U.S. Air Force. February 2012.
http://www.af.mil/shared/media/document/AFD-120201-027.pdf

Anthony H. Cordesman with Bradley Bosserman. Center for Strategic & International Studies, 30 January 2012.
http://defensealt.org/xpBqhn

Excerpt:

The US must fundamentally rethink its approach to “optional wars.” It is far from clear that it can win the Iraq War, rather than empower Iran, without a strong military and aid presence. It will decisively lose the Afghan and Pakistan conflict if it does not quickly develop plans for a military and diplomatic presence, and help to aid Afghanistan in transitioning away from dependence on foreign military and economic spending during 2012-2020. US troop cuts are not a transition plan, and focusing on withdrawal is a recipe for defeat.

That said, the US cannot, and should not, repeat the mistake it made in intervening in Iraq and Afghanistan. It must deal with nontraditional threats with a far better and more affordable mix of global, regional, and national strategies that can deal with issues like the turmoil in the Middle East, and South and Central Asia, and terrorism and instability on a global basis. It must rely on aiding friendly states, deterrence, containment, and far more limited and less costly forms of intervention.

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.

__________________________________________________

Andrew Taylor. AP, 20 January 2012.
http://defensealt.org/xN9mYD

Excerpt:

The White House plan, likely to reprise new taxes and fee proposals that are nonstarters with Capitol Hill Republicans, would turn off the entire nine-year, $1.2 trillion across-the-board spending cuts, referred to as a “sequester.”

“We have a sequester coming less than a year from now unless Congress acts,” said a senior administration official. “We’re going to ask Congress to do now what we think Congress should have done in December, which is enact more than $1.2 trillion in deficit reduction, turn off the sequester and maintain the (spending caps).”

DefenseTracker.com, 18 January 2012.
http://defensetracker.com/web/?p=1681

Excerpt:

Part of the “Doomsday Mechanism” hysteria spread by Defense Secretary Panetta and his comrade in the budget wars, Cong. Buck McKeon, has been the automaticity of the across-the-boards cuts that sequester would impose on the defense budget next January–in the likely event that the lame duck Congress and its successor next year will both be as dysfunctional as the can of red and blue worms we have now. (The other part of the hysteria is the “horror” of returning to 2007 levels of base budget defense spending.)

It seems that the president has existing statutory authority to modify the sequester mechanism–but not the amount of cuts required.

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.

Department of Defense. 05 January 2012.
http://www.defense.gov/news/Defense_Strategic_Guidance.pdf

Winslow Wheeler. TIME Battleland, 13 December, 2011.
http://battleland.blogs.time.com/2011/12/13/is-leon-panetta-the-right-man-to-be-secretary-of-defense/

Excerpt:

Without the inclusion of war spending, the DOD base budget under the “Doomsday Mechanism” is no longer at or near its post-World War II high, but it is also not near any of the historic lows. In fact, it is roughly $38 billion above annual spending during the Cold War…

Sara Sorcher. National Journal, 29 November 2011.
http://www.nationaljournal.com/nationalsecurity/insiders-u-s-should-begin-pivot-to-asia-through-diplomacy-not-military-steps-20111128

Excerpt:

President Obama recently announced steps to strengthen the architecture of an American foreign policy with new focus on the Pacific, including plans to deploy 2,500 troops to a base in Australia—all the while insisting that any reductions in U.S. defense spending will not come at the expense of priorities in the Asia-Pacific region. Even as many in Washington warily eye China’s rapidly modernizing military and expanding naval presence in the Pacific, 39 percent of Insiders said the next move is to improve American engagement with Beijing while avoiding any military-related steps.

Paula G. Thornhill. CNN, 23 November 2011.
http://www.cnn.com/2011/11/23/opinion/thornhill-defense-cuts/index.html

Excerpt:

The nation’s leadership needs a Plan B so that a heroic assumption — or hope — about the unlikelihood of future wars does not inadvertently lead to strategic disaster. This is harder than it seems. Plan B would allow more flexibility to meet what could go wrong in the strategic environment rather than just making budget cuts.

Editor’s Comment:

Plan B is to maintain a good ‘strategic reserve.’ As neo-conservatives like to point out the United States spends only 4.5% of its GDP on its military. If new threats pinch, the U.S. can easily ramp up spending and engage its still considerable industrial and knowledge base. The problem this country faces with a reconstitution strategy is lack of political will. Civilian leaders are loathe to ask the American people to sacrifice. A robust National Guard and Reserve force that is not abused by frequent deployments to unnecessary wars and a societal expectation to pay a tax surcharge in times of national emergency are the fundamentals of what this country needs to be strategically prepared while maintaining a small standing peacetime force. With such a strategic plan the U.S. can be well provisioned for any threat.

Matthew Leatherman. Bloomberg Government, 21 November 2011.
http://defensealt.org/veAUPs

Anthony H. Cordesman and Bradley Bosserman. Center for Strategic and International Studies, 17 November 2011.
http://csis.org/files/publication/111511_Defense_Resources_Threats.pdf

Michael E. O’Hanlon. New York Times, 14 November 2011.
http://www.brookings.edu/opinions/2011/1114_defense_budget_ohanlon.aspx

Excerpt:

By keeping a ship abroad for a couple of years and having two crews share that vessel as well as a training ship at home, the Navy could improve its deployment efficiency by up to 40 percent per ship, accomplishing with about three and a half ships what, on average, might have required five. Focusing on the Navy’s large surface combatants, cruisers and destroyers, this approach could theoretically allow roughly 60 ships (with slightly less than half of them deployed abroad at a time) to maintain the global presence that the Navy says it needs, rather than the 94 ships it is currently pursuing.

Carl Conetta. PDA Briefing Memo #52, 25 October 2011.
http://www.comw.org/pda/fulltext/1110bm52.pdf

Excerpt:

The sharp rise in the Pentagon’s base budget since 1998 (46% in real terms) is substantially due to strategic choice, not security requirements, per se. It reflects a refusal to set priorities as well as a move away from the traditional goals of military deterrence, containment, and defense to more ambitious ends: threat prevention, command of the commons, and the transformation of the global security environment. The geographic scope of routine US military activity also has expanded.

companion piece: The Pentagon’s New Mission Set: A Sustainable Choice?, by Carl Conetta. An updated and expanded excerpt from the Report of the Task Force on a Unified Security Budget (USB) for the United States, August 2011. http://www.comw.org/pda/fulltext/111024Pentagon-missions.pdf

Charles Knight. Project on Defense Alternatives Briefing Memo #51, 25 October 2011.
http://www.comw.org/pda/fulltext/1110bm51.pdf

Excerpt:

…modest changes to U.S. military strategy and global posture implemented over the next ten years can reliably offer deficit-reducing savings from the Pentagon budget ranging from $73 billion a year to $118 billion a year.

To achieve the savings only requires the application of different means to attaining strategic goals. That is precisely what any good strategy does when conditions change.

Dan de Luc. Agence France-Presse, 19 October 2011.
http://www.defensenews.com/story.php?c=SEA&s=TOP&i=8003142

Excerpt:

“Asia will be clearly a priority and we will adjust our operations accordingly,” Admiral Jonathan Greenert, chief of naval operations, told reporters in a teleconference.

The Navy now constantly maintains an aircraft carrier – either the Kitty Hawk or the George Washington – in the Pacific, compared to 10 years ago when a carrier was available only 70 percent of the time, he said.

Abu Muqawama. Center for New American Security, 13 October 2011.
http://www.cnas.org/blogs/abumuqawama/2011/10/looking-trim-defense-budget-start-qdr.html

Excerpt:

Yesterday’s announcement that the Department of Defense will form a “Strategic Choices Group” to identify priorities and risks ahead of $450 billion in potential cuts to the budget is the latest example of the worthlessness of the Quadrennial Defense Review (QDR). A strategic document would necessarily identify risks and priorities, but since the QDR does neither, the Department of Defense has to establish an entirely new working group to do just that.

See also: Is the QDR ‘a PR stunt’ or a sincere effort to reconcile posture and budget with strategy?

Andrew Tilghman. Defense News, 12 October 2011.
http://www.defensenews.com/story.php?c=LAN&s=TOP&i=7935114

Excerpt:

Panetta said the Army should expect reserve-component troops to be a vital part of the future force.

“As we draw down from these wars, we need to keep the Guard and the Reserve operational and gaining experience. This is the best investment we’ve made over the past 10 years,” he said. “We need to continue to be able to maintain that as a valuable asset because the reserve force has a special role to play as a force that gives the nation strategic depth in the event of crisis, access to unique civilian skill sets that can be useful in modern conflicts and as the Army’s bridge to a broader civilian population.”

Carl Conetta. Project on Defense Alternatives Briefing Memo #50, 11 October 2011.
http://www.comw.org/pda/fulltext/1110bm50.pdf

Excerpt:

What makes sequestration impractical (and marks it as a scare tactic) is the precipitous manner in which it would implement cuts. A gradual approach could accomplish
equivalent savings without comparable disruption. As devised, the provision is meant
to motivate, rather than mitigate, revenue increases and cuts to entitlement programs.

Ethan Pollack, The Economic Policy Institute Blog, 20 September 2011. http://www.epi.org/blog/militaristic-foreign-policy-saves-money/

One of the persistent criticisms of President Obama’s fiscal plan is that it counts war spending reductions as savings. Basically, the Congressional Budget Office calculates its defense baseline in part by taking the most recent war supplemental (technically called Overseas Contingency Operations, or OCO) and assuming that amount—adjusted for inflation—will be spent each year over the foreseeable horizon. This adds up to about $1.73 trillion over 10 years. The president’s proposal, however, includes only $653 billion in OCO spending over 10 years, for a savings of about $1.1 trillion.

Some critics, however, allege that these savings cannot be counted because the CBO OCO baseline itself isn’t realistic, therefore the savings are not “real.” For example, the Committee for a Responsible Federal Budget (CRFB) argues that counting these savings is a “budget gimmick” that the president uses to “inflate his savings.” According to this critique, another baseline for OCO expenditures should be used—either the president’s budget request or the CBO’s drawdown policy option—which would lower the baseline and make it practically impossible to generate budget savings from reducing war spending.

All due respect to CRFB and the other critics, but this criticism is silly. The CBO OCO baseline isn’t “unrealistic”—rather, it represents the costs of President Bush’s aggressive invasion-centered approach to foreign policy extended into perpetuity. President Obama is, thankfully, in the process of trying to change America’s approach to foreign policy, drawing down troops from Iraq and Afghanistan and moving toward a more multilateral, patient, diplomatic, and most importantly, less expensive approach. Furthermore, the fiscal plan proposes to cap OCO spending, thereby making sure those savings are realized.

