examples. Unless the defense budget is reduced, we will not have the financial wherewithal to tackle these problems.

"If the defense budget is cut, what would you do with the money? Right now a "budget wall" basically requires that any cuts in defense spending go to deficit reduction. This prevents coalition building between people interested in healthcare, low- income housing, small business development, job retraining for defense workers, the environment and new technologies for pollution control, etc. Without a broad coalition to cut the defense budget, all we have are peace groups, left over from the Vietnam War, trying to make this change happen. We need to build this multi-issue coalition to tackle the big interests that back grossly excessive defense spending. Unfortunately the budget wall eliminates our ability to reuse defense monies for social and domestic programs. Last year there was a close vote to keep the budget wall intact, so look at your representative's record; be conscious of it. (Another vote on ending the budget wall is planned for this year; see article below.) If we do remove that budget wall, we have a good chance of getting some of these dollars for the defense department rechanneled for the domestic needs of the country.

"The budget wall contorts rational decisions to cut defense into political hot potatoes. Consider the case of the Seawolf submarine (mentioned above). Congress voted to continue production of two submarines for a total cost of four billion dollars over two years, to maintain 20,000 jobs in Groton, Connecticut. Unfortunately after these two subs are built we will be in even a worse position than we are now. We will have two more unneeded nuclear submarines to fight Soviet nuclear submarines; we will be four billion dollars more in debt as a country; and we will still have 20,000 workers that will need to be re-employed. The "budget wall" ensured this outcome because Congress could not take money from defense spending and use it to retrain the workers or give them opportunities to go back to school to get a better job. Unless workers' security is provided for, it will be politically impossible to redirect defense spending. (To illustrate how much money is involved, if the two billion dollar cost of just one submarine were divided among the 20,000 workers, they would have $100,000 each -- more than enough to provide generous retraining, relocation, or other benefits.)

"There are other connections we could make. For example, you probably did not know that the U. S. defense industry is the number one polluter in the world. Many defense plants and bases have very bad toxic problems, many are Superfund sites that need to be cleaned up, at billions of dollars a year in public expense.

"In the presidential race, Clinton is talking about conversion, about cutting the defense budget a little more than Bush wants to do. Bush is talking about a 25 percent reduction over five years; Clinton is talking about 30 to 35 percent. He's walking a fine line, because the issue of jobs has paralyzed the call for cutting defense.

"We need to rethink our national security in terms of what this country is and what it can do. Two of the most nationally secure countries in today's world are Japan and Germany, because they have strong economies. They don't have a big defense budget; at the end of World War II they were forbidden to build a big military. That helped them, because they have been able to put that money into developing industry in their countries, to make sure they are competitive in the international market and that their workers are well trained and well paid."

For More Information

The Center for Economic Conversion publishes the quarterly newsletter Positive Alternatives, and a number of research reports. It provides organizing assistance, speakers, and workshops -- and technical assistance to workers, managers, and public officials confronting military cutbacks. (For example, it is now working with the City of San Jose to apply to the Office of Economic Adjustment of the Department of Defense for funding to help the city plan for economic conversion. Santa Clara County, the "silicon valley" area where both CEC and San Jose are located, is the largest per capita recipient of defense spending in the U. S.)

For more information, contact the Center for Economic Conversion, 222 View St., Suite C, Mountain View, CA 94041, 415/968-8798.

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