More Defense Spending Without Cuts?

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This week on Conservative Crossroads, should Congress approve President Trump's
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$ 350 billion defense budget request through reconciliation without requiring any
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spending cuts to pay for it? Mackenzie Eaglin says yes.
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Brittany Mandy says no. Defense spending hikes without pay-fors coming
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up on Conservative Crossroads now. Welcome back to Conservative Crossroads,
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the program where conservatives lean into their differences rather than
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deny them. I'm Henry Olson, senior fellow at the Ethics
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and Public Policy Center, your host for the series and
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your moderator for today's discussion. Today, the question is President
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Trump's request for $ 350 billion in defense spending above and
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beyond the normal request that goes through the budgetary process.
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The president wants it to come through reconciliation, which can
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be passed on only a party-line vote. And the question
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conservatives are debating is whether or not that should come
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with or without offsetting spending cuts. Here to argue it
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should come without offsetting Offsetting spending cuts, if necessary, is
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Mackenzie Eaglin, Senior Fellow in Defense Policy Studies at the
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American Enterprise Institute. And here to argue that it requires
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some form of domestic or other spending cuts in order
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to approve is Brittany Madney, Senior Fellow for Fiscal Policy
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at the National Taxpayers Union. As is normal in conservative crossroads,
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we'll start with a five-minute introductory statement by each person. Mackenzie,
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as you have the affirmative on this, you're up first.
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Thanks, Henry.
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I appreciate you having me on to discuss this. You're
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a good friend and colleague, and I always enjoy learning
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from you. I think Operation Epic Fury has exposed what
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I've been worried about for far too long through my
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work at AEI and what the data shows, which is
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that we essentially have a one-war military. Iran isn't that capable.
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We were told they were a middle power. I'm not
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really sure what that means, but we are having a
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difficult time militarily achieving the political objectives that the president
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has laid out for operation epic fury.
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So there's been, you know, a generation.
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Of challenges confronting the defense department and the profession.
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Of arms, and they're all exposed right now in real time.
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So there's no, there shouldn't be, I mean.
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Congress has proven to be, um, uh, less helpful than
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I would have hoped in the middle of a named, prolonged,
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pretty violent military operation. So the urgency is real and
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the need for the funds are significant.
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And this is bigger.
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I understand we're not talking specifically about money for an
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emergency supplemental or something like that for Epic Fury, but
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that we were speaking broadly about the need for a
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generational one-time investment. that President Trump has asked for in
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his 2027 defense budget request.
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And that's also necessary.
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Both are actually necessary because money's getting shifted around constantly.
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You know, while they might be three different requests, Epic Fury,
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27 reconciliation, 27 base budget, the way the dollars actually
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move around in defense is that right now, because Congress
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has been unable to pass 27 appropriations on time into law,
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the funds are all getting mangled and shifted and nothing's.
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Actually working at its peak optimization.
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And so the point of the one-time mandatory spending for
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defense is terrific, actually. The money works differently. It works
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more like it does for other federal agencies. The Defense
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Department has held to different sets of rules for spending
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than other feds and other buckets of money, whether that's
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discretionary or mandatory.
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And so in this case, what.
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One-time infusion does is it jumpstarts necessary investments that have
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been kicked. The can has been kicked down the road,
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like I mentioned, for 20 plus, you could argue 35
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years now. And all the bills are coming due at
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the same time. Machines age out at the rate you
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purchase them. And you can extend them and you can
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put Band-Aids on them, but eventually they will just die.
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And that's where we are with our conventional and strategic deterrents.
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And so the one-time infusion of cash with different sets
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of rules, a little bit more liberally applied, that allows
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the department and the defense industrial base that supports the
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warfighter to get an accelerated jumpstart on the things that
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have to be paid for, whether we like them or not.
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What the nation and Congress and Washington has asked the
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armed forces to do has really remained unchanged.
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It's an additive benefit.
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Giant list of to-do. Everyone's job jar is full. Pentagon
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is the super Walmart of federal agencies. They get tasked
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with everything and all the time, and.
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There's no let up in work.
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And so if we want to talk about changing national
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objectives and aspirations for what we want from the military,
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that is an important conversation. But as of right now,
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just look at, for example, let's cue up one lens,
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one example of combat power stretched to its maximum limit,
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which is the United States Navy. There's about 20 ships
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currently supporting Operation Epic Fury in the Middle East. We
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have two of the eight critical maritime choke points in
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the globe shut down effectively, and the Navy's having trouble
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to even process.
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Maritime convoys to keep shipping open in the strait. It's
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also doing.
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It's also trying to do a port blockade and a
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counter blockade all at the same time.
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And the Navy is officially maximum peaked. There's no more
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Navy to throw at the problem.
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A colleague in defense circles mentioned to me how his,
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when last I saw you, Henry, how his son was
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on the last remaining Navy ship that sailed from the
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East Coast to support Epic Fury a couple of months ago.
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Everything else is up in layup or in maintenance. So
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this is the kind of example of the state of
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affairs for the profession of arms. So the 350 isn't
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just necessary, it's overdue.
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Thank you, Mackenzie. Brittany, you're up.
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Well, I agree with Mackenzie on a lot of her points.
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One of the things that she mentioned is that we
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have a one war military at this stage, and that's
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incredibly precarious position for us to be in. Unfortunately, I
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would argue that we're nearing the point of having a
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one war military that can't even fight that one war
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on multiple fronts. And that's because we don't have the
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ability to fully fund all of the military's needs, as
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well as maintain basic operations at home for a limited
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government system. Now, as we spend more money on the military,
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we have to find ways to pay for that spending.
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I actually don't have a problem with spending $ 350, 000 billion
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if that's what our armed forces need to succeed at
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home and abroad. What I have a problem with is
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when we aren't paying for that by reducing costs elsewhere
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in the federal government. We're $ 40. 1 trillion in terms of
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our national debt right now. When you break that down
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by household share, you end up at a point where
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many families would theoretically be on the hook for their
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national debt at a median home price for a single family.
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That's just to put some perspective on what we're dealing
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with here. So should we be spending what the military
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needs to be effective in whatever the agenda is that
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the president lays out? Yes, we need to consider that.
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But in order for those $ 350 billion to actually go
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as far as we want them to go, we have
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to find ways to measure what that looks like against
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the rest of federal spending. There are plenty of places
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across the federal government that would be well worth looking
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at reforms, cuts, and adjustments from fraud all the way
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through adjusting sorts of expenditures through Medicare, Medicaid that are
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not in line with the American people's priorities right now.
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If you don't do that, then that $ 350 billion is
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quickly going to run out. It won't be enough to
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even satisfy what is being requested right now because inflation
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is growing so rapidly with just all the Fed raise
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interest rates. So on top of that, we also have
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to be very concerned about not only the principal national debt,
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but our deficit spending as well. So we need to
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find other areas to offset that spending, even so that
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we can achieve the same shared goal of having the
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strongest possible military.
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Thank you, Brittany. Thank you, Mackenzie. And now the floor
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is open for you to question one another. Who wants
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to go first?
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I would love to ask Mackenzie a little bit more
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about what you think the most important priorities are within
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that $ 350 billion. Because maybe there's a center point that
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we could reach where we say, okay, here is a
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portion of that spending that's really necessary to get contracts
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started and out the door. And that would help us
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identify some offsets that make sense for upfront in the
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budget window. And we could maybe find some solutions from there.
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Great question.
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It's pretty clear that you know, the bins are empty
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in terms of our magazine depth. I've been on a
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munitions jihad since I was on the Army Science Board
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report study committee that we released it near the tail
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end of the Biden administration to look at surge capacity
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in the munitions industrial And what we found was everybody
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has their hand in the cookie jar, taking a little
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nip and cut into that account at each step of
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the process every single year. And it's how you, you,
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we have the outcomes that are now front page news
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to people who don't care about the things that we
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talked about here today in our small group where, you know,
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Patriot and bad shortages and all these other kinds of
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offensive and defensive critical munitions.
