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April 22, 2013

Necessary Spending

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This year’s defense budget is coming into focus, and the picture isn’t pretty. Congress and the president will probably agree to increase defense spending by a small amount, but they will probably also take money away from future defense budgets. This will allow them to say that they have increased defense spending while in reality the wholesale unraveling of American power will continue.

Here is a timetable of defense-budget decisions over the past four years:

  • 2009: After Barack Obama takes office, Secretary of Defense Bob Gates cuts $400 billion from defense spending, ending most major Pentagon modernization programs, including the F-22, the C-17, the DDG-1000 Destroyer, and the Army’s Future Combat Systems program.
  • Spring 2010: The Perry-Hadley independent panel reviews the department’s plans for the future and issues its report. It finds a “mismatch,” dating back to the end of the Cold War, between the missions that the military has been expected to perform and its size and strength. In particular, the report finds that the size of the Navy should be increased and that the aging inventories of all three of the services should be updated. Unless its recommendations are implemented, the panel warns, a “train wreck is coming” for the military.
  • Spring 2011: Secretary of Defense Bob Gates submits a budget plan that provides for modest increases in defense spending over the following ten years. But soon after, the president asks for $400 billion in defense cuts, ignoring both the Perry-Hadley report and his own secretary of defense, and without offering any strategic analysis whatsoever of the impact of the reductions.
  • Summer 2011: Congress agrees to cut $500 billion from then-current budget projections, again with no analysis of the impact.
  • Fall 2011: Congress and the president come to an agreement: Unless there is a $1.2 trillion deficit-reduction agreement by the end of 2012, sequestration will take effect, including an additional $500 billion reduction in defense spending over the next ten years.
  • March 2013: After a 60-day postponement, the sequester goes into effect, reducing defense spending by an additional $50 billion for the current fiscal year and lowering the defense-budget baseline by similar amounts in succeeding years.

These cuts have begun to affect day-to-day readiness. The Navy is routinely canceling deployments, and the Air Force has grounded a third of its combat aircraft. Elements of the military that are not deployed on the highest-priority missions will not have the training or equipment they need to be combat ready. Over time, the backlogs in training and maintenance will grow, and it will cost more in the long run to reverse them than the cuts themselves save.
Over the longer term, a force that was already too small will get smaller, and already-outdated equipment and weapons will get older. The Navy will continue to retire more ships than it buys, and its fleet will decline to 220 to 250 ships, 50 to 80 ships fewer than even the Obama administration believes is necessary. (The Perry-Hadley panel recommended 347 ships.) The Army will not be able to replace its vehicles, tanks, or aging helicopter fleet. The Air Force likely will fail to buy the number of F-35 Joint Strike Fighters it needs (even though that is its last remaining fighter program), will not be able to fund a new bomber program to replace the 50-year-old B-52s, and will come under intense pressure to delay its tanker program. The Marines’ amphibious capability will continue to suffer. There will be no hope of replacing America’s aging satellite infrastructure, and a host of other second-tier priorities will be unfunded.

All of this will translate into reduced effectiveness. The armed forces of the United States operate an integrated system that sustains global presence, collects intelligence, patrols the seas and air, supports America’s alliances and commitments, protects American citizens, and maintains a constant readiness to project power. They operate jointly and depend on a complex logistical network and an industrial base that is already fragile. Depending on how long the funding shortfalls continue, and on the decisions that the Pentagon makes in the meantime, what will probably suffer most are our peacetime naval presence, joint military exercises, air superiority, the nuclear deterrent, sea and air lift, and amphibious assault. More generally, the procurement and modernization programs will take another hit, further reducing capabilities across the board. 

As I posted recently, every category of primary risk to the United States is growing. The Chinese are building up their power without masking their intent: They want to be able to deny the United States access to the East and South China Seas so they can pursue their national ambitions in those waters. Al-Qaeda is active again in Iraq and has created planning bases in the Arabian peninsula and Northern Africa. Iran is approaching nuclear capability, which it will use in support of its conventional aggression, much as North Korea is doing now. Syria is descending into chaos; the conflict there, and forces unleashed by the Arab Spring, are threatening to destabilize other parts of the Middle East. There are a host of lesser threats — the “known unknowns” that Don Rumsfeld used to refer to — as well as others that can’t be foreseen now, just as no one in Washington foresaw the Arab Spring or its consequences.

