On Thursday, October 24, at the National Press Club in Washington, DC, Rep. Adam Smith, Chairman of the House Armed Services Committee, delivered the keynote talk at a special briefing we hosted on the future of US nuclear policy. He outlined his vision for US nuclear policy, including his funding priorities and how these will affect nuclear force structure and future modernization. Here is some of the news coverage, followed by a transcript.
- Defense News: HASC Chair Takes Aim at air force's handling of icbm replacement program / Military Times
- Politico: Smith Dumps Cold Water on Skinny NDAA
- Space News: HASC Chairman Single Contractor Bid for New ICBM is Troubling
- Rollcall: As NDAA Talks Drag on Inhofe Readies Pared Down Bill
TERRY GAMBLE BOYER: Good morning. My name is Terry Gamble Boyer. I'm the Chair of the Board of Ploughshares Fund, and we are so happy to have all of you here today. Boards, staff, guests, friends, people interested in reducing the threat of nuclear events. And it is my extreme pleasure this morning to introduce Congressman Adam Smith.
Somebody asked me the other day, are you introducing the original Adam Smith? (Laughter) I’m sure he’s never heard that joke before. But Congressman Adam Smith – fun fact – was the youngest person to be elected to the state legislature at age 25 in the state of Washington. (Applause) So, we have a very precocious Congressman who we are so happy is the Chair of the House Armed Services Committee.
Last year, he talked to us in what I think was almost a historic presentation. But he had not yet assumed the chairmanship because while the Democrats had taken control of the House, the chairmanship doesn't happen until January. So now we have Chairman Adam Smith who's going to speak to us about how he's reducing the risk of nuclear war and the chances of the United States being the first to use [nuclear] weapons. So please join me in welcoming him. (Applause)
CHAIRMAN SMITH: Thank you very much. It's a great pleasure to be here and I really appreciate all of the work that you are doing, and the work towards that goal is really just beginning. I think we had a lot of success in 2018 obviously in the elections and I think [we] are putting out the right arguments.
But make no mistake about it that the president, the Senate, and a lot of people, even bi-partisan people are not totally sympathetic at this point to the viewpoint that we need to reduce our dependence on nuclear weapons and take a different approach. So, we've got a lot of work left to do.
I'm very proud of the bill that we passed off of the House floor for a lot of reasons, but certainly the statements it made about this issue, I think are incredibly important. Opposing the deployment of a low yield nuclear weapon; urging increased dialogue between the US, Russia, and China as the major nuclear powers in the world on how to make sure we deconflict and avoid stumbling into a nuclear war; and, also, just questioning the entire nuclear posture review and the need to spend the amount of money that they're talking about over the time period that they're talking about.
That was a good step. The Senate doesn’t agree with us in case you were wondering. So, we’re going to work through that, but it is really important continue to advance the argument because we are at a very dangerous point right now. We are in an arms race – an arms race that almost has no sort of control at the moment.
Russia is increasing its nuclear arsenal. We are sprinting to try and respond to that. And as near as I can tell, nobody is talking about the danger of that and how to control it. And I think that is the first and most important step that we can take is to open up lines of communication between the US, Russia, and China about the importance of having arms control agreements when it comes to nuclear weapons and the delivery vehicles for them.
That was something that was started in the Cold War between the US and Soviet Union [and] I think was crucial in making sure that we changed calculation so that nobody thought that starting a nuclear war was a good idea. Those dialogues need to be restarted. And that's really one of the huge dangers of the low-yield nuke: it starts the conversation of a manageable nuclear war. There is no such thing. Once you've stepped over that line, you've created a situation where the Earth is literally in jeopardy.
So, we need to start that dialogue. And then also I think we need to strongly make the case to rethink the Nuclear Posture Review. And this is a bipartisan challenge. As many of you know, the Obama administration – they put out the Nuclear Posture Review that called for the $1.2 trillion over some period of time to upgrade our nuclear arsenal. And there are a lot of false assumptions contained in the determination that there was a need for that type of expansion. And, of course, the Trump administration has only taken it further in some of the things that they’re doing.
I think there was a very powerful argument to be made for taking a different approach – for not relying on so many nuclear weapons. And basically, I always cite China as the primary example. They have less than 300 nuclear weapons, but they have a very clear policy: We have enough weapons that if you existentially threaten us, we can cause you a massive amount of pain. So, don’t.