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We are, we are, we're running out.
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In fact, I think the early days ceasefire with Epic
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Theory was partly because we just ran out of this
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key essential stuff.
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This was all knowable.
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These numbers are all public. The build rates for munitions
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are pretty paltry. So like I mentioned, this was a bipartisan,
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everybody was in on creating the problem and it was generational.
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It's been, it's been forever.
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Since basically the, the, all, all munitions, Modern problems basically
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started at the end of the Cold War, the so-called
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end of history, and then the peace dividend or the
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military that followed, which was primarily a procurement holiday.
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And so the munitions shortfalls are pretty prevalent. And what
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it's exposing is.
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Not just the one war military capability, which is terrifying,
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but this is not the first time America has run
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out of munitions in modern warfare. Bill LaPlante, the Pentagon
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Acquisition Chief, said, at an event a couple of years ago,
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America's run out of munitions.
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Five times in the last 20 years.
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I think that would surprise most people. So it seems
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clear we have a pattern of not buying enough strike
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and defensive capabilities, particularly as it relates to munitions. It's
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a huge portion of the 350 billion. And we don't
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just need these types of weapons, particularly to defend our
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bases and troops and assets. But what the 350 billion
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also supports is strengthening and then expanding the defense industrial base,
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bringing in new entrants who can do the things. Sure,
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do you need your public utility equivalent defense primes to
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continue to backfill what's been expended in Epic Fury?
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That's great. Over time though, I'd like to see.
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Some new companies compete against even those traditional companies who.
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Make exquisite world-class systems. For now, I'll just take all
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the masks that we can muster.
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But for new companies to have the interest from private
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capital to be able to raise funds and then to
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enter into this space, even in munitions, they need more
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predictability and a longer time horizon and more flexible funding,
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none of which are coming without the.
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$ 350 billion. So that's where I would start, Brittany. What
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do you think?
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I think that's a great piece of information for me.
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I had no idea about that. shortage in, you said
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five times there was a shortage of munitions?
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Five different times.
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That's pretty wild. So I think one of the points
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you were making is really tied to the question of
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private investment and stability needed in funding so that the
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private sector can step up, the DIB is available to
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the United States military writ large. I would be concerned
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that that because of inflation, which is driven, we know this,
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by federal overspending, that they are going to be suffering
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right now from general economic instability. And taking a corporate
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view of that is going to lead to them wanting
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even more stability, even more predictability. And of course, you
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know even better than I do that there's really nothing
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about warfighting that is ever predictable beyond decade because, of course,
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technology changes, the geopolitical environment changes. So if they need
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more stability, one place that that's absolutely requisite is in
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economic certainty. In order to do that, we have to
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push down our general spending. So I would say, hey,
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I'm with you. We need the full munitions arsenal that
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could possibly be put together in a short period of time.
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I don't disagree with that at all. What I would
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say is if that is our priority, if we're choosing
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that as a priority, then that means we have to
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deprioritize something else in the federal government. And it doesn't
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even necessarily have to be within the Pentagon, although I'm
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sure there is some mission creep that we could agree
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maybe the Pentagon doesn't need to be responsible for, is
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distracting from their core goal that Secretary of War Hegseth
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maybe wouldn't want to have to deal with. So there
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may be a few dollars there. But really, Pentagon spending
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is only, defense spending is only about 50% of our
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discretionary spending, and discretionary spending is only about a quarter
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of our total spending. So when you look at it
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in those terms, we should be finding offsets that aren't
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taking away from defense spending elsewhere, so that every dollar
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that's going toward defense, going toward these critical munitions projects,
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actually does carry the value that we believe it carries
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the day that Congress approves it. And there's plenty of
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places that we could be finding and cutting spending on
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the mandatory side of things, the autopilot spending side. So
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I'm happy to provide some suggestions there as well.
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Absolutely.
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The Washington Post editorial board wrote last month, or earlier
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this month, how the U.S.
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Can't afford a major war and what if it comes anyway?
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And they said the cost of a Gerald Ford, our
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newest version of aircraft carriers, costs the equivalent. It's eye-wateringly expensive.
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Don't get me wrong.
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It's 13 to 15 billion, depending on how you calculate it.
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And they said, that's three days of social security spending.
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Yep. I mean, that's eye-watering. That is eye-watering. I completely
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agree with you.
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Terrifying. Yeah. So what I would love for you to
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help me understand is inflation.
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So the Defense Department, historically, their bills, CBO has looked
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at this for decades in their long-term defense outlook. They
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used to issue it annually.
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The four major defense accounts, weapons.
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Research and development, operations and maintenance, and personnel, all four
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of those, historically, every year, outpace inflation by 2% to 8%.
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And since COVID, those numbers are now double digit. The
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Pentagon typically doesn't get defense budgets at inflation. And as
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you and I know, this is compounding.
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So I want to talk about.
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inflation since COVID and help me think about that in
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the defense sense. But actually you made a comment that
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I wonder if Henry's listeners fully understand what you meant.
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So I used to also work at the Harris Foundation
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and we would spend a lot of time looking into
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when the federal government starts putting its thumb on the
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scale and spending somewhere.
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The cost of that, i.e. higher education, college, the cost
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of it explodes.
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And the output isn't necessarily more, except as we all
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know in higher ed, it was administrative bloat. You said
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inflation is driven essentially by government spending.
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Please tell us all more about that.
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You're setting me up here. I love it. This is
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sort of something that we also refer to as like
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subsidy shift. And basically when the federal government spends on
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a specific fund, sector or program, particularly through subsidies, but
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it doesn't have to be subsidies. That's sort of like
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the cleanest example. What you end up seeing is not
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that the cost for that program or project actually goes down. Instead,
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what you see is that the cost for that program
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or project goes up, usually commensurate with the same amount
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of the subsidy. So it's not that the which is
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sort of what it looks like at the front end,
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it's really that the private sector responds to the government
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incentive by making everything cost that much more. So you
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see this with Obamacare. It's a rampant problem across the
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healthcare sector in general. People don't realize that it's also
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happening in other sectors like defense, where the option of
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a subsidy isn't really the same. It's really done more
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through contracting and promises and proposals, but it does function
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in the same way. So one very clean way that
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we could try to start attacking this is by reducing
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government promises that are never really going to come to
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fruition through subsidies across the federal government. So not even
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necessarily in the defense space, but just, hey, maybe we
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shouldn't be making the economy more expensive for everyone through
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subsidies that sound good, but are really not only just
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papering over the problem, but making it worse.
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Yeah.
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I'm very worried about the, within the defense budget, we
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see this, that sort of phenomena at play. So when
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the cost of living, you know, troops get a stipend
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typically to live in certain expensive cities and, you know,
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depending on where they live and if they're on base
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and off base and all that sort of thing. And
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every time Congress generously increases for, you know, to match inflation,
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et cetera, or to be more competitive in a certain
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housing market, landlords.
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Just all up the fees.
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And so, like, they just get into this vicious cycle
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as opposed to a virtuous one.
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I know exactly what you're talking about.
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I am very concerned about inflation generally just absorbing, eating
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up all of.
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The defense proposed increase. And so you don't.
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So then worst case scenario is you get 350 billion
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and then everyone says, well, what did they do with that?
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Because the inflationary costs are so exorbitant. It would be
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a legitimate question, of course, to ask.
