Statement of Problem
U.S. defense budgeting must constantly reevaluate what scenarios the country is likely to confront, both in the near to mid-term, and mid to long-term. Designing the military for a rapidly changing world requires a flexible and agile force that can respond not only to those campaigns defense analysts predict, but also the ones that pose a surprise. Two possible directions for military transformation involve creating a military force better suited to confront the expeditionary warfare being experienced today, versus the creation of a force focused on confronting a near-peer competitor such as China. Although no country is likely to challenge the U.S. in the short-term, decisions made now will influence America’s degree of readiness in the long-term.
Unfortunately, budget constraints will make it unlikely that America can fully fund both strategic directions. When considering these two possible goals, tradeoffs will have to be made, and priorities put in place to guide defense spending. The defense budget will likely provide $600 billion over the next ten years towards these two goals.
Expeditionary missions aim to address the type of warfare America is likely to confront in the near to mid-term, and beyond. Primarily focused on the “southern arc of instability”, these missions can be expected to require a less intensive effort than a traditional major theater war (MTW), but present their own set of requirements and difficulties. Spending would be focused on Army ground forces, prepositioned bases and equipment along the southern arc, mobility and low density/high demand (LD/HD) assets, and training and security assistance. Fully funding this first goal would cost $200 billion.
Strategic dominance aims to prepare for a future near-peer competitor such as China. Addressing such a rival would call for maintaining and enhancing U.S. military superiority. Spending would be focused on national missile defense (NMD), the Army’s Future Combat Systems (FCS), airpower modernization, increased shipbuilding, and investment in space systems. Fully funding this second goal would cost $600 billion.
The U.S. will confront a variety of resource intensive problems in the future, which include health care, social security, and a variety of other domestic concerns. Each of these issues will require significant additional funds at approximately the same time that China’s military could become a challenge, and energy shortages may lead to price increases in oil. Due to boom and bust spending, many of the military’s assets will need to be replaced in blocks. Spending priorities are often driven by political concerns, rather than economic forethought. These politically powered spending waves led to a procurement holiday during the 1990’s, which kept procurement spending artificially low. Many factors will contribute to the need for fiscal austerity.
Three options are described below. Each provides for a differing allocation of assets to address the expected $200 billion shortfall.
Option 1: “Enhanced Expeditionary Warfare”
This option chooses to fully fund expeditionary missions, while delaying funding for strategic dominance. It argues that China will not provide a threat in the near-term, and America’s most important focus should be improving today’s military to fight today’s battles. Most analysts predict that China will be in no position to seriously challenge the U.S. for at least 20 years. In the interim, many technological developments will advance exponentially, making systems prematurely fielded, rapidly obsolete. While America should still address the rise of China, it will be many years before any country can approach U.S. military and economic preponderance. Option 1 allocates $200 billion towards the first goal, and $400 billion towards the second.
Option 2: “Strategic Dominance”
While expeditionary missions often involve campaigns with debatable direct national security significance, confronting China will not be an option; it will eventually be a necessity. Degrading America’s capabilities could signal to the Chinese a weakness they would be likely to exploit. Military forces should first be designed to ensure America that can protect its interests against a direct threat. Option 2 provides $75 billion for the first goal, and $525 billion for the second.
Option 3: “Dual-Purpose Preparedness”
Often a mix of forces is the best hedge against an uncertain future. Frequently the predictions made by defense analysis have not come to pass, and unseen variables carried the day. Few people believed the Cold War would come to an abrupt end, and when it did, many predicted unprecedented peace and stability. History argues prudence. The strategic landscape is often strongly influenced by one unlucky event, or a convergence of factors combining to generate a new blend of threats. The best course of action in the face of countless unknown variables is to maintain flexibility. Option 3 allots $150 billion for the first goal, and $450 billion for the second.
