August 2013

The adverse consequences of hangings and budgetary cutbacks preoccupy those who face them. There may be no silver lining for those about to die, but there can be for those who must live with less. Cutbacks can force evaluation of priorities and the slimming of organizations whose bloat clouds institutional concentration and hampers agility. The DoD is one such organization: it has too many cooks concocting too many broths that either should be the responsibility of other elements of the US government or of no elements at all. Thus, the sequester can be a blessing.

The DoD is like most organizations; if leaders do not have to make hard choices, they will avoid doing so. Even the hard-nosed Donald Rumsfeld, a man with his own settled views, signed off on Quadrennial Defense Reviews that were criticized for their failure to provide the guidance necessary to choose between this or that entity, program, or provider of services. But such guidance would probably have been superfluous; budgets after all were rising dramatically and (over)matching the increases in demands levied on the DoD. The people asking the DoD to do more were understandably not interested in giving it less to do it with.

Secretary Gates struck the right tone when he did three things. One was to “re-balance” priorities to concentrate on the ongoing wars at the expense of preparing for wars against a future regional hegemon. A second was to cancel hugely expensive programs that were over budget and overdue. A third was to argue for a “whole of government” approach when evaluating who should do what to secure US national interests. He believed that the DoD had taken on or been assigned too many functions which were better suited to State Department, the Agency for International Development, and other civilian agencies. He even did something that many saw as an unnatural act for a department head: recommend to Congress that it re-program DoD moneys to the State Department so that State could better carry out the nation-building that the DoD had been doing.

Gates’ third initiative was the most important. How much of a blessing the sequester will be depends on how well our nation’s leaders (and not just the DoD’s) undertake to prioritize what they want for this country and to specify which department or agency is best fitted to carry it out. Those discussions have remained muted or in the background for too long, and that reality lessens the ultimate utility of the continuous stream of DoD budgetary studies, proposals, and commentaries coming out of the DoD, the Congress, think tanks, talking heads, and pundits. When national security experts (including former JCS Chairman Mullin) tell us that our most important national security priority is to get our economic house in order and that our greatest security threat is our debt, we should acknowledge that the defense budget is more tail than dog.

Too many Americans are not used to thinking that way. The Cold War conditioned many of today’s older Americans in particular (many of whom hold the reins of power) to overvalue the military instrument and to readily accept debt to pay for it—in other words to prioritize military needs over economic considerations. (Indeed, Vice President Cheney went so far as to argue that the Reagan years proved that debt did not matter.) Containment was the overarching national strategy that provided the framework for deciding on the priority to be allocated to the politico-diplomatic, economic, military, public outreach, aid, covert action and other ways to defend and advance US interest. But even then how to choose among these choices was not obvious. It hardly ever is. The original author of containment, George Kennan, was unhappy with the overemphasis (in his mind) on the military dimension of containment as advocated by Paul Nitze, Kennan’s successor as director of the State Department’s Policy Planning Staff. After the onset of the Korean War, Nitze’s conception largely dominated thinking through the end of the Cold War even when some Presidents—Dwight Eisenhower, Richard Nixon (with heavy input from Henry Kissinger), and Jimmy Carter (up to the Afghan invasion)—sought to push back.

It was not until the Bush (43) Doctrine of preventive war (supplemented with democracy promotion) that the US had a grand strategy comparable to containment. Depending on one’s point of view, the Doctrine provided the ex ante rationale or the ex post rationalization for the strategically-disastrous Iraq War, but there was no confusion as to the centrality of the military instrument and the need to raise the DoD’s budget accordingly.