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But I think what happens is you get You get less,
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you spend more. And then predictably, people are like, well,
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we shouldn't do that again. I think the real risk, actually,
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to Henry's question is that there's not a noticeable, tangible,
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widespread benefit from that kind of spending, in part because
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of inflation. And as I mentioned, it's, as we all know,
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the eighth wonder of the world, as Einstein said, is
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things that compound. compounding interest. Inflation is also compounding. And
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so since COVID now, seven budget years since we're in
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the 2027 defense budget debate, it's why I try to
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explain often to policymakers the defense budget is so big
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and it.
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Doesn't have.
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The effects that I think people would expect from that
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kind of a largesse. I call it the paradox of
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scarcity in a defense budget of largesse.
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So I'm curious about, well, I don't have to ask
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the next question. I'll defer to you if you wanted
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to ask anything.
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No, I'm happy to just continue the conversation on that
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train of thought. Yes, the compounding problem here is really
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being neglected in a lot of ways. So we're talking
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about $ 350 billion request. That's actually not the cost of
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this request. The request line is $ 350 billion. The cost
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of that is actually about $ 500 billion, give or take
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three to four billion. $ 500 billion is the result of
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the $ 350 billion plus the interest cost. So I used
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CBO's modeling to.
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Estimate what that interest cost would be. So this is
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added debt service costs. If we do the $ 350 billion
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upfront in a one-time blast, which my understanding is that's
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really what's needed. If we do that in FY27, then
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that automatically comes with $ 150 billion price tag just to
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spend that because it's all deficit spending. We don't have
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money from elsewhere. It is deficit spending. Now, if you
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offset that $ 350 billion request, either in part or in total,
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you don't have to pay that $ 150 billion interest fee.
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So just by offsetting it, you're starting to tamp down
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on the quote-unquote true cost of the request and keep
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it to the $ 350 billion. And that is, of course,
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not only compounding in the negatives, on interest, but it
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compounds in the positive if you do the offset, because
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that means that you're reducing inflationary activity. And so that
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$ 350 billion will tend to go farther. It actually is
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sort of the dollar that you think you're getting and
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can spend. Um, and again, like there are plenty of
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places that we can find to offset $ 350 billion. Now,
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as you start to spend more, um, and spent over time,
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of course, it gets more and more difficult to find
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those offsets. So there is also a very, very real
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fear that it won't stop at $ 350 billion, that the
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requests will keep growing. And then at some point, we
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will have gotten ourselves into such a hole that we
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are in the debt spiral. And that's arguably a bigger
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threat than any geopolitical threat we might face or that
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our warfighters might have to take on directly. Because if
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you're facing a threat internally and an external one presents itself,
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you won't have the firepower because you won't have the
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money to respond.
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As a defense nerd, I am not a financial services person, obviously,
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although I like to look at the budget and I
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like to think about the big trends and the macro
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issues and what are these requests really telling policymakers and
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where are the gaps and the seams. But I become
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an overnight armchair general on.
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The bond yield market. And what are they trying to signal?
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Uh, and is this, is this the, is this our
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Greece moment, uh, or not, or potentially in.
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The next year or so where.
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The markets finally force, uh, this larger discussion about total
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federal spending, because really, uh, when we're talking about any
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federal agency, whether that's defense and what type of.
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Dollar, mandatory or discretionary, it all.
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Really comes back to the total federal spending, how every
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year it exceeds.
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Incoming tax revenue.
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And how, you know, we're constantly swiping the credit card
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and debt financing to cover that gap and inflation and and.
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Comes back to Congress.
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Yeah, no, I totally agree with you. And to your
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question about, is this our Greece moment? First of all,
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I pray that it's not. I pray that we start
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getting things under control before it hits that point. But
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we have two major expenditures that are coming to a
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head in the next congressional cycle. So senators who are
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entering office after this coming election are They'll serve a
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six-year term. It's the first time that we know those senators,
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the exact sitting senators that individuals are going to be
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putting in office in the coming year, they will have
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to personally deal with insolvency in both Medicare and Social Security.
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It's a given. In 2032, both the actuaries and the
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trustees have already predicted that that social security will be insolvent,
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as will part of Medicare. And what that means is
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benefits will automatically be cut. Now, how does that relate
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to defense spending? It means that senators who are making
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decisions now can't kick the can down the road and
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make it the next guy's problem because it's happening during
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their term, which means they need to start thinking critically
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now about what their priorities are, what are the American
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people's priorities to do with their tax dollars. And that means, hey,
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if we don't want to be in a position where
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benefits are automatically cut, where inflation is so bad that
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we can't purchase the most basic needs, then we have
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to be responsible right now. And that means you make
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decisions about priorities. If defense expenditures are a priority, that's
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all well and good, but you have to find places
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elsewhere in the budget to fix. And one place that
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you could do that is by closing some of the
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loopholes and fraud gaps in some of these major expenditure
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programs that we know are not only the drivers of
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the debt and deficit, but that are also going to
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be the ones that are automatically hit in the next
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couple of years.
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Yeah, it's not a PR stunt to talk about fraud
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in federal benefits and programs. But I want to get
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back to bashing out of Congress in a minute because.
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They deserve it.
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They haven't shown a proclivity in modern times to address
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the hard problems, even when it's upon them.
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So I am deeply concerned. I genuinely am.
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Ten years ago, I started worrying about interest on the
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debt when it would surpass defense, and here we are.
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As a federal expenditure.
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And, you know, there doesn't ever seem to be, you know,
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when Congress walks to the edge of the cliff, the
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fiscal cliff, right, they just build more sand or add
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more dirt or whatever the metaphorical equivalent is. And so
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if I look back at the defense budget of the
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last 15 years, a.
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Remarkable thing happened in Obama's midterms. He called it his shellacking.
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When the Tea Party swept into power, when the last
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sort of moment of national concern, I.
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Think, arguably about the debt and deficits. And so a
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couple of things happened.
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As you recall, the super committee stood up and it
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was supposed to be bipartisan and it was to identify ways.
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To reduce federal.
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Spending and additional ideas, including revenue increases.
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And the late great Senator John.
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Kyle, for example, was on that super committee and He
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started to talk publicly more about it after its implosion.
486
00:29:40.099 --> 00:29:43.160
and said that Republicans had totally agreed to tax increases
487
00:29:43.200 --> 00:29:45.380
and Democrats had totally agreed to.
488
00:29:45.279 --> 00:29:48.599
Funding cuts to Social Security, Medicare, and Medicaid.
489
00:29:48.619 --> 00:29:51.769
So I think there is a reason that we all can't,
490
00:29:51.809 --> 00:29:54.109
you know, we could infer why it exploded.
491
00:29:54.430 --> 00:29:58.250
Maybe because the grand bargain was finally at hand. But
492
00:29:58.269 --> 00:30:01.559
what followed was the failure of the super committee led
493
00:30:01.599 --> 00:30:05.720
to a series of successive events that created the budget control.
494
00:30:05.400 --> 00:30:08.680
Act, which was politicians way of getting out of that moment,
495
00:30:09.140 --> 00:30:11.740
looking like they were going to do something to rein
496
00:30:11.859 --> 00:30:16.420
in the growth, the planned growth of federal spending, not
497
00:30:16.440 --> 00:30:17.259
to cut spending.
498
00:30:17.599 --> 00:30:20.809
It was literally to arrest growth by like a year.
499
00:30:21.369 --> 00:30:23.670
And what they ended up doing, of course, because partly
500
00:30:23.710 --> 00:30:28.720
because the defense department and the uniform services were were
501
00:30:28.980 --> 00:30:33.170
disproportionately singled out as a bill.
502
00:30:32.950 --> 00:30:34.109
Payer of debt reduction.