President Obama’s foreign policy approach costs less money than President Bush’s, and the budget outlook should reflect those savings.

Editor’s Comment:

It must be a sign of just how bad things are for progressives that EPI now celebrates a big puff of smoke from the Obama administration sent to divert attention from real budget reductions and, in particular, to protect the Pentagon from further cuts in the fiscal battles. Ethan Pollack has worked for OMB, so he surely understands the accounting distortion built into the CBO baseline projections based on current law. Not one person in the world (including those at CBO who prepare the baseline) believes that OCO expenditures will continue to fund the wars in Iraq and Afghanistan at the same level as 2011. That’s why the CBO did a “draw down policy option” – to estimate likely OCO costs. That latter exercise is not “silly”, nor the suggestions that such estimates be the basis for considering budget reduction plans.

Mr. Pollack must also know that President Obama’s FY12 budget submission to Congress contains only $50 billion a year for OCO for future years. Which is it? $118 billion forever or $50 billion forever? You can’t have it both ways.

CBO’s draw down option is surely better for budget (and deficit
reduction) planning that either the unrealistic “placeholder” (which
is simply irresponsible budgeting) or the CBO baseline artifact of
$118 billion forever.

If President Obama wishes to announce a plan to save meaningful
amounts from OCO he would need to announce more rapid withdrawals from Afghanistan… but then no one really believes he is leaving
Afghanistan in 2014. So this is all smoke and mirrors…and progressives should feel terrible about it, not celebrate.

It is disingenuous to claim that the CBO’s baseline OCO is somehow a Bush responsibility. It is simply a methodological artifact of how CBO does its baseline.

President Obama has been in charge for nearly three years and has not brought all the troops home from Iraq and has hardly begun a draw down in Afghanistan. The current year OCO of $118 billion is his responsibility as is the phoney-ness of projecting it forward ten years and then claiming savings from spending “$653 billion…over ten years.” If he was really willing to end the war in Afghanistan soon he might be able to cut that OCO in half and offer $325 billion from reduced future war costs to deficit reduction.

And until this year’s budget imbroglio in Congress forced his hand he
has continued to feed the Pentagon with higher and higher base budgets every year. There is no evidence that President Obama’s “approach to foreign policy…[is] less expensive”… not as far as the largesse offered up to the Pentagon is concerned.

We must not base progressive policy on smoke and mirrors. Such
politics only hurts us in the long run.

Another critique of this budget gimmick can be found at: http://capitalgainsandgames.com/blog/gordon-adams/2369/how-about-those-defense-savings.

___________________________________________________________

Matthew Leatherman. The Will and the Wallet, 26 July 2011.
http://thewillandthewallet.squarespace.com/blog/2011/7/26/dods-64b-question-where-is-that-64b.html

Excerpt:

“CBO has long said that DoD underestimates program costs including, most recently, its report on the Long-Term Implications of the 2012 Future Years Defense Program. That study concluded that “the difference between the CBO projection and DOD’s estimates for the FYDP is about 2%, or about $64 billion, over the five-year period.” “

David E. Mosher, assistant director for national security, Congressional Budget Office. Testimony before the Committee on the Budget, U.S. House of Representatives, 7 July 2011.
http://www.cbo.gov/ftpdocs/121xx/doc12162/07-07-FYDP_Testimony.pdf

editorial. Boston Globe, 30 June 2011.
http://articles.boston.com/2011-06-30/bostonglobe/29722652_1_panetta-pentagon-government-discretionary-spending

When Leon Panetta takes the helm at the Defense Department tomorrow, he will be facing difficult choices about the US military efforts in Afghanistan, Iraq, and Libya. But an equally pressing — and potentially even more intractable — problem is the Pentagon’s budget and spending. Outgoing secretary Robert Gates was good at paying lip service to the need to control spending; he noted recently that “the United States should spend as much as necessary on national defense, but not one penny more.’’ But the department’s baseline budget has risen every year since Gates took over — from $450 billion to more than $550 billion four years later. This year alone, the Pentagon is seeking a 3.4 percent increase from its 2010 budget.

It’s not just the wars; they represent less than 30 percent of the Pentagon’s enormous budget request. In the context of other government spending, the Pentagon is a behemoth. For every $100 of government discretionary spending, over $30 goes to non-war defense expenditures. The scope is overwhelming; the need for more than piecemeal cuts of failed systems is urgent.

Gates recently claimed that the Pentagon has already cut $300 billion, but the math suggests otherwise. That money came from programs already scheduled to be terminated. The savings were simply put into other military priorities. After noting that the Navy’s 11 carrier battle groups were excessive, Gates refused to eliminate a single one.

Panetta will need to take a more disciplined and systemic look at the budget. There is no shortage of advice from influential think tanks and independent studies, including last year’s report of the Sustainable Defense Task Force, a bipartisan group convened by Representative Barney Frank. Their recommendations would trim $960 billion between 2011 and 2020, if only the Pentagon would act on them.

Cutting the number of deployed nuclear weapons by half — to 1,000 warheads — is consistent with a reduced emphasis on nuclear warfare and the efforts of arms control advocates. This move alone would save over $100 billion over 10 years. Reducing conventional forces by 50,000, which would still leave 100,000 personnel deployed in Europe and Asia, is more realistic force structure. Cancelling just a few systems that are neither cost-effective nor essential would save more. The MV-22 Osprey and Expeditionary Fighting Vehicle are long on trouble, and short on capability. In addition, the Congressional Budget Office and the Government Accountability Office both have proposed changes to support efforts, such as maintenance, supply, and infrastructure, that could save $100 billion in the next decade.

All this could be accomplished without compromising national security. Panetta needs to push back on the political forces that claim any cuts make the nation vulnerable to various enemies. The deficit is a much greater security risk.

Unfortunately, the Pentagon remains the largest federal agency that simply cannot pass an independent auditor test; when subjected to the normal bookkeeping procedures, it cannot, with any accuracy, track spending, fraud, waste, or redundancy. It has given itself a September 2017 deadline for audit “readiness.’’ That’s not soon enough. Panetta, who, as the former head of the Office of Management and Budget, has a reputation as a rigorous fighter for fiscal discipline. He will need to get the Pentagon’s house in order on day one.

Task Force on A Unified Security Budget Institute for Policy Studies, July 2011.
http://www.comw.org/qdr/fulltext/Unified_Security_Budget_FY2012.pdf

Melvin Goodman. Baltimore Sun, 29 June 2011.
http://articles.baltimoresun.com/2011-06-29/news/bs-ed-gates-20110629_1_military-spending-defense-budget-secretary-of-defense-gates

Excerpt:

In his recent lectures, Mr. Gates warned against any freeze in defense spending, leaving Mr. Panetta to deal with weapons systems and military missions that the United States can no longer afford. As the former director of the Office of Management and Budget, Mr. Panetta presumably understands that the United States, with less than 25 percent of the world’s economic output and more than 50 percent of the world’s military expenditures, will have to curtail certain weapons and missions. The defense budget has grown more than 50 percent in the past 10 years and now exceeds the pace of spending of the Cold War era, including the wars in Korea and Vietnam as well as the peacetime buildup of President Ronald Reagan.

A reexamination of current troop deployments must include the tens of thousands of troops in Europe and Asia more than six decades after the end of World War II; hundreds of bases and facilities the world over; and the excessive willingness to project power in areas such as Iraq, Afghanistan and Libya, where vital national interests are not at stake.

William Hartung. Huffington Post, 28 June 2011.
http://www.huffingtonpost.com/william-hartung/afghanistan-for-real-savi_b_886241.html

Excerpt:

There won’t be large scale savings from the winding down of the Afghan war until virtually all U.S. forces are withdrawn. Even then there are still likely to be ongoing costs for training, equipping and possibly even paying Afghan security forces, which could cost up to $10 billion or more per year if current rates are maintained. But the vast bulk of the $120 billion per year now being spent on the war will be freed up for other purposes: deficit reduction, or public investments, or some combination of the two.

An end to the Afghan and Iraq wars may also open the way to a more comprehensive public debate on the Pentagon’s $550 billion-plus annual base budget — a sum over four times as large as what we spend on the wars. Politically, making real cuts in Pentagon spending during a time of war is a tough sell, even given our current budgetary predicament. But an end to the wars combined with the pressure from the deficit could lead to real cuts in the Pentagon’s base budget as well, especially if we adopt a new strategy that forswears major wars of occupation or large-scale insurgency campaigns of the kind our nation has waged in Iraq and Afghanistan. If we cut the war spending and bring the Pentagon’s larger budget into line with reality, then we’ll be talking real money.

Sandra Erwin. National Defense , 10 June 2011.
http://www.nationaldefensemagazine.org/blog/lists/posts/post.aspx?ID=441

Excerpt:

Not only are there internal disagreements within the Pentagon and the Obama administration over what the military services will be doing in the future, but factions within Congress also will be pushing individual agendas. “In Congress, you have 535 individuals and every one of them thinks they’re in charge,” O’Keefe said. “If you don’t have some benchmark to work with to start the discussion,” the Pentagon will lose control over what gets cut in future budgets.

“If there is no strategic framework, that is what will happen: The process takes over,” said O’Keefe. Defense leaders should come up with a reasonable strategic framework as early as possible that they can sell to Congress, he said. “Absent that, it is going to be the programmers and bean counters driving the train to meet a number.”

A coherent message from the Defense Department is “missing right now,” said John J. Hamre, president of CSIS and former deputy defense secretary.

“What are we really trying to plan for, as a Defense Department, that is good for 20 years?” he asked. “Are we going to get the hell out of these wars and never fight them again? What are we preparing for?” he added. “That, I think, is the work for the next six months.”

There has to be a sense of urgency about articulating a plan for the future of the U.S. military, because increasingly the American public is losing patience with seemingly endless wars and gridlock over how to move forward, Hamre said

Steps Toward Defense Budget Discipline, a Hill briefing sponsored by Taxpayers for Common Sense and the Project on Defense Alternatives, 7 June 2011, video by the Stimson Center. Featuring: Amy Belasco, Carl Conetta, Benjamin Friedman, Matthew Leatherman, Laura Peterson and Winslow Wheeler.

Carlton Meyer. G2mil.com, June 2011.
http://www.g2mil.com/OBCL.htm

Excerpt:

Here is a list of outdated U.S. military bases overseas that can be promptly closed to save billions of dollars each year…

Close Outdated U.S. Military Bases in Japan – Futenma & Atsugi

Pull Aircraft and Airmen Out of Osan – now in a kill zone

Cut Army Fat in Korea – 8th Army and Daegu

Vacate Two Army Bases in Germany – as once planned

Close Torii Station – a U.S. Army base on Okinawa?