And I think it’s a pretty effective policy, and frankly it enables them to spend more money on other aspects of their defense and national security. And I think we would benefit from looking at that model and figuring out how to have a more manageable nuclear arsenal.
Now – make no mistake about it – we need to update our nuclear weapons. We need to have an adequate deterrent. The weapons are old. But we don’t need to have as many as we have as many as we have historically had. So, I think we need to change the Nuclear Posture Review, engage in dialogue, and think about our broader policies. The No-First-Use bill that we’ve put out is, again, a way to signal to the world that we do not consider nuclear weapons to be an acceptable policy.
And I think if you want to understand the dangers of this – and I’ll close with this and then get to questions. I had a very extended debate on the low-yield nuclear weapon with a whole lot of people (Michael Turner, most entertainingly, but others as well). And the basic argument that was put forth was Russia has this plan to escalate-to-deescalate: that basically Russia has a plan to use low-yield nuclear weapons to stop us in a conventional setting.
First of all, and as much as that is said, as I have dug into it there is actually no evidence that Russia actually has that plan. There are a few people who have muttered but it is nowhere in official doctrine that Russia has adopted the idea that they should use nuclear weapons first in a low capacity.
So, no matter how many people you hear say that, it’s not really true, first of all. But second of all, as I was arguing, what we need to communicate to them is that any use of nuclear weapons is a red line that will be met with an overwhelming and probably nuclear response.
And the argument back was: Well, if they know that we have nothing but larger nuclear weapons, they’ll think that we won’t do it because our response won’t be proportional. We need to have the smaller nukes so if they hit us, we can hit them on the same level.
Yeah, exactly. I mean, if you think about it, you see where that’s going. It’s going to a conversation. And at the end of one of these arguments, I said this very discussion makes my point. The fact that you’re even talking about it, the fact that you’re contemplating a manageable nuclear war is the problem.
And it’s also insane. Because I said: Well, why don’t we tell Russia that we don’t care about proportionality? We have a large number of options – and, by the way, we even do have some low-yield options in our arsenal short of the one they wanted to deploy on submarines or planning on deploying on submarines.
Just tell them: don’t do it, or we’ll hit you. ‘Well, we don’t think they’ll believe us.’ Okay, so you think they will believe us if we say we have a low-yield nuke and will respond proportionally, but they won’t believe us –
This is all nonsense. It is all an excuse to build more and more and more and more. It really, at the end of the day, is a lack of imagination because – aside from the military-industrial complex piece of this – there is also this sort of insecurity that we have to spend more money. As long as we’re spending more money, as long as we’re building bigger weapons, then we’re fine, right?
No. It’s more complicated than that. And we ought to get into that level of complication.
Side note, but missile defense. We’ve been arguing for a lot of years that we’re wasting money on a variety of missile defense programs. And whatever we say about missile defense, the Republican response is we need to spend more, almost irrespective of what we’re spending it on.
And it just turned out here a few months ago – and Leonor you know the details of this far better than I do – but one of these systems turned out to, well, not work. And we spent an enormous amount of money on it to build a lot of defense weapons that, they don’t work, which is why we didn’t want to spend the money on them. But the mentality was we just got to spend the money, because we spend the money and we’ll look tough and everything will be fine.
No, no you won’t. We need to change that mentality. Let’s be smart – not just spend more money and think that it makes us look tough and think that this is an adequate deterrent.
This is a really complicated discussion. Working with someone who at this point is – “enemy” is a strong word – “adversary,” let’s go with: Russia. They’re an adversary. We have different interests in a whole lot of different directions. I will not make the presidential joke at this point, but we have different interests in a bunch of places. We need to open up a dialogue and start working through that.
It’s not as simple as if they spend $100 million, we need to spend $200 million; if they spend $200 million, we need to spend $300 million; if we have ten of these, we need twenty of them. That’s not a smart approach. It’s a recipe for disaster on a series of levels. We need to have a smarter defense policy on all of these issues. And I look forward to your questions. Thank you. (Applause)
JOE CIRINCIONE: Congressman Smith, thank you very much for opening us up that way and for coming here. I know it's a very busy time on Capitol Hill and you are much in demand. So, let me get started with a few general questions.
You talked about re-doing our nuclear posture. I agree with you. But what would a re-do look like? If you were advising the next president of the United States – if the Democrats are fortunate enough to take the White House and the president walks in the Oval Office in January 2021 – what would your advice be to her or him about what the nuclear posture changes should be?
