BUDGET
Five Key Questions About the Defense Budget
8/1/2010
By Sandra I. Erwin
By Sandra I. Erwin
While these issues will take years to unravel, it’s worth pondering some of the key questions that policymakers should bear in mind when it comes to the defense budget:
1- Is the United States spending too much on defense? More importantly, can the nation afford what it is currently spending?
With a defense budget exceeding $700 billion (80 percent is the baseline budget, 20 percent funds the Iraq and Afghanistan wars), the United States is now spending more than at any time since World War II. Yet, as a share of the U.S. economy, defense amounts to 4.8 percent, which is lower than what the nation spent during the Vietnam and Korea wars, or World War II. “As a percentage of GDP, we’re below average,” says Todd Harrison, senior fellow at the Center for Strategic and Budgetary Assessments. “What this says is that what we’re spending today is affordable,” although it can be argued that the money is not spent the right way, says Harrison. But in the context of today’s national debt, defense could increasingly become an unaffordable luxury. The Congressional Budget Office estimated that by 2017, the annual interest on the debt alone will exceed the entire defense budget. To protect future defense budgets, some Pentagon officials have advocated setting a 4 percent of GDP floor. But that may not be a wise move, says Harrison. “I wouldn’t want to be locked into that line of thinking. What happens when the economy crashes and GDP goes down?” European allied nations, by the way, spend anywhere from 1 to 2 percent of GDP on defense.
2- The U.S. military spends more on defense than the rest of the world combined. So why is the Pentagon worried about future confrontations with China or Iran, which spend far less on defense than the United States?
There are two major reasons. One is the widespread availability of “smart” guided weaponry that would neutralize the overwhelming U.S. advantages in the size of its arsenal. Emerging powers such as China and Iran will be stocking up on guided rockets, artillery and missiles that would be capable of sinking U.S. ships or bringing down U.S. aircraft, says military strategist Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments. The current U.S. military strategy is built on the premise that American strike weaponry — positioned in bases around the world — would be able to hit targets anywhere. But increasingly China and Iran are developing “high end anti-access capabilities” that would deter U.S. weapons from entering areas where they would be vulnerable to enemy missiles. “Chinese missiles could target U.S. forward bases,” says Krepinevich. “Those bases are no longer sanctuaries, they’re increasingly vulnerable.”
The United States currently is not building new weapon systems that would counter that anti-access threat, he says. The biggest military procurement program today is the F-35, a tactical aircraft that has to be located in those vulnerable forward bases. “The value of the F-35 could drop depending on how we deal with this problem,” Krepinevich says. “One might think that the major increases in defense spending have left the U.S. military well-equipped to address these challenges. Sadly, this is not the case. The defense buildup has not resulted in a significant modernization of the military. Indeed, from a procurement standpoint, the U.S. military can be said to have experienced a ‘hollow buildup,’” he says. “The result is an aging inventory of equipment whose service life is being shortened further by the high tempo of ongoing military operations.”
3- Can the United States reduce defense spending and still remain technologically ahead of its enemies?
It is possible to have superior weaponry and spend less. But the United States will have to change its mentality about what it means to be technologically ahead of others. During the Cold War, the Soviets would build a third-generation fighter jet and we would respond by building a fourth generation, Krepinevich says. “We’re not racing with anybody now.” In a fiscally constrained universe, the Pentagon appears to be adjusting to a “new paradigm” that accepts that the best technology may not necessarily be the most complex or most expensive. Witness the large number of programs currently on the Pentagon’s books that have been in development for years and never seem to materialize. Those programs are not contributing to military modernization and are draining the Pentagon’s coffers. The answer is more “off-the-shelf” procurement, says Krepinevich. “We are moving to less emphasis on modernization, and more recapitalization.” Instead of pipedream hardware such as the Future Combat Systems, the Comanche helicopter or the DDG-1000, we are more likely to see Stryker armored vehicles, Black Hawk and Apache choppers, and DDG-51 Arleigh-Burke destroyers. The Marine Corps may have to ditch its over-budget, behind-schedule Expeditionary Fighting Vehicle in favor of an off-the-shelf vehicle. This shift is congruent with Gates’ assertion that the enormous amount of time it takes to deploy systems is a strategic vulnerability for the United States, says Krepinevich. The emphasis is on timely and cost-conscious procurement rather than the “next big thing.”
4- Can the Pentagon cut its budget and still carry out most national security functions?
Yes, but with some caveats. First, it has to prioritize its goals, says Krepinevich. For decades analysts have talked about a gaping mismatch between the nation’s military strategy — which calls for being prepared for any form of conflict and to be forward deployed around the world — and the resources available to sustain it. Even if the Iraq and Afghanistan wars ended today, the “over-commitment” problem would not be solved. The U.S. military strategy still requires forces to be available and ready to deploy anywhere in the world. Such level of engagement and readiness requires huge resources, and thus the argument about whether the current strategy is under-resourced.
Strategy is defined as “how a state’s resources are best employed to achieve the ends it seeks,” Krepinevich says. “Strategy necessarily involves setting priorities and taking risks. This is because no state, however powerful relative to other states, has ever had sufficient resources to eliminate all risks to its security and well being,” he says.
If the United States faces a decline in resources, it has to reduce the objectives to be achieved or accept greater risk that they may not be accomplished. “There is an opportunity here, if the Obama administration is willing to seize it,” he says. “It involves exploring all available options for diverting the country from its path toward a declining military posture. … Similar to the approach pursued by Great Britain a century ago, this would involve providing clear guidance as to how the United States might expand its circle of willing and capable allies, how it might identify, create and leverage sources of advantage and how they would be employed to address the most pressing challenges to the nation’s security. Such a strategy would set clear priorities and make hard choices,” he says. “It would identify areas where the United States would have to scale back or divest itself of commitments.”
The Obama administration’s recently unveiled national security strategy, which analysts have derided as a PR document and a wish list, makes no such choices.
5- How can a president be willing to make ‘tough choices’ knowing that members of Congress will feverishly stall any cuts that kill jobs or pork spending back home?
This is tough one. The Pentagon has been Congress’ go-to piggy bank for many decades. The Defense Department is not only the agency in charge of protecting the nation but it’s also the largest spender and the biggest employer, with 2.3 million people on its payroll. Defense contractors hedge their programs from cuts by spreading facilities and jobs in as many states as possible, which adds huge overhead costs to military projects. In addition to saddling the Pentagon with pork-barrel projects, Congress also has stuffed all sorts of benefits and entitlement programs into the defense budget that the Pentagon has to keep funding ad infinitum.
“Everyone says we have to support the troops. Who would disagree with that?” Harrison asks. But this creates a huge financial predicament for the Defense Department. It supports today’s troops with generous compensation packages, but it also has to bankroll the pension and health benefits of 5.5 million retirees (not including veterans’ health care funded by the Veterans’ Administration) while it must invest in tomorrow’s force by funding modernization and training programs. “You can’t continue to do all those to the same extent that we do today,” says Harrison. “With a flat budget you have to prioritize.” Military health care costs, Secretary Gates has said, are “eating the Defense Department alive.” While the average U.S. worker pays $3,500 a year for health insurance, military retirees only pay $480 for full coverage.
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