Reducing Military Spending to Spur Economic Growth at Home

Reducing Military Spending to Spur Economic Growth at Home

Thursday, March 11, 2010




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Reducing Military Spending to Spur Economic Growth at Home

The Senate struggled to approve a $15 billion jobs bill and has yet to enact additional fiscal relief for the states, but lawmakers continue to approve trillions of dollars for wars and defense appropriations.  In fact, ignoring the almost $1 trillion spent on the Iraq and Afghanistan wars, military spending has grown 41 percent since 1998.  If progressive leaders intend to reduce long-term deficits and ensure a robust economic recovery, cutting inefficient and costly areas of the defense budget should be a top priority.

For this reason, state legislators from across the country have signed on to the Women Legislators' Lobby's (WiLL) letter encouraging the federal government to trim the unnecessary spending in the Pentagon budget and redirect that money to areas in the economy that generate more jobs and address significant issues, such as climate change, education, and infrastructure maintenance. 

If you are a female state legislator and interested in supporting the effort, please sign on by clicking here, calling (202) 544-5055, ext. 2602, or emailing

FY2010 Budget Request: 
In February, President Obama remarked that one of his priorities would be reforming the defense budget so that the country is not spending scarce revenue on obsolete weapons.  Nevertheless, the President's FY2010 budget request for the Department of Defense and the nuclear weapons portion of the Department of Energy is approximately $557 billion, which amounts to half of the entire federal discretionary budget.  The Congressional Budget Office (CBO) finds that this level of spending will only increase in the future.  "In CBO’s estimation, carrying out the Department of Defense's 2009 plans for 2010 and beyond—excluding overseas contingency operations—would require defense resources averaging at least $573 billion annually (in 2010 dollars) from 2011 to 2028."  These astronomical figures do not include the costs of the wars in Iraq and Afghanistan, as they are funded through an emergency supplemental budgeting process.  Since 2001, the country has allocated approximately $915 billion to the military operations in Iraq and Afghanistan.

In the State of the Union, President Obama proposed to freeze all non-security discretionary spending for three years, creating $250 billion in savings, yet exempted the defense budget from scrutiny.  However, as Lawrence Korb, a senior fellow at the Center for American Progress and former Assistant Secretary of Defense under President Reagan indicates, "[i]f President Obama is serious about controlling spending, he can’t exempt the Pentagon... Because the budgets of [Defense] agencies, particularly that of the Pentagon, are responsible for a large and increasing share of the discretionary portion of the federal budget, the president’s spending freeze will have a marginal effect."

Source: Women's Action for New Directions - Making the Military Budget Smarter, Not Bigger

US Military Spending:  Even as the US is failing to invest in the basic infrastructure needed for global economic competitiveness, the nation's military budget dwarfs the amount other countries allocate for defense and accounts for almost half of all military spending in the world.

Additionally, 83 percent of US national security spending is specifically allocated to the military, while 11 percent is directed toward homeland security, and 6 percent to international affairs.  As a result, US security spending is overwhelmingly skewed towards weaponry rather than basic protection and diplomatic efforts.  As Women's Action for New Directions (WAND) notes, portions of the military's budget go to "weapons systems that were intended to fight the military might of the Soviet Union during the Cold War.  They are now obsolete, unnecessary, and eating up federal dollars that could be better spent elsewhere."  WAND and the Center for American Progress identify several defense spending cuts that would not threaten US efforts overseas or security within the nation's borders.  

Jobs and Economic Recovery:  According to a report by economists at the University of Massachusetts, reducing spending on obsolete weaponry and inefficient defense spending and shifting funding towards other critical sectors will create jobs and foster economic recovery.  For example, investing in mass transit creates twice as many jobs as spending on the military.  Specifically, investing $1 billion in the military only creates 8,500 jobs, while the same investment in:

  • home weatherization and infrastructure create 12,800 jobs;
  • health care, 12,900 jobs;
  • education, 17,700 jobs;
  • and mass transit, 19,800 jobs.