Ground forces have been significantly degraded by the wars in Afghanistan and Iraq. The conditions under which our ground troops are operating is unacceptable. Asking the same people to risk their lives repeatedly by returning to combat tours is only morally defensible during nationwide mobilization against a ubiquitous threat such as that posed by Nazi Germany. Clearly, our present campaigns do not meet this standard. Limited funds should be focused on replenishing those sectors of the military that have been hit hardest by the present conflicts, and are likely to bear the brunt of near-term battles.
The war in Iraq is affecting active duty and reserve forces alike. The reserve forces are providing approximately half of the troops in Iraq, with 49,000 coming from the Army National Guard, 22,000 being supplied by the Army Reserve, and 4,000 from the Marine Corps Reserve. Traditionally, the reserves have been used to augment active duty troops. People who commit to reserve duty do so with the understanding that they will serve as a supplemental force, except in times of national emergency. Requiring them to do more than was originally asked of them, while requiring little from the rest of the country, is a serious break in faith with our troops. The reserves are paying for that break. During the first nine months of 2005, 36% of U.S. casualties came from this group, while that number increased during August and September to 56%.
Soldiers in the reserve are being asked not only to risk their lives, but to put their careers on hold indefinitely. While the 1994 federal Uniformed Services Employment and Reemployment Rights Act (USERRA) protects soldiers from losing their job due to deployment, this has proven difficult to enforce. In 2004, the Department of Defense (DOD) processed 6,242 job discrimination cases. In an era where job security is rare, and downsizing common, companies often use any excuse at their disposal to “right-size” their workforce. Deployment has provided this excuse. While most companies clearly fulfill their obligations under the law, many do not.
The list of difficulties that our troops are facing is long and varied, from living with permanent disabilities, to post-traumatic stress disorders, to the effects of substance abuse. There are many tragic effects of war that can only be mitigated, but fully funding effective forces is something in America’s control. The $200 billion shortfall pulled from strategic dominance could be recouped starting in year five, by finding $20 billion in savings over the course of ten years. This would fall well within the 20 years analysts predict China will be able to mount a concerted and effective military presence to challenge the U.S.
The primary mission of the armed forces is to protect the vital interests of the United States. Failed or failing states are common. Simply from an economic point of view, the U.S. can not respond to all, or even most, of these situations. Since America is facing a future of constrained resources, the best use of those resources will be focusing on threats to our vital national interests. China promises to be a future economic powerhouse, which will allow them to significantly upgrade their military capabilities in the next 20 years, providing a plausible challenge to American interests.
Historically, China has a history of conflict with the West. In the modern day, many of China’s policies run counter to American values. The Chinese governments willingness to use excessive force and draconian measures to maintain a rigid social structure will inevitably conflict with America’s focus on individual rights, free speech, and civil liberties. Although some claim that China’s domestic policies are strictly an internal matter, this avoids the inevitable practical ramifications of those differences. Certainly, there are many countries whose practices are antithetical to our own. However, most countries do not have the power to project those customs beyond their borders. China will. And it will do so in the marketplace, America’s primary method of engaging the world. People who believe America’s only real conflict with China would result over Taiwan, lack the historically grounded imagination to realize that armed conflicts are begun over much less.
The best investment in good relations with China is for America to maintain a position of strength, encouraging the stability required for trade to flourish. The only thing worse than an overly empowered China, is a failing China. To successfully navigate this fine-line, the U.S. must encourage China’s slow transition to free markets and democratic participation. Without a strong America, China will probably not make this transition, and the effects would reverberate worldwide.
To fund this goal, significant reductions would have to be made in expeditionary capabilities. Most of these reductions would make it extremely difficult for the United States to participate in expeditionary conflicts in the future. If the military cannot physically perform a particular mission, the politicians are less likely to authorize one. Not having these resources could keep us out of future limited wars. In any case, it is unlikely that American citizens would support additional wars after the U.S. experience with Iraq, making such expenditures a waste. Under this option, the Army would receive an additional division, but no stabilization and reconstruction (S&R) brigades would be created. In addition, there would be no funding for southern arc bases, prepositioned equipment, mobility assets, or foreign security assistance. LD/HD assets would be funded, due to their flexibility and cost effectiveness. NMD would be reduced by 25 MCI’s, still providing a sufficient deterrent in the unlikely event of a missile attack on the U.S. involving multiple warheads. Air modernization would be reduced by 250 aircraft, assuming that technological development will increase the range of missions UAVs can perform. Other savings would come from minor reductions in remaining line items. Diminishing marginal returns on aircraft procurement begin to level off just past the 1000 unit mark. Therefore, 1250 aircraft should provide a robust force, in addition to a generous cushion.
