U.S. military spending peaked in 2010 at $668 billion. It has dropped slightly since then, as the military started withdrawing troops from Iraq and Afghanistan.
But real austerity has yet to come. So far, the looming budget cuts have been a bogeyman lurking in the dark.
The administration and Congress already have agreed to remove $487 billion from future defense spending beginning in 2013. There is the possibility of further cuts as part of a new deficit-reduction deal expected next year that would avert the congressionally mandated 10 percent across-the-board sequestration. Depending on how the chips end up falling during the negotiations, defense could be squeezed a percentage point or two more.
But the crunch is likely to be relatively benign compared to previous post-war defense drawdowns when budgets plunged by more than 30 percent. The presumption now is that the defense spending curve will stay flat for several years. While that would be welcome news for other federal agencies, no-growth budgets amount to real pain for a Pentagon that, for the most part, still lives in a world where money is no object.
Nobody expects the downsizing to be easy for the Defense Department, where spending has gone unchallenged since 9/11. Former Secretary Robert Gates quipped that trying to cut waste from military agencies was akin to an “Easter egg hunt.”
Tough budget decisions about what stays and what goes have been avoided thus far, as the government has operated in wait-and-see mode over the past year, while hoping for the sequestration meat ax to go away. The crisis should come to some resolution next year when the new Congress gets to work. After that, the Pentagon can no longer keep delaying the inevitable. The economic and political realities simply won’t allow it, says Gordon Adams, foreign policy professor and a former budget official under the Clinton administration.
“The public is focused on jobs, the economy, the deficit and the debt, and it wants these things fixed,” Adams writes in a recent editorial. “So it is high time to start thinking about how to manage a serious drawdown, instead of pretending that it will not happen.”
Under any scenario, there will surely be contentious disagreements about what should be cut. The big money in the Pentagon’s budget is in operations, payroll and benefits for current workers and retirees. Although the administration already has proposed a 100,000-troop reduction and would like to close dozens of military bases around the United States, Congress is likely to push back.
“These are difficult, emotional issues,” says Arnold L. Punaro, a retired Marine Corps major general who serves on a Pentagon advisory panel.
If the budget is going to stop growing, the military has to shrink its workforce and infrastructure, he says. The all-volunteer military force has become so expensive that, compared to a decade ago, the Pentagon is paying twice as much for the same number of people. Excessive overhead costs are a chronic problem at the Defense Department, and the imbalance has started to boil over, says Punaro. “There is too much infrastructure, too many bases; personnel and deferred compensation accounts are unconstrained and continue to grow,” he says. Weapons acquisition programs are a drain, too. “They continue to take longer, spend more and deliver less.”
These issues, for too long, have been buried in the “too hard” box, he says. “If they were easy, they would have been fixed.”
Punaro is leading a study that will measure the “fully burdened cost of personnel.” The analysis is expected to provide eye-opening numbers about the cost of military service members, civilian personnel and contractors. “It’s not just the paycheck,” he says. The Pentagon has never studied this in a comprehensive way, Punaro says. “These things usually are not welcome with open arms.”
Slashing payroll and benefits would provide temporary fiscal relief, but might be counterproductive in the long run, some analysts contend.
“The recent wars in Afghanistan and Iraq have revealed the volunteer force’s Achilles’ heel: In order to attract large numbers of qualified personnel who are willing to serve in dangerous and unpleasant wartime conditions, the Defense Department has had to raise salaries and benefits substantially,” says Andrew F. Krepinevich, of the Center for Strategic and Budgetary Assessments. The Pentagon will need to set priorities and stop trying to do it all, he writes in a paper titled, “Strategy in a Time of Austerity.”
For the past 20 years, he says, a “stable international order and generous budgets have enabled the United States to avoid making difficult choices about defense and strategy. Decisions were often dominated by the domestic politics of defense policy, parochial bureaucratic interests and sheer inertia rather than rigorous planning.”
In the strategic guidance that President Obama unveiled a year ago for the Defense Department, he called for a shift in focus from large-scale land conflicts to low-intensity special operations, cyber and drone warfare. These missions, however, are being treated by the generals as additional items to be piled on the to-do list, rather than priorities that will require them to give up existing fiefdoms.
Some generals are beginning to get the message, though. “None of us are sitting there [in the Pentagon] right now with an expectation that we’re not going to go through a period of austerity,” says Gen. James F. Amos, commandant of the Marine Corps.
Based on historical trends, the military will be in downsizing mode for probably a decade, he says. As a result, the nation’s defense strategy should not be about “what we can afford” but rather about “what our nation should do as a global power.” All military leaders these days, he says, are trying to figure out “how much is enough.”