CHAIRMAN SMITH: Have an arsenal that is, first of all, reliable without question and large enough to deter our adversaries, and have that be the focus. What do we need to have to make sure that we deter our adversaries from ever thinking that it's okay to use a nuclear weapon?
And by the way, I didn't talk about this in my opening remarks, but aside from Russia, China, and the US, proliferation is a major issue and we've also sort of stepped back from our efforts to stop proliferation. As you know, Turkey is now muttering about that they'd like to develop a nuclear weapon.
First of all, we really need to re-engage our diplomatic corps, which has just been completely gutted over the last three years and that has impacts that go far beyond – which I’ll explain shortly – and engage on that issue. But in terms of the weapon systems that we need? Yes, we need to upgrade the systems and we need to truly task them. I was out at Los Alamos a couple of weeks ago and without question, we do.
But I think also there's a lot of assumptions about what's not working, and, in fact, it may still be working. So, let's test that and rely on that. Also, we simply don't need, in my view, four to five thousand nuclear weapons.
So, you could look at the ICBMs. Have a defendable force and figure out how you can save money on it – and I think there's a lot of places to save money – and have, at the end of the day, fewer nuclear weapons and fewer platforms and still meet our needs.
JOE CIRINCIONE: You know, we don't actually have a nuclear budget. We have a pretty good idea of what we spend on the Army and the Navy and the Air Force, but the nuclear budget is spread off among different accounts, even different departments – Department of Energy. Have you ever thought of trying to consolidate the budget? To ask the Executive Branch to give us the nuclear budget, everything we’re spending?
By my independent calculations, it's around $50-$55 billion a year on nuclear weapons and related programs, like missile defense.
CHAIRMAN SMITH: I think that would be helpful. I was only smiling cause we're still trying to get the Pentagon to know where they spend their money period, much less on what it is. (Laughter) And we are making progress on that.
We need to get the Pentagon audited, basically. And we’re making progress. Yes, I think that would be one part of auditing. Obviously, this would not just be the Pentagon, it’s the Department of Energy and others. Figuring out how much we spend, I think, would be worth doing.
JOE CIRINCIONE: And you don't have a target in mind for how much would be a reasonable amount? Because we have to do the posture first to figure out what we need?
CHAIRMAN SMITH: Yeah, I think so. There have been a number of studies. I think General Cartwright had a study that said something like 500 delivery vehicles would be more than enough and laid out exactly why. I think the place to start on all this is on the ICBM discussion. And actually, there was a study I saw somewhere talking about how – because right now we're in the middle of doing the GBSD–
JOE CIRINCIONE: The Ground-Based Strategic Deterrent.
CHAIRMAN SMITH: The new ICBM – and, by the way, it's now going to be a sole-source contract because Boeing's out of it. But as we're looking at that, there is plenty of argument that we can extend the life of the existing ICBMs if we rely on fewer.
Part of the problem – part of the reason that we need the new thing – is they insist on having 450, 500, something like that, when in fact we probably could have an adequate deterrent from that at a lower number that would not require us to build a brand new missile.
JOE CIRINCIONE: Right. Eliminate one of the wings, close a base, go down to 300, 150, and just do it by modernization. Back to that little issue of Boeing being ruled out of the competition, we have never done a major procurement program with a sole source, with only one bidder on the program. Does that worry you just from a good management point of view?
CHAIRMAN SMITH: It does and, just to be clear, Boeing was not ruled out. They declined a bid because, well, it's hard to say. Let’s take them at face value for the moment and say that they feel like the Air Force gamed the system in a way that was advantageous to Northrup. And it is actually documented that the Air Force did at one point accidentally share proprietary information that was Boeing’s with Northrup.
And as a side note, I am not fond of the Air Force procurement process. I have worked with them on launch and other things and it strikes me that they are way too close to the contractors that they are working with. And they seem to show bias towards one or the other. It could be incompetence, but I think it is more likely that they like their historical partners. And this is really, really bad because competition is a good thing. And I could go off on about a 20-minute rant about the space launch.
JOE CIRINCIONE: We have time. (Laughter)
CHAIRMAN SMITH: It's not something you're terribly interested in. But the way they’ve handled the ULA relationship at the expense of emerging competitors is costing the taxpayers an enormous amount of money and denying us the ability to benefit from competition. And I suspect some of the same things happened in the GBSD competition. So, yes, that is very troubling that it's going to be a sole source contract.