Other countries have recognized that these investments translate into economic growth.  For instance, China's $585 economic stimulus program is predominantly focused on infrastructure spending on highways, railroads, and power grids.

Speaking in Florida in January, President Obama acknowledged that Asian and European countries are vastly ahead the United States in developing high-speed rail:  “Other countries aren’t waiting. They want those jobs.  China wants those jobs.  Germany wants those jobs.  They are going after them hard, making the investments required.”

Take Action:  Sign on to WiLL's letter calling on the President to cut non-essential spending in the Pentagon budget and redirect that money to areas in the economy that generate more, and better, jobs for long-term security by clicking here, calling (202) 544-5055, ext. 2602, or emailing

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Labor Peace Law in New York Part of Trend of Promoting Labor Rights on Government Projects

On March 1st, a new law in New York goes into effect, strengthening the freedom of employees to form labor unions at hotels or convention centers run or funded by state authorities, a dramatic victory for hotel workers in the state.  The law has specific language requiring that hotels or convention centers where state public authorities have a substantial proprietary interest include a "labor peace agreement" with hotel unions in the state in exchange for the unions agreeing not to strike for five years.  The law follows a similar executive order by the Governor approved last year.

Such "labor peace agreements" laws, also often called Project Labor Agreements (PLAs), have become increasingly common in recent years, sometimes negotiated by state and local governments on a project-by-project basis but also required for particular categories of projects.  A major expansion of the Los Angeles International Airport includes a PLA that requires neutrality by employers and recognition of unions when a majority of workers sign cards asking for recognition.  Hartford and the District of Columbia, for example, also have general labor peace ordinances.

At the federal level, President Obama's Executive Order 13502: Use of Project Labor Agreements for Federal Construction Projects encourages -- although does not require --  federal agencies to use PLAs on federal construction projects in excess of $25 million.

The advantages of such labor peace agreements are clear.  As this report by the Cornell School of Industrial and Labor Relations notes, it makes costs predictable and prevents delays and disruptions, while preventing the "'under the table' cash payments, ignoring wage, hour and tax laws, and intentional misclassification of workers as independent contractors" that has become too common industry practices.

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Eye on the Right: Adding Anti-Gay Provision to Wasteful Film Tax Credits in Florida

PSN has noted in previous Dispatches, these credits are costly, favor out-of-state workers, offer minimal to no returns, do not create permanent jobs, and place an excessive burden on taxpayers in a time of economic uncertainty.  The Massachusetts Department of Revenue recently determined that in twelve states that administer a film tax credit, the return is extremely meager-- finding that states were only getting back "$.0.07 to $.0.28 per dollar of tax credit granted."

Adding a discriminatory twist on a fiscally inefficient program, Florida conservatives are advancing HB697, a $75 million film tax credit bill, that contains a clause prohibiting movies that display "nontraditional family values" from receiving state dollars.  Lawmakers have declined to specify what they actually consider "traditional" or "nontraditional" family values.  Although the bill's sponsor, Rep. Stephen Precourt, claimed that he did not intend to target the gay community, when asked if films with gay characters should receive the credit, he responded, "[t]hat would not be the kind of thing I'd say that we want to invest public dollars in."

Using wasteful tax credits to advance right-wing social values is just another indication of the hollowness of conservative claims of "fiscal responsibility."  Even as Florida is facing a $147 million mid-year budget gap and a projected $4.7 billion FY2011 deficit, right-wing lawmakers have somehow found revenue to fund an ineffective program that intentionally discriminates against the gay community.