Humans often predict the future through glasses of their own making; either much worse or much better than is warranted. Although analysts attempt to guard against their biases, this is an ongoing and often unsuccessful battle. The same analyst who believes the Russians were a danger is prone to believe that the Chinese are a danger, while the analyst who believes free market democracies will save the day, probably believes this of most times and most places. In any case, this psychological bias deeply affects our decision-making. Perhaps it is too unsettling for the human race to confront the lack of control we actually have over events.
The Chinese may present less a threat than supposed, due to the domestic challenges they face. Like many developing countries, simply the dilemma of managing their megacities may require most of their attention. The western powers have time to explore engagement with China, and proactively solve tension points before they erupt. The somewhat amorphous nature of terrorism can certainly be used as the “common enemy”, to bind our nation closer to those we have ambivalent relationships with. Finally, there is a great deal America can learn from China’s tradition of long-term thinking; the very type of thinking which will be required to solve many of our future problems.
On the other hand, Chinese authoritarianism is not likely to end anytime soon. America can only hope to modify it. The U.S. will have to continue to debate what questionable behavior can be ignored, and what must be confronted. No solution regarding Taiwan seems apparent. Our Japanese allies continue to eye China warily. There is reason for concern.
Similarly, America might not participate in expeditionary warfare for a significant period of time. The American people may simply refuse to support such action while the sting of Iraq remains. Any series of domestic incidents could turn the U.S. almost entirely inward. Another major storm followed by a series of layoffs, and an European “ally” blaming America for the wrong thing at the wrong time, could encourage renewed isolationism. However, a nuclear bomb exploding in a container ship in Baltimore Harbor would probably have the opposite effect. How do we spend our resources wisely in the face of such unknowns?
The best way to adjust for this blindness is to steer the middle path in decisions that contain a great number of unknown variables. We can surmise that expeditionary conflicts, such as those that were predominate since the 90’s, will continue to occur. They are not going away. But neither is China, or North Korea, or Iran. There will always be frictions, and they will always have to be managed. In the absence of overwhelming evidence that one threat poses the greatest threat, fairness suggests economic restrictions should be equally born by all concerned parties. The third option calls for cuts across the board, allowing all programs to proceed. Three S & R brigades becomes two, eight fast cargo ships becomes six, and so on. Each program can be adjusted periodically based on developing events.
Most cost-cutting seeks to find components in a program that would be ideal, but can be removed, while still maintaining the original intent of the system. In times of fiscal austerity, entire programs are targeted, in an attempt to bring costs under control quickly and simply. However, there is savings to be found in changing how DOD operates on a day-to-day basis.
Modernization and automation promise to reduce manpower costs. For example, switching from Sikorsky’s SH-60F helicopter to the MH-60R Seahawk reduces the four-man crew to three. The Navy is pursuing aggressive crew size reduction goals using the systems engineering method of human systems integration. The new DD(X) destroyers were designed for a crew 70% smaller than previous destroyers. This reduction would save approximately $18 billion over the life of a ship. Further savings can be found from designing aircraft that will deploy together with common systems. The Marine Corp plans to replace Bell’s AH-1W Super Cobra and UH-1N Twin Huey helicopters with the AH-1Z attack and UH-1Y armed utility helicopter. Over 80% of these aircraft’s parts are identical.
