Defending America: The Price We Pay

<v Speaker>[music]. <v Narrator>Keeping our nation secure is one of our government's most vital responsibilities, but the job of defending our country has become increasingly complex. In order to feel secure, the United States strives to be number one in military might. The cost of maintaining this position is rarely questioned. However, recent charges of fraud and corruption at the Pentagon raise the issue of how the military spends our tax dollars. Yet this may be only a small part of a much larger concern. Perhaps the real question is how does military spending affect our society and our lives? <v Man>I as a taxpayer, I feel definitely not getting my dollars worth in terms of defense or security for what we spend. <v Woman>I don't think they need to spend millions upon millions of dollars for a nuclear bomb that's going to wipe everybody out. <v Man 2>Well, I used to work in the defense industry, and when I did, I thought that much of that money was basically a welfare program for engineers. No, I don't think too much is spent on defense. How do you judge what it takes to protect your country? Where do you put a price tag? Where do you put limitations?

<v Narrator>This year, our government will spend over 400 billion dollars on national defense. Some of this money will be used to develop new weapons programs. Another share will be used to support our armed forces stationed in the United States and in other parts of the world. And part of this money will be used to pay for past wars. Taxpayers foot the bill for the U.S. military budget from 1981 to 1988. The average family's contribution to the military budget has totaled about 20000 dollars. In 1988, the typical family paid 250 dollars a month to support our military. Is this money well spent? Do we feel more secure? What are the hidden costs? For Silicon Valley, just south of San Francisco, military spending plays a prominent role here. The Pentagon spends 3700 dollars per resident, the second highest in the nation, surpassed only by a county in Connecticut. When many Valley residents consider such massive spending, their focus is often influenced by the jobs this money creates. One of the largest military contractors in the valley is FMC, formerly called the Food Machinery Corporation, production of the Bradley Fighting Vehicle employs 3000 people. Relaxing after their shift, these FMC employees see few problems with the work they do. <v FMC Employee>Defense spending really kept me above water, I should say, as far as family wise and everything else. It's made me get what I have now. I've worked for the defense industry now for 20, 26 years, my job in defense related plus three years in the service. And I know that when I was in there, I appreciated everything. We had to go ahead and do our jobs.

<v William Highlander>If you look at the economic impact of defense spending on Silicon Valley, you would find that it has been a very stabilizing influence for a number of years. It was a stabilizing influence during the recent downturn in the electronics industry. It is a an important, although not the overriding economic factor in the valley, because this is a very robust economy, a very affluent county in the United States. <v Narrator>Bill Highlander, a former army officer, is now a spokesman for FMC. <v William Highlander>I think it's absolutely essential that we spend money for a strong defense. One of the founding premises was that we would provide for the common defense of the country. You know, that's listed right in the beginning, the Constitution. How much is enough that has always been debatable, but I don't think that you can gamble the future of the country by not spending enough to have a strong and credible defense. <v Speaker 2>The Soviet military buildup during the past decade in Eastern Europe has presented NATO strategists with a formidable defensive task to match Soviet capability without matching their numerical superiority. Western forces are outnumbered three to one by the armor and personnel of the Warsaw Pact nations. NATO forces can counter Soviet strength of numbers with coordinated combined arms, rapid maneuver of mechanized forces, superior firepower, day and night fighting capabilities and a technological edge.

<v Steve Moulds>I'd have to attribute a lot of the vitality of the real estate in Silicon Valley to the past two to three years for in defense spending. <v Narrator>Steve Moulds is a commercial real estate broker who has seen the defense industry step in as a savior during troubled times. <v Steve Moulds>Real estate has been through some tough times in the valley here. Certainly the computer industry and the chip industry have been having a tough time, but there was an overbuilt market. And so we've been having some tough times here. But the defense industry and their voracious consumption of space has really kept a lot of developers and brokers in in beans over the last three years. <v Speaker>It appears that about 500 companies and remember, this is about 1500 company valley approximately are significantly engaged in defense activities, meaning, you know, more than 25 percent. With such a high percentage of well-paying jobs associated with military contractors, few people choose to leave. However, some workers have qualms about the nature of the work they are doing.

<v Speaker 3>OK. Coming up, <v Narrator>Shelley Kessler now works as a labor organizer, but at one time she assembled missiles. <v Shelley Kessler>There is two two different kinds of jobs and missile tubes that you could deal with. One was a cruise missile, two which if people are not familiar with it, the cruise is the kind of thing that follows like landscape that you can really that radar allows it to do some very interesting maneuvers. The job I turn down in that section was one where I was to crawl inside the missile tube and put a Teflon padding system along on the inside, and they wanted me to do this job. One of the reasons they hired me is because they thought I was small enough to get into these very tight situations because that's what they needed in some of these other fellows had too much table muscle. So they had me been crawling inside of these situations. And that's a scary feeling to crawl inside of a missile tube and think about what you were doing. And it was being developed for the purpose of killing people. <v Narrator>When Shelley decided to turn down a promotion into the cruise missile project, her coworkers were surprised.

