Breakout: Pioneers of the Future, Prison Guards of the Past, and the Epic Battle That Will Decide America's Fate

by Newt Gingrich

  The shuttle program lasted thirty years, not counting the decade in which it was developed. And after those thirty years, we are reduced to buying seats for American astronauts on a class of Russian spacecraft first launched almost half a century ago. What further evidence do you need that bad bureaucracy can set breakthroughs back generations?

  NASA has conducted some spectacular science and robotic missions in recent years, including the Mars rovers Spirit, Opportunity, and Curiosity, and the agency deserves credit for these achievements. But even if rocket scientists and astrophysicists think in longer time frames than most people, it would be desirable for the human space program to make some important advances over the span of their entire careers.

  The golden age of the space program makes all Americans feel proud. But today’s non-manned interim diminishes the luster of that history and disappoints even NASA’s employees and supporters. It’s obvious that the bureaucratic model is failing, and failing expensively.

  Freeman Dyson writes of the two NASAs: the “real NASA,” which he describes as “intensely conservative” and “dedicated to preserving existing programs,” and the “paper NASA.”2 Klerkx elaborated on this observation: “The ‘paper NASA’ has long been engaged in maintaining an image that is bold, daring and committed to a Star Trek kind of future,” he says, “…detailing fantastical futures that are always, so it is promised, right around the corner…. Impressive as such efforts may seem, nothing in the ‘paper NASA’ process costs very much and few of the recommendations that emerge from these blue-sky activities ever see the light of day.”

  “Such remarkable and visionary things require money,” Klerkx continues, “which is controlled and administered solely at the discretion of the ‘real NASA,’ which is all about the convoluted bureaucratic mix of political back-scratching, government appropriations, industrial contracts and—at the core of it all—the one inarguably tangible result of their interplay: jobs. The ‘real NASA’ is concerned with keeping the dollars flowing from its immediate and long-tested sources. Where they flow to within the agency, as long as they do, is of considerably less importance.”3

  The “real NASA” is extraordinarily risk-averse in order to protect this stream of funding, the opposite of what we want from an agency that’s supposed to be at the forefront of discovery. This is a familiar disease in any large bureaucracy, but for some reason it’s a little harder for Americans to believe that NASA, the agency behind moon landings and the Hubble Space Telescope, is just another bureaucracy. We don’t want to believe that they often act more like IRS agents than intrepid explorers.

  This bureaucratic mess is the main cause of the agency’s history of horrendous cost overruns. The shuttle, for instance, was originally supposed to fly dozens of times per year at a cost of about $50 million per flight. Ultimately the program delivered far fewer flights than originally planned at a cost of roughly $1.5 billion each.4 That’s almost thirty times the early estimates. But when everybody has to have a piece of the program, costs pile up.

  In addition to the absurd operational complexities that NASA creates for political reasons, the agency pays its contractors (the giant aerospace companies) on a “cost-plus” basis, meaning whatever they spend plus a markup. This gives the companies a disincentive to save money. Seen in this light, the overruns are much less perplexing.

  Rather than trying to fix this perverse incentive by changing its payment structure and introducing greater competition, NASA has protected itself and the coterie of contractors it works with from any challenge to their privileges. Lost in Space details NASA’s determination to kill the purchase of Russia’s aging Mir space station by a group of private entrepreneurs who would have put it to commercial use. The deal was all but done, but NASA pulled out all the stops to prevent it from happening, apparently because the private venture would have competed with the new International Space Station.5

  While NASA obstructs innovation by private-sector space entrepreneurs, its major partners have continued to win contracts even after repeated and expensive failures. In 1998–1999, Lockheed Martin underwent five formal investigations for mismanagement. Its errors caused the loss of a spy satellite ($1.3 billion), two military satellites ($800 million and $250 million), the Mars Pathfinder ($265 million), the Mars climate orbiter (Lockheed’s famous failure to convert from English to metric units—$145 million), and the Genesis probe ($264 million). Yet after this string of catastrophes, NASA rewarded Lockheed with a $7.5 billion contract to build the Orion capsule, its next vehicle for manned spaceflight.

