Recently, the Senate Armed Services Committee, which I chair, completed a year-long investigation into the costs of maintaining our nation's overseas military presence. The investigation produced a bipartisan report [PDF] that reaches some troubling conclusions.
I directed the review of our costs in Japan, South Korea and Germany. Together, those countries account for 70 percent of the roughly $10 billion we spend each year on overseas bases -- a figure that doesn't include personnel costs to pay and take care of our troops and their families. All three countries are also key U.S. allies. In order to better sustain our presence in these important locations, we need to understand and control our costs.
Our review found that contributions from our allies are failing to keep up with rapidly rising costs, increasing the burden on U.S. taxpayers. At the same time, allied payments are increasingly coming as in-kind , rather than cash payments.
This shift to in-kind payments makes it harder to monitor how funds are used. In fact, our review found that, in many cases, in-kind payments are spent without proper oversight, congressional notification or approval. In some cases, in-kind payments are being used for projects that simply aren't necessary.
Cost increases and the use of funds on projects that aren't mission critical are unacceptable at a time when there is incredible pressure on the defense budget and the federal budget as a whole, and when cutbacks to bases in the U.S. are under debate.
Our review found that South Korean contributions are not keeping pace with the growth in U.S. costs. While South Korea's estimated contribution grew by about $42 million between 2008 and 2012, U.S. costs increased by more than $500 million.
Japan's contributions also have not kept pace with U.S. costs. For example, at its peak in 1992, Japan's contribution to funding for infrastructure and facilities amounted to more than $1 billion. That figure has fallen by 80 percent.
Our use of in-kind payments from South Korea and Germany is especially worrisome.
South Korea's contributions to a program that supports the construction of U.S. military facilities amounted to about $339 million in 2012 alone -- all of it in-kind. But projects built using these in-kind contributions are not reviewed at all by the Department of the Army and only undergo limited review at higher headquarters or at the Pentagon. Congress isn't even notified, let alone given a chance to review and approve these projects. That lack of oversight increases the chance that funds will go to non-essential projects. In fact, our review found that plans for using in-kind contributions include a $10.4 million museum.
In Germany, we receive in-kind payments as compensation for facilities that we turn over to the German government as we reduce our military presence there. We found millions of dollars of in-kind payments from Germany earmarked for projects that simply don't make sense. For example, $200,000 was spent on sunroom additions for senior officer homes.
We also have to take a hard look at the cost of our future commitments.
In South Korea, the Army has proposed a public-private venture to build housing for military families that, if approved, would add hundreds of millions of dollars to our costs. Setting aside questions about the wisdom of bringing additional families in the region while North Korea continues its belligerence, the plan is simply not affordable.
The Defense Department is also planning a series of troop movements in the Asia-Pacific region. We found that rough estimates provided for some items in the plan are highly speculative and do not account for potentially significant additional costs. Congress already has barred most spending on these projects until the Pentagon produces more detailed and useful estimates, and our review found no reason to set aside those conditions.
The military should always be careful with taxpayer dollars. There is never a good time for large construction projects to go forward with little or no oversight. But at a time when the military, and the entire federal government, are facing significant budget cuts, cuts that will damage our national security and important domestic programs, the current situation is simply not acceptable. I'm working with my colleagues on the Armed Services Committee to develop reforms that will increase oversight and help ensure that we only spend money on projects we really need.