<v Shelley Kessler>When I turned this down, I came back to my department and management razmi because I had an opportunity and turned it down, but more importantly, my coworkers razzed me because they said, look, you're working in a defense industry. You're going to be doing the kind of jobs that that go in that direction. And we have very little things that are land use, positive, whatever. You made a choice and a decision when you came here and here, you an opportunity, you can be making better wages. Why are you here? If you don't like the work, you should leave. And I, of course, justified and said, no, I do like the work. I enjoy my coworkers, I enjoy the work. I like working with my hands. I enjoy being a mechanic. I just didn't like being in the cruise missiles. <v Narrator>Even some of the people who still work for defense contractors have reservations about their jobs, such as this FMC employee, <v FMC Employy>I've been to Nicaragua and I met two guys, that legs were blown out by tanks. And I cry when I met them and I heard their stories and I came back to the plant thinking, did I make this?

<v Narrator>Most of the military work in the valley does not involve assembling weapons, but rather focuses on the research and development of such weapons. Software engineer Jeff Dean had a challenging job at a local artificial intelligence company until he found the company was increasingly dependent on military contracts <v Jeff Dean>when they started getting into the military. I when I noticed that there is a real trend, what I did was I went to the president of the company and I said I'd really like to get out of the military work and start working on more commercial applications. And at the time, I was told that there would be no problem with that. The company was clearly moving in that direction. And I said, well, I'd like to plan on phasing out within the next year. And they said, no problem, six months, there's no problem. And I felt very good about that. And about a year later, I was working on the company's only nonmilitary funded project and the project came to an end and there was nothing left. <v Narrator>Jeff found himself with no other option but to leave a job he liked in every other respect,

<v Jeff Dean>when I decided to leave the company, my fellow employees were some of them were a little surprised and a little puzzled because they didn't quite understand the dilemma that I'd been wrestling with. And the people who I was closest with knew exactly what was going on. Everyone who I spoke to was quite supportive. Even the people who didn't agree with me, the people who are quite pro defense, pro military, still respected me for for the choice that I had made because they all realized that it was a difficult choice and there was a tremendous amount of support, which is, again, one of the things that made it difficult to leave that kind of environment, leaving an environment where everyone says, I understand why you're leaving and I admire you for that. You can begin to get a sense of how difficult it was to pull oneself away from that environment. <v Narrator>With one out of three engineering jobs, defense related engineering students like those at San Jose State University have to decide whether to accept positions in the defense industry or not.

<v Student>You can be as idealistic as you'd like, but the truth the reality is that you have to get paid and a job is a job. You know, we went to school five, six years and we paid a lot of money and struggled. And then after we graduate, we find out that there are a lot of contractors and they're going to they're willing to pay 30, 40 thousand a year. Are we going to turn down because we feel like, well, you know, we don't like it that you make a missile parts. I don't think most people would do that. <v Narrator>Engineers are among the prime beneficiaries of defense spending. One person who studies employment trends in Silicon Valley is Michael Closson, director of the Center for Economic Conversion. <v Michael Closson>While the impact of defense spending, unemployment has been mixed, on the one hand it's generated a lot of jobs nationwide. About six million people are directly employed working on defense contracts. So it's significantly, you know, it's had an impact in terms of employment. However, its studies have been done by the Congressional Budget Office and the Bureau of Labor Statistics that indicate the dollar for dollar defense spending is one of the poorest employment generators. Almost any other form of spending generates more jobs. Also, there's not a good mix or a good match between the people who are out of work in our society and the people who are employed in defense industry. If you went down to any local employment office, very few of the people in those lines would be qualified to do defense work because the average defense worker these days is a 48 year old white male with an advanced technical degree, hardly the kind of person who has the trouble of getting a job. <v Narrator>Because of the capital intensive and high tech nature of military production, it is estimated that 76000 jobs would be created for every one billion dollars spent in this area. However, the same one billion dollars spent on mass transit would create 92000 jobs or 100 39000 jobs in the area of health care or one hundred eighty seven thousand jobs in education. Yet despite these statistics, there is still tremendous pressure on Congress to spend money on military projects.

<v Barbara Boxer>The pressure on members of Congress to spend more money on defense has always been a problem since the days that that Eisenhower warned about the military industrial complex. Essentially what happens is members of Congress believe that jobs in their districts are affected and that they must therefore continue to provide for a big increase in defense spending year after year. <v Narrator>Even members of Congress, such as Don Edwards, who have generally opposed increases in military spending, find themselves defending the military budget when it comes to jobs in their districts. <v Don Edwards>The military wanted the Bradley I would like to not have it, but but as long as it's going to be built to building, it's being built in San Jose. And I want my people working there rather than having having it built somewhere else in the country. It's going to be built.