Vacate RAF Lakenheath – the Russians aren’t coming

Close Gitmo, the Entire Base – it has no purpose

Close Chinhae Tomorrow – it commands nothing

[There is more argumentation about each of these at the source.]

Winslow Wheeler. Guest Post, 24 May 2011.

The National Defense Authorization bill, H.R. 1540, will be debated by the House of Representatives this week. The bill is the work product of the House Armed Services Committee (HASC), Chaired by Congressman Buck McKeon, R. – Calif..

The Operation and Maintenance section (Title XLIII) of the bill is one of its largest and most important. “O&M” deals with the support, logistics, maintenance, training and much else needed to enable our armed forces to function effectively. $170.8 billion was requested by President Obama; the committee increased that by $361 million to $171.1 billion. However, to get there the Committee took some detours.

Sprinkled throughout the O&M title the HASC added various earmarks (one minor example: $4.0 million for “Simulation Training Systems for the Army” [p. 430 of the Committee Report]). All of these came to a lot more than the $361 million net add to the bill. The Committee and its staff had to find offsets to help pay for these earmark goodies and other additions.

In past years, the HASC (and the Senate Armed Services Committee and the Defense Subcommittees of both the House and Senate Appropriations Committees) has listed strange sounding reductions in the O&M sections of their bills – “unobligated balances.” These should be technical alterations for money previously appropriated to the various military services for various programs; they become “unobligated” when the planned expenditure does not occur, and they presumably become available for offsets for new spending, or – if the Committee were to be more forthcoming to the taxpayer – return to the Treasury.

For example, on p. 432 of the HASC Committee Report, the tables for Army O&M show a reduction of $384.6 million labeled “Army unobligated balances estimate.” That amount happens to be 1.1% of the president’s request for total Army O&M ($34.735 billion).

The Navy section on O&M in the HASC bill shows a $435.9 million reduction for “Navy unobligated balances estimate.” For some strange reason, that amount also calculates to 1.1% of the President’s request for Navy O&M ($39.365 billion).

Stranger even, the Marine Corps O&M reduction for unobligated balances as also 1.1% ($66 million of a $5.960 billion request).

Same thing for the Air Force; the same 1.1% ($400.8 million from a $36.195 billion request).

None of these are discussed or explained in the text of the committee report; the only “explanation” we get is that they are “Army [or Navy, or Air Force, etc.] unobligated balances estimate.”

That all of these “estimates,” which should be technical in their nature, come to 1.1% reeks of gaming the system. Two relevant questions: Who did it? And Why?

First, I seriously question if these conveniently similar estimates did indeed come from the military services. That would require a rather strange (and specious) amount of coordination by them all to all come to 1.1% of their respective O&M budget requests.

Secondly, why are there no “unobligated balances” in the procurement and R&D titles, which are heavy with the kind of spending that can end up “unobligated”?

Third, why isn’t this money being returned to the Treasury, from whence it came and now belongs if indeed the money is no longer needed by the Defense Department?

There are lots of other questions, but hopefully you get my drift. The offsets the HASC took, calling them “unobligated balances,” are nothing but across the board whacks at one of the most importance accounts in the DOD budget – the one that makes for a well trained and supported military. Why is the HASC doing these across the board cuts, and why are they doing it in O&M?

There are some other “unobligated balance” issues in the bill. The defense wide part of O&M also took a $456.8 million hit from a request of $30.940 billion. This comes to 1.47%. Why does the part that supports the special forces and others take a bigger proportional hit than the other military services?

Also, the Defense Health Program takes a $225 million hit which is “explained” as a “GAO estimate,” but no GAO analysis or other explanation is offered.

The Military Personnel budget that pays military salaries takes a $693 million hit from a $142.828 billion request (.48%). I found no explanation.

Finally, section 2107 permits the Secretary of the Army to use $115 million in previously “unobligated” spending to fund a water treatment facility at Fort Irwin California. Perhaps the House representative from the Fort Irwin area can explain how all this works and how he or she got to fund some spending in the district from these ubiquitous funds.

In my judgment, the HASC, which is charged with oversight of DOD, could use a little oversight itself.

Pentagon’s Phantom Savings: $330B Claim Erodes as Programs Reappear
Marcus Weisgerber. Defense News, 16 May 2011.
http://rempost.blogspot.com/2011/05/pentagons-phantom-savings-330b-claim.html

Excerpt:

Nearly 40 percent of that sum [$330 billion] is going straight back into U.S. military programs that replicate the canceled ones, and it’s unclear where another 10 percent came from at all, according to a Defense News analysis and to several analysts.

…many of the military services’ capability requirements remained in place. More than $130 billion is back on the books, or will be soon, for follow-on or replacement programs. Of the programs canceled in 2010, at least five have already been relaunched, or are in the planning stages to begin again.

Editor’s Comment:

When President Obama addressed the nation about the Federal deficit on April 13th he said, “Over the last two years, Secretary Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again.” A number of us military budget analysts looked at each other and said, “Huh, did we miss something?” We hadn’t notice any significant cuts in Pentagon spending that could count toward reducing the Federal deficit. Where did the President get that big number?

Of course, we had taken notice when Defense Secretary Gates had announced $78 billion in budget cuts for the FY12 five year defense plan. We noted that the DoD budget would still continue to grow, that some of these cuts were fairly soft (dependent on assumptions about future inflation rates) and most savings would be generated in the out-years. (See: Pentagon Resists Deficit Reduction)

And we had noted that Secretary Gates had cancelled a number of programs in 2009. But we also noted that many of the cancelled programs were being replaced by others substantially reducing the putative savings (see Gordon Adams, Defense Budgets: Still Need to Get it Right!)

In the days following the President’s speech we commented on how there was much less real savings than the President attributed to Secretary Gates’ “courageous” efforts. I pointed out that $68 billion of the January $78 billion in savings had been consumed when 2012 war costs appeared in the budget released in February, replacing small placeholder numbers.

Benjamin Friedman observed that “current ‘savings’ consist entirely of spending that the Pentagon reprogrammed and kept, and the future ‘savings’ come by reducing planned spending growth, rather than reducing actual spending.”

Carl Conetta reviewed the history of these supposed cuts going back to 2009 and compared successive Obama budgets, 2010 through 2012, finding no more than $233 billion in “maybe” DoD reductions in projected out years.

The collective skepticism of independent analysts about the $400 billion no doubt reached the attention of the editors of Defense News, the leading defense industry weekly, where Marcus Weisgerber sought to justify Secretary Gates’ claim of $330 billion in savings from the 2009 program cancellations. When DoD officials refused a request to give a program-by-program breakdown of the figure Defense News “used budget justification documents, DoD officials’ public statements, annual acquisition reports and Government Accountability Office estimates to project program costs. For classified and far-term programs not on the books – but factored into DoD’s projections – think tank and analysts’ estimates were used.” The Weisgerber article title, “Pentagon’s Phantom Savings“, sums up the results of Defense News’ effort to justify Secretary Gates’ claim of savings.

Defense News editorial, 16 May 2011.
http://rempost.blogspot.com/2011/05/us-defense-budget-get-real-pentagon.html

Excerpt:

There is an old Washington saying that no money is less real than out-year money. This means that anything that is beyond the immediate spending bill is purely notional.

Requirement control is a popular method of limiting the costs of new weapons, but it’s equally important to control the growing number of missions.

The first step should be to ensure the roles-and-missions review ordered by Obama slashes unnecessary and costly redundancies in capabilities.

Second, the Pentagon must avoid doing what it did – portraying soft numbers as hard ones that do little other than expose it to criticism.

Lastly, to make wise cuts, the Pentagon must improve its internal financial management processes to pinpoint what it’s spending and how. Without hard data, it’s hard to come up with hard savings.

Winslow Wheeler. Center for Defense Information, May 2011.
http://www.cdi.org/pdfs/GreenbookInflationMay11.pdf

Excerpt:

The comparison of DOD’s prediction of inflation for itself compared to the commonly accepted GDP measure looms as a major consideration when one considers the time frame that President Obama and Congress are contemplating in the context of deficit reduction. The President’s Commission on Fiscal Responsibility and Reform assumed a budget window of 10 years from 2011 to 2020. In his April 13 speech on deficit reduction the president addressed a budget window going out to 2023, when he implied, but did not explain, a reduction in the planned “security” budget of $400 billion in the 2012 -2023 time frame.

There are multiple caveats and uncertainties in the defense related reductions the president appears to have been talking about; these should be identified before identifying how the inflation issue impacts any contemplated savings. They are the following:

• The manner in which the president addressed past and future “savings” made it unclear the extent to which he was addressing actual reductions in spending, or “savings” as efficiencies (i.e. internal transfers inside the DOD budget as Secretary of Defense Gates has for the most part been conducting);

• No DOD budget figures exist for some of the years the president addressed; available DOD figures go out to only 2016; available OMB figures for defense spending go out to 2021, but the amounts for 2022-2023 are unknown; it is also notable that in recent budget history, most deficit reduction plans have spanned either five or ten years, not twelve; the latter spreads out the annual amount required to be saved, and – more importantly – moving savings out to years as far as ten or twelve years away literally moves them to never-never land;

• No figures were released for any reductions in any year, whether the pre-existing annual budget was known or unknown;

• The target for these $400 billion in “savings” is the “security” budget, not just the Defense Department’s budget. The security category includes not just DOD but the State Department/International Affairs budget function, the Department of Homeland Security, the Department of Veterans Affairs, the nuclear weapons activities of the Department of Energy, and other miscellaneous programs and agencies; the Defense Department’s proposed share of the $400 billion “savings” is unknown, and

• Materials released by the White House at the time of the speech asserted that the new plan had a “goal” to hold DOD spending “below” the rate of inflation. While DOD’s preferred rates of inflation will – as always – be used for the DOD budget, the differences between the DOD and GDP inflation indices for the years beyond 2016 have also not been made available.

… if the Department of Defense is held to the rate of inflation – or just “below” – as calculated by the DOD inflation indices, it is clear from the above analysis that it will be quite possible for the Pentagon to enjoy “real” growth – under the more generally accepted GDP indices.

Carl Conetta. Project on Defense Alternatives Note, 30 April 2011.

Why is our defense spending so high and apparently out of control? Plenty of ink has been spilled addressing this question, including my own short, The Pentagon’s Runaway Budget.

Andy Bacevich may get closer to the key political dynamics in Why Military Spending Remains Untouchable.

There is no better example of the dysfunctional political dynamic governing the Pentagon budget than President Obama’s affirmation (April 13, 2011) of the claim that Secretary of Defense Gates has “already saved” the nation $400 billion in defense expenditure. And there is no better illustration of the poverty of our discourse on this subject than the fact that the claim goes largely unchallenged.

