Defense Strategy in a Square Corner
A square corner is an apt description of the situation now facing the Defense Department. It has a strategy laid out in the 2014 Quadrennial Defense Review that could not possibly be executed with its current resources.
Two important documents underscore this bleak reality. One is a presentation given by Congressional Budget Director Douglas Elmendorf to the Economic Club of Minnesota in February. He started by revealing that the federal budget deficit has fallen sharply from the 2009 peak of $1.4 trillion to about $500 billion and only 3 percent of gross domestic product in 2014.
Does anyone recall the outrage and fulmination that accompanied President George W. Bush administration’s $450 billion deficit? And now we seem to be cheering a deficit of “only” $500 billion. To quickly puncture this short-lived celebration, Elmendorf goes on to say that the United States “has not made the fundamental choices it needs to make” to manage its fiscal future. And he notes that federal debt “remains on an unsustainable path.”
Between now and 2024, CBO projects deficits of 3 to 4 percent of GDP with publicly held debt rising to 80 percent of GDP. Government spending continues to rise to 22 percent of GDP with revenues lagging at 18 percent of GDP, while piling up more debt. Alarmingly, net interest on the debt rises to 3.3 percent of GDP. And projections of health care, Social Security and net interest are on the rise, with all other categories falling, including defense. With caps on discretionary spending set in the law, the non-discretionary components increase unconstrained.
This is, indeed, a dire picture of the nation’s financial situation and of the challenges that lie ahead. For example, a $4 trillion deficit reduction over 10 years merely returns us to the previous 40-year average. And this would require a one-fifth cut in Social Security or one-fifth cut in non-interest spending, or a 10 percent increase in taxes. It all comes down to reducing health care and retirement, or raising taxes.
This report serves as context for what the Defense Department faces as it tries to execute a strategy — and its required force structure and resources — set in the QDR with the funding that is available.
We now have a formal assessment that confirms there is a gross mismatch between strategy and resources. The National Defense Panel recently published its review of the 2014 QDR. Panel leaders William Perry, former secretary of defense, and former Central Command chief Gen. John Abizaid called it a consensus report with no dissenting opinions.
The panel opined that the United States in the past deployed its economic, diplomatic and military power to stabilize and promote rules-based international order, which was not self-sustaining without robust U.S. engagement. This worked irrespective of political party or political disposition, but it no longer does.
The 2011 Budget Control Act, which triggered sequestration, was a serious misstep, leading to investment shortfalls and U.S. weakness, as both allies and adversaries are questioning our resolve.
As a result, we are left with a force that is less than combat ready, a disconnect between national defense objectives and inadequate budgets.
The capabilities needed far exceed budget resources. This is especially problematic in light of the huge global turmoil we see today. The list of challenges and instabilities is growing: Russia, Ukraine, China, North Korea, Iran, Syria, Iraq, in addition to non-state threats like the Islamic State’s terrorist army.
Interestingly, one consequence of the disagreements we are having with the Russians threatens to disrupt two ventures we share with them. One is our manned access to space as we pay them dearly for a ride to the international space station. The other is the dependence we have developed for their RD-180 rocket engine, one of the world’s best, which we use for our heavy lift rockets that put U.S. national security payloads into space. Congress has most recently begun to direct monies for the United States to start developing an alternative to that world-class engine.
The instability that is exacerbated by diffusion of power and expanding lethal technologies — real power in the hands of relatively unsophisticated and non-state actors — is causing more carnage on the battlefield and is making asymmetric conflict the norm.
In the view of the National Defense Panel, it is today better to err on the side of having too much. The members suggest an expansion in the strategy to deter and defeat in one theater while being able to simultaneously deter and thwart aggression in multiple other theaters.
They conclude that the current force structure and resources are inadequate, and that Congress must repeal the Budget Control Act as soon as possible. The ongoing efficiency initiatives and other savings the Pentagon is pursuing are welcome, but they are not going to be enough to make up for the fiscal shortfalls that now put our forces at risk.
The CBO paints a picture of an unsustainable, out-of-control budget process, unlikely to produce enough discretionary spending to support the defense needs of the country. The National Defense Panel, meanwhile, absolutely demands greater resources for defense.
The reality is that in the current political environment, the Defense Department is unlikely to get a fiscal year 2015 budget, and can expect only a continuing resolution that pushes the 2015 appropriation to December or January.
But the real “square corner” for defense will arrive with the submission of the 2016 budget, likely to exceed the BCA caps and sure to be sequestered. The services have tried to make adjustments. To reduce costs, the Air Force is seeking to retire aging aircraft and curtail some procurements. Congress, however, has successfully blocked almost every force structure move to this point.
But as we move into the reality of the 2016 budget, these force structure adjustments will be inevitable.
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