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The fleet replenishment oiler USNS Tippecanoe (T-AO 199), left, conducts a replenishment at sea with the guided missile cruiser USS Cowpens (CG 63) in the Philippine Sea Nov. 10, 2012. Cowpens was part of the George Washington carrier strike group and was under way conducting maritime security operations and theater security cooperation efforts in the U.S. 7th Fleet area of responsibility.
Determining what our defense capabilities can do for the nation, our allies and peace and stability around the world is the lens through which our military budget should be evaluated. Like all federal spending, military investment must be analyzed both quantitatively and qualitatively. While numbers tell an important story, they are but a part of the whole picture. Consequently, any analysis of the defense budget must answer the question of what is the return on that spending.
Cashing a ‘peace dividend’ without the peace
America’s defense budget is set to decline by every metric: in real terms, as a percentage of the federal budget and relative to the size of our economy. In nominal terms, defense spending in 2017 is projected at $567 billion, a little over 12% of the federal budget and 2.8% of America’s expected GDP. Since 1940, America has spent only 2.8% of its GDP on defense twice: in FY 1999, and FY 2001. When those budgets were constructed, the world looked far different than it does today.
This would place defense spending at a post-WWII historic low by both of these metrics. The U.S. is already ranked 23rd in the world for the size of our defense budget relative to our economy. Worse, the decline in defense spending is based on projections that do not include sequestration, which would cut another half trillion dollars from the military over the next decade. In FY 2021, the final year of sequestration, defense spending would be a little more than 2.3% of GDP—close to the NATO floor of 2% of GDP.
“All of these trends are worrisome because this is not your grandfather’s defense budget, demands on U.S. forces are not falling significantly alongside mission reductions in Iraq and Afghanistan, and the world is increasingly unsettled.” -Mackenzie EaglenIn real terms, the military’s budget is losing ground to inflation and falling faster in purchasing power than numbers alone indicate. All of these trends are worrisome because this is not your grandfather’s defense budget, demands on U.S. forces are not falling significantly alongside mission reductions in Iraq and Afghanistan, and the world is increasingly unsettled.
Budget growth consumed by consumables
Much of the current debate about the size of the defense budget is driven by the perception that the post-9/11 era’s large military spending increases mirrored previous build-ups. But defense budget growth after 2001 generated little cushion. The increases have largely been consumed by current operations, not on future preparedness.
Adding to the budget strain was the fact that combat operations in Iraq and Afghanistan were undertaken without any prior mobilization. Much of the corresponding growth in military spending over the last decade was largely hollow as increased health care costs and urgent war-related priorities took precedence over longer-term priorities like modernization.
This year, the cost of people now comprises a full 50 percent of the defense budget. As health care costs continue to rise, this share will only grow in the coming years. For instance, DoD health care costs were $17.4 billion in 2000. Since then, health care costs have ballooned by 144% to $42.5 billion in FY 2013.
One illustrative way to look at the problem are the fourteen programs—representing just 1% of line items—that constitute 21% of procurement spending. Collectively, these programs represent most of each services’ key procurement objectives from the past decade of spending.
Unsurprisingly, the wars in Iraq and Afghanistan meant that ground forces and related systems received priority funding. Examples include the Bradley and Stryker fighting vehicles, mine resistant ambush protected vehicles (MRAPs), Abrams tank upgrades, Predator and Reaper RPVs, as well as the Global Hawk system. Yet an emphasis on these programs meant that systems designed for other contingencies fell as priorities. Navy and Air Force money went largely to existing programs of record like the DDG-51, C-17, and F/A-18E/F.
The reality is that many of the services’ most critical next-generation programs were terminated, deferred or trimmed over the past decade—putting the U.S. military further out of reach from an upgraded arsenal after ten years of budget growth.
The “next generation” is now here
America’s decade of largely hollow defense increases unfortunately has left the military unready for the multitude of challenges of the 21st century. The arsenal of new equipment acquired for counterinsurgency operations over the past decade would be critical in a future land engagement but is poorly suited for many other threats that may emerge in maritime or air-dominated domains.
As advanced technologies proliferate to other states and entities, America’s military edge is shrinking as many high-tech modernization programs are continuously foregone. As senior Air Force leaders have testified, “Legacy fourth-generation aircraft simply cannot survive to operate and achieve the effects necessary to win in an integrated, anti-access environment.”
The services need new and innovative solutions to defeat enemy air defenses and anti-access and area-denial technologies. Part of the solution is stealth, including the Air Force’s nascent new bomber and the fleet of F-22 fighters. Another part of the solution includes the integration of electronic, sensor, space and cyber attack capabilities. But whatever the solution or, more likely, the basket of solutions—it is wholly unaffordable under current budget projections.
The level of investment needed in order to finance a credible deterrent posture, maintain robust overseas presence, and at the same time invest in new capabilities that can survive in contested environments is incompatible with ongoing and projected cuts to defense spending. The U.S. simply cannot sustain a global military and superpower posture under current plans.
Mackenzie Eaglen is a resident fellow in the Marilyn Ware Center for Security Studies.
Like all federal spending, military investment must be analyzed both quantitatively and qualitatively. While numbers tell an important story, they are but a part of the whole picture.
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