What should be done? First, the most recent and dangerous round of budget cuts, those that resulted from the sequester, should be repealed. No one in Washington defends them, and it is impossible to claim that they are necessary to balance the budget. The Ryan budget eliminates the defense sequester, though beginning only in 2014, while replacing it with other reductions and balancing the budget in ten years. The Republican Study Committee has produced a budget that repeals the sequester, again only after this year, while achieving a balanced budget in five years. Even the president’s budget reverses the sequester, though it reinstates some of the sequester cuts after he leaves office in 2017. (That is a common budgetary trick, allowing presidents to count savings against their ten-year budget targets while handing the consequences to their successor.) To the extent possible, the House should hold the line on its budget, which exempts the Department of Defense from the full effect of sequestration.

More broadly, those in Washington who really want to address the budget crisis should understand clearly that the defense budget is not the problem. The driver of the budget crisis is the structural gap between the cost of entitlement programs and the revenue collected to fund them. That gap is growing. As it does, it crowds out everything in the discretionary budget, including defense funding. Shrinkage of the defense budget is therefore less a solution to the crisis than one of its negative consequences. Moreover, to the extent that a decline in American power leads to global instability and conflict, it will reduce economic growth and, therefore, the revenues that are available to balance the budget.

Second, there are crucial defense programs that can and must be funded even in the current environment. Chief among these is missile defense. Ballistic-missile defense is an entirely defensive, non-nuclear system that will — if it is fully deployed — give the United States the ability to shoot down missiles, which are most likely to be launched by rogue regimes such as North Korea and Iran. There simply is no reason not to build out the system as soon as possible. Yet the Obama administration has cut missile-defense funding by a quarter over the past four years. Congress should restore that funding — it would cost only $2–3 billion — and concentrate its oversight efforts on forcing the administration to complete the missile shield with no additional delays.
Finally, it is essential that the Pentagon take credible steps to reduce the waste in its budgets. Efforts should focus on reforming the acquisition system, reducing the number of civilian employees, and rebalancing the compensation system in a way that reduces the out-year costs of retirement pensions and health care. The Perry-Hadley panel addressed these issues three years ago and recommended commonsense solutions that Congress ignored at the time but should make a priority now.

Two caveats are in order, however. First, the budgetary shortfall has become so great that there is no hope of closing it just by eliminating waste, even if we assume that Congress redirects the savings within the defense budget rather than using it to support other spending. If, for example, the Obama administration immediately eliminated 20 percent of the Pentagon’s civilian employees — and no one in Washington would bet their own money that that would ever happen — it would save at most $15 billion per year, while the difference between what the government is scheduled to spend on defense in 2020 and the amount that Secretary Gates believed was necessary is close to $250 billion.

Second, every secretary of defense in the past 20 years has talked about reforming the Pentagon. Some have actually meant it, yet in the end very little has been accomplished. The fiscal pressure on the Pentagon is now so great, however, that with determined leadership it might be possible to overcome some of the institutional and political constraints that have prevented reform in the past. That is the only good thing about the current budgetary climate. But as conservatives understand all too well, the idea of “government efficiency” is at heart oxymoronic. The Pentagon will never run like Walmart, and any defense policy that counts on its doing so is not grounded in reality.

Much of what passes for national-security debate in Washington is really a discussion of tactics, in the context of whatever crisis happens to dominate the headlines at the time. Should the United States arm the rebels in Syria? What is the appropriate response to North Korea’s provocations? What is the appropriate use of drones against al-Qaeda?

All of these are important, but they are not as important as the larger strategic questions that few people in Washington ever discuss. What are America’s vital and enduring national interests? What strategic approach to the world is the best way to protect those interests? What capabilities must be sustained to support that strategy?

Ever since the introduction of weapons of mass destruction on the world scene, the highest strategic purpose of the American military has not been to win wars but to mitigate risk; America maintains a robust set of capabilities so that presidents can protect the vital national interests of the United States while deterring or at least containing conflict within acceptable limits. Perhaps that approach should be changed, and perhaps changing it will make it possible to save money in the defense budget. But what must surely be wrong is to divorce defense policy, including spending decisions, from strategy — that is, to make budgetary decisions that sacrifice important capabilities wholly without regard for strategic considerations. That is what Washington has been doing for the past four years.

— Jim Talent is a former member of the Senate Armed Services Committee and is currently a distinguished fellow at the Heritage Foundation.

First appeared in National Review Online.

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