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Trump’s budget more than doubles OCO war-fighting slush fund and proposes cutting social safety net by 9% at a time when White House rhetoric against Iran is heating up and Netanyahu, Mohammed bin Salman, and Trump all face corruption charges and challenges at home – Col. Wilkerson with Paul Jay

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PAUL JAY: Welcome to The Real News Network. I’m Paul Jay.

President Trump presented his 2020 budget on Monday. It’s titled ‘A Budget for a Better America: Promises Kept. Taxpayers First.’ And we know which taxpayers Donald Trump considers first, when you look at his last budget and tax cuts. This budget includes nearly a 5 percent increase over fiscal year 2019 in military spending, and a 9 percent cut in non-military spending. What’s that mean? Cuts in the Departments of Education, Health, and Human Services; the Interior and State.
The details of the military spending increases are not known yet, but we do have general ideas based on what’s been released.For example, the Overseas Contingency Operations account, OCO. Now, that sounds like some crazy technical term that everyone glosses over when you read it in the newspaper, but it’s worth paying attention to. Overseas Contingency Operations account, OCO. This account is not subject to mandatory congressional spending limits, and it’s set to more than double to $165 billion. Let’s do that again. It was $69 billion, and now it’s going to $165 billion. That’s an account that was meant to pay for war. The Iraq war, the Afghan war. So why is it going up by more than double?

$2.6 billion are included in this budget for developing new hypersonic weapons. Meanwhile, the Air Force plans to purchase more F-15s and F-35 fighter jets. The Navy plans to retire the USS Harry Truman aircraft carrier in exchange for buying two new Gerald Ford aircraft carriers. Now, those things were budgeted at about $10 [billion] or $11 billion. They’re coming in at about $13 [billion] or $14 billion. Now, Trump didn’t come up with the purchase of these Ford-class aircraft carriers, but they’re continuing to have to pay for them. But it’s not just two. Over the next few years the plan is for close to a dozen of these aircraft carriers–again, at somewhere around $13 [billion] or $14 billion apiece.

Joining me to take a closer look at Trump’s defense budget is Colonel Lawrence Wilkerson. Larry is a retired U.S. Colonel and former chief of staff to Secretary of State Colin Powell. He’s now a distinguished professor at the College of William and Mary. And thanks for joining us, Larry.

LARRY WILKERSON: Good to be with you, Paul.

PAUL JAY: So, over the next while we can talk about various parts of this budget, but let’s start with sort of the thing that leaps out, and this tremendous increase in the OCO. Now, if I understand the OCO, this was an account to fight wars with. It helped fund the Iraq war, helped fund the Afghan war. What do you make of this enormous increase?

LARRY WILKERSON: I see it as an attempt to avoid the appropriations process, just as you pointed out when you defined Overseas Contingency Operations funding. That’s what it was put in there for in the very beginning, in my administration. Yes, ostensibly, for war fighting. And it was for war fighting. But ultimately now it’s not just for war fighting. In fact, it probably isn’t for war fighting, primarily. It’s for getting money that isn’t under the guidelines and appropriation process. A slush fund, in other words. The more you get, the better you feel.

PAUL JAY: Is it also possible that this is because they expect to be doing a lot more war fighting? Trump and Bolton and his crew around him, Pompeo, they’re very focused on Iran. There’s been a lot of buildup to this. You and I have talked about this. Especially Trump in such trouble, Netanyahu in such trouble, MBS in Saudi Arabia in trouble. There’s a lot of factors that lead to the conclusion that they might start something more serious with Iran sooner than later. Is it possible some of this money is for that?

LARRY WILKERSON: Oh, there’s a remote possibility of that, I think. I said to a senator sitting in the Congress last week, “Remember, Senator, your baboon-like leadership at the CIA completely missed the fall of the Shah in 1979. You need to be real sure they’re not going to miss the collapse of the House of Saud in 2019-2020.” That’s how bad the situation is getting in Saudi Arabia.

