Mere days after Barack Obama became President, his budget chief, Peter R. Orszag, pulled out his pen and cut $57 billion from the new Pentagon budget, slashing it from $584 billion all the way down to $527 billion. Orszag returned the plan to its author, Defense Secretary Robert M. Gates, for a major rewrite.
Gates’ $584 billion plan for 2010 had no real chance. Critics derided it as "bloated." Others saw it as inappropriate at a time of economic crisis. Rep. Barney Frank (D-Mass.) wanted a 25 percent cut. The press quoted one unnamed White House aide dismissing it as nothing more than a military "wish list."
The military took a far different view. Gates claimed a smaller budget would not keep pace with inflation or account for the cost of US wars. USAF and Army leaders said the new plan added $20 billion to their greatly underfunded weapon programs.
It is true that Gates’ plan would have produced the largest "core" budget (excluding war cost) of the post-9/11 era. It would have been 43 percent higher than in 1998—not saying much, given that 1998 was the nadir of the Clinton defense famine. Two reasons for the recent cut were publicly cited:
First was a perceived need to free dollars for Obama’s economic stimulus package. That logic, however, is exactly backward, noted Harvard economist Martin Feldstein. "The overall weakness of demand," he wrote, "implies that ... military spending ... should rise." Second was the desire to rein in deficits; the Pentagon, however, accounts for just 20 percent of federal spending.
Unfortunately, and as might be expected, there seems to be more to the story than a sudden desire for fiscal hygiene.
In a late January Senate hearing, Gates warned, "The spigot of defense spending that opened on 9/11 is closing." He appeared to be saying, in so many words, that the robust expenditures that had prevailed in the Bush years simply had run out of political support in this new political era in Washington.
If Gates’ belief is true—and all signs are that they could well be—then the impact will be large, immediate, and long-lasting.
With less money, the services will have to find ways to muddle through. Coping mechanisms could include cutting force structure, slowing modernization, hanging on to old hardware, buying cheaper and less capable systems, or ... maybe something else.
Note that, within days of Orszag’s action, DOD officials already had proposed imposing some or all of the following cuts: $3.2 billion from joint F-35 fighter program; $1.1 billion from Navy F-18E/F fighter program; $2.5 billion from Navy DDG-51 destroyer program; $1.9 billion from Army Future Combat System.
The budgetary issue is especially acute for the Air Force, which is struggling to carry on with a large inventory of aircraft that have been kept in service far longer than planned. Virtually all aircraft that USAF flies today operate under restriction.
The average age of the Air Force’s fleet is 24 years, with some aircraft nearing 50 years in service. The average fighter age has crept up to a shocking 21 years. As one USAF general put it, "The Air Force fleet of airplanes is not an aging force; it’s a worn-out force."
According to insidedefense.com, a trade publication in Washington, D.C., DOD later convinced the White House to restore $10 billion, for a total of $537 billion. This rejection of nearly $50 billion leaves DOD with essentially a zero-real-growth budget, a problem to which Gates already seemed reconciled.
In Jan. 27 testimony on Capitol Hill, Gates told lawmakers that the budget pressures will force "hard choices" through the entire defense program.
He’s not kidding. He is privately preparing a list of programs for possible termination. He has identified harsh principles that will guide his upcoming budgetary decisions. Among them:
¾ No "across-the-board adjustments," nibbling away at programs but keeping them all alive. Entire programs will go.
¾ No duplication. He will "invest more in the future-oriented program of one service and less in that of another."
¾ No nice-to-haves. He will, he said, "critically and ruthlessly separate appetites from real requirements."
Given the new austerity, Gates has indicated he will give special scrutiny to what he derisively terms "exquisite systems"—those that far surpass any in the hands of current adversaries or potential adversaries. He says he will be alert to distinguish "those things that are desirable in a perfect world from those things that are truly needed."
Ever since the 1950s, the services and civilian overseers considered their principal and essential duty to be to prepare to fight a war of national survival, against a large and formidable military foe, even if that is a remote danger. Under Gates, that is no longer true. The defense leader has even coined a pejorative term for this belief: "next-war-itis."
In Gates’ view, the "typical" military approach is to seek "99 percent exquisite" weapons that nevertheless take years to build. Those days are over. Now, he said, "We will pursue greater quantities of systems that represent the 75 percent solution."
Or, as it was put by a Pentagon official to
It should be obvious to everyone that the defense budget shortfall is real, and it is serious. If nothing else, the mere favorable mention of a "75 percent solution" to US defense problems by the nation’s top defense official should have eliminated all doubt about that.
We will know for sure when the new Orszag-friendly defense budget arrives. Due in April, it likely will only confirm what everybody already knows— America’s armed forces are in for a very rough patch.
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