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Research Roundup

Building for Long-Term Economic Recovery

  • Winning the Race: How America Can Lead the Global Clean Energy Economy - The United States must commit to developing a domestic manufacturing sector capable of meeting heightened demand for the parts, systems and components of the growing clean energy economy, according to this report by the Apollo Alliance and Good Jobs First.  Otherwise, clean energy investments will just end up subsidizing  growth of those activities in low-wage countries such as China.
  • Restoring Prosperity: Transforming Ohio's Communities For the Next Economy -  In a model of interest to other states, this Brookings Institution study lays out some of the specific policy options that could help Ohioans restore the prosperity that the state once enjoyed.  The report recommends greater emphasis on understanding metropolitan regions as engines of economic growth, better partnerships between state, local and federal resources, and coordination between public investments and private sector business growth.

Broadband Adoption in Low-Income Communities - The Federal Communications Commission released findings prepared by the Social Science Research Council (SSRC) that highlights the barriers to home broadband adoption in low-income and other marginalized communities.  Cost is an important factor but skills training and language are also significant barriers for many households participating in the digital world.  Libraries and other community organizations are increasingly under pressure to meet community demand for help in getting access.

Addressing State Fiscal Crises

  • State Tax Changes in Response to the Recession - In 33 states, tax changes are increasing annual revenues, relative to what they otherwise would have collected, by $31.7 billion, according to the Center on Budget and Policy Priorities (CBPP).  By taking such actions as eliminating tax exemptions, broadening tax bases, and in some cases increasing rates as well as raising a number of fees, these states are pursuing a balanced approach towards addressing state fiscal deficits.
  • Recession Threatens State Health Care Programs - Given state fiscal problems, states may cut hundreds of thousands, and perhaps millions, of low-income Americans, from state programs and cast them into the ranks of the uninsured.  This CBPP report highlights the critical need for Congress to extend the temporary increase in federal support for state Medicaid programs that last year’s economic recovery legislation provided.

Protecting Wage Standards

  • Data Matters:  How the Nation’s Top Labor Cop Can Use Data to Drive Enforcement and Protect American Workers - Lack of data or poor data collection practices hinder enforcement of wage and hour laws, according to this report by the Center for American Progress.  This report highlights improvements urged for the federal government, but the recommendations on better recordkeeping by agencies, making the data public to increase accountability, and implementing reporting requirements on key data by the private sector all would strengthen state enforcement efforts as well.
  • Looking for Blame in All the Wrong Places - The Economic Policy Institute finds that recent federal minimum wage increases have not had a negative impact on part-time employment.

A Matter of Degrees: Preparing Teachers for the Pre-K Classroom -  Improving teacher quality is key to making investments in early education most effective, according to this Pre-K Now report.  The report concludes that educators with at least a bachelor’s degree coupled with specialized training in early childhood are best able to foster development of the cognitive, social and emotional skills children need to be ready for kindergarten.  The report also also highlights state models for increasing teacher quality.

2008 Ballot Measure Overview - This report by the Institute on Money in State Politics shows that special interests and businesses, not individuals, dominated the funding of 2008 ballot measures.  Special interests and businesses contributed 69 percent ($564.4 million) of the total raised to oppose or promote 274 measures that year.  Gambling-related measures received the most contributions, at $273 million, followed by $120 million given around measures that addressed same-sex marriage.

The Gender Wage Gap: 2009 - The Institute for Women's Policy Research tracks the disparity in median earnings of men and women since 1955 in this report.  They find that the gap narrowed slightly in 2009, but "the ratio of women’s to men’s median weekly earnings was 80.2" this past year.