<v Narrator>It is estimated that 71 percent of all federal research and development money now goes to the military, leaving only 11 percent for research in space, technology and energy, nine percent for health research and seven percent for research in the natural sciences. Has this created what some have described as a brain drain, or has military research and development led to profitable consumer spinoffs? <v Jim Martin>The defense money, defense research and development money has a tremendous impact in the commercial sector. If you go back and look historically, computers were developed by the Department of Defense. ENIAC was a DOD funded well, the war department at that point because they hadn't changed the name. But a war department funded project at New York University, the development of the transistor under Shockley was funded very largely by the Department of Defense. What got the semiconductor industry started an economically viable was the fact that the Defense Department that was willing to gamble on this new, untried technology was willing to spend a tremendous amount of money on semiconductors while the commercial world was sitting there buying vacuum tubes and saying, well, maybe if this semiconductor thing really happens somewhere downstream, we'll use it. That impetus was what eventually led to the development of the microprocessor chip, the large scale memories we have, all of the things that have contributed to automotive control systems, personal computers, VCRs, all of the things that we consider almost essential to life today that didn't exist 20 years ago. <v Narrator>At the University of California, Berkeley campus physics professor Charles Schwartz believes that potential spinoffs do not justify military research.

<v Charles Schwatz>If you want to produce a ballpoint pen, you don't have to go to the moon to do it. If you accidentally discover a ballpoint pen by going to the moon, it's an accident. I mean, that doesn't prove it was right to go to the moon. You go to the moon because you want to go to the moon and you build weapons because you think you need to build weapons and you don't build weapons because you think you might accidentally find some good things on the way for two reasons. It's it's wasteful of money and may be wasteful of your security if you're building weapons that will provoke war. So I think that whole argument is is thoroughly illogical and doesn't have a proper place in the debate. <v Narrator>Biological or not, military research has produced spinoffs, whether this trend will continue is a matter of question. <v Michael Closson>Historically, particularly in the 60s, there's evidence there were a lot of spinoffs from the military sector, the computers, the whole aircraft industry, both airframes and jet engines were clearly a result of weapons spending. Now, as we move into the 80s, we find a diminished or significantly diminished amount of spinoffs or spillovers. And that's for two reasons. Military weaponry has become so esoteric that there aren't very many commercial applications for it that are cost effective. Number two is even when there are the applications because of heightened security requirements, they're not able to really be applied. The R&D that goes on in the black industry, black budget industry is a secret and doesn't get out into the commercial industry for approximately 10 years. <v Narrator>Pete Carey, Pulitzer Prize winning reporter for the San Jose Mercury News, has written a series of articles on the black budget, the part of the military budget kept secret from Congress and the general public. He has focused on the impact black budget research and development has had on the lives of workers in this secretive industry.

<v Pete Carey>Scientists and engineers in the industry don't get to deliver papers at conferences. They don't exchange their information with classified engineers. And in general, their findings are kept secret. They don't get awards, they pay a price, and we do, too. I think we pay a price and they're not getting access to this neat stuff. <v Narrator>Super secret buildings called skiffs or special compartmentalized information facilities protect black budget projects from detection from the outside. These buildings look similar to any other office building or electronics company. <v Pete Carey>If he were to go out in Silicon Valley and try to identify a building which was dedicated to like budget programs, you'd have some trouble to look for it. And in fact, many of the buildings which are used to reforming commercial buildings housed other companies. A good example. My favorite example is the Pizza Time Theater Corporation. The building is now used by IBM federal systems for a classified Air Force satellite program. And that is being remodeled at this very moment. It still looks like the old pizza time theater headquarters until you get walk up to the window and then you look in the windows and you see that about three feet on the other side, there's a wall. <v James Blackwell>There's no way we could have a strong defense without a significant number of black programs, we just can't afford to let our enemies know that we know what they're doing. We can't let our enemies know what leading edge technologies we're taking advantage of. We have to have special access programs.

<v Narrator>James Blackwell, a former Army officer and now a specialist in black budget programs with the Center for Strategic and International Studies feels such programs have an impact on the way our democratic political system is supposed to work. <v James Blackwell>Categorizing and Development Project as black has profound implications for democracy. After all, democracy depends on accountability of officials of the government to the consent of the governed. And by definition, special access or black programs have a very limited amount of review by those elected representatives and those appointed to represent the president in these matters. So, yes, black programs are less democratic in that sense, but much more efficient. That's another reason why we ought to keep the number of black programs limited to those necessary for national security, for the national defense. <v Narrator>Another indication of the priority military research and development holds is its place on university campuses. In recent years, university research grants have been increasingly tied to projects which might lead to more sophisticated weapons.