Similar reductions could be found if lessons learned in one program or service were readily shared with the others. Although the services are known for defending their individual territory, and not always cooperating, organizational change could help overcome this impasse. For instance, the use of a “Red Cell/Red Team” has been used in the military to simulate enemy forces, thereby providing a near-realistic challenge. The use of a “Red Team” drawn from a mix of the services could provide a similar foil to procurement efforts. A service member from the Marine Corp, a group known for operating with reduced resources, could provide corporate knowledge to challenge traditional operations. While walking the line between competition and cooperation might lead to friction, the institutionalization of a devil’s advocate would be a useful exercise in driving down costs.
While the majority of civilian government workers within the defense department are industrious, there is clearly a difference in corporate culture between those in and out of uniform. Those in uniform often operate from a paradigm of working until the job is done, whereas those out of uniform have a reputation for limiting their hours. This difference suggests that while reviewing military personnel for redundancy, the civilian work force should be scrutinized as well. In the interest of fairness, an employee should not be required to work over the amount of time for which they are officially compensated. However, the civilian culture could be brought slightly more in line with that of the military, so that the two can work together more compatibly.
Another area amenable to cost reduction is America’s nuclear arsenal. The U.S. has an estimated stockpile of over 10,000 nuclear weapons matched only by the aging Russian collection, which is neither well-maintained nor well-accounted for. Not only would reductions lead to cost savings, they would allow America to provide leadership in nuclear non-proliferation efforts, and help the U.S. meet its commitments under the Nuclear Non-Proliferation Treaty. Even taking such small steps as canceling development of the Robust Nuclear Earth Penetrator would provide $8 million in savings.
Some costs are accrued simply through organizational procedures which work against savings. For example, a common practice in the military is to spend any remaining funds in the last days of the budget cycle, often on frivolous expenditures. This comes from a “use it or loss it” mentality, that money not spent in a given year will be cut in subsequent years. While it can be argued that most military units have endless lists of useful needs, and that this practice simple acts as an end of year “bonus”, it does not encourage rational spending. An alternative method might award first-pick of the following years budgeting priorities to units which were able to cut costs without sacrificing quality. Often small improvements can lead to enormous savings when spread across multiple parts of a system. The often-cited example of the airline reducing the number of olives in its salads by one, can certainly find its corollary in the DOD. It would probably be more efficient for units to have ownership in cost reduction, rather then providing them built-in incentives to game the system.
Over the long-term, changing attitudes within DOD will go further than hiring outside consultants. There are areas where consultants are the best answer. However, the nature of the consulting industry suggests they are usually a poor choice. Due to the boom and bust spending that permeate the defense industry, consultants overcharge for their services against the day when work will be scare. Because compensation is based on a continuing work flow, consultants are encouraged to extend the length of time needed to complete a project, and to invent work. Finally, the difference between the two cultures is too great to easily bridge. Sometimes it is useful to have an outside perspective. More often than not, that outside perspective applies business school practices which do not work with the military ethos. A fresh look should be taken at the effectiveness of outsourcing, in favor of building in-house capabilities. In the short-term, saving on employee benefits may look like savings, but in the long-term the benefits outweigh the costs.
Savings in O&M
When looking for savings in O&M, one target may be the health care system. The military funds generous and comprehensive health care for members and their dependents. Due to several factors, the cost of health care continues to rise in this system, as it has across the nation. People are living longer, advances in technology have led to greater availability and greater cost for a variety of procedures, prescription medication options have significantly grown, and obesity has become more commonplace. Placing limits on health care spending will probably become necessary, and there are many places where “use” of the system can be classified as “abuse.” It is at these margins where cuts should start.
To participate in the health care system, members should be required to participate in their health. The health standards that are used today should be extended, and their reach widened to include a variety of behaviors that contribute to illness. Generous weight standards and exercise standards are already in place. How else could the system limit its cost, while providing high-quality healthcare?
♣ Members in the system who are convicted of a DUI, should be removed from the system.
♣ Mandatory post-traumatic stress counseling should be required of all members returning from combat. Members do not seek counseling due to cultural constraints, and the effects of untreated stress are now well documented, to include alcoholism, domestic abuse, drug addiction, and other forms of reckless and violent behavior.
