Healing the Wounded Giant: Maintaining Military Preeminence while Cutting the Defense Budget

4. Modernization

Even after the cuts in planned weapons buys of recent years, it is still the case that we can rethink a number of weapons programs. Some weapons are bought partly out of bureaucratic inertia as well as logrolling by Congress. Some are simply unnecessary or, to be more precise, not worth the money even if they do provide certain attractive capabilities. As Admiral Gary Roughead and Kori Schake have argued, the services continue to add new performance requirements to weapons systems too far into the acquisition process. The so-called acquisition accounts—primarily research, development, testing, and evaluation (RDT&E) on the one hand, and procurement on the other—together cost the nation almost $200 billion a year in the core defense budget. This is more than China spends on all accounts for its entire military and is at least three times what China spends just on military modernization. All other countries are even further behind. It is also true that the Pentagon has close to a trillion dollars worth of plans on the books just for major weapons 47 4 Modernization systems in the years ahead, completing development and production of weapons it already has in the pipeline. Yet these acquisition costs represent less than 40 percent of the $550 billion or so in core defense spending. As such, we have to avoid the common mistake of thinking that the best and easiest way to cut the defense budget is always to cut acquisition programs.1 Moreover, for all the stories of expensive weapons, the flip side of the reality is that American military technology generally performs extremely well in combat. Examples include Operation Desert Storm in 1991, the overthrow of the Taliban in Afghanistan in 2001, the rapid invasion of Iraq and Thunder Run through Baghdad in 2003, the dependable deployment and sustained support of U.S. forces in the field during all these and other operations, the magnificent intelligence and command and control networks that facilitate rapid targeting of extremists on the battlefield and around the world, and the development of drone technology to complement earlier breakthroughs in areas like stealth and precision munitions. These are testaments to scientific and industrial excellence on the part of America’s laboratories, weapons development teams, and manufacturers. In the 1990s, reducing procurement budgets was a prime way of slashing defense budgets after the cold war ended. Indeed, annual procurement budgets were reduced by two-thirds relative to earlier Reagan-era highs. But that was an unusual situation. The United States at that point could take a “procurement holiday” of sorts since it had recently bought so much new equipment during that Reagan buildup, and since the reduction of the combat force structure allowed older equipment to be selectively retired first. Today, there is no large inventory of new equipment that can allow us such a budgetary reprieve in the coming decade. In particular, much of that Reagan-era equipment is still around, but now in need of replacement—not just to modernize the force, but simply to keep it safe and reliable. The defense industry faced major challenges during those 1990s cutbacks , of course. Softening the pain to an extent, however, was the fact 48 Modernization that the 1980s had been a quite good decade for defense business. In addition, even though the economy was mediocre in the early part of the 1990s in the United States—and even though defense cutbacks exacerbated the difficulty in some cases2 —the situation rapidly improved. As the 1990s progressed, the general condition of the U.S. economy strengthened, creating new jobs in other sectors. Today, of course, the national economy is much weaker. The defense sector is also smaller. The number of workers in aerospace and defense is down from more than 1 million in 1991 to just over 600,000 two decades later, exemplifying the tendency of the U.S. manufacturing base to lose lots of jobs over that period.3 After mergers and consolidations, there are now just five major contractors in the defense business—Boeing , Raytheon, Northrop Grumman, Lockheed Martin, and General Dynamics. Often only one or two contractors are capable of creating a given type of weapon system. As such, the health of the industrial base needs to be kept in mind, since budgets are not large enough to guarantee a diverse and strong national security industrial base absent considerable care and attentiveness.4 Certain capabilities could simply be lost...