<v Charles Schwatz>It's an investment that the Pentagon is making in a very advanced scientific research. But where there's a very strong likelihood of payoff in terms of new developments for military purposes. And the payoff is not just in the new discoveries that that can and do come out of the purely scientific work. But more significantly, I think, and the training of the students in both undergraduate and graduate students in these advanced technology areas, science and technology, very highly developed instrumentations for particle physics, for astrophysics and so on. And then when these people leave the universities, about the only places they can find jobs are in the defense sector at weapons labs like Livermore, Lockheed, General Dynamics. And so the universities are performing a very vital role for the Pentagon and accelerating the technological pace of the arms race. <v Narrator>Unwilling to conform to this system. Professor Schwartz altered his role in the physics department.

<v Charles Schwatz>Personally, I've taken a much stronger stand at the academic level, I've concluded that just as a regular teacher of physics courses to undergraduate and graduate physics and engineering majors, that I'm doing a very important job. Or rather, I was doing a very important job for the Pentagon by training the people who will work working their weapons laboratories. So over the last two years, I've just stopped teaching those courses and focus my efforts on teaching science for people who are not going to be employed in the weapons sector. <v Narrator>Pentagon funds spent on military related research and development are funds that cannot be spent on other kinds of research and development. Stanford economics professor Mordecai Kurz feels the sciences have suffered as a result. <v Mordecai Kurz>Let us recognize the total budget for the National Science Foundation in nineteen eighty eight. Is one point seven billion dollars so that the federal government spends on basic research in all fields through the National Science Foundation, one point seven billion dollars. I'm pointing out that one F-16 16 costs fully equipped with all the missiles and all the equipment that goes with it cost close to 100 hundred million dollars. One missile launching cruiser costs one billion dollars, a B1 bomber cost a billion dollars, which means that for two be one bombers, we exceed the budget of the entire National Science Foundation, specifically within the National Science Foundation. We are spending 30 million dollars, 30 million dollars. On social sciences, we spend 10 million dollars on basic research in economics. Ten million dollars, one tenth of the cost of an F-16. <v Narrator>Because of these priorities, our ability to compete with other nations is affected.

<v Barbara Boxer>It has been said that that nobody really wants to buy an Amex, but a lot of people want to buy because and you can't find an American made VCR. I think that speaks to it. <v Don Edwards>60 percent of our scientists and engineers in this country, the research and development they do or for the Pentagon and the spinoff really isn't there. About one hundred percent of the scientists in Japan are working on consumer goods, on better automobiles, better VCRs in Germany is the same rule applies. And that's one of the reasons why we and of course, the Russians are, but especially the United States, our find ourselves fifth or sixth in the world in areas of standard of living and certainly a trade deficit of one hundred and fifty billion dollars. We're just not competing anymore. We're not making things people want to buy. <v Nancy Walker>Our schools are going to help our old folks don't have what they need. Children are growing up addicted to drugs, being born into this world, addicted to drugs, and we're spending more money on farmers.

<v Narrator>Local government officials often experience the impact of military spending from a different perspective, San Francisco Board of Supervisors President Nancy Walker sees a direct relationship between increases in military spending and cutbacks for programs which deal with social problems. <v Nancy Walker>Increases in military spending have affected social programs in the Bay Area and a variety of ways. I could cite reductions and changes in Medicare funding programs. I could cite almost any domestic social program that has experienced cutbacks in the last eight years or certainly in the last seven and a half years of the Reagan administration. While we have seen an increase in the Defense Department budget. And that's everything from reductions and block grants to the city, reductions in revenue sharing to cities, reductions and availability of funds for transit reductions and money available to build housing. <v Narrator>Since 1981, two trillion dollars has been spent on the military part of the federal budget in one four year period from 1982 to 1986, military spending increased 38 percent. At the same time, federal money for housing was cut by 82 percent for employment and training by 52 percent for mass transit by 28 percent, and for education by 14 percent when comparing the costs of various weapons programs with other needs in our society. The costs are often startling. One billion dollars now is spent on the military could be used to house 180000 homeless people, provide day care for 350000 children, or train 400000 workers in vocational skills for a year. Out of every federal tax dollar, 52 cents now goes to pay for current and past military activity, two cents for food and nutrition, two cents for housing, and two cents for education.

<v Dina Rasor>The defense budget is very artificially high right now. It has shot up artificially high. We are on a wartime footing and we are fighting the war.

<v Narrator>Dina Rasor believes this priority is given to military spending because the Pentagon creates an impression, we're always just one step behind the Russians and our survival depends on our catching up. She runs a Washington based agency which monitors military procurement practices. <v Dina Rasor>One of the reasons that we always feel that our weapons are obsolete is that that's part of the game of the defense industry and the Pentagon to constantly feel like we're we're just we're not quite. But we're losing the game. We're losing the race not by so much that you throw your hands up. So I can't win or not so much that you become so frantic that you feel like you can't fight. But just a little bit so that by the time we roll something off a weapon, our intelligence people, especially the defense intelligence people, will find out the Soviets have just a little something just a little bit better. And a lot of times the intelligence is good. It's obviously made to fit with what the Pentagon wants to buy next. <v Narrator>Another factor influencing the high cost of our military budget is the kind of agreements military contractors negotiate in the Pentagon.