♣ Psychotropic drugs should be limited to those individuals who are under a regular counseling regime with a psychiatrist. DOD is large enough to confront pharmaceutical industry driven over-prescription.
♣ Subsidization of cigarettes and alcohol should be discontinued. The Commissary system should not be encouraging tobacco use, which is now well-documented to cause lung-cancer, emphysema, and a host of other ailments. Alcohol is a luxury, not a food item, and should not be subsidized by the taxpayer, particularly given the prevalence of alcohol abuse.
♣ Random lung x-rays should be performed along with the regular weight checks, and limits set as to the amount of damage permissible before members must quit smoking. Similarly, doctors should be able to petition to have people dropped from the system for a documented egregious lack of self-care i.e. obesity, lack of dental care, etc.
♣ Mandatory annual check-ups should be instituted to ensure that doctors have the opportunity to catch conditions early, when treatment is likely to be more effective, and less costly.
♣ Soda machines, junk food machines, and fast food establishments should be removed from military bases. There is nothing to stop military members from purchasing these commodities in the outside world, but there is no reason for the U.S. taxpayer to subsidize both Coca-Cola, and the inevitable resulting dental work.
♣ Retirement should be allowed after 19-years of service for members who meet documented, measurable, consistently high health standards over the course of their military career i.e. weight, clear lungs, body mass index, etc.
Generous military health-care can only be maintained if members take more responsibility for their health. In the short-term, requiring higher standards could lead to drops in recruitment. However, in the long-term, raising the overall quality of health would reduce costs. The military should be the healthiest group of people in the country, and set the standard. There are many conditions which disqualify a person from service because they are not “fit for full service”, and the reduction in aerobic capacity which accompanies tobacco abuse should be on that list.
While analysts are often urged to think “outside” the box, this type of thinking is infrequently rewarded. The following two scenarios seek to post the extremes at either end of a range of options, thereby enlarging the possibilities.
Option 4: “Free from Hegemony”
There are many prosperous and successful nations around the world who owe their prosperity to their inability (or lack of desire) to seek military power. Perhaps it is a conceit of the United States which believes that our withdrawal from military dominance would lead to unmanageable global instability. Various world powers have lost dominance over the years, and the global community has muddled through.
Presently we are supporting approximately 50% of the European Union’s (EU) defense needs, allowing them to continue avoiding a fair share of their responsibilities. It has been several generations since the end of World War II, and in that time institutions and frameworks have been developed which makes hostilities among the EU member states almost unimaginable. If they were irrational enough to find themselves on this path again, the U.S. should not hold itself responsible for fixing the problem. The EU is strong enough to begin providing its own security umbrella.
Similarly, the U.S. has found itself intervening in many situations where we simply provide a lightning rod for grievances, and an excuse for other nations to avoid confronting their own failings. Countries around the world use the U.S. as a scapegoat, instead of honestly accepting that there are real causes for their breakdown, such as institutionalized corruption, burgeoning youth populations, environmental degradations, and archaic social traditions that are holding them back. Intervening in the affairs of these nations only enables this behavior.
In any case, America has a wide variety of its own challenges which it is not confronting, some which are due to converge in the mid to long-term. The U.S. will have its hands full, without providing security services for the rest of the world. Global warming promises an increase in Katrina-like storms, with their unimaginable recovery costs. Confronting our energy dependence on the Middle East directly, rather than continuing to enable that region’s dysfunctions, is a severe problem that should be addressed now, while we have a choice in the matter. With the continuing discussion regarding Saudi Arabia’s overstatement of oil reserves, and a dawning realization that our technological advances are not providing real energy alternatives, we are possibly facing a serious fossil fuel shortfall.
While America enjoys the benefits of democracy and free markets, our quality of life indicators continue to drop. We work unsustainable hours that contribute to the breakdown in stable families. We are unable to provide healthcare for our population. Our overtaxed prison system is the scene of countless human rights abuses, with far more instances of exploitation than those being so hotly debated regarding Iraq. Quality of life indexes routinely put us below developed countries that have invested heavily in their domestic issues.
