No Peace Dividend?
If there is to be no peace dividend, as Defense Secretary Richard Cheney keeps telling us, why not? If the Pentagon budgets are being cut, as Cheney also keeps telling us, where is the money going? Somebody must be pulling our leg.</br></br>The first lesson to be drawn from the apparent contradiction between Cheney's promise of a big reduction in defense spending and the prospect of no peace dividend, is this: Cheney isn't really offering a major cut in defense spending. On the contrary, he is proposing only to keep defense spending from rising as rapidly in the next five years as it otherwise would have. Moreover, the average Pentagon spending level in the five-year period, 1996-2000, would jump to $365 billion annually from an average of $304 billion in 1991-95. Hence, no apparent defense cut, no apparent peace dividend.</br></br>But if defense spending were to be reduced enough to reflect political reality-namely, that the West is in less danger of attack from the Soviet Union than it was before-there must be a peace dividend.</br></br>It would be one thing if Cheney were to say that some part of the peace dividend has already been spoken for: the savings-and-loan debacle alone will chew up $200 billion in the decade of the '90s that could have been better spent elsewhere. And the probability is that taxpayers will have to fork over billions to make good on some other government-insured or -sponsored programs. But those unfortunate costs would be there even if there had been no dramatic prodemocracy developments within Eastern Europe and a better understanding with the Soviet Union.</br></br>The problem is how to assess all of the bills facing the nation in changed circumstances, and to determine how to allocate our total resources. And the first task is to cut through all of the gobbledygook of Cheney's numbers. He projected a "$180 billion reduction" in defense spending over five years. That, first of all, refers to budget authority, not outlays, which would be down $120 billion. But that is a bit of fantasy-a cut from earlier, projected levels of expenditures that have not yet been reached, not from current levels.