<v Dina Rasor>There's two kinds of contracts. There is what they call cost plus, which means whatever it costs you to make it. Plus you get a profit. The problem with that is your profits based on how much it costs you to make it. So you do everything you can to make it the most expensive, the most wasteful and the most expensive it can be so that when you finally feel your profit, you get a higher profit. So the defense contractors really got away with a lot for many years with that. So the Defense Department, quote, cracked it down with fixed price, contract fixed price was this is how much we're going to pay you no matter what. And the Pentagon and defense contractors gotten very creative on how to get around that. And one of the ways is to do that is to say if the government wants to change something in the weapon, it costs the government money above the fixed price. So they have what these call these engineering change proposals. So the government realizes the company is not going to make it. Company is going to be, you know, bankrupt. They keep going this way. They can't let a company go bankrupt. So they suddenly discover the government that they have to add something to it, you know, change it in some way. It just happens to be the way that these people are also behind in defense contractors. So that's a little game that goes on. You can have hundreds and thousands of engineering change proposals on a weapon. <v William Highlander>When the government decides that they need a piece of equipment or a system, that they will put out a request for proposal to the industry, the industry looks at that phase. Does that fit within our business? Can we make it can we make it at a profit? Can we make it at the schedule called for? And we go through the the business decisions of whether or not we will bid on that contract. Then we put together a proposal pitch that proposal to the various decision makers along the government chain and bid. And then, as you know, most contracts today are given on a competitive basis. We have some contracts that we have had for a while that our sole source contracts and the government has stayed with us because we provide a quality product on time, on budget at a reasonable cost.

<v Narrator>Other factors also play a role in determining the cost of weapons. <v Dina Rasor>There are several reasons why the weapons cost so much. One of the reasons is that. The way we base the price for our weapon, how much do you pay for B1 bomber? How should you pay for a bomb or how much do you pay for a tank? Well, you think that you'd go out like most industry does and you build it from the bottom up and you figure out how much, how many hours, how many widgets, how many, you know, how much production time, how much overhead. And you come up with this price of what it should cost. But unfortunately, the Defense Department and the contractors have gotten into the system of doing what what it will cost because what it cost before. For example, take the B1 bomber full of fraud, full of overruns, full of bad mistakes that had to be corrected. Very expensive airplane. But at two hundred and fifty million dollars copy, it has become the new level of what we're going to pay for a bomber. So when you come in with the new bomber, like the stealth, who has a special coating or special this or special that and or you want to say with a tank, you have a tank with wings and stuff comes through the tank, then you add on to that two hundred and fifty billion dollars base. So every generation of weapon exponentially gets more and more expensive.

<v William Highlander>Well, a lot of the the high cost or perceived high cost that you see on military systems or due to technology advances, the increased use of electronics, the the amount of research and development that had to be spent and trying to keep that technological edge. And then that has to be put into the product. You have to understand that you don't turn these things out like television sets or automobiles, the numbers that you buy often affect the unit price.

<v Narrator>Military contractors have been accused of achieving an edge in their negotiations by getting insider information from Pentagon employees, as well as hiring these employees when they leave the service, a process referred to as the revolving door. <v Dina Rasor>A big problem that comes up is a revolving door syndrome, and that is where officers and civilians, but mainly officers, usually generals, go work for defense companies after they retire. Average age for an officer to retire at age 40 for prime of life. And so you go in there and it isn't so much what you do after you retire to get you the big job. It's what you do before you retire. It's for services rendered and you can decide whether or not you're going to go ahead and get go ahead and be tough on a contractor and not get that job or do what your buddies had done before you. And that is to look the other way, go along with the contractor, go along with his members of Congress that he's got lined up and get a very nice job. And so that kind of system could corrupt even a Boy Scout. <v Barbara Boxer>I think we really had a situation for the past several years where there has been such a fine line, if any, line between the defense contracting community and the Pentagon itself that in my view, we were being ripped off to to the tune of many billions of dollars. If it hit home to me in the spare parts scandal where we found out we were paying seven thousand dollars for a coffee pot, four hundred dollars for seven dollars hammer, six hundred dollars for a toilet seat. These kind of things that people could really relate to, I mean, in and of themselves may not be that significant. But when you realize how you're being overcharged for something you can understand, you can imagine the kind of overcharging that's going on and missiles and tanks and these kinds of things.