503
00:30:34.549 --> 00:30:36.789
What they had to do, they wound up doing was
504
00:30:37.430 --> 00:30:39.970
amending the budget control act every two years until its
505
00:30:40.170 --> 00:30:44.250
10th year of expiration. And they let the automatic trigger
506
00:30:44.269 --> 00:30:48.990
known as sequestration in 2013. That was considered the, we're
507
00:30:49.009 --> 00:30:51.390
going to take the hostage and put the gun to
508
00:30:51.430 --> 00:30:55.190
the head. And the gun was the uniformed military So
509
00:30:55.210 --> 00:30:56.930
everyone said, of course, we'll never do this. And then
510
00:30:56.970 --> 00:31:00.769
what did Congress do? It shot the hostage and let
511
00:31:00.789 --> 00:31:03.619
sequestration happen, even though it was busy also amending the
512
00:31:03.630 --> 00:31:06.160
Budget Control Act at the same time to blunt the
513
00:31:06.220 --> 00:31:10.599
impact on the Defense Department in particular. So the Pentagon
514
00:31:10.640 --> 00:31:14.240
ended up in this awful state of stasis and muddle through.
515
00:31:15.099 --> 00:31:19.180
And I can draw pretty clear lines. If I were
516
00:31:19.220 --> 00:31:21.240
a lawyer, I wouldn't say this term, but I'm not.
517
00:31:21.819 --> 00:31:26.900
Almost near causal. lines from budget control act sequestration and
518
00:31:26.960 --> 00:31:29.569
avoidable preventable deaths that we saw when the mccain and
519
00:31:29.609 --> 00:31:34.289
fitzgerald ships collided in the pacific in 2017 readiness funds
520
00:31:34.329 --> 00:31:38.710
had been reduced so dramatically uh crews were cut everything
521
00:31:38.730 --> 00:31:42.970
in the department the peanut butter spread hit everything and
522
00:31:43.069 --> 00:31:47.680
so i i remind everybody about sequestration because congress didn't
523
00:31:47.859 --> 00:31:52.930
stop it so i i'm And now we lived, even
524
00:31:52.950 --> 00:31:55.829
to this day, and partly the $ 350 billion request is
525
00:31:55.869 --> 00:31:59.890
because of the Budget Control Act as well. And this
526
00:32:00.049 --> 00:32:02.690
feast-famine cycle doesn't work for defense.
527
00:32:02.819 --> 00:32:06.660
It's just you can't build. Donald Trump's Navy was built
528
00:32:06.680 --> 00:32:07.460
by Ronald Reagan.
529
00:32:08.019 --> 00:32:12.559
It takes that long to create these systems and to
530
00:32:12.759 --> 00:32:16.230
the leaders and the combat experience and all of the
531
00:32:16.349 --> 00:32:19.559
training and schoolhouse and time and education and Change of
532
00:32:19.599 --> 00:32:22.269
duty station to get the Navy Trump can use today.
533
00:32:23.650 --> 00:32:25.450
And so anyway, I just I wonder.
534
00:32:25.269 --> 00:32:29.589
Your thoughts on the possibility of a grand bargain, which
535
00:32:29.690 --> 00:32:32.359
seems to me the only way to address defense in
536
00:32:32.380 --> 00:32:38.819
a more healthy, rational, reasonable and long term way that where,
537
00:32:38.859 --> 00:32:39.519
you know, it's.
538
00:32:39.440 --> 00:32:42.980
We all jump off the cliff together. Grandma, veterans and
539
00:32:43.140 --> 00:32:44.029
everyone in between.
540
00:32:44.049 --> 00:32:48.509
Yeah, no, you bring up. Such a great point here.
541
00:32:48.529 --> 00:32:51.750
There are so many concerns that I have with the BCA.
542
00:32:53.509 --> 00:32:55.369
I almost don't even know where to start because there's
543
00:32:55.430 --> 00:32:57.910
so many things. I'm like, yeah, let's get it. I
544
00:33:00.500 --> 00:33:03.240
guess where I'll start is at the beginning. The Budget
545
00:33:03.259 --> 00:33:07.660
Control Act, and in fact, all of our federal spending decisions,
546
00:33:07.819 --> 00:33:14.109
defense and otherwise, are predicated on the congressional budget process
547
00:33:14.130 --> 00:33:17.299
that was put in place by the Congressional Budget Act
548
00:33:17.380 --> 00:33:23.240
in 1974. We don't live in a 1974 environment. We
549
00:33:23.259 --> 00:33:28.019
shouldn't be budgeting like it's a 1974 environment. And I
550
00:33:28.039 --> 00:33:31.099
think that is really at the heart of so many
551
00:33:31.119 --> 00:33:34.740
of the problems that we're encountering right now. We're constantly
552
00:33:35.089 --> 00:33:40.710
treating this as though Congress is failing to do its job.
553
00:33:40.769 --> 00:33:43.829
Congress is failing to pass a budget on time. Congress
554
00:33:43.869 --> 00:33:47.970
is failing to appropriate on time. etc. I'm not saying
555
00:33:48.289 --> 00:33:50.470
that they're not failing to meet the mark. What I'm
556
00:33:50.539 --> 00:33:54.819
saying is, if they are doing it so consistently, then
557
00:33:54.880 --> 00:34:00.039
perhaps the process by which we're expecting Congress to make
558
00:34:00.079 --> 00:34:04.480
these decisions is so fundamentally out of date that we
559
00:34:04.519 --> 00:34:07.670
need to reevaluate it. Stop trying to fix the budget process,
560
00:34:07.910 --> 00:34:11.420
break it entirely, and build it over from the ground up.
561
00:34:12.070 --> 00:34:16.510
The entire budget process is built around a series of
562
00:34:16.610 --> 00:34:20.750
steps that starts with the president's budget request. And that's
563
00:34:20.769 --> 00:34:21.090
what it is.
564
00:34:21.150 --> 00:34:21.909
It's a request.
565
00:34:21.969 --> 00:34:25.110
It's just a wish list to Santa Claus. And it
566
00:34:25.429 --> 00:34:30.909
ends with appropriations theoretically being enacted. And then the whole
567
00:34:30.969 --> 00:34:34.019
cycle starts over. Well, we've already talked about the fact
568
00:34:34.039 --> 00:34:38.820
that appropriations are only 25% of the federal budget. That's crazy.
569
00:34:39.099 --> 00:34:42.969
Defense is just about half of that. So if you
570
00:34:43.050 --> 00:34:48.260
want defense spending to really be considered appropriately, it needs
571
00:34:48.300 --> 00:34:52.320
to be considered within a more holistic view. And that
572
00:34:52.360 --> 00:34:56.480
means not only offsets, but making it clear to Congress
573
00:34:56.539 --> 00:35:00.849
where the money is going. They're bickering annually over whether
574
00:35:00.909 --> 00:35:07.420
or not defense appropriations are sufficient, necessary, timely. etc. Well,
575
00:35:07.440 --> 00:35:10.840
they're bickering over such a small part of the pie
576
00:35:10.920 --> 00:35:14.880
that is truly necessary. I mean, it's constitutional, right, to
577
00:35:14.920 --> 00:35:19.929
provide for the common defense. But they're simultaneously ignoring the
578
00:35:20.010 --> 00:35:22.809
main drivers of the debt and deficit that don't ever
579
00:35:22.949 --> 00:35:25.949
really get reviewed on an annual basis because of the
580
00:35:25.989 --> 00:35:29.389
process that was set up in 1974. So if we
581
00:35:29.409 --> 00:35:34.099
want to avoid unnecessary deaths like the tragedy you mentioned
582
00:35:34.219 --> 00:35:37.969
for our warfighters, okay, well, we need to be making
583
00:35:38.110 --> 00:35:41.190
sure that every dollar that is being spent by the
584
00:35:41.250 --> 00:35:45.469
federal government is being used in a responsible way. And
585
00:35:45.510 --> 00:35:48.429
we're not just automatically cutting the place that seems like
586
00:35:48.469 --> 00:35:50.760
it's getting the most money. Sure, you want to say
587
00:35:50.800 --> 00:35:54.099
defense gets a lot of money because, and I don't
588
00:35:54.119 --> 00:35:57.320
mean you specifically, Mackenzie, I mean the grand yield, capital yield.
