The following is a re-post of an opinion piece by Tom Schatz from Citizens Against Government Waste. It is not meant to be a representation of MDAA’s opinion, but is merely part of the entire missile defense picture.
Republicans campaigned in 2010 to reduce the deficit by cutting spending. They promised to cut $100 billion in non-defense discretionary spending in the first fiscal year.
But defense covers nearly two-thirds of all discretionary spending. While the Republicans’ initial plan excluded defense, the fiscal year 2012 budget approved by the House in April agreed with Defense Secretary Robert Gates’ plan to locate $178 billion in savings through fiscal year 2016; $100 billion would be reinvested in defense and $78 billion cut outright.
Much more could be done, however. One possible cut is the Medium Extended Air Defense System, a collaborative transatlantic missile defense project. It was created in 1995 to replace the Patriot Missile system, used successfully by the United States and its allies for decades.
The international agreement required Washington to pony up 58 percent of the development costs, with Germany covering 25 percent and Italy 17 percent. The U.S. has already spent $1.9 billion on design and development, but the MEADS program has been plagued with total program cost overruns of $2 billion. It is now 10 years behind schedule.
Unfortunately for taxpayers, there are many other costs involved. Completing the research and development phase would require an additional $2.8 billion. Barring any further setbacks or cost overruns, the finished product could come to $13.7 billion. That means $16.5 billion in costs remain to complete the MEADS program.
However, an internal U.S. Army memo, as The Washington Post reported last March , stated that the program “will not meet U.S. requirements or address the current and emerging threat without extensive and costly modifications.” Translation: It’s sure to cost a lot more than $16.5 billion.
That should not be surprising, considering that a March 2009 Government Accountability Office study of 96 major defense acquisition programs showed that they had an average research and development cost overrun of 42 percent, and were delayed an average of 22 months.
The Army wanted MEADS cancelled in March 2010, but the Pentagon has been reluctant to scrap it because unilateral withdrawal would mean termination fees of between $550 million and $1 billion.
However, U.S. partners on the program have signaled their displeasure. The Merkel administration in Germany is now under intense pressure to withdraw, and the Italian government has also signaled its desire to end its involvement. The three allies may be able collectively to negotiate an end to MEADS, resulting in savings for each country, including hundreds of millions for Washington.
The issue has gained traction recently on Capitol Hill. During a Senate Armed Services Committee hearing on March 29, Sen. Mark Begich (D-Alaska) advised Pentagon officials that the U.S. should “cut our losses and move on.” In addition, a March Congressional Budget Office report recommended terminating MEADS in favor of continuing production of the Patriot Missile System, a proven and less costly alternative.
The GAO, in its 2011 annual report on DOD weapons programs, noted problems with MEADS, including that it “is at risk of not meeting several technical performance measures.”
President Barack Obama’s 2012 budget funds the design and development phase of MEADS through 2013, at $804 million. However, there does not seem to be much wisdom in spending that money on a weapons system that the DOD says it has no intention of using.
The most reasonable use of scarce defense dollars would be to drop MEADS and instead modernize the Patriot Missile system, potentially with cannibalized MEADS technology, at far less cost.
The time is ripe for stronger fiscal responsibility. Riding such sentiment, GOP leaders came to office with a mandate to trim wasteful spending. While considering wider budget cuts, Congress should take a harder look at defense spending – starting with MEADS.
Tom Schatz is the president of Citizens Against Government Waste, a nonpartisan, nonprofit organization seeking to eliminate waste, fraud and mismanagement in government.