Most of the $400 billion in earlier DoD “savings” that President Obama has attributed to Secretary Gates are not “savings” in the ordinary sense of the word. They do not show up as reductions in DoD budget plans from one year to the next, as shown below. At best, they represent DoD marginally adjusting its programs and aspirations to marginally deal with spiraling cost growth.

Rough analogy: Having said it would deliver a “fully-loaded” Cadillac for a specified price X, and having discovered that this estimated price is entirely unrealistic, a car dealer trims back some of the features and delivers something less for the full promised price. Most consumers would call this a gyp, not a savings.

The alternative would be for DoD to further boost subsequent budget requests to fully reflect cost growth, and let Congress and the Executive reconsider what they wanted to buy. I suppose one could say that DoD has “saved” these authorities from the headache of making this decision. Fully confronting a realistic pricing of current programs might lead to a thorough-going rethink of our defense posture and modernization efforts. But that’s too much to consider.

Now, let’s try to find those $400 billion in “savings”….

THE $400 BILLION

1. Much of the $400 billion that Secretary Gates is claimed to have saved derives from his April 2009 announcement of program cuts. Gates claims that the systems and programs he cut in 2009 would have eventually cost more than $300 billion. However, at least some of this was immediately reprogrammed, meaning: DoD used the savings to buy other things.

April 2009 Gates Defense Budget Recommendation Statement

2. In August 2010 and January 2011, Secretary Gates outlined additional “cuts” and “savings” totaling $178 billion. Of this, $100 billion was immediately reprogrammed to purchase other things or cover other costs. The remaining $78 billion was supposed to be released from the Pentagon orbit to help pay down the deficit. In the August 2010 statement, we find Gates’ claiming that his earlier 2009 effort has already saved more than $300 billion.

August 2010 Gates Statement on Department Efficiencies Initiative

Jan 2011 Gates Statement on Department Budget and Efficiencies

PDA summary chart re: the $178 billion

3. How much (if any) of the earlier “more than $300 billion” in savings was similarly given over for deficit reduction? Looking at actual budget plans, what do we see? The first $300 billion was announced in April 2009 and it might reasonably have shown up as difference between the last Bush budget plan (FY09) and the first Obama budget plan (FY10).

Comparison between these two budget plans is easy for the years 2010-2013:
- Bush FY09 planned total spending for 2010-2013 = 2.155 trillion
- Obama FY10 planned total spending for 2010-2013 = 2.183 trillion

An increase is not a reduction, therefore: no savings apparent in the near years.

4. Obama’s next budget plan (FY11) foresaw a significant increase over his first. So, no savings apparent there either.

5. Only in the next plan – the FY12 plan – do we see a reduction in planned spending between FY12 and FY11 plans. In the nine years that overlap between the FY11 and FY12 plans, we see a reduction of about $233 billion.

But the FY12 plan follows Gates’ second announcement of cuts and savings (summarized in #2 above). So, at least, $78 billion derives from that and not the earlier cuts. Indeed, when we compare the FY12 plan with the FY11 plan for the years 2012-2016, there is a reduction in planned spending of $76 billion. Still no apparent impact from the April 2009 “cuts,” however.

6. Well, as noted above, the total difference between the FY11 and FY12 plan for the years 2012-2020 is $233 billion. 233 minus 78 = 155. This additional planning rollback of $155 billion shows up for the years after 2016. So maybe we’ve found at least $155 billion of the earlier supposed cut? Maybe it just took 2 years to register? Maybe.

“Maybe” because the Obama FY12 budget rolls back planned spending almost exactly to the levels foreseen in the Obama FY10 budget …being the budget that was larger than the final Bush budget and being the budget that showed no impact from Gates’ April 2009 offer. To put it another way: Obama’s FY12 budget simply rolls back the future spending plan he produced in FY11 to the level he had proposed in FY10. The FY12 plan simply disappears the increase proposed in FY11.

7. The other possible (likely) reading of all this is that: (i) None of the original $300 billion “saved” ever left the Pentagon,
(ii) The $78 billion that Gates offered up to deficit reduction is the only “savings” really specified so far to actually show up as a reduction in planned spending, and (iii) The other $155 billion that the FY12 plan subtracts from the FY11 plan involves as yet unspecified cuts and efficiencies.

Project on Defense Alternatives Budget Brief, 28 April 2011.

The Obama Administration to date has made three successive Pentagon budget requests: FY10, FY11, and FY12. Each has looked ten years into the future.

On 13 April, the President offered a new proposal and framework — a revision to achieve greater deficit reduction. It looks forward 12 years. How do all these compare?

In order to compare the President’s successive plans, we must stretch the earlier ones out to the new horizon set in his April 13 speech, which is 2023. Reviewing the budget requests shows that in each case the projections for the “out years” — the tail-end years — have been generated by the application of a simple inflator. We can adopt these inflators to stretch all the requests out to 2023. Of course, the result must be regarded as only an estimate of the administration’s intent.

The difference between the FY11 and FY12 plans for the 10-year period 2012-2021 is around $240 billion. Stretch it out two more years and the difference grows to about $400 billion. This shows that the differences among the plans (when measured in “then year” dollars) really begin to accumulate as we go further and further into the future.

Keeping in mind that Congress must consider and pass the budget year by year, any series of budget projections going out twelve years, spanning three Presidential terms and differing economic conditions, must be judged distinctly uncertain.

Below are the total budget figures (in “then year” dollars) for the President’s successive plans. Each plan is also weighed as a percentage of the earliest one (i.e. FY10):

FY10 plan for 2012-2023: 7543 billion = 100%

FY11 plan for 2012-2023: 7947 billion = 105%

FY12 plan for 2012-2023: 7512 billion = 99%

New (April 13) proposal for 2012-23: 7112 billion = 94%

The most consequential years for national policy are the next five: 2012-2016, which constitute the FYDP. The President’s successive requests for these years are more firm and we needn’t do any estimating to derive them. All the Administration budget requests have been explicit about these years. And reviewing the successive requests for 2012-2016 shows that the difference among them is not as substantial:

FY10 plan for 2012-2016: 2878 billion = 100%

FY11 plan for 2012-2016: 2995 billion = 104%

FY12 plan for 2012-2016: 2919 billion = 101%

We don’t yet know what the President’s April 13 proposal will imply for the 2012-2016 period. It’s a fair bet, though, that he will want to reinstate his earlier request to DoD that $150 billion be “saved” in the near future and not just the $78 billion pledged earlier this year by Secretary Gates. That would produce the following:

New plan for 2012-2016: 2845 billion = 99%

If this proves true, the rollback in planned spending for the five years that matter most will be modest, verging on insignificant.

Project on Defense Alternatives, Briefing Memo #49, 25 April 2011.
http://www.comw.org/pda/fulltext/1104bm49.pdf

There is good reason to welcome a strategic review, as promised by President Obama on 13 April. For nearly 14 years, US defense policy has been guided by the “QDR consensus” – a set of axioms and imperatives that won adherence among defense planners in the course of four Quadrennial Defense Reviews, beginning in 1997. In retrospect, this consensus has produced a syndrome of profligate and desultory military activism. It has fed the dysfunctions of our military procurement system and helped drive the Pentagon’s base budget to unsustainable heights. Certainly, it is time for a fresh start. But will the promised review deliver?

Will the review be more open and critical than the QDRs it aims to rectify? How deep will it dig? Will it even aim to “rectify?” Or will it serve a more narrow purpose: a revised bargain among the Commander-in-Chief, his defense secretary, and the chiefs of the armed services to exchange modest new constraints on budget growth for a strong rationale, a bulwark, against any further cuts.

What the President seeks is only $400 billion in savings over 12 years – about 6.5% of planned base budget expenditures. Last year, the President’s Fiscal Commission and other independent task forces identified more than twice as much in potential defense savings over a period of just ten years. And it is unclear whether the President intends to extract the $400 billion from the Pentagon’s budget alone or from the larger “security basket,” which includes International Affairs, Homeland Security, and Veterans Affairs.

Also, it is not encouraging that the President applauded Defense Security Gates for having “already saved” $400 billion in previous years, when most of those “savings” never left the Pentagon’s coffers, nor dented the government’s deficits. What the nation needs now are “savings” in the colloquial sense of an actual decrease in defense spending.

A serious strategic review should enable considerably more than a 6.5% retraction in planned future expenditures. It should do more than limit future growth. And maybe it will. But we should recognize at the start that what the President has proposed is not itself substantial enough to actually necessitate a strategic review. Yes, we need one – but not because the President hopes to modestly dampen Pentagon growth.

To be meaningful, such a review must look well beyond $400 billion in savings, and even beyond what the Fiscal Commission and other task forces have proposed. Of course, Secretary Gates and Admiral Mullen disagree. They have already publicly derided any substantial new constraints on their spending as putting the nation and its armed services at risk. The strategic review should be more than a conciliatory concession to their concerns, which are tendentious.

We can gain needed perspective by comparing recent budget submissions and proposals in historical context. This table prepared by PDA converts recent plans and proposals into average annual Pentagon base budgets, expressed in 2010 dollars. It shows that the President’s requests and proposals, including his recent one, would produce average annual budgets that occupy a narrow band of spending. They are all close cousins.

Even the more ambitious proposal by the Sustainable Defense Task Force does not go far afield.

All of the President’s requests and proposals produce average annual budgets that, in real terms, exceed previous spending, exceed Reagan-era levels of spending, and substantially exceed average spending during the entire Cold War period. (And, notably, the budget average for the Cold War years includes war spending, while the more recent averages do not.)

We should gladly accept the opportunity for a review of defense planning and work to make it worthwhile. But we need not and should not accept the idea that modest revisions in budget planning give good reason to hit the “strategy panic” button.

Sebastian Sprenger writing in Inside Defense on 21 April 2011 reports that the QDR Red Team headed by Gen. James Mattis (USMC) and Andrew Marshall, director of the Office of Net Assessment, raised concerns in 2009 about the fiscal restraint effects of the deep recession on military plans to be represented in the QDR.

The Red Team report was not made public. When the QDR was published in early 2010 it did not include a presentation of the effects of fiscal constraints.

Last week, a little more than a year later, President Obama asked Secretary Gates to find $400 billion in additional security budget cuts over a twelve year period and called for a new review of military roles and missions.

The effect of this development will be an update of the 2010 QDR which will likely now heed the concerns of the 2009 Red Team concerning fiscal constraints.