589
00:35:58.480 --> 00:36:02.820
People want to say that defense is getting way more
590
00:36:02.880 --> 00:36:05.280
money than any other part of the budget. That's because
591
00:36:05.300 --> 00:36:09.239
they're only looking at appropriations. Well, you're only looking at
592
00:36:09.239 --> 00:36:13.039
25% of the pie. If you look at the other 75%,
593
00:36:13.039 --> 00:36:18.260
you realize that that's really not the truth. And so
594
00:36:18.280 --> 00:36:22.670
I really believe that it comes down to a full
595
00:36:22.849 --> 00:36:28.429
overhaul of the budget process that considers spending elsewhere in
596
00:36:28.469 --> 00:36:32.110
the budget as part and parcel of any conversation for
597
00:36:32.469 --> 00:36:36.300
any spending. whether that's making sure that defense is fully funded,
598
00:36:36.400 --> 00:36:39.699
appropriately funded, or that things that aren't the priorities of
599
00:36:39.719 --> 00:36:43.679
the American people, dealing with fraud, for example, that those
600
00:36:43.719 --> 00:36:45.380
things are restrained.
601
00:36:46.099 --> 00:36:47.800
Yeah. I mean, if I could burn it all down,
602
00:36:47.960 --> 00:36:50.139
trust me, the budget process, I would.
603
00:36:50.639 --> 00:36:54.489
It's so fundamentally broken to the point where now Jim Mattis,
604
00:36:54.530 --> 00:36:57.809
former Secretary of Defense, said no enemy has done more
605
00:36:57.849 --> 00:37:01.949
damage to the United States military than continuing resolutions these weeks.
606
00:37:02.449 --> 00:37:08.230
When Congress cannot pass its budget on time and the
607
00:37:08.269 --> 00:37:11.389
discretionary accounts lock up under a spending freeze at last
608
00:37:11.409 --> 00:37:14.639
year's levels, that's fine for like HUD and EPA.
609
00:37:14.719 --> 00:37:17.219
No offense to those agencies. I'm sure they do great work.
610
00:37:18.639 --> 00:37:21.579
I don't follow those budgets.
611
00:37:23.179 --> 00:37:26.820
But the Defense Department is unique, not just in its mission,
612
00:37:27.320 --> 00:37:30.699
but its size, as I referenced earlier in my opening remarks.
613
00:37:31.019 --> 00:37:35.659
And it has tens of thousands of linings and these
614
00:37:35.860 --> 00:37:39.440
spending freezes lock in misaligned accounts.
615
00:37:40.000 --> 00:37:40.300
That's right.
616
00:37:40.360 --> 00:37:43.500
It's basically lighting money, taxpayer money in the trash can
617
00:37:43.659 --> 00:37:44.059
on fire.
618
00:37:44.780 --> 00:37:45.500
Oh, it totally is.
619
00:37:45.719 --> 00:37:46.840
Yeah. Go ahead.
620
00:37:47.739 --> 00:37:49.809
No, I'm just, I'm in agreement with you. I mean,
621
00:37:49.829 --> 00:37:51.690
what's the point in even having the J books if
622
00:37:51.730 --> 00:37:55.150
we're not going to look at the line items annually? It's,
623
00:37:55.389 --> 00:38:00.150
it's a completely different type of spending than almost anywhere
624
00:38:00.190 --> 00:38:03.840
else in the federal budget. Um, One thing I'm really
625
00:38:03.920 --> 00:38:12.409
curious about is thinking through the contract length and how
626
00:38:12.469 --> 00:38:16.429
we can better address contract length and making sure that
627
00:38:16.909 --> 00:38:19.829
programs and projects are met on a certain timeline, because
628
00:38:19.849 --> 00:38:21.710
that's part of the biggest challenge I have when I'm
629
00:38:21.849 --> 00:38:27.909
looking at defense budgeting versus budgeting in other sectors. I'm
630
00:38:27.989 --> 00:38:31.969
much more confident in looking at expenditures under entitlements because
631
00:38:31.989 --> 00:38:35.519
we can estimate demographic shifts, we can understand some of
632
00:38:35.559 --> 00:38:38.420
the parameters there. But when it comes to defense, not
633
00:38:38.599 --> 00:38:41.480
only do you have to deal with the, you know,
634
00:38:41.760 --> 00:38:45.309
forever unknowns of is there going to be some unexpected
635
00:38:45.369 --> 00:38:48.550
activity across the world, but you also have to deal
636
00:38:48.590 --> 00:38:51.230
with contracts in a way that's very different from a
637
00:38:51.750 --> 00:38:55.969
lot of the other federal engagements. So how can we
638
00:38:56.260 --> 00:39:00.699
be better at that when we're looking at budgeting? Because really,
639
00:39:00.739 --> 00:39:03.900
if we are trying to find an offset for federal
640
00:39:03.940 --> 00:39:08.179
spending and defense offsetting elsewhere, I need to be able
641
00:39:08.199 --> 00:39:12.940
to understand where the dollars are actually being obligated and
642
00:39:13.219 --> 00:39:14.780
sort of like how that flows out.
643
00:39:17.050 --> 00:39:17.769
Interesting.
644
00:39:17.809 --> 00:39:21.449
My colleague at AEI, Bill Greenwald, he was industrial policy
645
00:39:21.489 --> 00:39:25.429
head at the Pentagon late in the Bush administration. And
646
00:39:25.750 --> 00:39:30.289
he did Senator Services Committee work on these questions for
647
00:39:30.630 --> 00:39:34.489
Senator McCain. And so I often will read his work
648
00:39:34.510 --> 00:39:39.760
to get smarter on exactly that point. So when I
649
00:39:39.780 --> 00:39:45.400
look at the defense budget pie, it basically funds, where
650
00:39:45.420 --> 00:39:47.300
it starts is three separate workforces.
651
00:39:48.329 --> 00:39:51.070
Those in uniform, active duty. Of course, we have Guard
652
00:39:51.090 --> 00:39:51.809
and Reserves.
653
00:39:51.550 --> 00:39:53.949
As well, but depending, you know, their pay is smaller
654
00:39:54.010 --> 00:39:56.329
if we're not in a major war. Then we have
655
00:39:56.349 --> 00:39:59.489
the Army of Bureaucrats, the federal defense civilians. They are
656
00:39:59.530 --> 00:40:01.920
full-time government employees. They may work at a shipyard. They
657
00:40:01.940 --> 00:40:03.920
may work at the Pentagon and everywhere in between.
658
00:40:03.960 --> 00:40:07.539
But there's about, as you know pretty well, I don't know,
659
00:40:07.699 --> 00:40:12.539
in any given year, about 750,000 to 800,000 full-time beds.
660
00:40:13.639 --> 00:40:19.630
And then the defense industrialists, people who provide goods, services, software.
661
00:40:19.650 --> 00:40:22.949
And IT to the Defense Department. And those three workforces
662
00:40:23.550 --> 00:40:26.550
consume well over half the defense budget. Now, obviously, it's
663
00:40:26.610 --> 00:40:29.619
hard to parse that third line and exactly how many.
664
00:40:29.639 --> 00:40:32.059
I mean, there are numbers out there, but, you know,
665
00:40:32.980 --> 00:40:36.380
people are the single largest line item on the balance sheet,
666
00:40:36.420 --> 00:40:39.400
just like most organizations for the Defense Department. And then
667
00:40:39.579 --> 00:40:48.030
after that, you know, antiquated stuff.