We are in a new era, and the sequester is nicely setting the scene to re-evaluate what we are about and how we should go about it. From a top-down perspective, we need for our national leaders to explicitly call for a national discussion. At the top of the agenda is the question: What are my country’s requirements? Reminiscent of Walter Russell Mead’s framework, should we give priority to a Jeffersonian emphasis on internal development and well-being? A Hamiltonian priority on international economic engagement? A Wilsonian priority on instilling American values abroad? A Jacksonian priority on the autarchic preservation of American honor and the achievement of military victory? What is the priority among them? How will we meet them? What ways—economic, politico-diplomatic, military, covert, etc—make the best sense and what are the priorities among them? Each way implies the generation and maintenance of resources and prioritizing among them. Generating resources in turn implies generating the capital to pay for them. In the best of all possible worlds, the capital would be there to allow the process to be top down only from requirements to resources, but that circumstance is rare and there must always be a bottom-up perspective: how much can I afford and how much must I trim my requirements? How much must I scale back on the ways on which I will rely? Which will be favored and within them which resources will I buy and to what extent? What bets will I place when making those choices? Where can I skimp in the purchase of resources in the hope that I will not regret it later? Alternatively how many contingencies—ranging from threats to domestic economic wellbeing to threats to our external influence—am I committing myself to respond to in the hope that I will never have to respond to too many at the same time? Indeed, how much is my commitment stance in any area more bluff than real, more hope than readiness?

The sequester provides an opportunity we should not forego.

Donald C. F. Daniel teaches security studies at Georgetown University. Previously he was Special Assistant to the Chairman of the National Intelligence Council and prior to that he held the Milton E. Miles Chair of International Relations at the US Naval War College, Newport, RI, where he also chaired the Strategic Research Department in the College’s Center for Naval Warfare Studies.

July 2013

I was there (special asst to CJCS Powell) when we implemented the reductions to establish the Base Force and, further, when Les Aspin and Bill Clinton implemented even further cuts (resulting in the need, later, to use contractors massively in order to fight two wars simultaneously and thus avoid end strength limitations imposed by the very Congress that approved those cuts and authorized those two wars–or, actually, three wars if we count the backdrop war, the so-called GWOT–and to enrich men like Richard Cheney). Those were interesting times and very insightful as to what composes such situations in terms of the White House, the bureaucracy–civilian and military–and the national security decision-making process.

Today, my approach is that of the IPS/CAP report for 2013. The first step is to acknowledge that we spend $1.2T or more now annually on the national security account. That is State (150 account), VA, DOD, DOE (nuclear weapons), 17 intelligence bodies, and Homeland Security Dept. While GDP–particularly our anemic GDP–is an atrocious measure of almost anything and certainly for national security spending, such a holistic approach demonstrates a 7-8% of GDP expenditure rather than the 3-5% so often cited. That’s a hell of a lot of money by any measure.

Once this holistic approach to national security is the rule–and it has to be if one is going to make sense of what the nation is doing–then the first requirement is to balance appropriately the overall accounts in accordance with the nation’s strategic approach to the world. Since the best and only sensible strategic approach is to lead with soft rather than hard power, one realizes immediately how out of balance is the national security budget. This is true whether one is a balance of power theorist or otherwise; unless of course one’s objective is to destroy the empire through bankruptcy.

When even a rough re-balancing is accomplished within the accounts listed above, it becomes immediately clear that we can reduce the national security budget by somewhere between three-quarters of a trillion and a trillion dollars over the next decade, or done wisely year by year, between $60-100B per year, starting with FY 2014.

The essential details of these reductions should be accomplished in accordance with the nature of the threats we envision and the resultant capabilities we believe required to meet those threats. The White House, not DOD, should lead these efforts. DOD, as the major user of funds, should have a strong voice, but that voice should be conditioned by the overall strategy devised in the White House.

Will anything remotely resembling this happen? Probably not. We are led by amateurs, in all branches of government. I see not a strategic–or even an adult and wise–mind among them.

Col. Lawrence Wilkerson (US Army, ret.) had a distinguished career in the U.S. Army, was special assistant to CJCS Colin Powell and was Chief of Staff during Powell’s term as Secretary of State.

July 2013

One of the Pentagon’s earliest and catchiest bumper-stickers for the automatic cuts of sequestration came from then-Secretary Leon Panetta during the first week of January 2012. If that cut arrived – as it did – the Pentagon would “probably have to throw that [strategy] out the window and start over.”

Eighteen months have come and gone with steady, uncomfortable murmuring about strategy but no definitive change. Most recent is Secretary Hagel’s July letter to the Senate Armed Services Committee. This tension is a reminder that politics drive budgets, not just strategy.