I think it’s more a budget trick than it is a preparation for war. That said, your comments are of concern. The base budget would be more difficult to go into in a speedy way in the event that something happened really fast. But the whole thing, the whole purpose of OCO in the first place, when we put it together, was not to finance projected war. It was to finance ongoing war. That was the purpose the House approved it for.

Now, the House of Representatives, as you well know, is the budget House of our Congress. There’s no way the House of Representatives, as it is presently constituted, is going to go along with this. They’re not going to go along with that cut in domestic spending. They’re not going to go all with the 5 percent or a 4 percent or perhaps even a 3 percent increase in defense spending. Not only are those increases preposterous, and the House knows that, but there are other reasons for the administration putting so much forward, not the least of which is if I put 5 forward, maybe I’ll get 2. I’ve just been through a budget drill with a number of people who are very concerned about the fiscal status of this country right now. If you look at what this commission just predicted about the defense budget, and you look at what others have said about the defense budget and how it has to go up and go up and go up and go up, you will see that if we follow even the least of their recommendations we’re going to be a trillion dollars annually very shortly.

If we get that kind of increase in the defense budget, even with a 9 percent decrease in the other side of the budget, as it were, even with entitlements staying roughly the same, we are going to be without discretionary federal spending in less than a decade. In other words, annual payments, interest payments on our colossal debt, and the defense budget will consume every dollar of discretionary spending. Someone has got to stop this. Someone has got to get off this train. Someone has got to be rational. And I think I sense in the House there are some of those someones. And so this president is going to hit a buzz saw with any budget that does what you just said this one proposes to do.

PAUL JAY: Now, he’s got to know that. When they present a budget that’s going to be a 9 percent cut–it’s mostly, it seems, to social services. We don’t know the detail of that yet. But it’s a long–you know, they’ve been wanting to go after Social Security and Medicare for a long time. And who knows, Department of Education’s there. There is no way that a House, this House, passes this thing. Even the most conservative Democrats, center-right Democrats in the house, they can’t go along with this. So this is a negotiating document. This is a thing he’s going to fight with the Dems over. But he’s doing it in in late 2019 as we head into, you know, October, when they’re supposed to pass the 2020 budget, which–essentially the 2020 election is full on. So he somehow thinks this is good for him in the 2020 election?

LARRY WILKERSON: How many years has it been, Paul, since we passed the budget on fiscal year time? I can’t recall when we did. I’m sure we did at one point. Generally speaking, we were able to get the NDAA, the National Defense Authorization Act, the military budget, passed by that time, or close to that time. But the rest of the budget usually struggles across the threshold, as it were, sometime in February or March. We’re horrible right now with budget passing.

The pressures that are going to be brought on Trump, though, with regard to any major increase in defense spending, regardless of people like Schumer, and Menendez, and even Pelosi, and maybe Hoyer, who are just as warmongering as any Republican, they are going to be great. Because I’ve been over there. I’ve seen these new people. I’ve talked with them. Good luck getting any kind of increase in defense through this House. And people can sit on the House Foreign Affairs Committee, and Service Members Committee, and all these other people–Armed Forces Committee–and they can yell and holler all they want. They are not going to get this kind of cut in social spending, in entitlements, or whatever it is that they’re proposing, and this kind of increase in the defense budget.

So, yes, it’s a negotiating ploy. They’ll hope that they can get 2 percent, maybe, and 3 percent, or whatever. But it’s going to be a really hard row to hoe. We just presented a number of members of the Senate Finance Committee with a prospect of cutting a trillion dollars out of the national security budget over the next 10 years. That’s about a hundred billion a year. And we think, and I think, as a military professional, I think that is a very sane proposal. When I’ve seen the specifics and everything, it’s a very sane proposal.