668
00:40:49.320 --> 00:40:52.239
That's usually through services, meaning you're, you know, because we're
669
00:40:52.260 --> 00:40:55.880
not buying a lot of new stuff. And then some,
670
00:40:56.320 --> 00:40:58.360
and the smallest fund is for.
671
00:40:58.179 --> 00:41:02.929
Buying new combat power, I guess you could say. And
672
00:41:02.949 --> 00:41:05.510
the contracts are different across, and it matters because as
673
00:41:05.570 --> 00:41:08.409
you know, each account has a different, what we call
674
00:41:08.469 --> 00:41:12.170
color of money, a different spend rate, a burn rate,
675
00:41:12.250 --> 00:41:12.730
if you will.
676
00:41:12.750 --> 00:41:14.590
You know, you have to spend it in one year
677
00:41:14.789 --> 00:41:16.980
or three or five So at.
678
00:41:16.960 --> 00:41:22.360
Any given moment right now, the Navy, it's executing, for example,
679
00:41:22.639 --> 00:41:27.030
submarine and new ship construction contracts from 2017 and 2018
680
00:41:27.030 --> 00:41:31.530
and 2019. It's 2026 calendar year, it's 2027 budget year,
681
00:41:31.570 --> 00:41:34.550
and they're building their 28 budget as you know right now.
682
00:41:35.210 --> 00:41:37.769
It's hard to keep up with all of that.
683
00:41:38.309 --> 00:41:39.869
And then you do that every single year.
684
00:41:40.610 --> 00:41:43.570
So you can see why the Washington's focus on acquisition
685
00:41:43.610 --> 00:41:44.110
reform is.
686
00:41:44.090 --> 00:41:45.710
A never ending hobby.
687
00:41:46.320 --> 00:41:51.119
A favorite hobby of Washington, and a.
688
00:41:51.099 --> 00:41:53.340
Look at contracting in particular.
689
00:41:53.360 --> 00:41:55.809
It's not a great answer, but I'll kind of conclude
690
00:41:55.849 --> 00:41:59.010
by saying what I do know about the contracting challenges
691
00:41:59.949 --> 00:42:03.929
is that this is a finicky customer, doesn't buy a lot,
692
00:42:04.150 --> 00:42:07.110
buys mostly bespoke things that there's not a good commercial
693
00:42:07.159 --> 00:42:09.719
derivative for, so therefore companies aren't attracted to this.
694
00:42:10.619 --> 00:42:12.280
They cancel their orders constantly.
695
00:42:13.059 --> 00:42:15.500
Washington doesn't want to spend the extra money for competition
696
00:42:15.519 --> 00:42:21.280
because Pentagon is a monogamistic buyer. And so what happens
697
00:42:21.550 --> 00:42:25.559
is you get what the outcome I called, I jokingly
698
00:42:25.579 --> 00:42:28.880
called our primes as public utilities. And it's hard to
699
00:42:28.920 --> 00:42:35.300
attract new innovative companies and business processes. The out has
700
00:42:35.360 --> 00:42:38.639
been for the last couple of years when Putin invaded
701
00:42:38.739 --> 00:42:42.159
Ukraine and then the army was, our army was supporting
702
00:42:42.380 --> 00:42:44.409
Israel after October 7th and still is.
703
00:42:45.929 --> 00:42:47.650
Multi-year procurement authorities.
704
00:42:47.750 --> 00:42:52.329
Contracts over not just one year, but basically giving industry
705
00:42:52.369 --> 00:42:55.659
this five to seven year stability. We've done it for
706
00:42:55.719 --> 00:42:59.079
years with ships, occasionally with aircraft. But for the first time,
707
00:42:59.099 --> 00:43:04.059
the Defense Department has asked for munitions. I'd argue they
708
00:43:04.079 --> 00:43:08.050
need to do this for military instruction as well as
709
00:43:08.489 --> 00:43:13.019
facilities and sustainment. Why is everyone moving, last point, why
710
00:43:13.199 --> 00:43:19.219
is the Defense Department continuously begging for more multi-year contract authority?
711
00:43:19.619 --> 00:43:23.179
Because Congress is broken. Congress hates multi-year because you're tying
712
00:43:23.199 --> 00:43:25.670
the hands of a future Congress, right? Presumably you're locking
713
00:43:25.710 --> 00:43:27.829
down funds before those people are even elected.
714
00:43:28.429 --> 00:43:31.690
But the reason everybody rationally wants that is because Congress
715
00:43:31.730 --> 00:43:33.530
has stopped working and stopped.
716
00:43:33.289 --> 00:43:34.929
Providing defense budgets on time.
717
00:43:35.639 --> 00:43:39.530
Which, as we already went over, uniquely harms this agency,
718
00:43:39.800 --> 00:43:40.789
unlike any.
719
00:43:40.750 --> 00:43:46.349
Other federal agency. Most other federal agencies are just paying people. So, sorry,
720
00:43:46.590 --> 00:43:47.170
off my rant.
721
00:43:48.610 --> 00:43:50.610
Hey, I'm with you on this. I think that we
722
00:43:50.690 --> 00:43:56.300
really have a unique moment in our fiscal stresses for
723
00:43:56.340 --> 00:43:58.400
the nation where we could not only fix part of
724
00:43:58.440 --> 00:44:02.079
the budget process, but fix defense spending at the same time.
725
00:44:03.159 --> 00:44:05.070
I agree with you on all of this.
726
00:44:05.190 --> 00:44:09.010
I know that's perhaps not what Henry wants when we're
727
00:44:09.070 --> 00:44:12.530
having a conversation from two opposing sides, but I think
728
00:44:12.550 --> 00:44:16.250
that there's a solution to be had here that prioritizes
729
00:44:16.300 --> 00:44:20.940
defense spending where it needs to be prioritized and deprioritizes
730
00:44:21.039 --> 00:44:22.380
failures across.
731
00:44:22.019 --> 00:44:26.840
The federal budget. And to me, a key component of
732
00:44:26.880 --> 00:44:31.199
that is making sure that every defense dollar is actually
733
00:44:31.280 --> 00:44:34.760
being used to the right value of that dollar when
734
00:44:34.800 --> 00:44:38.039
it's approved, which requires dealing with inflation and that comes
735
00:44:38.059 --> 00:44:38.619
through offsets.
736
00:44:39.219 --> 00:44:41.239
I guess I just want to jump in since you
737
00:44:41.260 --> 00:44:44.969
do seem to have a lot of overlap. But the
738
00:44:45.010 --> 00:44:48.489
question I would say is if both of you are
739
00:44:48.550 --> 00:44:53.269
a senator and there is a proposal to spend the
740
00:44:53.269 --> 00:44:57.869
$ 350 billion without pay for, how would you vote and why?
741
00:44:58.789 --> 00:45:01.070
I would vote against it. And I would hate voting
742
00:45:01.130 --> 00:45:05.050
against it. I'm a military spouse. I certainly don't want
743
00:45:05.090 --> 00:45:12.710
my husband going off to war feeling underfunded, under-resourced, under-armed.
744
00:45:12.989 --> 00:45:17.070
That's the last thing I want. But at the same time,
745
00:45:17.090 --> 00:45:20.699
I don't want to be in a position where in
746
00:45:20.739 --> 00:45:24.139
a year or two years from now, he has no
747
00:45:24.179 --> 00:45:27.820
funding and no resources and no arms. So I would
748
00:45:27.840 --> 00:45:30.800
vote against it. I would use my vote as a
749
00:45:30.840 --> 00:45:34.860
way to say I'm for defense spending where it makes sense.