Top-line budget request decisions belong to the White House and, like Congress’ defense committees, it has its own political reasons for not acknowledging sequestration. Even if the Pentagon wanted to submit plans for matching strategy to sequestration-level spending, it likely couldn’t – the political system will not accommodate that conversation right now. So strategy stays where it is, sure to adjust because of the size of the cuts but not yet adjusted.

This is less concerning than it might sound.

A rudimentary description of strategy would be that it is a statement of goals, an ordering of those goals by priority, and a cut line demarcating how far down the list the US can afford to go. When less money is available, the cut line moves up and fewer goals are financed. The priority order of these goals should not change, however. Priority #1 always gets bought and, in accounts as large as the Pentagon’s, priorities much further down the list are just as safe.

Under any resource circumstance, though, there comes a point at which the money goes no further. This can become a problem if things falling off the list are essential for national defense, if the priorities are ordered unwisely, or if the cuts aren’t made according to the list. Today’s problem isn’t the first – our national defense doesn’t hinge on the savings margins at play – and the second issue is subjective. Instead our consensus problem is that cuts aren’t being made according to the list.

Sequestration is the obvious example. Applying a formulaic cut across-the-board isn’t strategic. But it’s not the only example. Secretary Hagel’s letter forewarned that “cuts of that magnitude” place “at much greater risk the country’s ability to meet our current national security commitments,” overlooking that strategy-driven drawdowns aren’t about holding current commitments constant and accepting risk everywhere. To the contrary, they’re about raising the bar so that goals our strategy prioritizes are unaffected and goals that barely snuck into earlier budgets fall away.

The Budget Control Act and the dynamic it has fostered between Congress and the White House are about the politics of taxes and entitlement spending, not defense. Even the most astute, realistic strategy won’t change that, and various political pressures aren’t permitting adjustment of any kind. But the way ahead is much clearer than Panetta’s “throw it out the window” statement suggests, or even General Dempsey’s more recent comment about a “redo.” Once Congress and the White House make a decision on handling sequester and the federal debt ceiling, the Pentagon can give us a clearer sense of how it prioritizes goals from the 2012 strategic guidance and which of the lowest will fall away.

Matthew Leatherman is resident fellow at the International Affairs Council of North Carolina and former budget analyst at the Stimson Center, Washington, DC.

Carl Conetta. PDA Briefing Memo #55, 18 July 2012.
http://www.comw.org/pda/fulltext/120717-US-world-military-spending.pdf

Efforts to cull savings from the US defense budget for purposes of deficit reduction have been stymied by Pentagon claims that any significant cut might have “devastating” or even catastrophic” effects. However, a review of global defense spending data by the Project on Defense Alternatives shows that America and its allies outspend potential rivals by a margin of four-to-one.

Moreover, according to the PDA review, the United States carries much more than its share of the allied defense burden, as measured by percentage of Gross Domestic Product allocated to defense. Together, the United States and its close allies worldwide spent $1.23 trillion on their armed forces in 2010 – more than 68% of the global total. But had the burden been shared equally among the allies based on GDP, the United States could have reduced its military spending by one-third (33%), including spending for war. This proportion substantially exceeds the Pentagon budget cuts mandated under the sequestration provisions of the Budget Control Act.

Project on Defense Alternatives, 29 June 2012.

How much is enough spending for the Pentagon? By various measures, the United States has outspent the next nine, 14, or 21 countries combined. What is perhaps more telling is that most of those other countries are staunch US allies.

* International Institute for Strategic Studies
** Stockholm International Peace Research Institute
*** PPP = Purchasing Power Parity, a measure that facilitates international budget comparisons by adjusting exchange rates to reflect the relative domestic buying power of national currencies.

Notes: The IISS column presents officially reported spending in USD at 2010 exchange rates, with two exceptions: China and Russia. For these, the number is an estimate of actual spending. The second column is SIPRI’s estimate of actual expenditures, also shown in USD at 2010 exchange rates. The PPP column converts estimates of actual expenditures into approximate purchasing power, mostly drawn from SIPRI data. For China and Russia, it also shows an IISS estimate of purchasing power, thus producing a range. Purchasing power calculations improve on estimates that use exchange rates alone. However, PPP ratios are based on comparisons between national economies as a whole, not the defense sectors specifically. This can overstate military purchasing power when a nation’s military sector is much more advanced than its economy overall or when a nation depends heavily on international arms purchases.