So there have got to be some people in the House, not necessarily just progressives and these new folks that just came in, there are going to be some people in the House who put their thinking caps on and realize that this money we’re giving to defense pollutes our national security establishment. It doesn’t help it. Look at what happened this year, and apparently what’s happened in previous years. They couldn’t even spend the money. There were some billions of dollars unspent this year. Even the military construction fund. This is crazy. We’re giving them too much money. It is corrupting them. It is polluting them.

PAUL JAY: So these guys–you know, the John Boltons of this world–you know, they love this game theory. They play these things out. So they must be envisioning that this kind of a budget is going to, one, split the Democratic Party to some extent, because as you said, there’s a lot of the corporate Democrats that are as much in bed with the military industrial establishment as Republicans are. There’s going to be tremendous pressure on those Dems not to just shoot this whole thing down. And also I think it’s important that in the lead up to the 2020 election, if the military industrial establishment sees the goodies waiting for them with the reelection of Trump, and even if they can retake the House and the Senate–I don’t know if any of this is possible. But the the power of the military industrial complex to run a ground game, a media game, to fund campaigns, you know, before they got–they used to get pretty good budgets out of the Democrats, too. But this may create a scenario that to some extent splits the Dems, gets the military arms manufacturers completely on board for Trump, and all of the clout they have. I mean, is this–are they playing this as a game theory? Because they can’t possibly think, as you said, they’re going to pass this thing.

LARRY WILKERSON: There are just as many, I think, lobbyists on the other side–and I’m not praising them, either–who are going to fight them tooth and nail and in the streets, if necessary, in regard to social spending, or what I call spending on the other side of the state structure. The people. Americans. We used to call that a welfare state, but now that’s a perjorative, and I can’t call it a welfare state, because that immediately makes it suspect, just like socialism makes things suspect.

‘Welfare state’ simply means you’re taking care of your people, period. That’s what’s going to get in their face. And lots of these people in the House are going to get in their face. I was just up in Boston. And you know, Massachusetts is not necessarily the breeding ground for this kind of uprising, even with its reputation of the revolution beginning, and so forth. But Massachusetts is angry, and Connecticut’s angry, and Rhode Island’s angry. And I’ve been in Texas and Oklahoma, and they’re angry, too. And they’re angry that Trump promised to take care of the domestic situation, his most potent promise with these voters in terms of Make America Great Again, and he isn’t doing it. And he certainly isn’t doing it by increasing the defense budget well beyond what even the average American understands is probably necessary to keep this country secure. It’s going to be a very hard argument, Paul. So as a negotiating tactic it may look good. As a tactic in the real world, I don’t think it’s going to work.

PAUL JAY: Well, I don’t know if it works or not, but I can imagine the thinking of the people behind this budget, Trump and Bolton and such, of number one, they don’t give a damn about budget deficits, anyway. So the idea of a 9 percent cut to social services is just a sop to the people in the Republican Party that claim to care about budget deficits. But when they get into the negotiations it will be, you know, give us our military budget and it will only be an 8 percent cut. No. OK, give us our military budget and it’ll be a 7 percent cut. Oh, no. They’ll just keep negotiating the social services cuts down to some extent, because they don’t give a damn about the deficit, anyway.

And then the second thing is if he can throw a lot of this military spending into the economy in early 2020, I don’t know how quickly this can be done, maybe it has a bit of a stimulus effect. Because, you know, I listen to Bloomberg Business radio in the mornings. And every morning they are talking about everyone’s expecting a recession by the end of 2019 or early 2020.

LARRY WILKERSON: Very likely. Very likely. And I’ll just remind you of the studies that we did, and there are other studies, too, but we did studies in 1991 and ’92 when George H.W. Bush as president asked Colin Powell and the Defense Department to cut the military by 25 percent, and then we had to cut it by another 3 percent when Les Aspin came in with Bill Clinton. Those studies showed without any doubt how little economic impact military dollars had. They virtually die inside the federal reservation, or inside the Raytheon, Boeing, or whatever, complex. When you compare them–and we use these arguments with with mayors and governors, because we want to convince them that what we were doing would not hurt them badly–an economic dollar is a two to three multiplier. And by that I mean investment in trade, or new training, education for new jobs, that sort of thing. An education dollar, a pure education dollar, multiplies four or five times. An investment dollar–that is, sort of like a venture capital dollar–usually multiplies with a two to three multiplier. The defense dollar doesn’t multiply. So it’s a facetious argument that says a plus-up of the defense budget is an economic healthmaker in the broader economy. It simply isn’t.