750
00:45:35.760 --> 00:45:38.360
The condition there is that there's no magic money tree
751
00:45:38.380 --> 00:45:40.860
in the basement of the Capitol. And that means you
752
00:45:40.880 --> 00:45:43.239
have to stop spending somewhere else. And I would probably
753
00:45:43.280 --> 00:45:46.429
go to the floor and be a real pain to
754
00:45:46.469 --> 00:45:51.150
leadership and offer amendment after amendment after amendment after amendment.
755
00:45:51.739 --> 00:45:54.380
offering suggestions for offsets. And I would force a vote
756
00:45:54.500 --> 00:45:57.340
on every single one of those, particularly because this is
757
00:45:57.380 --> 00:46:00.699
being done through the budget reconciliation process, which is where
758
00:46:00.719 --> 00:46:04.780
you're supposed to reconcile federal spending to the budget of
759
00:46:04.840 --> 00:46:05.940
what we have available.
760
00:46:05.960 --> 00:46:11.380
And so I can't wait for Senator Madney's amendments in Votorama.
761
00:46:11.440 --> 00:46:13.489
It's 2.30 in the morning and we're voting to cut
762
00:46:13.590 --> 00:46:17.590
sleep apnea payments for disability, veterans disability, which according to
763
00:46:17.630 --> 00:46:21.210
the Washington Post is a real thing. So Mackenzie, Senator Eaglin,
764
00:46:22.519 --> 00:46:27.679
your vote on the $ 350 billion reconciliation with no pay-fors,
765
00:46:27.840 --> 00:46:29.610
it's all deficit?
766
00:46:30.530 --> 00:46:32.889
Yeah, that would be an easy yes for me.
767
00:46:33.010 --> 00:46:35.949
Not because I don't want to arrest the debt and
768
00:46:36.010 --> 00:46:37.670
reduce it, obviously.
769
00:46:37.829 --> 00:46:39.190
It's common for everybody.
770
00:46:39.309 --> 00:46:42.630
That's the debt challenges and the inflation as we've kind
771
00:46:42.670 --> 00:46:45.829
of gone over here. But being a rational politician that
772
00:46:45.889 --> 00:46:50.449
I am in this case, this hypothetical, thank goodness I'm not, uh,
773
00:46:50.980 --> 00:46:53.039
My point is, hey, the train's leaving.
774
00:46:53.059 --> 00:46:55.179
The gravy train is leaving the station, so I'm going
775
00:46:55.199 --> 00:46:57.380
to get my priorities on it.
776
00:46:58.800 --> 00:47:01.900
But I would give a series of thoughtful and serious one-minutes, Henry,
777
00:47:02.219 --> 00:47:07.010
to my colleagues and explain to them how they are contributing.
778
00:47:06.510 --> 00:47:09.989
To the need to have this $ 350 billion in the
779
00:47:10.030 --> 00:47:10.570
first place.
780
00:47:11.389 --> 00:47:15.230
And I would rail against continuing resolutions and Congress's inability
781
00:47:15.250 --> 00:47:21.559
to solve big, hard problems. with bipartisan solutions. And I
782
00:47:21.599 --> 00:47:26.789
would explain that the Pac-Man that's eating the defense budget
783
00:47:26.869 --> 00:47:31.070
lunch are the big three entitlements known as Social Security, Medicare,
784
00:47:31.090 --> 00:47:33.630
and Medicaid. And then I would probably link arms with
785
00:47:33.670 --> 00:47:37.070
my colleague Senator Brittany here and say, well, he and
786
00:47:37.130 --> 00:47:39.070
I both know we're not going to get a penny
787
00:47:39.090 --> 00:47:42.769
of Social Security. The odds seem pretty high. What's funny
788
00:47:42.889 --> 00:47:45.989
is it's the septuagenarians who can't seem to have this conversation.
789
00:47:46.070 --> 00:47:48.590
It's not the young people who are unwilling to have
790
00:47:48.650 --> 00:47:54.719
the difficult conversations. We're all put on our thoughtful hats
791
00:47:54.820 --> 00:47:56.079
and we can work this out.
792
00:47:56.119 --> 00:47:57.679
And I think we can get there because isn't it
793
00:47:57.699 --> 00:47:58.139
better to.
794
00:47:58.099 --> 00:48:04.500
Have the solution before we break glass in case of emergency?
795
00:48:04.519 --> 00:48:06.199
Because that's basically what's going to happen.
796
00:48:07.099 --> 00:48:10.039
And when Washington breaks glass in an emergency, they come
797
00:48:10.079 --> 00:48:17.820
up with awful, truly awful solutions. So like 9-11, ODNI, TSA, DHS.
798
00:48:18.079 --> 00:48:22.239
I'm sorry, I'm going on a three-level agency rant. If
799
00:48:22.300 --> 00:48:24.329
we could all go back in time, I don't think
800
00:48:24.550 --> 00:48:27.130
any voter would pick that we would create any of
801
00:48:27.190 --> 00:48:30.389
those three or recreate them as they exist today.
802
00:48:30.630 --> 00:48:32.070
So I'm very worried about.
803
00:48:32.929 --> 00:48:36.679
The terrible choices we'll make after we scramble when the
804
00:48:36.719 --> 00:48:40.739
markets or somebody forces this upon us, but I'm still
805
00:48:40.760 --> 00:48:43.619
going to definitely vote for my 350 because that's what
806
00:48:43.659 --> 00:48:45.699
politicians do.
807
00:48:45.699 --> 00:48:48.539
I just, I want to ask one last question for
808
00:48:48.599 --> 00:48:50.119
each of you, which is, it sounds to me that
809
00:48:50.159 --> 00:48:52.059
you're very similar in what you would like to do
810
00:48:52.119 --> 00:48:55.639
in the ideal sense, but that for McKenzie, the current
811
00:48:55.679 --> 00:49:00.010
situation with the national defense budget and our war fate
812
00:49:00.030 --> 00:49:03.449
and capability is too important to ignore. And for you, Brittany,
813
00:49:03.809 --> 00:49:07.070
the current crisis with the debt and the mounting federal
814
00:49:07.110 --> 00:49:11.480
deficit and federal debt is too important to ignore. That's
815
00:49:11.559 --> 00:49:15.070
a sense that both of you agree on what should happen,
816
00:49:15.119 --> 00:49:18.530
but disagree on which of the crises are more important.
817
00:49:18.889 --> 00:49:19.969
Could you just respond to that?
818
00:49:20.929 --> 00:49:25.039
Sure. I'll go first to let Mackenzie have the last
819
00:49:25.099 --> 00:49:29.980
word here. I would say that both of these crises
820
00:49:30.400 --> 00:49:33.550
are too important to ignore. I don't think it's reasonable
821
00:49:33.610 --> 00:49:38.199
to pick one over the other. Now, the reason that
822
00:49:38.599 --> 00:49:40.820
I would, you have to prioritize, you have to put
823
00:49:40.840 --> 00:49:45.000
things in order. The reason I would first deal with
824
00:49:45.039 --> 00:49:50.070
the debt is because dealing with the debt enables you
825
00:49:50.150 --> 00:49:54.829
to better deal with the defense needs. It's not necessarily
826
00:49:54.889 --> 00:49:58.289
that I think having a better debt picture, better fiscal
827
00:49:58.329 --> 00:50:01.550
picture for our country is more important than having a
828
00:50:01.650 --> 00:50:05.969
strong and stable military picture. It's that I think having
829
00:50:06.010 --> 00:50:10.030
a better fiscal scenario enables a stronger military.
830
00:50:10.050 --> 00:50:11.550
And Mackenzie.
831
00:50:12.789 --> 00:50:14.309
Yeah, you can't, amen to that.