Comments: The biggest spenders of concern to the United States are Russia and China, although neither are considered US adversaries today.
• America and its top spending allies outpace these two countries taken together by margins exceeding three-to-one.
• America alone spent more than twice as much as these two countries in 2010, by some measures. By other measures, it outspent them combined by nearly four-to-one.
The review draws on data compiled by the International Institute for Strategic Studies (IISS) in London and the Stockholm International Peace Research Institute (SIPRI), both regarded as world leaders in the field of defense assessment.

Neither IISS nor SIPRI accept Chinese or Russian official defense budget numbers at face value. Their estimates seek to capture unreported military expenditure from other parts of the Chinese and Russian economy. Both also offer alternative estimates that aim to correct for exchange rate distortions when comparing nations at very different levels of economic development – although these corrections may somewhat over state the “purchasing power” of military budgets.

Differences in the IISS and SIPRI methods, and the difference between corrected and uncorrected exchange rate estimates, account for the range given in number of countries whose combined budgets equal that of the United States. The answer ranges from nine to 21 countries — and all but a few of these are US allies.

Sources: International Institute for Strategic Studies, The Military Balance 2012 (London, 2012); Stockholm International Peace Research Institute, SIPRI Yearbook 2011 (Oxford, 2011).

HTML version of this table www.comw.org/pda/120618-Military-Spending-Comparison.html

A Project on Defense Alternatives Commentary, 26 June 2012.

After years of touting the necessity of guns over butter, the defense establishment has changed its tune. With the official US unemployment rate stuck at over 8 percent, Pentagon flaks are now boldly declaring that “guns are butter.” The Department of Defense as a social program? It’s a cynical ploy as William Hartung and Stephen Miles point out in this article.

Here are the Pros and Cons on the story:
• A National Association of Manufacturers study released last week says Pentagon cuts will mean substantial jobs loss in the defense sector.
• At the same time, cutting defense spending may be among the least painful ways to trim the Federal deficit. This two minute video by Chris Hellman of the National Priorities Project explains why. His data is from a study by the Political Economy Research Institute at UMass.
• A $1 billion cut from the education sector will result in more than twice as many jobs lost as a $1 billion cut from the defense sector.
• We could cut $50 billion from the defense budget next year, put $25 billion to deficit reduction and put $25 billion into education and have a net increase of more than 20,000 jobs. That’s a win-win fiscal deal.

For more on Pentagon spending and jobs see this background compilation: The Pentagon Budget and Jobs.

Stephen M. Walt. Foreign Policy, 18 April 2012.
http://defensealt.org/Ifat2Q

Excerpt:

There’s an overwhelming case for removing these archaic and unnecessary weapons from the European continent. Ideally, we would do this as part of a bilateral deal with Russia, but we ought to do it even if Russia isn’t interested.

Editor’s Comment:

Couldn’t agree more!

Carl Conetta. Project on Defense Alternatives Briefing Memo #54, 23 March 2012. A comparison of discretionary spending in 2008 and 2013 shows an increased tilt toward the “Security Basket” and National Defense. http://defensealt.org/GTaHbL

C.J. Radin. The Long War Journal, 18 March 2012.
http://defensealt.org/GJ8zo8

Excerpt:

In June 2011, President Obama announced that the US would begin withdrawing military forces from Afghanistan and transferring responsibility for security to the Afghan National Security Forces (ANSF). The US goal is to be substantially out of Afghanistan by 2014, with ANSF responsible for the entire country.

The plan for 2013 is currently being developed. The final version will be presented for approval at the NATO summit in Chicago in May. While still incomplete, portions of the plan have been disclosed or can be deduced. According to The Guardian, Obama described the next phase of the transition as follows: “This includes shifting to a support role next year, in 2013, in advance of Afghans taking full responsibility for security in 2014. We’re going to complete this mission, and we’re going to do it responsibly.”

The most significant element of the plan is that US and ISAF forces will stop conducting combat operations in late 2013. The ANSF will then be responsible for executing all combat operations in Afghanistan.

