Gov. Jennifer Granholm was lobbying officials in Washington, D.C. last week, as the 2005 version of the Base Realignment and Closure (BRAC) process is underway. Under the BRAC, the Selfridge Air National Guard Base in Mount Clemens, the Army Tank-Automotive and Armaments Command in Warren and three facilities in Battle Creek could be closed, with thousands of jobs eliminated.

While BRAC brings short-term pain to affected communities and employees, it also provides useful lessons in budgeting and setting official priorities.

HOW BRAC WORKS

Congress passed the enabling legislation, which requires every military installation in the United States to be examined in light of eight criteria, (link is pdf file) the first of which is a facility’s "current and future mission capabilities and the impact on operational readiness of the total force of the Department of Defense."

Department of Defense officials will consider the national security environment, anticipated threats and the inventory of current military facilities. By May 16, Secretary of Defense Donald Rumsfeld will send a list of facilities recommended for closure to the BRAC commission.

The nine-person commission, whose members were recently appointed by President George Bush, will review the recommendations and turn in a report to the president by Sept. 8. If the president approves the commission’s report, then Congress has its say.

But here’s the unusual part of the process: the president and Congress must accept or reject the list in its entirety. No cherry picking or trading is allowed. Before BRAC, one member of Congress could use military installations as bargaining chips in a process of Congressional management of military real estate. A senator, for example, could offer an amendment to forestall the closure of a facility in one state in exchange for promises of increased agricultural subsidies in his own. The prohibition on amendments is fundamental to the BRAC reorganization process, and was established to stymie the kind of legislative gamesmanship that had long frustrated the Pentagon’s plans to adjust its inventory of real estate to best fulfill its mission.

WHAT HAS HAPPENED SO FAR

As a result of four previous rounds (1988, 1991, 1993 and 1995), 97 installations around the country were closed. These included the Warren Tank Arsenal and Wurtsmith Air Force Base in the lower peninsula, and K.I. Sawyer Air Force Base near Marquette.

The Defense Department estimates that after costs such as environmental cleanup are taken into account, over $16.7 billion has been saved. It also estimates that after 2001, another $7 billion has been saved each year.

Even after four previous rounds of closure, the defense department occupies a substantial amount of real estate. It owns over 500,000 installations, used for functions such as operations, training, maintenance, research and development, supply, administration and family housing.

In addition to saving taxpayer money, BRAC is an opportunity for the military to make sure that the right people and equipment are in the right place at the right time. Changes in weaponry, geopolitics, local population growth and many other factors can make a military installation obsolete.

THE BROKEN WINDOW FALLACY

It’s easy to understand why Gov. Granholm is making her pitch to BRAC commission members. State and local politicians are often held responsible (justly or not) for the loss of federal jobs. Policy makers and the public must not, though, forget the lesson of Frederic Bastiat's "broken window" fallacy, focusing on the visible effects of spending and forgetting the invisible effects of taxation.

It is easy to count the number of government jobs. Public relations campaigns will be waged throughout the country, as state and local political and business leaders tout the number of jobs "created" by this or that military installation. The payroll of such installations, as well as income taxes paid by the associated employees, will also be mentioned.

Those things are important, especially for the people directly affected. But for the public at large, alternate uses of taxpayer money — money that could have been retained by individuals and used to support privately-directed business activity — must not be forgotten.

When government takes our money to provide services, then, the money should be used to purchase services (such as military defense) that could not be provided any other way. In other words, government spending is about achieving important public goals, not simply providing a certain group of people with jobs.

When the BRAC commission in 1995 considered closing the Army garrison at Selfridge Air National Guard Base, Candice Miller, then Michigan’s secretary of state, acted as an advocate for the facility. But she based her appeal on the argument that closing it would hurt the strength of the military. Miller, now a member of Congress, argues that such an approach must be used again.

"You can go anywhere in the nation, any installation, and the local people and their local congressperson will tell you: 'They can't do that to my base because of the economic impact." That’s the natural response of any politician "But that's not the business of the Department of Defense, to worry about jobs."

Miller has it (half) right. Saving money is an important goal. But equally important, if not more so, is whether the government’s utilization of assets (including in the case of the Pentagon, real estate) is optimal to perform the legitimate functions of government.

This means that government ought to make do with much less than it has and that once the mission of a department is determined, taxpayer money should be spent in a way to best achieve the stated objectives.

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John R. LaPlante is an adjunct scholar with the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited