Mr. Gates knows well that America won’t balance its budget by squeezing the Pentagon. “If you cut the defense budget by 10%, which would be catastrophic in terms of force structure, that’s $55 billion out of a $1.4 trillion deficit,” he told the Journal’s CEO Council conference last November. “We are not the problem.”
So what is? Mr. Gates acknowledged it only in passing this week, but the reality is that the entitlement state is crowding out national defense. Over two decades ago, liberal historian Paul Kennedy claimed that “imperial overstretch” had brought first the Romans, then the British and now Americans down to size. He was wrong then, but what’s really happening now is “entitlement overstretch,” to quote military analyst Andrew Krepinevich.
The American entitlement state was born with the New Deal, got fat with the Great Society of the 1960s and hit another growth spurt in the first two years of the Obama era. The big three entitlements—Social Security, Medicaid and Medicare, plus other retirement and disability expenses—accounted for 4.9% of GDP by 1970, eclipsed defense spending in 1976 and stood at 9.8% as of last year. Under current projections, entitlements will eat up 10.8% of GDP by 2020, while defense spending goes down to 2.7%. On current trends, those entitlements will consume all tax revenues by 2052, estimates Mackenzie Eaglen of the Heritage Foundation.