Truman Series: Spending priorities and national security

This post is the latest in our series from fellows in the Truman National Security Project.  Jonathan Shafter writes:

Even in times of peace and prosperity, difficult choices must be made balancing the needs of today’s military against investing in the systems and technologies to meet the challenges of tomorrow.
And these are certainly not times of peace and prosperity.

The progressive national security agenda calls for broadening (without weakening) the traditional military-centric view of national security to focus on the root causes of insecurities such as global poverty and human rights abuses.  While in the long run preventative medicine is likely a more cost effective strategy than emergency symptom treatment, it will require significant up-front investment if efforts in these areas are to have any real impact.

This occurs at a time when America is in a highly strained fiscal position.  Our national debt ballooned under the Bush Administration and the crisis of underfunded entitlement programs still lies ahead.  Meanwhile, the rest of the world is increasingly concerned with permanently financing perpetual American deficits in a dollar-centric universe.

The likely magnitude of our economic downturn will create many compelling priorities for spending alongside national security. Economic stimulus, cleaning up the financial markets crisis, and rebuilding social safety nets will all compete for a finite fiscal pie. As progressives we recognize the urgency in dealing with many of these critical needs.

The economic downturn will also constrict tax revenues not only at the federal level but at the state and local levels where less flexibility exists to borrow funds (as at the federal level) – instead, states have to  balance current budgets.  It is likely that state and local taxes may rise, and core government services will be cut to close these gaps against a backdrop of rising unemployment and failing industries.

Over the past eight years a broad network of progressives laid the conceptual groundwork for a powerful national security agenda. We did so, however, largely during a period of global economic prosperity.

President-elect Obama will unfortunately assume office in the midst of what could well be our most serious economic downturn in post-war history.  As a result, we face the difficult challenge of figuring out how we will pay for our agenda.  As the governing party in hard times we must consider:

• Which elements of our agenda are absolute priorities and where will we accept compromises?
• How can we build domestic grassroots support for initiatives such as international development and poverty reduction abroad when Americans will be facing such tough times at home?
• How will we convince our fellow Democrats that the long term benefits of dealing with the root causes of insecurity are worth compromises in such core party priorities as social welfare?
• How much political capital will we spend defending free trade through a likely period of increased protectionist pressures?
• Which parts of the current national security system will we reform to do more with less?

Advocates for a strong, progressive national security agenda should pause to celebrate the victory of Barack Obama.  With his Presidency comes the opportunity to make our policy vision a reality.  But in some ways this is also the end of our innocence.  The reality of governing through hard economic times means that compromises are inevitable and some of what we want must be a dream deferred.  The reality of governing with a Democratic President and Congress means that many of the fights which lie ahead will be with our most cherished friends.  In prioritizing elements of the progressive national security agenda we will face new and powerful strains even within our own ranks.  So pause and celebrate – but not for too long – because the real work is just beginning.

Jonathan Shafter is a partner at a financial services focused investment fund.  The views expressed here are his own.