Shadow Government

Time to give up on six-party talks?

According to the New York Times, the Obama administration is resisting Beijing's call to respond to the latest crisis on the Korean peninsula by launching another round of the six-party talks. The administration is wise to resist the temptation to put the short-term desire to respond to heightened tensions ahead of the long-term need to resolve the North Korean problem once and for all.

As Mike Green explained, this is a temptation to which previous Administrations, including the Bush administration, fell prey. When all of the options look bad, sitting down and talking with North Korea can seem, on the surface at least, to be a least-bad way of "doing something." But it has not worked in the past and is unlikely to work this time.

The theory behind the six-party talks was plausible, and many people (including myself) endorsed the approach as a way of breaking a regional impasse that derived from several structural conditions.

  • Condition 1: North Korea favors regime preservation above all else and viewed nuclear weapons as its best guarantor of regime survival. Only if its possession of nuclear weapons could be seen as threatening its own survival is it plausible that the regime would agree to an adequate diplomatic solution.
  • Condition 2: Given decades of economic sanctions, U.S. non-military leverage over North Korea is limited. Not zero, as we found out when we started deploying new financial sanctions, but substantially less than the leverage China wielded. Only if we can get China to wield that leverage would North Korea begin to feel sufficient pressure that might alter condition one.
  • Condition 3: The United States and China have fundamentally different preference orderings regarding the various possible outcomes. While both might prefer a nuclear-free peninsula above all, China next prefers living with a North Korea with nuclear weapons to living next door to a collapsed North Korean regime. The United States, by contrast, clearly prefers North Korean regime collapse to living with a nuclear-armed North Korea. Nothing either side can say to the other will change this preference ranking. Only if other costs and benefits are applied can the strategic calculus change.
  • Condition 4: Given that the status quo trajectory defaults in its favor (i.e., reinforces condition three), China is happy to free-ride off of U.S. diplomatic efforts, even fruitless efforts. Only if China has more of a stake in the success of the diplomacy will they be likely to shoulder any actual burden.

The six-party talks were a plausible way to change these conditions. The idea was to give China an equity stake in the success of the non-proliferation effort. As host and co-leader, failure of the six-party talks would become China's failure. North Korea's belligerence would, of necessity, be directed at all of the six-party members, including China. Few people thought the six-party talks would by themselves yield a diplomatic solution. More people, myself included, thought that the collapse of the six-party talks, if demonstrably North Korea's fault and demonstrably China's problem, might adjust the incentives sufficiently to elicit more responsible Chinese leadership on the security issue.

That theory was tested and found wanting. As expected, North Korea repeatedly demonstrated bad faith. Yet the hoped-for response from China never materialized. Instead of ratcheting up pressure on North Korea, China has responded to North Korean belligerence with successive rounds of concessions and cover-ups. The situation rather resembles a weak parent seeking to excuse the public misbehavior of a spoiled child.

The Obama administration is wise not to rush in to rescue China from this latest embarrassment, and it is wise not to make other concessions that China is demanding -- for instance, restricting U.S. naval activity in the Yellow Sea. Instead, the United States should take visible steps to deepen cooperation with our regional treaty allies. And we should insist that China take similarly responsible steps to reign in North Korea.

The six-party talks only make sense if China is willing to shoulder its regional security responsibilities. Until that is demonstrated, there is not much to talk about.


Shadow Government

Congress should heed Gates and chiefs on defense health

Nearly five years ago, testifying alongside and in support of my former Pentagon colleague, then-Under Secretary of Defense David Chu, I pleaded with the House Armed Services Committee to do something, anything, about spiraling defense health care costs. At the time the Defense Health Program exceeded $40 billion, more than the entire defense budgets of most of our allies -- and of many of them combined. The program had more than doubled over the previous five years, spurred by two major Congressional decisions that took effect on Oct. 1, 2001, just as the war in Afghanistan was about to commence.

The first of these decisions was to create TRICARE for Life, a program to supplement Medicare benefits for military retirees; the second eliminated co-pays for active duty personnel. The Joint Chiefs had lobbied hard for both programs, arguing that it was imperative that military personnel and their families be fully cared for. Until Sept. 30, 2001, Medicare-eligible retirees were accepted only on a space-available basis at military treatment facilities. As a result, the plan was not that attractive to many military retirees. Overnight, however, TRICARE became one of America's top premium health insurance plans: TRICARE for Life meant that TRICARE was now the supplemental health insurer for all Medicare eligible retirees, and also covered costs that were not provided by Medicare.

But congressional action did not stop there. In Fiscal Year 2003, Congress expanded the TRICARE Prime Remote program, which covered military families that lived more than fifty miles, or an hour's drive, from the facility where the military member was stationed. Congress also expanded TRICARE eligibility for reserves, who were playing an increasingly arduous and critical role in the wars in Afghanistan and Iraq, by offering continuous benefits to those called to active duty since 9/11.

With pharmaceutical costs increasing more than five-fold over the past decade, with medical care outpacing inflation by four percent annually, and with co-pays remaining frozen at mid-1990s levels, more and more military members and their families have come to realize just what a good deal TRICARE really was. They have signed up accordingly, even as more people have become eligible for TRICARE coverage. On Oct. 1, 2001, there were 1.5 million persons eligible for TRICARE for Life; five years later that number was 1.8 million. Today it exceeds two million, and continues to climb. Spending on beneficiaries under the age of 65 has also grown: from 33 percent in 2006 to about 39 percent, or a ten percent increase projected, for the current fiscal year. Meanwhile the Congress, egged on by veterans' organizations, has absolutely refused to increase co-pays even by the minuscule rate of inflation nor to increase TRICARE's annual fees, which amount to only $460 for TRICARE Prime, the most popular insurance option that closely resembles an H.M.O.

Civilian employers, as well as at least a half-dozen state governments, have also come to recognize what a great deal TRICARE offers their military retiree employees -- many of whom join private industry as soon as they retire from the military, some as young as age 38. Recognizing that they would be contributing to health care plans for as long as three decades, employers naturally encourage military retirees to sign up for TRICARE. Since TRICARE costs are generally so much more economical than what most employers' plans offer, it takes little encouragement to get retirees to sign up.

Veterans' organizations argue loudly that retirees deserve all they get; and in a sense that is true. But by expanding the number of those eligible for benefits and minimizing the cost to receive those benefits, Congress is short-changing other elements of the defense budget, whether operations -- including training, procurement or research and development programs, that are equally crucial for the troops. During the earlier part of this decade, many Democrats otherwise opposed to defense spending, supported health benefits; if procurement had to be reduced, that did not worry them. Republicans went along, despite pleas from Bush administration officials, and other analysts who recognized that defense health had evolved into nothing other than an entitlement program, akin to Social Security or Medicare. As a result, the long range prospects for meeting even shrunken defense requirements are gloomy, with budget deficits likely to eat away at the defense top line.

The secretary of defense has engaged the deficit commission on the defense health issue. And the joint chiefs have finally come to realize that health care is devouring the rest of the defense budget, and has been doing so for a decade. They too now concede that it is not too much to ask those on active duty to increase their co-pays by the minimal amount that an inflation-based increase would represent. Nor is it outrageous to ask that the family free for TRICARE Prime, be raised from its current minimal level.

It is time that the Congress, and the veterans' organizations that egg it on, take note of the other needs of those who are in active service today, and those who will serve tomorrow. A defense budget that does not begin to rein in defense health costs will overwhelm our ability to buy the guns of today, develop those of tomorrow and furnish the means to operate and maintain them. And that will do neither our troops nor our nation any good now or in the days to come.

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