On Wednesday April 13th 2001, President Obama announced an initiative to roll back planned security spending by $400 billion over the next 12 years. The nature of these “savings” is not yet clear. Nor is it clear how much will be subtracted from the Pentagon’s spending plans.

Nonetheless, Secretary Gates and the Chiefs are not pleased and have begun to make noise about risks to security. Apparently, they were not briefed on the proposal until Tuesday.

Part of the initiative is to begin a “fundamental review of America’s missions, capabilities, and our role in a changing world.” What and how much is subtracted from the Pentagon will depend on this review. Notably, the United States just completed a Quadrennial Defense Review last year. What the President proposes is some sort of “second look.” The President, Secretary Gates, and the service chiefs will be the prime movers of this process. How deep their “second look” will go is unclear. And it seems battle lines are already being drawn.

At a press conference on Wednesday, Pentagon spokesperson Geoff Morrell said the review would likely affect the 2013 budget. It will not be ready by June, when congressional debate of the 2012 budget commences.

How open will the review process be? We don’t yet know. But the experience of recent defense reviews is not encouraging. Still we should welcome this first step and strive to open up the process. The need for a rethinking our defense strategy and posture was emphasized in the 2010 report of the Sustainable Defense Task Force:

[I]n order to ensure significant savings, we must change how we produce military power and the ways in which we put it to use. Significant savings may depend on our willingness to:

Rethink our national security commitments and goals to ensure they focus clearly on what concerns us the most;

Reset our national security strategy so that it reflects a cost-effective balance among the security instruments at our disposal and uses those instruments in cost-effective ways; and

Reform our system of producing defense assets so it.

News links on President Obama’s proposed rollback in planned security spending, his call for a strategic review, and the Pentagon’s reaction:

DOD: Finding More Savings In Defense Budget Means Nixing Missions. Christopher J. Castelli. Inside Defense, 13 April 2011.

Obama Calls for Sweeping Review of U.S. Military Strategy. Sandra Erwin. National Defense, 13 April 2011.

Pentagon warns on big defense cuts. Missy Ryan and Jim Wolf. Reuters, 13 April 2011.

Defence chief warns against planned cuts. Daniel Dombey and James Politi. Financial Times, 14 April 2011.

Events frequently overtake long-term Pentagon planning. Megan Scully. Government Executive, 14 April 2011.

Editor’s Commentary

13 April 2011 (revised and updated 16 April 2011)

In President Obama’s April 13th “deficit speech” he says:

Just as we must find more savings in domestic programs, we must do the same in defense. Over the last two years, Secretary Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again.

What might “do that again” mean?

Actually contribute $400 billion from projected Pentagon budgets to deficit reduction?

That would require the Pentagon to take in and spend $400 billion less. But it is very difficult to identify much actual contribution to deficit reduction in the first $400 billion in Pentagon savings President Obama refers to and believes can be repeated.

Let’s take a quick look at the components of that first $400 billion working backward through time.

This past January Secretary Gates announced $78 billion in cuts over five years. In February when the President’s FY12 budget appeared all but $70 billion of this as regards deficit reduction evaporated. $68 billion was consumed by the special Overseas Contingency Operations (war) budgeting as the FY11 projected placeholder of $50 billion was replaced by the FY12 real OCO budget of $118 billion. Another $2 billion in the savings appears to have simply vanished in the five year budget projections, perhaps due to those pesky “rounding errors” that plague Pentagon budgets.

In 2010 Secretary Gates announced $100 billion in “efficiency” savings. He was quite forthright at the time, saying that he was keeping all the savings within the Pentagon to pay for other requirements. So we can’t legitimately count those toward deficit reduction, and presumably the President did not count those toward the $400 billion that has been saved.

So that leaves about $322 billion in Pentagon savings the White House needs to account for.

In testimony before the Senate Armed Services Committee on 17 February 2011 Secretary Gates said:

…over the last two defense budgets submitted by President Obama, we have curtailed or canceled troubled or excess programs that would have cost more than $330 billion if seen through to completion.

Connecting this to President Obama’s speech Defense News reports (13 April 2011) that:

Of the $400 billion already saved, $330 billion is supposed to come from Gates’ cuts to weapons programs – for example the cancellation of the Army’s Future Combat Systems program and the Air Force’s Next-Generation Bomber, both of which Gates terminated in the 2010 budget. However, those two programs have been replaced: The Army is developing the Ground Combat Vehicle, and the Air Force has launched a scaled-back bomber program.

“Supposed” and “However” are the key words in the preceding paragraph. To be real savings that contribute in any meaningful way to deficit reduction the the program cancellations would have to lead to a declining Pentagon budget topline… and not be replaced by some other expenditure.

Gordon Adams of the Stimson Center assesses the $330 billion savings claim in a 5 November 2010 post this way:

Gates has not cut $330 billion from defense. When he announced hardware cuts, he said the out-year savings were estimated at $330 billion, but he didn’t cut a nickel from the projected defense budgets; he wants, as he has clearly said, to use those savings for other investments, not give them back to the taxpayer. And the figure is way too big, anyway, because he terminated the F-22 and the C-17 cargo plane when neither one of them was in the long-term budget (he has been trying to let both programs arrive at a normal death, as planned, and Congress keeps getting in the way.) It is even more too big because his savings figure did not net out the alternative investments he proposed for the same missions, like replacing the terminated Future Combat Systems (FCS) vehicle with a new Army vehicle R&D program. So a big kerfuffle over a non-number, but no big cut in defense here.

To date the Pentagon or OMB have not produced any accounting of these supposed savings from Secretary Gates’ program cancellations which indicate where they come out of the topline. Meanwhile it would be wise to substantially discount their value when thinking about overall Federal spending.

What we know for sure is that Pentagon budgets continue to rise despite the “savings.” The Pentagon and the Administration might argue that the Pentagon budget would have grown faster if Secretary Gates had not made those “courageous” program cuts. Possibly. But that “would have been” is simply not the same as actually contributing to deficit reduction which requires real cuts in the topline of the Pentagon budget.

In terms of cutting the topline of the Pentagon budget, when we remove the long-awaited reductions in war costs, we can count just $8 billion that Secretary Gates has given up to deficit reduction in the five year defense plan (FYDP) through FY16.

Looking out ten years there are more savings in the President’s projections. My colleague Carl Conetta finds $164 billion less Pentagon spending in the overlapping four “out years” (FY17-20) when comparing the President’s FY11 and Fy12 budget submissions.

We might speculate that this is where we realize some of Secretary Gates’ $330 billion in savings, but it would be only speculation…

So far no one in the Administration has demonstrated in sufficient detail how the Pentagon will contribute much of anything toward reducing the Federal deficit, rounding errors notwithstanding.

Budget Memo by Charles Knight. 14 February 2011.

For several years now White House budget projections have included a “placeholder for outyear overseas contingency operations” most of which are accounted for by the wars in Iraq and Afghanistan. This placeholder number has been and remains $50 billion. Every year actual OCO (overseas contingency operations) spending turns out to be several times that number. FY11′s OCO is $159 billion and FY12′s is $118 billion.

Adjusting for the effect of the new OCO for FY12, the $68 billion budgeted above the placeholder of $50 billion eats up most of the $78 billion in Pentagon cuts that Secretary Gates offered up in January to fiscal responsibility (only $76 billion actually shows up in the 14 February budget release.) The remaining $8 billion (and much more) will go to the war budgets when reality collides with placeholder projections.

On 14 February Pentagon Comptroller Hale confirmed that the $50 billion placeholders for FY13 and beyond was the “best we can do.” Others make an attempt to be more realistic. The high tech industry association called Tech America annually projects DoD budgets for ten years out. In their 2010 projection they estimate that OCO spending will be $102 billion in FY13, $69 billion in FY14 and $57billion in FY15. When we subtract the $50 billion placeholder for each of those years and total the remainder we find that the Pentagon is likely to spend $78 billion more in the years FY13 through FY15 than in the White House budget projections.

In sum, not only does the President’s FY12 budget plan give an exemption to the Pentagon from contributing anything substantial to deficit reduction, but the likely cost of the war in Afghanistan will push up the national debt substantially higher than the White House budget projections.

Decoding the Defense Budget by Winslow Wheeler, from The Pentagon Labyrinth, 09 February 2011.

Excerpt:

What Is the Defense Budget?

Each year in early February, the Pentagon releases what is invariably called the “defense budget” in press articles. The numbers presented do not address all forms of defense spending; they do not even address all forms of Pentagon spending.

For example, a table included in the Pentagon’s press materials for the 2011 budget shows the “base” (non-Iraq or -Afghanistan war) budget request at $549.8 billion. The materials presented by the Office of Management and Budget (OMB) are more complete. The 2011 budget request for “base” (non-war) Pentagon spending was $554.1 billion. The additional $4.3 billion was for “mandatory” spending (also known as “entitlement” spending) mostly for personnel programs. The number the Pentagon released was for the “discretionary” (new annual appropriations) spending. The difference may be a minor one in this case, but it can be significant; in past years Congress has added scores of billions in new mandatory spending for military healthcare, and retirement and survivors’ benefits.

The more complete exposition of DOD budgets in the OMB materials is not easy to find; it is usually buried in the “Supplemental Materials” to a volume called “Analytical Perspectives” that is released each year the same day the Pentagon releases its version of its budget. Unfortunately, the DOD press corps roundly ignores the more complete OMB materials. To be better informed in future years, track it down.

The same OMB table yields other important information: the additional DOD spending requested for the wars in Iraq and Afghanistan, not just for the budget year but also for succeeding “out-years,” and the non-DOD spending for what OMB calls the “National Defense Budget Function,” which includes nuclear weapons, the Selective Service, the National Defense Stockpile of minerals and commodities, and more. The total for 2011 comes to $738.7 billion in “total” (discretionary plus mandatory) spending.

The same table also yields the budget amounts for the departments of Homeland (domestic) Security, State (for economic and weapons aid and other national security programs) and Veterans Affairs (for what might be called the human cost of wars). Each is clearly related to national security or “defense,” writ broadly. Finally, if you know where to look near the bottom of this long OMB table, you can find some additional spending in the Treasury Department for military retirement and healthcare, and finally the data needed to make a calculation of how much of the 2011 payment for interest on the national debt can fairly be attributed to the Pentagon.

The results of this more complete compilation of the president’s 2011 budget request for “defense” is summarized in Table 1 below.

Table 1: Defense Related Budget Requests for 2011.
(President’s 2011 Budget Request – in $ billions)

“Base” DOD Budget (Discretionary only) 548.9

DOD (Mandatory only) 4.3

DOD War Spending 159.1

DOD Total 712.3

DOE (Defense) 18.8

Miscellaneous Defense-Related Agencies 7.6

National Defense Budget Function Total 738.7

Homeland Security (DHS) 43.6

Veterans Affairs (DVA) 122.0

International Affairs 65.3

Treasury Dept. Military Retirement Payments 25.9

Interest on DOD Retiree Health Care Fund 5.7

19% of Interest on Debt (DOD Proportional Share) 47.7

Grand Total $1,048,900,000,000.