<v Narrator>At Ford Aerospace, Silicon Valley's fourth largest military contractor, Vice president John Ruby, feels such corruption only represents a small part of the industry. <v John Ruby>But I feel that the large criticism that we have been under in the past few years in the area of waste, fraud and abuse, I think that's largely exaggerated. I think when you look at the total number of defense contracts, that there are only a very few that are involved in the problems that we have seen. The defense industries, aerospace companies like ourselves have worked very hard to improve our performance and improve our reputation. Orbiting twenty two thousand three hundred miles above Earth, the advanced discus three communications satellites are a vital element of the defense satellite communication system, jam proof and shielded against the damaging effects of an electromagnetic pulse. The satellites are part of a global command and control network serving the National Command Authority. The Department of Defense, NATO and other essential U.S. <v Narrator>Ford Aerospace has 90 percent of its business tied to Pentagon spending. They feel more regulation is not the answer.

<v John Ruby>Recent legislation has made it more difficult in the way that changes have been made to the procurement policy. Some of this is has been negative on the industry and that it has put a squeeze on profits in the industry. It has shifted the burden of risk to the contractors. In many cases, it has decreased the incentives for investing on the part of industry. And the net effect of this is that some companies have simply chosen to go out of the business and other companies are not investing as much in R&D as they once were. I think the defense industry is very important not only to the national security, but it's also very important to the economy and the technology base of the country. <v Speaker>["Solsbury Hill" by Peter Gabriel] <v Narrator>military spending has created controversy in the kinds of jobs it creates, the research and development it funds and the priority it holds when compared to other needs in our society. What role has the general public played in helping to decide these issues? For the past 25 years, Americans have demonstrated for a reduction in military spending and for changes in military policy. Though demonstrators still gather most of the headlines, a variety of largely unknown organizations work behind the scenes to affect military spending. Several organizations have developed to curtail military contractor spending abuses. One such group is BENS business executives for national security.

<v Bernie Ward>What Barnes is about is BENS wants to manage the military procurement system the same way you'd manage a business, which means that you stress output rather than input. You stress results rather than how much money you're spending. You minimize how much you spend to maximize what you're going to get. And BENS is also concerned that if you wreck the economy while you're building all of this money into the military, that the country is not better off in the long run. BENS works, in a sense, the exact same way the Pentagon works. 40 years ago, the Pentagon understood that the real power in the country is not in Washington. It's in every congressional district that if you can spread your money out into those congressional districts and create a job constituency, you are going to be able to guarantee almost every program continues. BENS' goal is to have a group of prominent business people in every congressional district throughout the country to wield power locally. There is no other organization in the country that is effectively trying to wield its power locally rather than using it in Washington. And what Bend's is going to have ultimately is a group of business people that will have a relationship with a member of Congress and with the senator who can lobby that member of Congress not in Washington, but in the local congressional district. <v Narrator>Unlike BENS' beyond war attempts to influence military spending without getting involved in politics, instead it focuses on getting its 40000 members to question the constant preparation for war and to seek nonmilitary solutions to international conflicts.

<v Wayne Mill>I think a lot of people look at the military industrial complex as a as an enemy, as as something bad. And what what you need to see is that we're all taxpayers and that's the most direct connection to any of the weapons. And that that's where our responsibility as individuals is, is to work on that, to to build a system and a and a way of functioning in this world that doesn't require that <v Narrator>Wayne Mill left Rome Corporation, where he was vice president to become one of the founders of Beyond War. <v Wayne Mill>I got into beyond war, really through an incident that occurred about 10 years after I'd gotten out of the submarine service. I was a nuclear weapons specialist during that time, and it was about 10 years later, I was in on a business trip in Japan and I had an opportunity to go down to Hiroshima and visit it. And the reason I went was because I had always studied Hiroshima in the nuclear weapons training and had been totally destroyed by one really a peanut of a bomb relative to what the bombs that I was dealing with. And so I went by train at night and I stayed overnight in the train station and walked from the train station in Hiroshima to the center where the bomb went off. And that takes an hour and a half. And in actuality, that entire area was destroyed by that one bomb in a second. And so it took me an hour and a half to walk. And I realized that everything I was passing through had been destroyed in a matter of seconds and that we were ready to do that with the entire planet 90 minutes. <v Narrator>In contrast to beyond war is psychological approach. The Center for Economic Conversion in Mountain View, California, tries to focus on the nuts and bolts of converting the defense industry to the production of nonmilitary products.

<v Michael Closson>The transformation of Silicon Valley from a very heavily military dependent. Industrial base to more of a commercially oriented economy is a very interesting and important one. <v Narrator>The California State Assembly has been studying the problem of economic dependance on military contracts, Michael Closson has testified before the assembly on how large aerospace companies can shift their emphasis. <v Michael Closson>The main problem is that a company like Lockheed number one, about ninety five percent of Lockheed missiles and Space Corporation is defense oriented. So the workers and the managers in that side have been trained over a period of years into practices that are not very applicable to the commercial sector, particularly the emphasis on cost maximizing as opposed to cost minimizing. So that's a real problem. And I think it's going to require a lot of retraining, a lot of reeducation. And frankly, it's not going to be an easy job for Lockheed to switch over. I think they can switch over. There's a lot of things they can be doing. There are large systems company. They can do work and mass transit. They can do work in large renewable energy resources. And an obvious area they can do work in is space station work, which is meets a lot of critical needs. So I think it's clearly possible for them, but it's going to take a period of time, I'd say. I'd say a five year period at least for them to make a transition. <v Narrator>On a personal level, deciding where to invest savings can be a way of sending a message to defense contractors working assets, a San Francisco based company prides itself on what it calls socially responsible investments.