JOE CIRINCIONE: This contractor influence gets us back to the low-yield nuclear warhead, the LYD5 as they call it. And this has been a big issue for you. This is one of the smallest new nuclear programs. It's one of the cheapest new nuclear programs. But what you find when you try to stop even this is that there's enormous resistance to it. You touched on this in your remarks. How much of that do you think is ideological – that we need this for our strategic deterrence – and how much is contractor driven?
CHAIRMAN SMITH: Well, that's kind of a chicken-and-egg question to a certain extent because the message that is out there is what I said earlier: whatever it is, it has to be more.
I recently read David Stockman's book, “The Triumph of Politics,” and he talked about how he never could get the defense budget shrunk because Cap Weinberger would always come in and he would have this chart that had a really big strong-looking soldier, which represented his defense budget. And this other, weak little guy over here in the corner, that was David’s budget. Now which budget, which one would you want? Come on.
And to some extent that's the message that is driven: more is better, spend more money, be tougher, be stronger, have more. That message is compelling to a lot of people who are nervous and just want to be reassured. But that message is driven in large part by contractors who want them to believe that so that then they will give them money.
So, it's both. It's both that parochial interest and then people buying into the argument that that parochial interest very cleverly makes. And this is also a problem on the ICBMs because Wyoming, Montana, North Dakota – where they are – for whatever reason they’re fond of their missiles. Apparently, they want to be targeted in a first nuclear strike. (Laughter).
I know they don't. They want the jobs, but there can't be that many jobs attached to silos. The pushback we get is from those states. In fact, one of the most bizarre things was an amendment that was introduced when the Republicans control the Armed Services Committee – it was added to the bill in committee – that said the Pentagon cannot even think about reducing the number of ICBMs in our arsenal. I had to ask, “How are you going to enforce that? You got some guy sitting in the corner of the Pentagon listening for, ‘What if we only did 300?’, and he’d say, ‘No! You're in violation of a law.’” (Laughter)
But that's how paranoid they are about it. They don't want any reduction at all, no matter the circumstances. And that's not rational, it's parochial.
JOE CIRINCIONE: The effort to cut the low-yield warhead is one of the leading contentious issues between you and the Senate. What do you think the odds are that you will prevail? Is it roughly the odds of the Nationals winning the World Series? (Laughter) Or is it worse than that?
CHAIRMAN SMITH: It's roughly the odds of the Seattle Mariners winning the World Series. (Laughter) Let's put it that way. And by the way, that was the first thought that I had when I saw that the Nationals were going to the World Series: It is now official, the only Major League Baseball team that has never been to the World Series is the Seattle Mariners.
JOE CIRINCIONE: Yes. Yes. The only one. We could turn this into a sports talk. (Laughter)
CHAIRMAN SMITH: In all seriousness, that's going to be very, very difficult because of the strong opposition from both the White House and the Senate.
JOE CIRINCIONE: And how do you feel about one of the other major amendments that you helped champion that the House passed with a very strong majority vote, which is to prohibit funding for an unauthorized war with Iran? The so-called Khanna-Gaetz amendment.
CHAIRMAN SMITH: The Executive Branch, in a bipartisan way, is never fond of the Legislative Branch telling it what to do.
JOE CIRINICIONE: Yes. They’re not even sure it's actually part of the government.
CHAIRMAN SMITH: There is that. That’s going to be a challenge as well, but we're still arguing about it.
JOE CIRINCIONE: I'm going to open it up for questions from the audience. We have about twenty minutes before the Chairman has to leave. And if you could start with that young lady next to you who happens to be standing by the mic.
SANDRA IRWIN: Thank you so much. Good morning, Mr. Chairman. Sandra Irwin with “Space News.” I wanted to ask you about the NDAA. There is talk now that it's going to be an abbreviated NDAA. What is happening? Can you give us an update? And will there be a Space Force in the NDAA for the Department of Defense as a separate branch?
CHAIRMAN SMITH: I still believe that we're going to get a bill done, that we're not going to go with the smaller bill. Just yesterday, I really started talking with the White House about the issues that we’re still divided on and I'm confident that we can resolve those.