We actually got letters from people all across the country, years after things had happened, telling us it was the best thing they ever did was to shut down that military base, or close that Navy wharf at Newport, or whatever it happened to be, because military dollars, defense dollars, by and large, do not multiply like other dollars in the economy.

So it’s a facetious argument. It won’t have an immediate impact. Not like, for example, the rising price of gas gas right now. I don’t see how an increased defense budget gives anybody a better chance of getting out of what you just described, and which I think is correct, that we’re headed for another crash. The housing market is inflated maximally again. The stock market is so inflated it’s pitiful. We’re at a point where the maldistribution of wealth in this country is like or exceeds that in 1929. The only reason that we didn’t have a tremendously worse crisis in 2007 and ’08 is because we printed more money than any state entity in the world has ever printed in history. And now we’re going to watch the impact of that come back to haunt us.

Did you see the supply of hundred dollar bills in the world, that graph the other day? Holy mackerel. We haven’t had a supply this copious in the world since 1929. We’re in trouble, fiscally. And Modern Monetary Theory and disregarding of deficits will not get us out of it. All it will do is deepen it and make it more profound. There are people in the House who are awakening to this, professional staffers, and so forth. And people in the Senate, too. They’re not sure what to do about it, particularly with this president and this regime. But I think ultimately they’re going to realize they have to do something about it. And one of the things they have to do is get a handle on the defense budget, the national security budget. Because that’s what we’re talking about.

You know, I’m not talking about just $760 [billion], $750 billion for defense. We’re talking about $1.2 [trillion] to $1.5 trillion now with these plus-ups to the national security establishment, which includes nuclear weapons in DOE, the Veterans Administration. Paul, there is a bill coming down the road for these 4.5 million veterans we’ve created over the last 17 years that is astronomical. Look at VA’s budget right now. It’s just climbing and climbing and climbing. The whole national security budget is twice what the defense budget is. We cannot sustain this.

PAUL JAY: Right. Well, put together the specific problems of Netanyahu, Mohammad bin Salman and Saudi Arabia, and Donald Trump and the United States, and even more importantly the systemic coming crisis you just described, the solution has always been war. And this budget, I think, is a reflection of that.

LARRY WILKERSON: You won’t get much argument from me on that. I hope we’re wrong. I hope we’re not looking to bail ourselves out of this crisis as FDR did in 1941. He had ample justification for doing it, I guess, with Pearl Harbor. But that is really what got us out of the Great Depression, is World War II.

PAUL JAY: All right. Thanks for joining us, Larry.

LARRY WILKERSON: Thanks for having me.

PAUL JAY: Thank you for joining us on The Real News Network.

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Distinguished Adjunct Professor of Government and Public Policy

Lawrence Wilkerson's last positions in government were as Secretary of State Colin Powell's Chief of Staff (2002-05), Associate Director of the State Department's Policy Planning staff under the directorship of Ambassador Richard N. Haass, and member of that staff responsible for East Asia and the Pacific, political-military and legislative affairs (2001-02). Before serving at the State Department, Wilkerson served 31 years in the U.S. Army. During that time, he was a member of the faculty of the U.S. Naval War College (1987 to 1989), Special Assistant to General Powell when he was Chairman of the Joint Chiefs of Staff (1989-93), and Director and Deputy Director of the U.S. Marine Corps War College at Quantico, Virginia (1993-97). Wilkerson retired from active service in 1997 as a colonel, and began work as an advisor to General Powell. He has also taught national security affairs in the Honors Program at the George Washington University. He is currently working on a book about the first George W. Bush administration.