  Lockheed is not alone in its expensive failures. Almost all of NASA’s traditional contractors are gigantic bureaucracies themselves. The agency’s endless red tape and paperwork mean that only a few large companies have the resources even to apply. Few entrepreneurs or private space startups could cope with the costs, complexities, or timelines involved in winning NASA contracts, and they are no match for the traditional aerospace companies’ massive lobbying operations. This is not an accident.

  Congress deserves a share of the blame for treating NASA as a political football, which has made the space program much more expensive than it would otherwise have been. Many of the agency’s strongest supporters in Congress have NASA centers in their districts or states, and the centers themselves are astute lobbyists for a piece of the action. Many of NASA’s activities, therefore, are driven by politics, not by the needs or interests of the space program.

  In 1984, I predicted in my first book, Window of Opportunity, that “the longer we keep space a government monopoly, the greater the danger of smothering initiative.”6 Thirty years later, NASA is still a government monopoly, and that’s exactly what has happened.

  The Prize Model

  There is a way forward for America’s space program. Despite the prison guards’ efforts to preserve the status quo, we have begun to see exciting progress outside of NASA. Genuine pioneers are opening space to the private sector, taking risks—both financial and physical—in pursuit of the high frontier. They’ve done it with encouragement not from NASA but from prizes.

  Prizes have figured prominently in the history of aviation from its infancy. Starting in 1906, Britain’s Daily Mail offered rewards for the first aviators to achieve various milestones, including a nonstop flight between London and Manchester and flying across the English Channel. In the United States, William Randolph Hearst offered $50,000 in 1910 to the first person to fly from coast to coast in thirty days. Most famously, Raymond Orteig offered a prize of $25,000 in 1919 for the first person to fly nonstop from New York to Paris. It took eight years, but Charles Lindbergh won the Orteig Prize in 1927.

  These competitions were far more dangerous than many today might imagine. In the 1927 Dole Air Race from California to Hawaii, only two of more than fifteen entrants made it to their destination. But the pilots took such risks eagerly and freely, and in doing so made enormous strides in advancing and popularizing aviation.

  A prize system similar to that of the early twentieth century, this time aimed at enticing private companies to pursue our goals in space, has produced far more progress in human spaceflight over the last ten years than NASA has done over the same period. It also better reflected our values of entrepreneurship and adventure than did the massive bureaucracy incompetently managed by Congress and appointed bureaucrats.

  In 1996, the privately funded X Prize Foundation offered a comparatively small $10 million prize for two manned suborbital flights in a reusable spacecraft within two weeks. It drew more than two dozen competitors, who worked independently on a human-rated spacecraft. Just eight years later, in 2004, a group led by Burt Rutan and Microsoft cofounder Paul Allen won the Ansari X Prize with SpaceShipOne, an inventively designed craft launched from a jet plane at high altitude.

  SpaceShipOne was a new beginning for the commercial space industry. The pioneers behind the vehicle joined with Richard Branson in the Virgin Galactic partnership to produce the larger SpaceShipTwo. It will
carry eight people on half-hour trips into suborbital space beginning in 2014. The initial cost of a ticket will be $200,000—a lot of money, to be sure, but a far cry from the $20 million that Dennis Tito paid for a trip to the International Space Station in 2001.7 There might be thousands of people willing to pay Virgin’s price. Indeed, there’s already a waiting list.

  SpaceShipOne, the first private manned space vehicle, and Virgin Galactic, the first private manned spaceflight carrier, are almost unimaginable in the absence of the Ansari X Prize. The contest’s successor is the Google Lunar X Prize, which will award $20 million, and up to $10 million in bonus prizes, to the first group successfully to land a robot on the moon, beam high definition video back to Earth, and travel five hundred meters. Twenty-three private initiatives around the world, including seven led by American teams, are now working to land robotic spacecraft on the moon once again—with minimal government funding.