It's not going to be as quick as we would like because there are a lot of controversial issues and the government's divided. Democrats in the House have a different viewpoint than Republicans in the Senate than the White House, so it takes a while to talk about it.
But I think we will get there and I think it is likely that, at the end of the day, there will be some form of a Space Force in the final bill.
JOE CIRINCIONE: Yes. Could you identify yourself?
ROGER HALE: Roger Hale. I was involved with Ploughshares for 23 years, I guess.
JOE CIRINCIONE: So, what happened? (Laughter)
ROGER HALE: I’m aging out. One thing that's worried me for many, many years – or concerned me – is the fact that the issue of nuclear proliferation and nuclear threat occasionally makes the front page, but rarely.
For example, in the debates that are going on now – and I've resigned myself to listen to most of them – I don't think there's been one word mentioned about nuclear proliferation and the threat of nuclear weapons, other than the fact that Korea puts it on the front page every now and then, and I thank them for that to a point.
What can be done to get the general public interested in this subject? It's just been overcome by everything else, which are very important issues, but this issue is so important, and it just has not been a big issue for the general public.
CHAIRMAN SMITH: I'm not sure I have any brilliant answers for how to do that. I do think I'm focused on at least getting Congress interested in the issue more broadly. And I think we are making progress on that, and your organization is part of that.
One of the best things to do is organize district by district. And there are a lot of groups – Physicians for Social Responsibility, a bunch of other groups – that organize around this issue. And I do have constituents who come in and talk to me specifically about this issue. And the more groups there are like that, that's what gets it on people's radar.
So, yes, I think it needs to be a greater focus and that that's the way I go about doing it. It's always going to be difficult. I visited some of our troops who work on nuclear weapons and, as I was seeing what they were doing, what struck me was the job is unbelievably boring because day in and day out nothing happens until something really bad does. But at the same time, you have got to be ready for it.
So how do you do that? Every day it's quiet, but on the other hand I have, right behind me, the power to destroy the planet. It requires you to stay focused in a disciplined way.
So, if I'm being honest with you, I don’t think the public is ever going to list this as one of their top two or three issues. I hope they don't, because if they do it's because we were in real trouble. I think it's going to require the leaders to make sure that we keep it that way, that we focus on it enough so that it doesn't come to the broader public's attention.
JOE CIRINCIONE: Speaking of real trouble – during the impeachment of Richard Nixon, there were a number of incidents in those final months, in particularly those final weeks, that gave even those around him concern about the president's stability. His behavior was increasingly erratic and unpredictable and there were worries about his command and control of the nuclear arsenal. Do you believe that as the impeachment crisis intensifies around President Donald Trump, that similar risks might present themselves?
CHAIRMAN SMITH: Well, you'll take this comment for what it is, but I firmly believe that the president is every little bit as stable today as he was when he came into office. (Laughter) And I mean that.
JOE CIRINCIONE: Your legislation to prohibit the first use of nuclear weapons, to make sure that the United States never starts a nuclear war, would somewhat address this issue. It would make it illegal for the president to order the first use. So the military would refuse such an order. Is that the way you're looking at, is that part of the motivation behind this legislation?
CHAIRMAN SMITH: No. I think that's a motivation regardless of who the president is. It's simply a recognition of how monumental the decision is and how we want to try to create as many fail-safe gaps to make sure that it doesn't happen when it shouldn’t. So that's regardless of who the executive is.
JOE CIRINCIONE: Good. A question in the back.
TONY BERTUCA: Chairman, thank you for your time today. Tony Bertuca, “Inside Defense.” I wanted to go back to the GBSD. So, the single contractor is obviously a problem for you. Can you take any action to do anything about it? Is there anything you can do to review this or force the Air Force to take another look?
CHAIRMAN SMITH: Yes. The problem is – when I was alerted to this was, I think, was actually after our bill passed out of committee but before it passed off the floor. And I offered at that point – and I’m doing stuff on the space launch thing to try and ensure competition – and there’s things that we could do to do that.
The problem is Boeing wasn't open to it. Because the main thing the Air Force could do is create the atmosphere – because I don't think there's anybody else out there. I don't think Radio Shack makes an ICBM, so you have a limited number of options.
The thing to do would be to address the concerns that Boeing raised about the procurement process. Because if Boeing is to be believed, they didn't say, “We just can't do this anymore.” They said, “The process wasn't fair.” And we offered to find ways to address that and Boeing didn't want us to.