<v Frank Tsai>Organized has got started back in 82 in order to provide a means for investors to invest with their social conscience. One of the founders felt that there was a need for product, a financial product that would provide investors with a way to make a decent return while not investing in defense or military spending or companies active in the military industrial complex. We were just simply concerned with do we think that this vision of bobwhite here fits then in with our economy hostage to defense, or is it just good luck? Yes, that's what I was saying. I mean, Beirut and hostages <v Narrator>in the midst of developing a new magazine ad, Working Assets focuses on one of its central themes. <v Man>Do you think that what we think we want to say following on from that now is that I'm going to read from a couple of different places. Is our economy a hostage to military spending? We'd like to believe not. We would like to think not just but the but the nine thousand dollars per second spent on the US military in the name of defense, we're going to find a few which then unavoidably commit the economy, something like that. And then straight on with this copy, our money fund investments exclude the top 100 military contractors and companies engaged in Star Wars R&D stop. Instead, we support ventures to grow food, build houses, create jobs and educate. Good.

<v Martha Cain>Are you interested in learning more about it? You might want to sign our mailing list. <v Narrator>For some people, the prospect of paying any money earmarked for defense is abhorrent. As a result, they refuse to pay the defense portion of their taxes, <v Martha Cain>which is information about war, tax resistance. Yeah. What's all this about? Well, it explains on the back here how you can resist the federal excise tax on your phone bill, which goes to the military. Did you know about that? <v Man>I didn't. I didn't. What's what's that front there?

<v Martha Cain>This is the budget that the War Resisters League puts out to explain how much of the money goes to the military. For the past three years, I've been resisting sixty percent of my income taxes, which which we figure goes to the military. Recently, I had my wages garnished at UCSF where I work, which is making a little dent. But fortunately I have people working part time now. So it's not make. They leave you seventy five dollars a week. So once you start not paying your taxes and really thinking about where it goes, it's really hard to start paying again. I mean, I see, like, you know, a bullet at the other end of my dollar. <v Narrator>And while many groups are attempting to limit military spending, other organizations work to support it. At this convention and Silicon Valley, the Association of Old Crows draws together defense contractors and military personnel so they can share information and design strategy to influence funding for electronic warfare. <v Association of Old Crows Member>Thirty three hundred pixels by twenty two hundred dollars free. I came to the AOC conference, you get to schmooze with the boys. That's an interesting club and it really is a small club. And you get to know a lot of people and you pick up a lot of things at play at conventions like this.

<v Association of Old Crows Member>It's a superhero, Dean, highly sensitive receiving system that helps the the Navy pilots and operators over there find out what's in the RF environment around them. <v Narrator>The president of the local chapter of the Association of Old Crows is retired admiral and electronic warfare specialist Julian Lake. <v Julian Lake>The Association of All Crows has a professional organization dedicated to the improvement of an appreciation of electronic warfare. It consists of some 25000 individuals who come from the government, the Department of Defense headquarters, the services and industry. And it is a very cohesive group because electronic warfare is something that cannot be taken for granted. Most of these people. Appreciate and understand this and therefore participate fully in the activities of the Old Crows from the Army's point of view, we need to continue to modernize our force. And so we need the resources. <v Narrator>Decisions about the size of the military budget are ultimately made in Washington, the 1988 Pentagon procurement scandal quickly reached into the halls of Congress.

<v Speaker 2>Salma shook to the ceiling about destruction's I've been over the last hour. Well, I'm getting to get all the facts, but there are 15 companies involved. It's just rampant bribery in many cases where they've paid five hundred thousand dollars to a government employee. <v Speaker>While some members of Congress and other Washington based policy makers are attempting to correct defense spending abuses. Others are raising the question, what do we actually need to defend our country? Retired Rear Admiral Gene La Roque, who used to work in the Pentagon's Office of Strategic Planning, is director of the Center for Defense Information. He has developed a proposal to significantly cut our military spending. <v Gene La Roque>I think the first place you could make successful cuts in the defense budget without endangering our national defense one iota is to reduce the monies we spend to keep troops in foreign countries. We keep a half a million men in foreign countries around the world. At one time it was important for us to do so when those countries were weak and threatened and some of them even under attack. Then it made sense for us because we were rich and powerful and we could step in and help them. And that didn't really affect our national economy nor our defense posture. Significantly, today, relatively, we're not so rich and those people who were once poor are now rich. The Germans, the French, the Japanese, the Koreans, they can take care of themselves and they're not threatened. They're all trading with the Soviet Union. So make some cuts in the half a million people we have in foreign countries. We spend each year about one hundred and twenty five to one hundred and fifty billion dollars a year to maintain our troops in foreign countries and provide the backup forces to support those troops in foreign countries. So that's the first place I'd start. <v Narrator>La Roque also advocates cutting our active military forces from two point two million to one point two million, a savings of 40 billion dollars a year.