Jim Lobe. AntiWar.com, 25 February 2012.
http://defensealt.org/yRw693

Excerpt:

Despite the IAEA’s apparent lack of progress, Iran’s acceptance last week of a long-standing request from EU foreign policy chief Catherine Ashton on behalf of the P5+1 to resume negotiations, stalled for over a year, makes it likely that a new round of talks will take place in late March or April, probably in Istanbul…Anticipation of those talks, as well as the rapid escalation of tensions over the last two months, particularly between Israel and Iran, has provoked a flurry of proposals to revive the dormant diplomatic track, if only to calm a situation threatening to spin out of control.

Charles Knight, commentary, 24 February 2012.

The Pentagon, the Obama administration, and many members of Congress hope that cuts to the defense budget stop with those mandated in the first stage caps of the 2011 Budget Control Act and made more specific in the President’s recently announced FY13 budget plan. As Reuters has reported the Obama FY13 budget shifts away from an austerity frame, partially adopted in 2012, to instead emphasize a program of higher taxes on the rich, a continuing tax cut for wage earners, and public investments in infrastructure, education and police services.

It is safe to predict that most all Republicans and some Democrats in Congress will join to block the President’s tax/revenue enhancement programs and domestic economic investments. The political stalemate on further deficit/debt reduction that followed passage of the BCA last year will remain in place through the remainder of 2012.

Even if we assume that after this year’s election Congress will find a way to avoid the particulars in the so-called “sequester” (second-stage) provision of the 2011 Budget Control Act, the pressure for deeper cuts will remain.

To see why the pressure for more defense cuts will continue into next year we need look no further than a new report from the Committee for a Responsible Federal Budget called Primary Numbers: The GOP Candidates and the National Debt. Their analysis shows that in 2021 the fiscal plans the GOP candidates will yield the following national debt levels as percentages of GDP:

Gingrich – 114%

Santorum – 104%

Romney – 86%

Paul – 76%

By odd coincidence Ron Paul’s plan and President Obama’s plan both end up at a debt level of 76% of GDP in 2021. Of course, the two plans get there by very different mechanisms. Obama’s plan relies substantially on increased revenue (including tax increases) and Paul’s mostly on spending cuts, including deeper cuts in the defense budget.

What makes the Pentagon budget vulnerable after the election is that the centrist Democratic president and the libertarian Republican candidate have positioned themselves as the most fiscally conservative, while the leading Republican contenders are looking like spend and don’t tax radicals.

Gingrich grabs for the mantel of Reagonomic fiscal policy by favoring an increase of national debt to 114% of GDP. Santorum is a close second at 104% of GDP. By comparison, Romney appears moderate at 86% of GDP, 13% higher than Obama or Paul. Romney is in favor of increasing military spending.

The problem for the Pentagon is that both Obama’s and Romney’s plans are politically unrealistic and very unlikely to be implemented. Obama keeps the debt low largely through tax increases — which will not happen if Congress remains controlled by Republicans. A failure to raise new revenues will be critical. If the Administration were able to get higher taxes on the rich it would facilitate holding DoD cuts to the level of the FY13 plan. Failure to achieve these tax increases will mean two things: 1) it will be much harder to get a domestic investment program (even if the Democrats do better than expected in November) and 2) the attractiveness to a significant portion of liberals and conservatives of additional DoD cuts will continue.

Romney, on the other hand, plans to keep taxes low and increases defense spending — therefore his fiscal plan depends on deeper cuts in domestic spending and substantial cuts to entitlements. Given that domestic spending has been cut to the bone in most accounts and entitlement programs have survived all conservative assaults to date, Romney’s plan seems equally unlikely. For more on the limits of the Romney plan see Ezra Klein here.

So there is every reason to believe that after this year’s election powerful fiscal conservatives who can see beyond the partisan nonsense will look hard again at the Pentagon’s budget to find things to cut. This condition means that the nation will remain open to strategic adjustment for some years to come.