TONY BERTUCA: So, we're headed for single contractor, then?
CHAIRMAN SMITH: Well, we're going to revisit the conversation for next year's NDAA and see if we can get Boeing to work with us to figure out how we can create the right procurement process for them participate. But I don't consider that likely to be successful based on the conversations we've had to date.
JOE CIRINCIONE: Yes. Right up here. And can you please identify yourself?
DAN LEONE: Good morning Congressman Smith. My name is Dan Leone. I'm a reporter with “Defense Daily” and “The Exchange Monitor.” You mentioned that we do need to modernize our nuclear weapons once we hit the sweet spot of where you think the arsenal should be.
We know on the Department of Energy side that they ran into some trouble with commercial off-the-shelf parts. It caused a delay to two of the ongoing weapons programs. There was a hearing in the Strategic Forces Subcommittee all about it. And the DOE said that they would sort of borrow against the future with future warhead modernization programs to make sure these two come off on time.
Given the late date of that subcommittee hearing, are you looking at maybe squeezing some extra scrutiny about the Department of Energy supply chain, about their practices, into the conference negotiations or do you have to save that for next year?
CHAIRMAN SMITH: We have to save it for next year because there's no airdrops, you can't bring stuff in that wasn't addressed in the first place. But, based on that hearing and further discussions, it's something we will take a very serious look at next year.
JOE CIRINCIONE: Thank you. Yes.
ARDETH PLATTE: Sister Ardeth Platte. I'm part of ICAN, the international campaign for the elimination of all nuclear weapons. And in the work with young people throughout the world, I am convinced that we folks with gray hair are way behind the times. They plead with us to eliminate all nuclear weapons, to stop the contamination of Mother Earth. Omnicide is going on right now. It's going on because we do not deal with waste, the cancers increase, every base is contaminated.
It just seems to me that we could unite as a people in this country to get rid of weapons that can never be used – must not be used – and that we can see the relationship between it and the environmental movement. So I plead with you Congress people to get together and deal with it, like you did to counter-apartheid, and counter in other countries. Please. (Applause)
JOE CIRINCIONE: Thank you for your comment. Thank you. We have some questions over here. Thank you very much, Sister. Could you identify yourself please?
RADIO FREE ASIA: Hi from Radio Free Asia. My question is on North Korea. The working level talks between the United States and North Korea were broken up about three weeks ago in Sweden. And today North Korea put out a statement emphasizing the personal of relationship between President Trump and Chairman Kim Jong-Un, while calling for the change in US calculations in nuclear negotiations with North Korea.
So let’s just hear your assessment or expectations on the negotiations between the United States and North Korea?
CHAIRMAN SMITH: On the nuclear question I don't think any progress has really been made. Now it's not nothing that tensions on the Korean peninsula have gone down considerably since the dialogue has started. And actually, I don't disagree with President Trump meeting with Kim Jong-un. I don't think he needs to sing his praises the way that he does, given a number of things that have happened. But the fact that they're meeting, and the fact that South Korea is engaging with North Korea so that the tensions on the Korean peninsula are reduced and it's less likely that a war will start – I think that's a positive.
But what we haven't made any progress on to point at this point is changing Kim Jong-Un's calculation about his nuclear weapons. I agree with John Bolton. I don't think Kim Jong-Un has any intention right now of ever getting rid of his nuclear weapons.
We need to change that. We need to figure out how to change his calculus on that because, to the Sister's point, the fewer nuclear weapons we have in the world, the better off we are. And reducing proliferation in North Korea would be a huge step. I just don't think we've made any progress towards that at this point.
His calculation is still, “I need them to make sure that you won't invade me.” I'm not saying I agree with that. That's just his calculation. So, we're not making any progress, but I'm in favor of continuing the dialogue. Talking is better than fighting. Thank you.
JOE CIRINCIONE: Jessica Mathews and then Daryl Kimball.
JESSICA MATHEWS: Jessica Mathews from the Carnegie Endowment. The missing issue the last four or five years on Capitol Hill has been the budget deficit. Since the Republicans got control of the government, they’ve forgotten about the deficit. And since the Democrats have wanted to be strong on defense, they’ve forgotten about the deficit.
Do your colleagues - does anybody think about it anymore quietly? And I say that with a smile, but particularly given how low interest rates are, we’re running towards a financial crisis.