  I met with the leaders of one Lunar X Prize team, Penn State’s Lunar Lion, who told me their current estimated cost to launch is only about 10 percent of their original expectation and a tiny fraction of what NASA would pay for a similar project. We hosted a discussion of the Lunar Lion project, which you can see at www.BreakoutUniversity.com.

  These prizes have jump-started the commercial space industry, which now includes dozens of companies with promising business models. SpaceX, another company founded by Elon Musk, created the Falcon 1 and Falcon 9 rockets as well as the Dragon spacecraft and now runs cargo resupply missions to the International Space Station. Within a few years, its vehicles may carry astronauts as well, and its planned Falcon Heavy should be capable of providing enough lift to reach Mars. NASA deserves some credit for taking such steps toward reliance on commercial space services in recent years, and so does the Obama administration, which pushed the agency further in this direction.

  Other exciting developments include Space Adventures, which is offering to launch two people on a lunar flyby trip. Another company, Golden Spike, is working to carry human passengers to the moon for lunar landings by 2020—again, for a small fraction of what NASA would pay for the same trip. (I am an unpaid member of Golden Spike’s board of advisors.)

  This boom in commercial spaceflight portends an exciting future for America in space. We are finally beginning to realize Gerard O’Neill’s dream of a commercially practicable space industry.

  The success of competitive prizes like the Ansari X Prize points us toward the best way for government to support big breakthroughs in a whole range of areas, at a far lower cost than our current programs.

  Instead of spending almost $20 billion each year on the space program and getting disappointing results, what if Congress set aside a large sum for prizes—say 10 percent of NASA’s budget, or $18 billion over a decade? We could save hundreds of billions and get better results. We could reduce the size of NASA and refocus its mission on breakthroughs in science and technology rather than developing or operating basic launch vehicles and spacecraft.

  After I discussed the prize concept (which I have advocated for most of my career) with Robert Zubrin, an expert on space exploration, in the 1990s, he estimated in his book The Case for Mars that if Congress posted “a $20 billion reward to be given to the first private organization to successfully land a crew on Mars and return them to Earth, as well as several prizes of a few billion dollars each for various milestone technical accomplishments along the way,” it would draw numerous competitors. The actual mission, he thinks, could cost as little as $4 billion, leaving the winner with a $16 billion profit and the taxpayers with a system that gets to Mars for a fraction of NASA’s annual budget.8

  Prizes have several huge advantages, which Zubrin also points out. First, taxpayers don’t pay anything until we get results, and we never pay more than the prize amount. If no one offers a system of launch vehicles and spacecraft that meet the prize specifications, it doesn’t cost anything. And cost overruns are impossible even if there is a winner. After spending $150 billion on NASA for no current manned capability, this is quite a virtue.

  Second, prizes would result in systems that are radically cheaper than those NASA has produced. Unlike the agency’s “cost-plus” contract basis, in a prize system, a company has to raise or borrow every dollar it spends, which means they use their money efficiently. Many competitors will spend money investing in technology and developing new solutions but won’t win the prize. And they spend all the money before the taxpayers ever have to pay anything.

  Finally, Zubrin points out that competition breeds better results. While NASA projects typically produce only one working design, a single prize incentive could result in several designs that make it to the flight stage, each with different merits. Awarding runner-up prizes further stokes the competition.9 With such a prize-based, entrepreneurial approach, we can recapture the spirit of adventure and again be the envy of the world in space.

  We could use prizes to achieve critical breakthroughs in other important areas of life. In 2012 the federal government made $108 billion worth of improper payments—money it simply never should have spent. If we had added that amount—just one year’s waste—to a competitive prize fund for big breakthroughs, we might find cures for Alzheimer’s disease, diabetes, or cancer. We might get an online learning platform that teaches students grades K–12 twice as well in half the time. Or a reproducible set of lab-grown lungs. Or a car that drives from New York to Los Angeles with no human being at the wheel. The list is endless. And again, none of this money would ever be spent unless someone actually achieved a breakthrough.

