Diplomacy & Crisis News

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The Pacific Islands are strategically important to U.S. ambitions to balance China. Although President Biden’s decision to cancel his trip to Papua New Guinea was unfortunate, the State Department managed to ink two important agreements elsewhere in the region.

On May 22 and 23, State announced the signing of Compact of Free Association (COFA) agreements with the Republic of Palau and the Federated States of Micronesia. The pacts will govern U.S. relations with both countries for twenty years. Ambassador Joseph Yun, the lead U.S. negotiator, hopes to finalize negotiations with the Republic of the Marshall Islands.

Micronesia, Palau, and the Marshall Islands were vital elements in the U.S. strategy to defeat Imperial Japan during World War II. Collectively known as the Freely Associated States (FAS), they remain critical to U.S. defense today. While the COFAs establish uniquely close relations between the parties in several respects, the key provisions are the exclusive military rights granted in return for economic assistance.

The COFAs grant Washington “full authority and responsibility for security and defense matters in or relating to” the FAS. The exclusive right to operate armed forces and bases throughout the FAS gives the United States an irreplaceable “strategic denial” right, granting it the ability to prevent foreign militaries from entering the FAS zone or using it as a base of operations.

These denial rights have grown in importance due to China’s military buildup and expanding footprint in the Western Pacific. Micronesia, the subregion that includes the FAS and Guam, is included in the Second Island Chain, making it critical for stationing U.S. military assets for any military contingency in the Indo-Pacific.

The Biden administration has proposed funding the COFAs at $7.1 billion for the next twenty years—approximately $300 million annually for all three countries. Thus, for less than one-tenth of the current assistance to Ukraine, the United States can ensure it maintains exclusive military access to these critical Pacific islands for at least two more decades.

Once negotiations with the Marshalls conclude, it will be up to Congress to amend all three COFAs and appropriate the funding. This can be done most expeditiously by following the Joint Resolution model, which Congress used last time it renewed the COFAs.

The Compact of Free Association Amendments Act of 2003 passed as a Joint Resolution, authorizing and appropriating $3.5 billion for Micronesia and the Marshalls in one legislative vehicle. Given the strategic imperative and broad consensus among conservatives and liberals in support of the COFAs, a similar Joint Resolution-based approach would offer the best chance at renewing the COFAs before they expire this September.

Another option is for a stand-alone bill, or bills, to pass through regular order in the House and Senate. Congressional leadership could task its respective chambers to fast-track these bills, although there is no guarantee they will complete this process before the current COFAs expire.

A third option for renewal would be to insert implementing text into a larger vehicle, such as the annual National Defense Authorization Act (NDAA) or appropriations legislation. It has become the norm for these “must-pass” vehicles to incorporate other important priorities that don’t pass through regular order due to congressional dysfunction. Depending on the legislative vehicle, the policy provisions could pass without any funding attached, requiring separate appropriations and complicating the process.

Should the process drag out beyond the September 30 deadline, some COFAs will require interim funding. When assistance funding expired in 2009, the United States and Palau reached a bilateral agreement setting new levels of assistance. True to form, Congress failed to authorize and fund the deal until 2018. In the interim, the legislature provided partial funding in successive appropriations bills. Stopgap measures such as these undermine U.S. credibility in the eyes of potential regional partners.

For decades, U.S. foreign policy has largely neglected the Pacific Islands. Today, the stakes are much higher. Former Micronesian President David Panuelo recently warned about China’s increased “gray zone” and political warfare tactics to coerce his country into accepting Chinese bribes and aligning more closely with Beijing. Last year, China signed a security agreement with the Solomon Islands, its first in the region, which allows for deploying Chinese military personnel on the islands in case of civil unrest.

The United States is a Pacific nation with vital interests and key allies across the region. Defending them requires America to be present across the vast distances of the Pacific Ocean. Congress has a once-every-two-decades opportunity to secure privileged access to three Pacific Island nations at a reasonable price tag, reaffirming America’s commitment to the region while denying China opportunities to expand its reach into the FAS.

Congress must not let the opportunity to re-balance the Pacific regional order slip away.

Andrew J. Harding, co-editor of “Winning the New Cold War: A Plan for Countering China,” is a researcher at The Heritage Foundation’s Asian Studies Center.

Image: Shutterstock.

Speaker Kevin McCarthy and President Joe Biden should be congratulated for getting Congress to pass the debt limit deal in a timely manner with large majorities in both houses of Congress. Given the fact that we have a divided government, it is not surprising that some members of both parties, like the Republican’s Freedom Caucus and the Democrat’s Progressive Caucus are unhappy with some parts of the bill.