CHAIRMAN SMITH: As my answer will reassure you, I think about it all the time. I believe the deficit is an enormous problem and I don’t think people understand fully how it is that we’ve gotten to the point where the debt and the deficit are a problem.
So, I will tell you. And there’s a lot of different ways that we got here, but basically the American public right now has a very clear consensus on the budget. They support a balanced budget strongly, in every poll that I’ve ever seen, they want their taxes cut, and they want spending increased. (Laughter)
And when you look at the polling data, that is exactly what they want. Because what we’ve gotten very good at in American politics is figuring out how to promise something for nothing and the American people have gotten very good at demanding it. This drives me insane.
I’m a very rational person and, as I say, I’m a rational person in an irrational world. Make your choice, okay? I can live with it either way. I’ll argue it, but don’t ask for something that literally cannot be done. And I think actually this is a problem in American culture.
I used to use this analogy to explain why healthcare costs are off the charts. I was in Luxembourg and there was a sign that was hanging over this bar in Luxembourg, which is apparently the official motto of Luxembourg or something, and it said, “All we want is what we have.” And I looked like that and I said, “that is downright un-American.” (Laughter)
Because we are taught in America – you walk into any grade school in America and there will be some poster of someone saying, “You can do anything. If you dream it, you can do it.” And I always walked in there and read that and thought, “No. No, you can’t, actually. That’s not true.”
But once you believe that - and I get it. I’ve accomplished things in my life that I never thought possible. So, I understand the idea of dreaming. But past a certain point, it’s just freaking insane. And you need to take a step back and go, “Okay we can’t do that.” But on the budget, that’s where we’re at.
So, the problem that comes up is this: politicians are vastly more rational actors than people realize. We are not driven so much by our donors as we are by the people who vote for us. I think that people manage to have this entirely contradictory opinion that “politicians need to show courage and, furthermore, they need to listen to us.”
Well the only courage that we ever show is when we don’t listen to you. That’s the definition of political courage - is to do something that you know the people who have your job in their hands don’t like.
The point is that, when we get to an appropriations bill, nobody who knows what’s going on in Congress wants to vote for an appropriations bill. Ever. And I’ll tell you why: because it is, by definition, a bad political vote. Because the public wants appropriations bills that balance the budget, cut taxes, and increase spending. Since that’s impossible, you’d better not vote for it.
Now the only thing that happened around two years ago is that the public expanded its list to say, “Oh also, continuing resolutions are bad.” Okay. So, we got hit with that and it’s like, okay, we can’t pass the budget, so between the two bads we’ll go ahead and cut a deal and avoid the continuing resolution.
Do you remember the morning the president signed that appropriations deal he tweeted out, “I’m going to veto this”? Which was just fascinating for me because we had spent months working on this deal and he’s like, “Oh, hell, I’m not doing that.” Really? And they talked him out of it by the end of the day.
But what happened was the president watched Fox News and he realized what I just said.
He said, “Wait a second, people are going to be pissed at me if I sign this. I don’t want to do that.” Yeah, but you kind of have to. And now he doesn’t want to again.
So, we don’t want to address it because if you address it, you have to pretend it’s not there. That’s how you get through it. I’m sorry this is a long answer but it’s kind of important, which brings me to my last point.
Have you heard of Modern Monetary Theory? This is the new thing. It’s not because Democrats want to increase the defense budget or forget about the deficit, it’s vastly worse than that. Democrats have decided that Modern Monetary Theory is the sophisticated way of understanding budgets that shows that deficits don’t matter.
Now, I will tell you when people told me this, I was intrigued. (Laughter) Because if deficits don’t matter, I’ve got the easiest job in the world. It’s like the ice cream diet. (Laughter) It’s like, “I don’t know where this is going, but I’m really interested. Tell me, how does this work?” The answer is: it doesn’t work.
Because Modern Monetary Theory – there’s nothing modern about it. It’s pretty simple and straightforward. The federal budget is different than anybody else’s budget because we print our own money. And that’s not an insignificant fact. And what that means is that if we’re backed into a corner, we have an option that no business, no individual, has. We can just print the money and call it good.
Now what’s the problem with that?
The problem with that has been well-understood for a long time: you can send inflation right through the ceiling. But, they said, “Interest rates are really low, inflation’s really low, so we can get away with it.” You can get away with it right up until the moment that you can’t. And the moment that you can’t is when you are spinning out of control downhill so fast there’s no way to rescue yourself.