Projected National Debt from GOP Candidates' Fiscal Plans

Now that speculation and discussion of a possible attack from Israel on Iranian nuclear development facilities is rampant, it is time to bring back a review I did on the eve of the U.S. invasion of Iraq:

First Strike Guidelines: The Case of Iraq
Project on Defense Alternatives Briefing Memo #25
by Charles Knight, 16 September 2002 (revised and updated 10 March 2003)
http://www.comw.org/pda/0209schneider.html

Excerpt:

…despite the repeated use of the term “preemption” to describe their counterproliferation strategy (see the 2002 National Security Strategy), the Bush administration’s strategic approach to Iraq is one of preventive war. The U.S. Department of Defense defines preventive war as “war initiated in the belief that military conflict, while not imminent, is inevitable, and that to delay would involve greater risk” while it defines preemptive attack as “an attack initiated on the basis of incontrovertible evidence that an enemy attack is imminent.” Preventive war has long been understood to be highly destabilizing and it is nearly impossible to reconcile it with the notions of non-aggression imbedded in the United Nations Charter.

Project on Defense Alternatives, 13 February 2012.

Comparing the President’s requested budget authority for the Pentagon “base budget” in two successive budgets (FY-2012 and FY-2013) shows a reduction of nearly $490 billion in the years of comparison 2012-2021. This is a subtraction from last year’s plan and not from the CBO baseline, however.

• 2012-2021 cumulative spending in FY-2012 plan = $6.14 trillion
• 2012-2021 cumulative spending in FY-2013 plan = $5.65 trillion

There are other ways to measure progress in bringing fiscal responsibility to defense budgeting:

– Taking the 2012 spending level and holding it steady over the period 2012-2021 with increases for inflation only would produce a cumulative total of $5.82 trillion.

– Taking the 2011 spending level and holding it steady with increases for inflation would produce for 2012-2021 a cumulative spending total of $5.9 trillion.

Either of these might be used as alternative yardsticks for measuring the administration’s austerity efforts in the defense field — and both suggest a more modest rollback: $170 billion over ten years and $250 billion, respectively.

Project on Defense Alternatives, 13 February 2012. Measured against recent spending levels, the new ten-year plan for Defense base budget spending shows only modest savings. One table. http://defensealt.org/GXMlQO

from the Project on Defense Alternatives, 26 January 2012

The future-years Pentagon base budget plan released by Secretary Panetta on 26 January 2012 foresees rolling spending back to the level of 2008, corrected for inflation.  Spending on the non-war part of the budget during the next five years (2013-2017) will be about 4% lower than during the past five (2008-2012) in real terms.  The real (that is, “inflation corrected”) change from 2012 will be a reduction of 3.2%

The chart below corrects for inflation by rendering all sums in 2012 dollars.  It shows that base-budget spending had jumped 55% after inflation between 1998 and 2010.  The new budget plan sets 2013 spending at $525 billion, which is 46% above the 1998 level.

The new budget plan – represented by the green trend line — stands in stark contrast to the reductions mandated by the Budget Control Act under the provisions for sequestration (represented by the red trend line).  Sequestration would roll Pentagon base-budget spending back to the level of 2004, which would still be 31% above the 1998 level (corrected for inflation).  The new budget plan and sequestration do have one thing in common: both would keep Pentagon spending above the inflation-adjusted average for the Cold War years (represented by the horizontal dash line).

Christopher Preble and Charles Knight. Huffington Post, 20 January 2012.
http://defensealt.org/ysCbHQ

Excerpt:

Balance depends on what you are standing on. With respect to our physical security, the United States is blessed with continental peace and a dearth of powerful enemies. Our military is the best-trained, best-led, and best-equipped in the world. It is our unstable finances and our sluggish economy that make us vulnerable to stumbling.

Unfortunately, the new strategy does not fully appreciate our strengths, nor does it fully address our weaknesses. In the end, it does not achieve Eisenhower’s vaunted balance.

__________________________________________________

Carl Conetta. Project on Defense Briefing Memo #53, 05 January 2012.
http://www.comw.org/pda/fulltext/1201bm53.pdf

Excerpt:

The roll back in spending plans and the actual cuts to the budget are sufficient to engage every office and program in the Pentagon. That makes for a contentious debate as well as a load of fodder for partisan politics. It will help if we can keep things in perspective. The cuts we face today are far less dramatic than those following the Cold War. Aggregate budget authority during 1991-1996 was nearly 20% lower in real terms than during 1987-1990 – a decline five times greater than what the administration today proposes. Given our nation’s current economic straights, Pentagon advocates should actually breathe a sigh of relief.