Strategic Spending Choices

Choices I A new political consensus for deficit reduction, formed during the past several years, has forced the United States to lower defense spending plans. After rapid growth from 1980 to 1985, and despite Reagan administration plans calling for significant budget growth thereafter, the Department of Defense (DoD) budget has declined slightly in real terms (that is, after adjusting for inflation) in every year since 1986. This represents a major loss from earlier Pentagon expectations . Figure 1 shows the decline in defense budget projections from the optimistic estimate of January 1987to current estimates of zero real growth.’ The DoD faces.a three-year cut in Fiscal Years (FY) 1990 through 1992 of approximately $230 billion-a potential twenty percent drop-from the internal plan it formulated in 1987. Such dramatic reductions in overall defense expectations are certain to have consequences for strategic programs- -The offensive triad of intercontinental ballistic missiles (ICBMs), long-range bombers, and submarine-launched ballistic missiles (SLBMs) and the nuclear submarines that carry them (SSBNs); -Strategic defense, including the strategic defense initiative (SDI) and its fledgling air-defense counterpart, the air defense initiative (ADI);and -Strategic command, control, and communications (C3). Cindy Williams is an Associate Department Head at the MlTRE Corporation in Bedford, Massachusetts. She formerly led the Strategic Offensiue Forces Division of the Defense Secretary’s Office of Program Analysis and Evaluation. 1. As late as January 1987, the Department of Defense (DoD) was planning publicly for real growth of 3 percent each year in FY 1988-92; internally it was planning for as much as 6.5 percent annually in FY 1990-92. By February 1988, the FY 1988-89 plan had been reduced by roughly 8 percent ($50 billion), and published DoD plans called for 2 to 2.5 percent annual real growth in FY 1990-92. The thrust of opinion outside the Pentagon now points toward zero (or even negative) real growth over the next five years. See Secretary of Defense, Annual Reports to the Congress, Fiscal Years 2988 and 1989 (Washington, D.C.: U.S. Government Printing Office [U.S. GPO]). For the internal 1987 plan, see Department of Defense Deputy Inspector General Derek J. Vander Schaaf, letter to Senator Lowell Weicker, April 10, 1988. For zero-growth projections, see, for example, the editorial in the New York Times, March 17, 1988, p. A-18; Anthony Cordesman, “The U.S. Defence Budget in FY 1989,” Armed Forces, June 1988, p. 272; Robert E. Foelber, ”Defense Spending Priorities,” Congressional Research Service Issue Brief, Order Code 1887231, December 15, 1987, pp. 1-2; and Fred Kaplan, ”The Pentagon Budget: On the Road to Reality,” Boston Globe, February 21, 1988, pp. 1, 18. International Security, Spring 1989 (Vol. 13, No. 4) 0 1989by the President and Fellows of Harvard College and of the Massachusetts Institute of Technology 25 International Security 13:4 I 26 Figure 1. Defense Department Funding (FY 1981-92). m ___ 400 I > 0 I 3 a t I -ACTUAL --JANUARY 1987 DoD INTERNAL JANUARY 1987 DoD PLAN TO CONGRESS --FEBRUARY 1988 DoD PLAN -ZERO REAL GROWTH I 01 I I I I I I I I I 1 81 @ 83 84 85 86 87 88 89 90 91 92 FISCAL YEAR SOURCES: Data from Annual Reports to the Congress, FY 7988 and F Y 7989;for internal 1987 plan, see Department of Defense Deputy Inspector General Derek J. Vander Schaaf, letter to Senator Lowell Weicker, April 10, 1988. Given choices that have already been made, what options does the new administration have for setting priorities, both among the strategic programs themselves, and between strategic forces and other national security needs? How much of planned strategic modernization can the United States afford, and at what pace? What factors should be considered in setting strategic spending priorities? Strategic Versus Other Defense Spending The 1988 presidential campaign focused considerable attention on whether the United States spends too much money for strategic forces. When viewed Strategic Spending Choices I 27 in the context of overall defense spending, however, the strategic budget is hardly a gold mine for savings. As Figure 2 illustrates, strategic’s share of the DoD dollar has averaged about 12 percent...