Acting SecDef: ‘We Won’t Do Cost-Plus-50’

Acting Defense Secretary Pat Shanahan shot down reports that the White House may ask allies to pay 150 percent of the costs of basing U.S. forces on their soil, a proposal that has been criticized by lawmakers and former senior defense officials as “a colossal mistake” and “pure idiocy.”

Those reports, which emerged late last week, are “erroneous,” Shanahan told the Senate Armed Forces Committee in his first appearance before Congress as the acting head of the Pentagon.

"We won't do cost-plus-50,” Shanahan said, using a common shorthand for the alleged proposal. “We're not going to run a business and we're not going to run a charity. The important part is that people pay their fair share.”

President Trump has long publicly complained about the expense of basing U.S. troops overseas and has insisted repeatedly that allies contribute more towards the hosting them. In February, Washington and Seoul struck an agreement increasing South Korea’s share of maintaining the 28,500 troops on the peninsula by almost 10 percent — far short of what Trump had asked for, but resolving fears, at least for a year, that he would unilaterally order their removal.

Shanahan’s remarks were the Trump administration’s first public denial of the proposal since it was first reported by Bloomberg on Friday, almost a week ago. Senior spokesman Charlie Summers has deferred questions to the White House, while deputy undersecretary for international security affairs Katie Wheelbarger said in a separate hearing on Wednesday that she was not privy to any conversations about such a proposal. "My understanding is that rhetoric came from the conversations from the Pacific,” Wheelbarger said, adding that it was “not a conversation we’ve had in my portfolio.”

Speculation has swirled that the report was part of a White House negotiating strategy aimed at pushing U.S. allies in Europe and elsewhere to foot more of the bill. But if it was a trial balloon, the idea was quickly deflated inside the beltway. Rep. Mac Thornberry of Texas, the top Republican on the House Armed Services Committee, said this week that the proposal, if real, wouldn’t go over well on Capitol Hill. “Some of the allies who host U.S. troops do some of the most to support our joint defense needs,” he said. “So I don’t know how seriously to take such reports.”

“I’m very concerned about this,” Ben Hodges, a retired 3-star general who was the most recent commanding general of U.S. Army Europe, said in an email to Defense One. “It shows either a complete lack of understanding or a complete disregard for the value of the access we get from having bases in Europe.”

Shanahan’s quick denial allowed him to sidestep what otherwise might have become a contentious line of questioning in his first major appearance on the Hill, where lawmakers have been broadly alarmed by Trump’s unusually critical rhetoric of multilateral U.S. alliances overseas. He gave a relatively even performance during just over two hours of questioning, often deferring to Joint Chiefs chairman Joseph Dunford and Pentagon comptroller and acting deputy defense secretary David Norquist.

Still, Shanahan did not escape unscathed. Democrats hammered him repeatedly over the use of military construction funds tucked away in a contingency funding account to pay for Trump’s wall on the southern border. Shanahan testified that it was “correct” that the Pentagon had not yet assessed which projects would be deferred until the following year to free up funds. “Why is that correct? You've had a month. Are you testifying that there's no information you can give us about which construction projects are on the chopping block?” snapped the typically genial Sen. Angus King, I-Maine. Later, Sen. Tim Kaine, D-Va., said that he felt “completely sandbagged” by the Pentagon, accusing it of withholding information about what projects could be deferred to pay for the wall.

"There has not been a deliberate attempt to withhold any information," Shanahan told lawmakers.