The next time someone tries to tell you that the numbers DOD throws at you in its press releases are what you should use to understand monies spent for national security, give him a polite smile; then, go to that obscure table in the Supplementary Materials in OMB’s “Analytical Perspectives.” It is published online the same day as the Pentagon press release. A few minutes of checking can give you a more complete understanding than what the press will report.

Project on Defense Alternatives Briefing Memo 46, 26 January 2011.
http://www.comw.org/pda/fulltext/1101bm46.pdf

Excerpt:

* Although described as a “cut,” Gates’ offer would allow defense spending to rise steadily over the next five years.

* Although Gates says that any bigger cuts would court “catastrophe,” all the savings plans grant DoD more money in real terms during the next ten years than it had during the last ten.

* The proposals for bigger cuts would produce average Pentagon base budgets during the next ten years that are only about 5% below Reagan-era spending, adjusted for inflation.

* The Pentagon seeks future budgets that average more than 12% above the Cold War highs.

Sandra Erwin. National Defense Magazine, 24 November 2010.
http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=258

Excerpt:

An AESA equipped Super Hornet is “generation four-and-a-half,” says [Michael “Ponch” Garcia, a reserve Navy pilot and manager of business development at Raytheon Space and Airborne Systems]. “All the sensors are fifth generation. You won’t have super cruise. You won’t have 360 stealth. You lose that. But you’re getting it for half the price.”

Sandra Erwin. National Defense Magazine, 22 November 2010.
http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=255

Excerpt:

“The Defense Department’s biggest weakness is its budget strategy: the absence of strategic choice,” says Gordon Adams, American University professor who authored the defense recommendations in the Domenici-Rivlin proposal that was presented by former Senate Budget Committee Chairman Pete Domenici (R-N.M.) and White House Budget Director under Clinton, Alice Rivlin.

Cutting the defense budget should not be about doing the same with less, Adams says. The reaction to the Simpson-Bowles report, which takes aim at many big-ticket weapon programs and calls for work force reductions, was predictable. Every targeted program or agency, as was seen recently with U.S. Joint Forces Command, is making a case that it is essential to national security, and its supporters already are mobilizing lobbyists and advocacy groups.

The smarter approach would be for the Obama administration and Congress to agree to a scaled-back military strategy, says Adams. “At the end of the day, it’s about policy makers restraining their impulse to use the military in the reckless way it’s been used in the past 20 years,” he says.

18 November 2010

Dear Co-chairman Bowles and Co-chairman Simpson:

We are writing to you as experts in national security and defense economics to convey our views on the national security implications of the Commission’s work and especially the need for achieving responsible reductions in military spending. In this regard, we appreciate the initiative you have taken in your 10 November 2010 draft proposal to the Commission. It begins a necessary process of serious reflection, debate, and action.

The vitality of our economy is the cornerstone of our nation’s strength. We share the Commission’s desire to bring our financial house into order. Doing so is not merely a question of economics. Reducing the national debt is also a national security imperative.

To date, the Obama administration has exempted the Defense Department from any budget reductions. This is short-sighted: It makes it more difficult to accomplish the task of restoring our economic strength, which is the underpinning of our military power.

As the rest of the nation labors to reduce its debt burden, the current plan is to boost the base DOD budget by 10 percent in real terms over the next decade. This would come on top of the nearly 52 percent real increase in base military spending since 1998. (When war costs are included the increase has been much greater: 95 percent.)

We appreciate Secretary Gates’ efforts to reform the Pentagon’s business and acquisition practices. However, even if his reforms fulfill their promise, the current plan does not translate them into budgetary savings that contribute to solving our deficit problem. Their explicit aim is to free funds for other uses inside the Pentagon. This is not good enough.

Granting defense a special dispensation puts at risk the entire deficit reduction effort. Defense spending today constitutes over 55 percent of discretionary spending and 23 percent of the federal budget. An exemption for defense not only undermines the broader call for fiscal responsibility, but also makes overall budget restraint much harder as a practical economic and political matter.

We need not put our economic power at risk in this way. Today the United States possesses a wide margin of global military superiority. The defense budget can bear significant reduction without compromising our essential security.

We recognize that larger military adversaries may rise to face us in the future. But the best hedge against this possibility is vigilance and a vibrant economy supporting a military able to adapt to new challenges as they emerge.

We can achieve greater defense economy today in several ways, all of which we urge you to consider seriously. We need to be more realistic in the goals we set for our armed forces and more selective in our choices regarding their use abroad. We should focus our military on core security goals and on those current and emerging threats that most directly affect us.

We also need to be more judicious in our choice of security instruments when dealing with international challenges. Our armed forces are a uniquely expensive asset and for some tasks no other instrument will do. For many challenges, however, the military is not the most cost-effective choice. We can achieve greater efficiency today without diminishing our security by better discriminating between vital, desirable, and unnecessary military missions and capabilities.

There is a variety of specific options that would produce savings, some of which we describe below. The important point, however, is a firm commitment to seek savings through a reassessment of our defense strategy, our global posture, and our means of producing and managing military power.

■ Since the end of the Cold War, we have required our military to prepare for and conduct more types of missions in more places around the world. The Pentagon’s task list now includes not only preventive war, regime change, and nation building, but also vague efforts to “shape the strategic environment” and stem the emergence of threats. It is time to prune some of these missions and restore an emphasis on defense and deterrence.

■ U.S. combat power dramatically exceeds that of any plausible combination of conventional adversaries. To cite just one example, Secretary Gates has observed that the U.S. Navy is today as capable as the next 13 navies combined, most of which are operated by our allies. We can safely save by trimming our current margin of superiority.

■ America’s permanent peacetime military presence abroad is largely a legacy of the Cold War. It can be reduced without undermining the essential security of the United States or its allies.

■ The wars in Iraq and Afghanistan have revealed the limits of military power. Avoiding these types of operation globally would allow us to roll back the recent increase in the size of our Army and Marine Corps.

■ The Pentagon’s acquisition process has repeatedly failed, routinely delivering weapons and equipment late, over cost, and less capable than promised. Some of the most expensive systems correspond to threats that are least prominent today and unlikely to regain prominence soon. In these cases, savings can be safely realized by cancelling, delaying, or reducing procurement or by seeking less costly alternatives.

■ Recent efforts to reform Defense Department financial management and acquisition practices must be strengthened. And we must impose budget discipline to trim service redundancies and streamline command, support systems, and infrastructure.

Change along these lines is bound to be controversial. Budget reductions are never easy – no less for defense than in any area of government. However, fiscal realities call on us to strike a new balance between investing in military power and attending to the fundamentals of national strength on which our true power rests. We can achieve safe savings in defense if we are willing to rethink how we produce military power and how, why, and where we put it to use.

Sincerely,

This letter reflects the opinions of the individual signatories. Institutions are listed for identification purposes only. The letter is the result of a joint effort by The Coalition for a Realistic Foreign Policy and the Project on Defense Alternatives.

by Winslow Wheeler.
November 2010.

Based on my experience at the Senate Budget Committee, I learned that reading different deficit reduction plans can be tricky. Some use CBO or other “baselines” as a basis for comparison, but those baselines can be a mystery to some and differ – sometimes by huge amounts – from more readily understood future budget proposals for departments, such as the Pentagon’s. Other sources of confusion can be whether the plan applies just to the Pentagon or the larger National Defense Budget Function, uses outlays rather than budget authority, and does or does not include funding for the wars in Iraq and Afghanistan. Sometimes the dollars used are “constant;” sometimes they are “current.”

Sometimes the press and others simply misunderstand elements of an overall plan, such as by reporting a plan’s savings for one “illustrative” year as the entirety of the plan’s savings. Sometimes uncovering what a plan really means requires close reading of the text and footnotes; in still other cases, it requires prolonged discussion with the authors.

This information paper attempts to remove the various impediments to an apples-to-apples comparison of the major plans to reduce defense spending that have been publicly proposed to the Obama Commission of Fiscal Responsibility and Reform. It compares all the plans to the Obama/Gates Plan for National Defense Spending for the years 2011 to 2020; it addresses only “base” budgets (which exclude spending for the wars in Iraq and Afghanistan, and elsewhere), and it applies budget authority in “current” dollars.

Budget Authority Savings
Relative to the Obama/Gates “Base” National Defense Budget 2010-2020
Billions of Dollars, All Dollars Are “Current” Dollars

After the above table each plan is addressed briefly, pointing out its major characteristics. I have attempted to do so objectively, with as little editorial comment as possible.

Editor’s Commentary

There are at least as many reasons to think that significant real reductions in defense spending will be hard to achieve as there are reasons to doubt that significant revenue increases will be found or that substantial reductions in entitlement spending will happen. “Political realities” are indeed daunting for any of the options the National Commission on Fiscal Responsibility and Reform will consider. If there were quick, easy and obvious decisions to be had there would be no need for the Commission.

Political realities change over time in part because underlying realities eventually change political calculation. Such is the case with defense spending. After more than a decade of rapid growth there is likely to be some retrenchment in the middle of this decade, notably by 2015.

The likely path of defense spending this decade was recently forecast by the high-tech industry association Tech America Foundation in their DoD Topline Forecast 2011-2020.

Tech America’s forecast is for a real reduction in the base Pentagon budget (not including Overseas Contingency Operation war supplemental funding) of 9% or $45 billion (USD 2011) in 2015 relative to the 2011 base budget.

When taking into account the Pentagon’s preferred budget path this decade of at least 1% real annual growth, Tech America forecasts a reduction in defense spending by 2015 of 16%.

Tech America’s forecast of Overseas Contingency Operation (OCO) war supplemental spending during the decade is also important to consider. Since FY10 (President Obama’s first budget) there has been an OCO war supplemental DoD budget line for FY12-FY15 of $50 billion per year. The OCO war supplemental in the FY11 budget is $159 billion.

Although the actual OCO war supplemental might come down in FY12, with the military operational demands in Afghanistan remaining elevated it is unlikely the OCO war supplemental will come down even $50 billion, let alone $109 billion in FY12. Tech America forecasts OCO war expenditures of $122 billion in FY12.

These likely under-budgeted OCO war supplemental costs should be counted as probable additions to the national debt beyond those already projected by the government.

Tech America’s forecast is for the OCO supplemental to be $122 billion in FY12, $102 billion in FY13, $69 billion in FY14 and $57 billion in FY15. That adds up to $150 billion more than is budgeted in the Five Year Defense Plan… an un-budgeted addition to the national debt.