<v Gene La Roque>There's another good reason why we don't need so many active duty military forces. You see, the only potential adversary of any size for the United States is the Soviet Union. There's no way that they can bring troops through Mexico or through Canada to attack the United States. So we don't need a big standing army in the United States to defend ourselves against the Soviets who can't get here with their military forces and probably have no reason in the world for wanting to send military forces to attack us any more than we would want to launch an attack in the Crimea against the Soviet Union. It'd be insane. <v Narrator>La Roque further feels we can cut our land and sea based nuclear warheads to one quarter of their present total from 13000 to 3000. <v Gene La Roque>If you make a decision that we have, in fact, a retaliatory deterrent posture, then you need a very limited number of missiles to shoot at the Soviets, a maximum number of 300 warheads with a very few missiles to get to carry those weapons to the Soviet Union. If, on the other hand, your policy is to strike the Soviet Union first, then you need an unlimited number of nuclear weapons and missiles, planes, submarines, ships to carry those weapons to the Soviets. So if we could establish clearly that our policy is one of deterrence based on our capability to retaliate after Soviet first strike, we could get along with about one fourth of the total nuclear weapons that we have today. <v Narrator>Some critics have responded to Admiral La Roque's proposal with skepticism, feeling instead that it's too soon to trust the Russians. Kenneth Adelman was director of the U.S. Arms Control and Disarmament Agency from 1983 to 1987 and is now a nationally syndicated newspaper columnist.

<v Kenneth Adelman>Almost the kind of plan that Gene La Roque is proposing would involve just a massive risk in the way the world works. You presume that there Tiger has changed its stripes, Soviet Union is not aggressive anymore, we're not going to have more Afghanistans Czechoslovakia invasions, Hungarian invasions, all that kind of stuff, not going to have any more threats to its neighbors or anything like that. And therefore, we're going to live in a different kind of world. Now, it may be right and it may come about. And if it does, it's worth doing. But I'm like the man from Missouri. I say, show me. I'm not willing to presume that 70 years of Soviet history is out the window in two years under Gorbachev. <v Narrator>In Washington, D.C., at the Center for Strategic and International Studies, retired Admiral Thomas Moorer, former head of the Joint Chiefs of Staff, feels that our national security is dependent on a strong military.

<v Thomas Moorer>The question as to whether the three hundred billion dollar budget is too much or too little or correct is one that must be viewed in light of inflation again, in light of the Soviet threat and other world situations. And my view has been cut. Thirty three billion dollars this year. We chose the time and Mr. Gorbachev was in London, in Washington to announce it. And that must have made him laugh all the way back to Moscow. But nevertheless, we must maintain a budget which considers inflation. And in that sense, I think it's too little. I mean, it should be it should go up every year, which would mean in our economy that it hadn't gone up at all. It just remained a constant in buying power. But we must, I think, keep up with technology. And I think that the assault by the Congress on SDI, for instance, is stupid because someday they're going to regret it. <v Narrator>The military, like any other institution, wants to insure itself of adequate funding and growth, not be cut back.

<v Stanley Fine>We now have a situation where conventional forces on both sides have been around large numbers for half a century and they have become institutionalized. How does one win down the U.S. Navy? How does one win down the U.S. Army? How does one turn to the U.S. Army and say, we're going to cut you in half or we're going to cut you to two thirds? How do you tell the Navy, really, we only need 300 ships? How do you tell the Marines? Tell us, what are you going to do if they're so against the Soviet Union? What mission do you have against the Soviet Union? And therefore, why do we need 200000 of you? How do you do that, how does the how does Gorbachev do that with his people? <v Gene La Roque>There are many people in the United States who say, oh, I can't do anything about the military. It's too big, it's too powerful. The military industries are too powerful. That suggests to me they've given up on democracy, I believe in democracy, I believe that the people can control events in this country, but they must get the facts and they must act on it. And they must try to act, in my view, on what's best for the nation, not what is best for a Silicon Valley or Texas or Boston or some other area. What's best for this country. It's real simple. We've got the best country in the world. We have the finest economic, political and social system in the world. But we're going to throw it away. If we keep dumping so much money down this rat hole called military spending, we pay a lot for insurance in our personal lives. <v Kenneth Adelman>We pay a lot for door locks, for police, fire protection. OK, you can say, well, there's not going to be any fire in your place. I know, but I'd like to have a fire department. I'd like that fire insurance. Still, there might be we should regard security the same way.