Among the most vociferous critics, of what they believe is a fatal flaw in the deal, have been Senator Lindsey Graham (R-SC) and five of his Senate Republican colleagues. These six senators contend that the adoption of President Biden’s proposed defense budget of $886 billion for FY2024 will undermine our security. According to Graham and his colleagues, the Biden defense budget for FY2024 of $866 billion is at least $40 billion short of what the Pentagon needs to keep pace with the Chinese military buildup because, when one factors in inflation for the FY2024 budget, it actually represents a real decline from the FY2023 budget of $841 billion. Senator Graham actually called the Biden defense budget a joke and said if Republicans adopt it, they will be doing a disservice to the party of Ronald Reagan.

But close examination reveals that, for at least five reasons, this argument is without merit.

First, the five-year plan for defense spending that Biden proposed in early 2021 projected that he would be spending $775 billion in FY2024 for defense. The amount approved in the budget deal is over $100 billion or 14 percent more than that projection and more than enough to keep pace with inflation. Moreover, in real terms, it is more than we spent at the height of the Reagan buildup and $146 billion, or 20 percent, above former President Donald Trump's last budget of $740 billion in FY2021.

Second, many of those supporters of spending more on defense argue that, because of the mandatory spending caps imposed by the Budget Control Act of 2011, often referred to as sequestration, our military capabilities actually declined over the past decade. But this argument is also without merit. The Pentagon got around sequestration by using the warfighting budget, which was supposed to fund only our military operations in Iraq and Afghanistan and therefore was not subject to sequestration, as a slush fund. For example, the Pentagon used funds from the warfighting budget to fund programs like the European Defense Initiative—which had nothing to do with the wars in Iraq and Afghanistan but did improve our contributions to NATO, thus helping us deal with Vladimir Putin’s invasion of Ukraine. In fact, the Budget Control Act did not undermine our military capabilities. For example, in 2016, six years after the enactment of the Act, General David Petraeus, who commanded our troops in Iraq and Afghanistan and also ran the CIA, argued in a 2016 article that the state of our military was “awesome.”  And in his four years in office, former President Trump actually increased defense spending by over $100 billion.

Third, Senator Graham and many of his supporters argue that the Pentagon can and should get more money because the Department of Defense’s share of the gross national product is at historic lows. This argument is also without merit. Neither defense nor any other federal program is entitled to a fixed share of the GDP. For example, what would happen if the threat increased, and the economy declined? Should defense spending be reduced? Moreover, at its current level, the Pentagon spends more than the next ten countries in the world combined, including three times more than China and ten times more than Russia.

Fourth, keeping the FY2024 defense budget level will prevent us from spending the appropriate amount on military equipment to help Ukraine fight its war with Russia and to deter China from invading Taiwan. But this argument ignores the fact that the $48.9 billion in military aid that has already been authorized for Ukraine is funded separately from the proposed $886 billion budget and Taiwan is actually paying for the vast majority of the equipment that we are and will be sending to them.

Fifth, the argument that the Pentagon needs more funds to protect our security ignores the fact that much of the money that the Pentagon receives is wasted. According to a recent 60 Minutes interview with Shay Assad—the former senior contract and awards negotiator for the Pentagon under Presidents George W. Bush, Barack Obama, and Donald Trump—military contractors routinely overcharge the Department of Defense for what it buys each year because there is not much competition for defense contracts. According to Assad, the average profitability for defense items rose in the Cold War from 12 to 15 percent to about 40 percent today. This position is shared by Speaker McCarthy and Dick Durbin (D-IL), the Senate’s number two Democrat. Durbin argues that one of the reasons that Pentagon spending keeps increasing is because of price gouging from defense contractors. McCarthy points out that the $866 billion agreed in the budget deal is the most we have ever spent on defense and that since the Pentagon has failed its last five audits, he knows that there are many efficiencies to be found.

If the Appropriations Committees keep these points in mind, they should not feel it is necessary to add funds to the FY2024 defense budget which is already at historic highs. In fact, the party of Ronald Reagan needs to realize that, in real terms, this budget is almost $200 billion above the peak of Reagan’s defense budget build-up.

By supporting the bipartisan deal, including the defense portion, the party of Ronald Reagan will not only provide the Pentagon with what it needs to protect our security, but also help the country deal with the immense budget deficits that will undermine our security if allowed to continue.

Lawrence J. Korb is a Senior Fellow at the Center for American Progress and a former Assistant Secretary of Defense.

Image: Courtesy of the U.S. Army.

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