For people who argue that a lack of intervention in failed states will provide a haven for terrorists, this is a difficult metric to measure. It is just as likely that we encourage terrorism by our presence, and our funds are better spent protecting our territorial borders directly. For people who argue that China must be countered, perhaps they are incorrectly analyzing the situation. As long as we are able to protect our territorial integrity, there is no reason to assume automatic confrontation with China.
First of all, China has the problems of an enormous population to support, requiring it to grow its economy exponential. It has no time for serious confrontation. Second, American reduction in weapons expenditures could encourage China to slow down its arms build-up. Third, the animosity directed at the United States due to the disruptions of globalization would be more evenly shared if the “face” of globalization was not American. Finally, perhaps China would provide a better template for the world we are about to be confronted with. Individual determination may not be well-suited for a world with 10 billion people, endemic environmental break down, and fossil-fuel shortages.
Obviously, this cannot be done overnight. America has obligations it must fulfill. However, reducing our military budget over time, and signaling to the rest of the world our expectation that they will begin to readjust their affairs accordingly, would take us the first steps towards rightsizing our priorities. Of course, this would lead to a loss in global influence. Perhaps the examples set by Japan and Germany should be followed, seeking economic rather than military dominance.
The mantle of military leadership is costly. Both Great Britain and Denmark once ran the world, and they have both gone on to provide their citizens with security and prosperity. Relinquishing the mantle voluntarily is an option that should be given consideration. Funding for this option would be $400 billion allocated for both goals, to begin the painful process of changing behavior and expectations.
Option 5: “Do It Right, Or Don’t Do It”
With an active duty force of 1.4 million, and approximately 900,000 reserves, the total number of people serving in uniform runs 2.3 million. Of these, there are approximately 600,000 actual troops, with the remainder serving support functions. In a country of almost 298 million people, this means an actual 2/10ths of 1% are actually fighting the war, while 8/10th of 1% of serving in uniform. Since America seems content to allow a tiny minority to carry its burdens, the least it can do is foot the bill.
A disproportionate number of uniformed personnel come from the lower socioeconomic classes, and few people in political leadership have worn the uniform, or have a loved one who serves. This is an unacceptable state of affairs for a democratic society. Democracy only works when the participants are educated, vested members of the society. U.S. involvement in conflict does not affect the vast majority of Americans in the slightest. Cutting costs is a nice idea, up to a point. But when that point intersects with how we outfit our soldiers, that point is passed.
Americans should be sharing in the burdens of a free society. An energy tax should be levied against the nations prolific use of fossil fuels. Whether it helps to pay for the war in Iraq, or fund research to provide alternatives to fossil fuels, a tax could provide a check against wasting the non-renewable resource that keeps us involved in the Middle East to begin with. Tax cuts during a war are an insult. Perhaps not every American should be carrying a rifle, but every American should be tightening their belts. Those who aren’t carrying rifles, who are protected from pain, disability, and death by others, can find the time to participate in national service. Teaching the sibling of an inner city enlisted soldier, or caring for the elderly parent of a uniformed member, or serving in any capacity at all should be a basic requirement of citizenship. If the nation that spawned Hitler’s Nazi party can participate in mandatory national service, the nation which prides itself on ethical high-mindedness ought to be capable of the same.
People argue that such steps are too expensive. War should be expensive. It should be as expensive as we can make it. It should be a time where every member of society feels the “inconvenience” of the fight. In the long run, this will be far cheaper, because the wars we become involved in will be important enough for everyone to contribute. Funding for this option would vary, depending on tax rates and the cost of national service, and would include fully funding both goals at a cost of $800 billion.
There are many challenges America must face in the coming years, and financial prudence will be necessary to meet those challenges. Difficult trade-offs will have to be made, and imperfect solutions relied upon. The best approach to all these decision will be to provide non-partisan analysis, and always keep the nations long-term wellbeing in mind, even in the face of short-term discomfort.