  What kind of world might we already be enjoying if we had set aside even a fifth of the $831 billion stimulus for breakthrough prizes? At worst, we would be $166 billion richer right now. At best, we would be talking about the new American breakout rather than the new normal.

  CHAPTER EIGHT

  BREAKDOWN IN GOVERNMENT

  Only 248 people lived in Boynton, Oklahoma, when state officials showed up in 2010 with federal stimulus dollars burning a hole in their pocket. Washington had sent $16 million to the state to improve its sidewalks as part of the “economic recovery” package, and evidently the Oklahoma Department of Transportation had run out of better places to build them. Perhaps they thought a gleaming new stretch of sidewalk “infrastructure” in rural Boynton would set off an explosion of economic activity. Perhaps they thought Boynton was so remote that they could hide waste there without anyone’s noticing—a sort of Yucca Mountain for the fiscally toxic byproducts of the stimulus legislation. Either way, residents watched bemused as contractors arrived to tear up the existing walkways and replace them with new ones, including a sidewalk that led into a ditch.1

  “This was brand new sidewalk, five years old,” resident Mike Lance told a local TV station about one stretch of walkway. “I mean, it didn’t even have weather stains on it.… This sidewalk looked just like this before they started.”

  “It’s goin’ to nowhere,” he exclaimed, pointing to another section “that fronts no homes or businesses, and leads directly into a ditch.”

  “If I’m wrong, convince me,” he said. “If I’m wrong, I’ll say I’m sorry…but I just don’t see me saying I’m wrong on this project.”2

  Boynton wasn’t the only town thus “enhanced” with stimulus money. Council Hill, Oklahoma (population 129), received $245,000 for “pedestrian improvement,” about $1,900 for every person living there.3 Other towns across the state got similar infrastructure upgrades.

  The sidewalks to nowhere in Oklahoma (as well as others in Michigan and Florida) are just one example among hundreds that Senator Tom Coburn has cataloged in thirty-five incredible reports on government waste. His annual “wastebook”—a must-read in Washington—would be funny if hardworking taxpayers weren’t financing every boondoggle he finds.

  Senator Coburn points to at least $1 billion in government payments to more than 250,000 dead people in the last decade,4 $114 billion worth of tax breaks to milli
onaires (including for their gambling losses, rental expenses, and electric vehicles),5 and $2.5 billion in improper food stamp payments.6

  Those are just a few of the larger-ticket items. Senator Coburn’s books contain hundreds of smaller but equally absurd expenditures, such as $27 million for pottery classes in Morocco (a country that has been making pottery for thousands of years),7 $6.5 million in overpayments for brand-name drugs with generic alternatives,8 $3 million for a children’s golf program in South Carolina,9 $5 million for a pedestrian bridge between the Saint Louis Zoo and its parking lot,10 and $2 million a year in service fees on unused federal bank accounts that have a zero balance.11

  Taxpayers spent $325,000 for a robotic squirrel to test how snakes responded to it,12 $300,000 to promote the consumption of caviar,13 $1.5 million for a NASA video game mimicking a trip to Mars,14 $500,000 on a pet shampoo company,15 $765,000 to build an IHOP in Washington, D.C.,16 $484,000 to build a Mellow Mushroom pizza restaurant in Texas,17 $937,000 to produce an online soap opera starring Billy Dee Williams,18 $100,000 to analyze World of Warcraft gamers,19 $1 million to display snippets of poetry in zoos,20 $90,000 on a Shrek-themed campaign promoting Vidalia onions,21 $100,000 promoting Idaho’s wine industry,22 $30,000 for a Hawaiian cookbook,23 $700,000 to study greenhouse gas emissions from cow burps,24 and $10,000 on talking urinal cakes to fight drunk driving.25

  Senator Coburn’s catalog goes on, and on, and on. Each example is more absurd and extravagant than the last. He has compiled thousands of pages of incontrovertible proof that government is broken—badly.

  Some of this is simply incompetence, and some of it is willful. But even what begins as incompetence ends up staying in place intentionally, as the prison guards refuse to consider defunding wasteful programs.