Financial Mismanagement at the Pentagon

President Joe Biden and the 117th US Congress have taken office at a precipitous moment in American history. The worst pandemic in a century, accompanied by an unprecedented economic crisis, has spurred the federal government into action. With the passage of the $1.9 trillion American Rescue Plan, total pandemic relief spending will equal 27.1% of US GDP, a staggering sum. On the foreign policy front, intensified competition with near-peer nations such as Russia and China has opened a furious debate within policy making circles over proper American military posture as well as how to balance defense spending with other domestic and foreign policy priorities—including pandemic relief.

The Pentagon is the US government’s largest discretionary investment. Defense spending has increased in recent years from $513 billion in 2009 to $730 billion in 2019, when it represented over 53% of federal discretionary spending. Debates over the bloated defense budget often center on overarching questions regarding America’s overall military goals—the costly “forever wars” in Iraq and Afghanistan, the merits of a confrontational approach in the South China Sea, and the value of a sprawling military deployed over hundreds of bases worldwide. However, these discussions rest on the assumption that policymakers have access to unambiguous information about where tax dollars appropriated for military use actually end up and can make adjustments accordingly.

​The Pentagon’s accounting and financial bookkeeping are famously inscrutable, making it extremely difficult for policymakers to accurately keep track of military readiness and inventory. Therefore, it is a challenge to ensure that appropriations are being used for their intended purposes. 

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