For the target year of the federal budget reaching “primary balance” in FY15, the forecast OCO war supplemental will add $7 billion to the problem that the National Commission on Fiscal Responsibility and Reform faces in attempting to balance the budget in that year.

Adam J. Hebert. Air Force Magazine, November, 2010.
http://www.airforce-magazine.com/MagazineArchive/Pages/2010/November%202010/1110edit.aspx

Excerpt:

…ill-advised calls to cut the Pentagon budget follow as predictably as the tides. Without credible analysis of strategy or requirements, critics are once again declaring defense spending to be out of control.

Editor’s Comment:

In his editorial Security Isn’t Cheap Adam J. Herbert cites the work of the Sustainable Defense Task Force as a case in point of critics of Pentagon spending recommending cuts “without credible analysis of strategy or requirements.” As a member of the task force I differ over the credibility of our analysis. But let me speak to where I agree with Mr. Herbert:

• “Security is not cheap.” In fact it is extremely expensive. When the country is hit with a financial disaster we owe it to the country and our military to reexamine our national security strategy and make sure priorities are clear and that our military investments are cost-effective. In the last twelve years of Pentagon budgets the planning has proceeded as though there is no resource constraint. Unfortunately, that is true of the last QDR as well. Those days are clearly over – Secretary Gates has said as much.

• “A well-trained, well-equipped, professional military is not cheap. If the nation wants it to cost less, the nation will probably have to ask it to do less.” Exactly. Since the end of the Cold War the U.S. military has steadily advanced its global reach and engagement. Missions have proliferated, including many that should be done by civilians in the State Department and other agencies. Significant numbers of U.S. troops still remain in Europe, even though there is no military threat to Europe that allies can’t handle. The most important take-away lesson from the wars in Iraq and Afghanistan is that long low-intensity land wars are not cost-effective uses of U.S. military power and should be avoided whenever possible. Hopefully we can all agree there should never again be such a “war of choice.”

• “There are certainly ways to reduce defense spending…” Yes, and one that will save around $45 billion in Air Force modernization accounts is available in a choice about how to modernize the fighter fleet. The Air Force has decided to replace its aging F-16s with just about the most expensive new fighter one can dream up, the F-35. In today’s fiscal environment either the Air Force will end up with a lot fewer of these planes than planned, or they will choose to get ahead of the budget crunch and modernize with new block versions of the still best of class F-16s and limit the buy of F-35s this decade to a few squadrons for high-intensity air-superiority missions. If serious air competition emerges a decade from now we can then roll out production of F-35s (or perhaps a less costly follow-on to the F-16), planes presumably much improved with ten years or more of further fighter technology development.

Daniel Goure. Early Warning Blog, Lexington Institute, 03 September 2010.
http://www.lexingtoninstitute.org/future-defense-budget-choices-require-clear-strategic-priorities

Excerpt:

The United States cannot afford and the people will not pay for a military that can do battle with uncertainty.

As a consequence of the need to do battle with uncertainty, emphasis was placed on a military that can cover all bases and do all things. This would not be a wise strategy even if resources were unconstrained. Not all threats are equal. Nor are all interests equally important. Finally, it is possible to make reasoned and reasonable judgments regarding how the future security environment will unfold and define a set of demand signals that would require shifting strategic priorities.

In the past, when U.S. leaders refused to make choices they allowed the military to shrink symmetrically, by cutting every program or service a little. That approach is self-defeating. It makes no sense to keep a so-called full spectrum military but continually reduce it in size.

Editor’s Comment:

Relevant passages from the archives ($3 trillion later):

Carl Conetta and Charles Knight. “Dueling with Uncertainty”, February 1998.
http://www.comw.org/pda/bullyweb.html

There is no escape from uncertainty, but there is relief from uncertainty hysteria. It begins with recognizing that instability has boundaries — just as turbulence in physical systems has discernible onset points and parameters. The turbulence of a river, for instance, corresponds to flow and to the contours of the river’s bed and banks. It occurs in patches and not randomly. The weather also is a chaotic system that resists precise long-range forecasting, but allows useful prediction of broader trends and limits.

Despite uncertainty, statements of probability matter. They indicate the weight of evidence — or whether there is any evidence at all. The uncertainty hawks would flood our concern with a horde of dangers that pass their permissive test of “non-zero probability.” However, by lowering the threshold of alarm, they establish an impossible standard of defense sufficiency: absolute and certain military security. Given finite resources and competing ends, something less will have to do. Strategic wisdom begins with the setting of priorities — and priorities demand strict attention to what appears likely and what does not.

The world may be less certain and less stable today than during the Cold War, but it also involves less risk for America. Risk is equal parts probability and utility — chances and stakes. With the end of global superpower contention, America’s stakes in most of the world’s varied conflicts has diminished. So has the magnitude of the military threats to American interests. This permits a sharper distinction between interests and compelling interests, turbulence and relevant turbulence, uncertainties and critical uncertainties. And this distinction will pay dividends whenever the country turns to consider large-scale military endeavors, commitments, and investments.

Among the visions that guide present policy, one is absent conspicuously: a world in which economic issues have displaced military ones as the central focus of global competitions and concerns. Failing to engage this prospect, the recent defense policy reviews are oblivious to the opportunity cost of military spending. And it is this lapse that gives license to their speculative methods and overweening goals.

The United States continues to invest more of its national product in defense than does its allies, more than the world average, and much more than its chief economic competitors. By disregarding the requirements and consequences of increased global economic competition, present policy makes an unacknowledged bet about the future: The Soviet Union is gone and no comparable military challenge to the West exists, except as distant possibility. Nonetheless, the American prospect depends as much as ever, if not more, on the specifically military aspects of strength. Of this much, the uncertainty hawks seem certain.

Hearing on Achieving National Security through Sustainable Spending, Committee on Oversight and Government Reform, National Security and Foreign Affairs, U.S. House of Representatives, 20 July 2010.

This hearing continued the Subcommittee’s oversight of defense spending by examining recent scholarship and policy research on defense budget reform, including the conclusions and recommendations made in a recent report by the Sustainable Defense Task Force, Debt, Deficits, & Defense: A Way Forward, which presents a series of recommendations to reduce the budget of the Department of Defense by $960 billion by 2020.

Witnesses offered perspectives on the Department of Defense’s plan to cut military spending in the context of national security priorities and the current economic environment. The Department of Defense’s budget has accounted for nearly 65 percent of the increase in federal discretionary spending since 2001. Citing the role of defense spending in the overall economic health of the United States, Secretary of Defense Robert Gates recently called for reductions in defense spending by eliminating wasteful spending and unnecessary weapons systems, and reducing overhead costs at the Pentagon.

To watch a webcast of the hearing, click here: http://groc.edgeboss.net/wmedia/groc/nationalsecurity/2010/07.20.10.ns.defense.budget.wvx

Witnesses:

* Carl Conetta, Co-Director, Project on Defense Alternatives
* Benjamin Friedman, Research Fellow, Cato Institute
* Todd Harrison, Senior Fellow, Center for Strategic and Budgetary Assessments
* Gary Schmitt, Ph.D., Director, Advanced Strategic Studies, American Enterprise Institute
* Gordon Adams, Ph.D., Distinguished Fellow, Stimson Center

Opening Statement of Chairman John F. Tierney

Prepared Statement of Mr. Carl Conetta

Prepared Statement of Mr. Benjamin Friedman

Prepared Statement of Mr. Todd Harrison

Prepared Statement of Dr. Gary Schmitt

Prepared Statement of Dr. Gordon Adams

Lance M. Bacon. Navy Times, 28 June 2010.
http://www.navytimes.com/news/2010/06/navy_force_cuts_062810w/

Excerpt:

With an eye on diminishing budgets and rising tensions with Iran and North Korea, Chief of Naval Operations Adm. Gary Roughead on June 24 called for continued international partnerships to hone a “just and sustainable international order.” He also continued his call for fiscal restraint, emphasizing that the Navy “cannot afford a tailor-made solution to every need that we have.” But the CNO still is adamant that a 313-ship Navy is needed to maintain maritime security.

Editor’s Comment:

Lance M Bacon quotes from a speech by Chief of Naval Operations Roughead at the Maritime Systems and Technology seminar on June 22nd. These quotes are misleading because Roughead is speaking not about reducing the national deficit, but rather about the Navy’s need to watch its spending in the context of growing fiscal pressures on service budgets.

Roughead remains committed to the goal of a 313 ship battle fleet. He also supports Secretary Gate’s initiative to save $105 billion within DoD accounts over the next five years. Gates’ savings will not contribute a penny to deficit reduction. He plans to plow all savings back into Pentagon programs and it is the Navy’s share of this money that Roughead wants to use to help grow the battle fleet to 313 ships.

Not only is Gates not offering to contribute to deficit reduction, but he is sticking to his goal of real growth of 1 to 2% a year for in Pentagon budgets. This will increase annual national deficits somewhere in the range of $6 to 12 billion.

Gates’ position is untenable and will not hold. If the nation is going to meet its deficit reduction commitments the Pentagon will have to contribute its share — which is at least 40% of the $230 billion a year increase in its base (non-war) budget during the last decade. This is the level of cuts the task force has suggested — it is not “extreme”, but rather responsible and realistic.

In the context of the coming national fiscal restraint, the worst thing the CNO can do is continue pushing to grow the Navy battle fleet to 313 ships. The more success he has in buying now what will prove to be unaffordable new ships, the further the fleet will have to shrink when austere budgeting arrives.

Far wiser is to start reconfiguring and trimming the fleet now and save procurement dollars for a more realistic set of priorities and a more restrained strategic posture. The task force has put forward one set of priorities for lean times. Let others suggest theirs.

Capitol Visitors Center, 11 June 2010.

Report of the Sustainable Defense Task Force. 11 June 2010.
full report: http://www.comw.org/pda/fulltext/1006SDTFreport.pdf
executive summary: http://www.comw.org/pda/fulltext/SDTFreportexsum.pdf

Excerpt:

Putting America’s defense establishment on a more sustainable path may require curbing some of our commitments abroad, adopting more realistic military goals, or putting greater emphasis on more cost-effective instruments of power.

C-SPAN video of the report release briefing hosted by Rep. Barney Frank, U.S. Capitol Visitors Center, 11 June 2010.

Photos of the report release briefing, U.S. Capitol Visitors Center, 11 June 2010.