So, yes, I think about it a lot and I want people to think about it more. It is one good argument for why we should spend a lot less than $1.2 trillion modernizing our nuclear forces. And that’s an argument we ought to use.
But as long as Republicans don’t care about the deficit because they want to cut taxes, and Democrats have this Modern Monetary Theory nonsense – and I know, the reason is the same.
I’ve got a very difficult decision that I have to make over the course of the next three days, and I really don’t want to tell the person that I’m going to make the bad–
Can I just do this and not tell them, and have them not know that I decided the way they didn’t want me to? Because it’s painful, it’s difficult. How do you go up to people and say, “We can’t actually have a balanced budget while cutting taxes and increasing spending”? But we have to start having that conversation. (Applause)
JOE CIRINCIONE: Let me pin you down on one issue that Jessica raises in her brilliant article in The New York Review of Books where she discusses the defense budget in great detail. One of the arguments is that this level of spending – this $738 billion that’s before us right now – is unsustainable. You can’t keep spending that much. The budget has got to come down. What you’re saying is maybe not?
CHAIRMAN SMITH: No. What I’m saying is that, in my view, our entire fiscal policy is unsustainable. Now I will say this: I have been surprised at how long it has been sustained. Maybe I’m wrong.
JOE CIRINCIONE: What would you recommend to an incoming Democratic administration? Could they have the courage to trim the military budget?
CHAIRMAN SMITH: The problem with all this is – and I’m sorry, I’m going a long way here, but I love this analogy, so I’ll throw it at you.
The problem is, and this is what Boehner and Obama tried to do, is they tried to say let’s hold hands and jump off the bridge together, basically. Because what every politician wants is for the other party to address the deficit. Because once the other party has addressed it, the problem is brought under control and they’re politically wiped out so now you’re in charge. It’s a win-win. It’s beautiful.
Sorry, I have to tell the Stripes analogy.
JOE CIRINCIONE: Okay, go.
CHAIRMAN SMITH: If you’ve ever seen the movie Stripes, there’s this great scene where Bill Murray and Harold Ramis are in trouble. They missed curfew and the sergeant knows somebody missed curfew. And he basically says, “Either the person who did this admits to it, or you’re all going to get punished.”
And so, Bill Murray’s standing in line. He looks at Harold Ramis like, “Hey man, we can’t. We have to admit to this.” And Bill Murray acts like he’s going to step forward, but then doesn’t so his buddy steps forward on his own and takes all the blame. (Laughter)
That is exactly want politicians want on the budget, okay? It’s to basically hold hands and then let the other guy jump.
JOE CIRINCIONE: The chairman has to go, but Daryl Kimball from Arms Control Association gets the very last question then we’ve got to go.
DARYL KIMBALL: Chairman Smith, nuclear costs are rising. Nuclear risks are rising. We’re in a qualitative arms race, but bad could get worse.
As you know, the New Strategic Arms Reduction Treaty (New START) is due to expire in 2021. Donald Trump has not made a decision. Without that we will not have limits on the world’s two largest arsenals for the first time since 1972.
So my question is what is Congress doing about it? What more can Congress do? If Trump does not agree with Putin to extend the Treaty, could and should Congress limit funding that would be necessary to increase above the START limits?
CHAIRMAN SMITH: Yes. Yes, and all of the above. We have some provision in our bill, which of course the Republicans are hostile to, but I think Congress should do everything it can to put pressure on the administration to not back of the START treaty.
And then this I can answer. If you were to ask me what I would say to a new Democratic president, I would say: number one, go start negotiating with the Russians and the Chinese on new arms control.
Because arms control has gone even beyond – even if we kept all of our existing arms control treaties, you’ve got so many other issues now with cyber and missile defense and new technologies like hypersonics. How do hypersonic weapons change the equation on all of this? How does AI change the equation on all of this?
So many things that, if we’re going to have faith that our allies aren’t going to sneak up and obliterate us so that we don’t feel like we have to obliterate them first, we need to talk. As quickly as possible. The major powers of the world need to talk so that we don’t stumble into something that destroys the globe. I think that is enormously important. (Applause)
JOE CIRINCIONE: Thank you. Chairman Smith, thank you for your time. Thank you for your leadership. Thank you for your service to the United States of America. Thank you. A real pleasure, sir. (Applause)