How Positive Immigration Policy Strengthens Economies

  • Immigration Reform and Job Growth- A recent report from the Immigration Policy Center outlines how comprehensive immigration reform would generate 750,000-900,000 new jobs in the first three years after its enactment and also result in increased tax revenues of $4.5-$5.4 billion for the nation as a whole.  The report comes on the heels of another enlightening analysis from the University of Southern California (USC) that examined the effect of a large-scale legalization program on the California economy which found the state's undocumented immigrants lost out on roughly $2.2 billion in lost wages and salary income last year alone as a result of their lack of legal immigration status.  For its part, cash-strapped California lost the opportunity last year to receive $310 million in income taxes from its undocumented workers, who are often forced to accept lower wages from their employers due to their lack of legal status.  The USC study also found the state would gain an extra $16 billion annually  from a legalization program as undocumented workers were able to demand fair wages from employers, move into better-paid jobs, and exercise their increased power as consumers. 
  • How Expanding E-Verify Would Hurt American Businesses -  Two recent reports highlight the myriad problems with E-Verify, a federal program that seeks to identify undocumented workers and prevent them from joining the workforce.  The  first, from the Immigration Policy Center, details how the flawed pilot program, which is not mandatory in all states, only increases costs to American businesses and often erroneously prevents US citizen and legal immigrant workers from joining the workforce.  The E-Verify program cross-references employees' information with Social Security Administration and Department of Homeland Security - yet it cannot identify those who are using someone else's Social Security number to work in the US.  The second analysis,conducted by independent research company Westat for the Department of Homeland Security found the controversial federal program incorrectly screened 54% of undocumented workers who passed through its system, according to the Associated Press. Westat's analysis found E-Verify incorrectly cleared over half of the undocumented workers it screened - underlining the system's numerous inaccuracies.  The findings, buried on the Department of Homeland Security's website, bolster the arguments of those who argue E-Verify should not be used as a work authorization system - including Sen. Charles Schumer (D-NY), who has voiced opposition to the system and is now drafting comprehensive immigration reform legislation in the Senate.  Immigrant rights and labor advocates have been pointing out the flaws in the E-Verify system for the last few years, and even the Social Security Administration has gone on the record to say its database was not designed  as a work authorization system. 

The 2010 Census: The Stakes of an Accurate CountAs the 2010 census prepares to survey homes nationwide in the next month, immigrant and Latino communities, concerns persist on how to reach the nation's undocumented and low-income residents, groups that are historically undercounted.

Please email us leads on good research at


Reducing Military Spending to Spur Economic Growth at Home

Center for American Progress - Paying for the Troop Escalation in Afghanistan
Congressional Budget Office - Long-Term Implications of the Fiscal Year 2010 Defense Budget
Progressive States Network - Reforming Defense Spending and National Guard Overseas Deployment
Women's Action for New Directions - Finding New Ways to Create Jobs
Women's Action for New Directions - Making the military budget smarter, not bigger
Women Legislators' Lobby - Balanced Security Spending

Labor Peace Law in New York Part of Trend of Promoting Labor Rights on Government Projects

Text of Labor Peace Portion of 2009 New York Public Authorities Law
American Prospect - Good Jobs, Healthy Cities
Cornell School of Industrial and Labor Relations - Project Labor Agreements in New York:  In the Public Interest
Office of New York Governor - Labor Peace Policy Directive
Labor Peace Now - The Hartford Labor Peace Ordinance
District of Columbia Hotel Development Projects Labor Peace Agreement Act
White House - Executive Order 13502: Use of Project Labor Agreements for Federal Construction Projects 

Eye on the Right: Adding Anti-Gay Provision to Wasteful Film Tax Credits in Florida

Good Jobs First - More States Yell "Cut" on Film Tax Credits
Iowa Department of Management - Tax Credit Review Report
The Massachusetts Department of Revenue - A Report on the Massachusetts Film Industry Tax Incentives
Massachusetts Rep. Steven D'Amico - A Primer on the Massachusetts Film Incentives
Tax Foundation - Movie Production Incentives: Blockbuster Support for Lackluster Policy


The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Fabiola Carrion, Broadband & Green Jobs Policy Specialist
Enzo Pastore, Health Care Policy Specialist
Suman Raghunathan, Immigrant Rights Policy Specialist
Altaf Rahamatulla, Tax & Budget Policy Specialist
Julie Bero, Outreach & Administrative Specialist
Charles Monaco, Press & New Media Specialist
Mike Maiorini, Online Technology Manager

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