832
00:50:14.329 --> 00:50:17.690
You can't divorce the need for, to spend what we must,
833
00:50:17.849 --> 00:50:21.699
whatever that amount is on defense and not have pro-growth
834
00:50:21.760 --> 00:50:26.659
economic policy. Otherwise everybody suffers, all the priorities of the
835
00:50:26.719 --> 00:50:31.599
nation suffer. And unfortunately, you know, that's not where we're at.
836
00:50:31.719 --> 00:50:36.199
So- The challenge for me, of course, is that terrible
837
00:50:36.239 --> 00:50:38.500
line that's so true, which is the enemy gets a vote.
838
00:50:38.920 --> 00:50:43.840
And the US Strategic Command commander recently said, there's no
839
00:50:43.880 --> 00:50:47.380
such thing as a regional conflict anymore. We didn't name
840
00:50:47.599 --> 00:50:50.739
World War II. We didn't call it that until it
841
00:50:50.760 --> 00:50:54.239
was years into it. And I'm worried that's kind of
842
00:50:55.039 --> 00:50:58.559
where we are right now with Iran. It's now a
843
00:50:58.719 --> 00:51:02.980
Gulf-wide challenge. The Houthis in Yemen are involved. I mentioned
844
00:51:03.000 --> 00:51:07.889
the two choke points are shut down. There are many
845
00:51:08.070 --> 00:51:13.909
competing and growing challenges within this one giant regional mess.
846
00:51:15.429 --> 00:51:20.199
And Russia and China are supporting Iran through AI and
847
00:51:20.320 --> 00:51:24.139
secrets by satellite. And North Korea is sending troops to
848
00:51:24.219 --> 00:51:30.289
Putin to die in Ukraine. The global chessboard is terrifying.
849
00:51:30.369 --> 00:51:31.309
I've never actually.
850
00:51:32.739 --> 00:51:36.659
Been worried about so many things at once so it's
851
00:51:36.699 --> 00:51:38.320
like you're going to pay me a dollar today or
852
00:51:38.380 --> 00:51:41.559
you're going to pay me five tomorrow and no matter
853
00:51:41.619 --> 00:51:43.400
what we're going to be paying this defense bill so
854
00:51:43.739 --> 00:51:45.500
I'd rather get in front of it to the extent
855
00:51:45.539 --> 00:51:48.079
we can and last point and so even if that
856
00:51:48.119 --> 00:51:51.880
meant spending it before you fix the other structural fiscal
857
00:51:51.920 --> 00:51:55.559
problems the one thing I think Beijing cares about well
858
00:51:56.239 --> 00:51:58.500
there's only a couple that really concern them about our
859
00:51:58.539 --> 00:52:03.420
military Increasingly, they've caught up technologically, training, they've stolen a
860
00:52:03.440 --> 00:52:04.280
lot of it too, of course.
861
00:52:05.000 --> 00:52:08.539
But they do worry about our nimble industrial base. They
862
00:52:08.559 --> 00:52:09.739
get concerned about.
863
00:52:11.519 --> 00:52:15.059
Our ability to, because we have access to capital markets,
864
00:52:15.099 --> 00:52:20.230
we have a patent system, we have leading edge, world-class
865
00:52:20.469 --> 00:52:23.789
innovation here in the US. If we don't spend this,
866
00:52:23.929 --> 00:52:28.550
then I think we're gonna take something unnecessarily off Xi's
867
00:52:28.630 --> 00:52:31.559
worry card And that makes things potentially even worse.
868
00:52:33.320 --> 00:52:35.739
Well, thank you. We'll now turn to the closing statements.
869
00:52:35.800 --> 00:52:39.980
We go in reverse order as we then originally. So
870
00:52:40.000 --> 00:52:42.340
that means, Brittany, you have two minutes and we will
871
00:52:42.360 --> 00:52:45.530
close with Mackenzie's final two. Brittany, you're up.
872
00:52:46.389 --> 00:52:48.639
I don't know that I even need the full two minutes.
873
00:52:48.849 --> 00:52:52.989
I'll just summarize by saying if everything's a priority, nothing's
874
00:52:53.030 --> 00:52:56.840
a priority. The best way to respect the taxpayers and
875
00:52:56.880 --> 00:53:00.940
respect soldiers, sailors, and airmen at the same time is
876
00:53:01.019 --> 00:53:04.679
by ensuring our funding is going where it needs to
877
00:53:04.719 --> 00:53:10.989
go for necessary operations, that resources are available. The way
878
00:53:11.050 --> 00:53:15.570
you do that is by finding ways to pay your bills.
879
00:53:16.309 --> 00:53:18.949
You can't pay for something if you are continuing to
880
00:53:19.070 --> 00:53:22.250
deficit spend money. left, right, and center on things that
881
00:53:22.349 --> 00:53:25.269
aren't the priority of the American people. We should be
882
00:53:25.289 --> 00:53:30.849
tamping down on things like Medicaid fraud, food stamp fraud,
883
00:53:32.010 --> 00:53:38.469
reining in unnecessary growth in Medicare and Social Security, among
884
00:53:38.510 --> 00:53:42.739
a plethora of other areas of the federal budget outside
885
00:53:42.760 --> 00:53:46.639
of the Pentagon that need massive reform. If we do
886
00:53:46.659 --> 00:53:51.030
those things, then we'll be able to effectively support our
887
00:53:51.090 --> 00:53:55.670
defense priorities and our defense needs without adding not only
888
00:53:55.670 --> 00:54:00.179
$ 350 billion, but another $ 150 on top of that to
889
00:54:00.440 --> 00:54:01.760
our net interest costs.
890
00:54:03.340 --> 00:54:06.079
Thank you, Brittany. Mackenzie, your word.
891
00:54:07.360 --> 00:54:08.860
I tell my kids, you know, if you can have
892
00:54:08.900 --> 00:54:12.110
that difficult conversations with other humans, you'll be ahead of
893
00:54:12.110 --> 00:54:13.750
99% of your peers.
894
00:54:13.889 --> 00:54:15.769
And I think that's where we are nationally. We need
895
00:54:15.789 --> 00:54:17.429
to have the difficult conversations.
896
00:54:18.110 --> 00:54:23.039
About all of this and how we're all paying front door,
897
00:54:23.079 --> 00:54:25.900
side door, back door. The bills are here. The chickens
898
00:54:25.960 --> 00:54:30.340
are roosting. Pick out your favorite metaphor. It's time to
899
00:54:30.440 --> 00:54:36.530
address our drunken sailor spending problem. But in the pursuit
900
00:54:36.550 --> 00:54:41.860
of life, liberty, and happiness, the foundational need there, of course,
901
00:54:41.909 --> 00:54:45.780
is safety. and security, and you can underfund it, but
902
00:54:45.820 --> 00:54:47.880
you'll wind up paying more than you would have if
903
00:54:47.920 --> 00:54:52.889
you just funded it adequately in the first place. Unfortunately,
904
00:54:53.489 --> 00:54:57.369
that is a phenomenal trend that we've seen nationally or
905
00:54:57.409 --> 00:55:00.809
had to relearn more often than I would like. So
906
00:55:00.849 --> 00:55:03.739
let's just not relearn it this time. Let's spend what's
907
00:55:03.800 --> 00:55:06.179
necessary and then do what's required.
908
00:55:07.059 --> 00:55:07.539
To pay for it.
909
00:55:09.429 --> 00:55:12.519
Well, thank you, Mackenzie. Thank you, Brittany. And thank you, listeners.
910
00:55:13.119 --> 00:55:15.940
Join me, Henry Olson, again in two weeks for another
911
00:55:16.000 --> 00:55:20.760
episode of Conservative Crossroads, where we'll tackle the important issue
912
00:55:21.030 --> 00:55:22.309
of data centers.
913
00:55:22.769 --> 00:55:24.309
Until then, take care.