Greg Grant. DoD Buzz, 09 April 2010.
http://www.dodbuzz.com/2010/04/09/army-budget-share-will-grow/

Excerpt:

In DOD’s funding forecasts, future costs to fight the wars in Iraq and Afghanistan are vastly understated as are personnel and healthcare costs. “Reset” costs for Army and Marine equipment returning from Iraq are also vastly understated, as all are new aircraft programs, e.g. F-35, tanker. The shipbuilding plan is also underfunded. Cost overruns in the F-35 and satellites continue due to immature technologies, the analysis says, and risks shifts to existing platforms.

The biggest future growth areas will be in networked communications and overhead surveillance, followed by repair, maintenance and training. The future requirements process will be driven more by combatant commanders than service bureaucracy, more joint and fewer overall contracts and programs. There will be further monopolization of large platform primes, e.g. one tank builder, one aircraft tanker builder and one shipbuilder.

Compiled by the Project on Defense Alternatives, 11 March 2010.
http://www.comw.org/pda/budgetreview.html

A compilation of critical analysis and opinion from 30 analysts and policy centers.

Travis Sharp. Nukes of Hazard, 05 March 2010.
http://www.nukesofhazardblog.com/story/2010/3/5/162522/3909

Excerpt:

It would help the Pentagon, the Congress, defense experts, and the American public if DOD published an analytically defensible record of its spending by strategic mission.

Editor’s Comment:
Yes, indeed.

Carl Conetta. Foreign Policy in Focus, 03 March 2010.
http://www.fpif.org/articles/the_pentagons_runaway_budget

Excerpt:

Following the collapse of Soviet power, America’s leaders set more ambitious goals for the U.S. military, despite its smaller size. This entailed requiring the armed services to sustain and extend their continuous global presence, improving their readiness and speed, increasing peacetime engagement activities, and preparing to conduct more types of missions quickly and in more areas. Recent U.S. strategy has looked beyond the traditional goals of defense and deterrence, seeking to use military power to actually prevent the emergence of threats and to “shape” the international environment. U.S. defense planners also elevated the importance of lesser and hypothetical threats, thus requiring the military to prepare for many more lower-probability contingencies.

Gordon Adams. Bulletin of the Atomic Scientists, 02 March 2010.
http://www.thebulletin.org/web-edition/columnists/gordon-adams/assessing-the-qdr-and-2011-defense-budget

Excerpt:

…there is a core assumption in the QDR and defense budget that near-term missions are going to last forever, particularly counterinsurgency, counterterrorism, and stability operations. The case for this projection seems to be based on the idea that Iraq and Afghanistan are the model for future U.S. military operations. Here the QDR and defense budget miss the point completely. Iraq and Afghanistan were wars of choice, designed to overthrow a regime and rebuild those countries. Which other countries will we need to invade and rebuild in the future? Neither the QDR nor the budget provides any answers, calling into question the logic behind this premise.

Mark Thompson. Time Magazine, 24 February 2010.
http://www.time.com/time/printout/0,8816,1967353,00.html

Excerpt:

Let’s repeat that: even without a superpower rival like the Soviet Union — with its arsenals of nuclear weapons, fleets of tanks and armadas of warships, all manned by 10-foot-tall Red Army troops — the U.S. is now spending more preparing for war against, well, who knows, than we spent readying to fight Moscow. And the Obama Administration has made it clear that defense spending is going to continue to increase, even as fiscal pressures — for bailouts, health care, infrastructure — inexorably mount.

As far as the eye can see, U.S. taxpayers will be spending one-third more to maintain the U.S. military than their parents and grandparents paid for the nation’s Cold War force.

Cindy Williams. statement before the Committee on the Budget, U.S. Senate, 23 February 2010. Hosted on the Commonwealth Institute website.
http://www.comw.org/qdr/fulltext/100223williams.pdf

Excerpt:

O&M spending does seem to rise and fall in loose concert with total defense budgets-an indication that some of the seemingly avoidable rise in O&M spending is a consequence of budget largesse as much as a cause of it.

One thing is certain: assuming that O&M costs face an unavoidable rise simply because they rose in the past is the surest way to make it so. Several past efforts to bring O&M costs under control have been successful. Assuming based on past trends that it cannot be done is an invitation to waste. The better strategy is to put O&M on a diet and challenge the services to bring the costs of operation and upkeep under control.

by Carl Conetta, Project on Defense Alternatives Briefing Report 20, 18 January 2010.
http://www.comw.org/pda/fulltext/1001PDABR20.pdf

This chart illustrates the new high plateau of defense spending, well above the averages of the last fifty years.

by Carl Conetta and Charles Knight. Defense News, 21 February 2010.

During the past decade, the U.S. Defense Department has enjoyed a rise in its budget unprecedented since the Korean War. With President Barack Obama’s fiscal 2011 budget request, it is up nearly 100 percent in real terms from its post-Cold War low. But few observers believe that this level of spending can continue in light of the mounting national debt. So it is wise to think now about options for savings.

A way to begin is to ask, what has driven budgets so high? Obviously, the wars are part of the answer. But they account for only 20 percent of today’s expenditures. And they are the least likely targets for economizing.

It is more fruitful to reflect on the shortcomings in past efforts at defense reform. Can we do it better? It is also worth thinking about the practice of force modernization during the post-Cold War period, which has been distinctly undisciplined.

The end of the Cold War presented a unique opportunity – as well as a manifest need – for the structural reform of our defense posture. The force reductions of the 1990s necessarily risked decreased efficiency, due to the loss of economies of scale affecting support activities and equipment acquisition. The standard solution to such problems is to restructure as one gets smaller, matching reductions in size with a reduction in complexity – a practice the DoD did not, for the most part, follow.

Although smaller, DoD and the services have largely retained or even increased their complexity. For instance, there are today 50 major commands either one step above or below the service level – not much different from during the Cold War.

In our recent study of budget trends, we identify a dozen areas where significant changes had been proposed in the 1990s. These involved service roles and missions, consolidation of various support and training functions, and recentering budget and acquisition planning at the joint level.

In addition, the need to reform DoD’s acquisition, logistics and financial management systems has been evident for a long, long time. However, only two reform initiatives – competitive sourcing and military base closures – were pursued far enough to yield significant annual savings, and these have not amounted to more than 4 percent of the defense budget.

There also was hope in the mid-1990s that a “revolution in military affairs” might lead to new efficiencies. We would reap more bang for the buck by means of increased battlefield awareness, improved logistics, increased capacities for standoff precision attack, and the networking of units within and across services.

In some areas, such as precision attack, capability has dramatically increased. Theater logistics also have improved. But nowhere has the revolution in information technology led to manifest and substantial savings. Rather than supplant-ing legacy capabilities and platforms, the new technology has mostly just supplemented them.

In prospect, the evolution of net-centric warfare might reduce the need for redundant capabilities. But progress toward the services sharing a common nervous system has been slow and mostly involved special operations units and precision ground attack. Generally, net-centric capabilities exist as an anemic overlay to traditional service-centric structures and assets.

DoD and the services have faced little pressure to economize or transform during the past decade. This is also evident in equipment acquisition.

We can discern three distinct acquisition trends at work in recent decades. First, there are legacy programs that came forward from the Cold War period with considerable institutional momentum. Second, there are programs reflecting the revolutionary potential of new information technologies. Finally, there are adaptive programs, such as the recent mass purchase of Mine Resistant Ambush Protected vehicles, that correspond to new mission requirements.

In an ideal world, the imperative to adapt to new missions and circumstances would draw on the revolutionary potential of new technologies to rewrite or supplant legacy programs. But this has not happened.

Too much of the $2.5 trillion in modernization funding since 1990 perpetuated the status quo circa 1990. Transformational acquisition was mostly restricted to producing supplements, such as Predator drones, to the legacy arsenal. And adaptive acquisition was largely delayed until field experiences forced a flurry of ad hoc efforts beginning six years ago.

The Pentagon’s central authorities have done too little, too late to compel the integration of modernization efforts along adaptive lines. Legacy, transformational and adaptive modernization have lurched forward together, but poorly integrated and competing for resources. And yet, even though modernization spending now surpasses that of the Reagan era, no one is happy with the result.

For 10 years, Congress and the White House have been permissive when it comes to defense spending; this has undercut any impetus for reform and prioritization. Obama’s decision to further boost the defense budget suggests that this dysfunction will persist for a while, but this, too, is a bubble that will burst. Preparing for that eventuality means revisiting options for structural reform and getting clearer on our strategic priorities.

Sandra Erwin. National Defense Magazine, 08 February 2010.
http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=67

Excerpt:

In his recent book, “Freefall: America, Free Markets, and the Sinking of the World Economy,” Stiglitz lays out the criteria for what he considers are spending programs that stimulate the economy. The nation’s soaring debt makes it imperative that government earn the most bang for the buck, Stiglitz said in a speech last month at the Council on Foreign Relations. The multiplier effect of defense outlays on the economy is weak compared to spending in other areas. “Some kinds of spending have bigger multipliers than others,” Stiglitz said. “The lowest multiplier is war spending.”

Carl Conetta. Project on Defense Alternatives, 05 February 2010.
http://www.comw.org/pda/1002BudgetSurge.html

Federal Debt as Percent of Gross Domestic Product

Excerpt:

The most ready comparison to America’s current circumstance are the years of the Second World War. Back then, the level of debt rose higher than it has today, but the period during which the burden exceeded 100% of GDP lasted only 4 years. Today, by contrast, it looks as though the period during which debt will equal or exceed 100% of GDP will last for more than twice as long. If we think of the mid-1940s as representing “the Mount Everest” of US debt accumulation, then the period after 2008 should represent “the Tibetan plateau” (which is not as high as Everest, but far wider.)

Lawrence J. Korb, Sean Duggan, and Laura Conley. Center for American Progress, 04 February 2010.
http://www.americanprogress.org/issues/2010/02/qdr_fail_resource.html

Excerpt:

The QDR … does not prioritize the missions that the military must be prepared for. The document states that “successfully balancing [DOD’s priorities] requires that the Department make hard choices on the level of resources required as well as accepting and managing risk in a way that favors success in today’s wars,” yet it also notes that “U.S. forces must be prepared to conduct a wide variety of missions under a range of different circumstances.” In other words, the QDR promises to make tradeoffs but asserts that DOD must be capable of confronting every contingency.

Editor’s Comment:

Follow the money. The priorities are reflected in where the money goes. A few changes, per usual, at the margins. Mostly the same ol’ same ol’ division of spoils.

Sandra I. Erwin. National Defense, March 2010.
http://www.nationaldefensemagazine.org/archive/2010/March/Pages/DefenseWatch.aspx

Excerpt:

The government’s own defense gurus are warning that it is not a question of if, but when the United States will lose its military superpower status.

These ominous predictions, by all accounts, are hard to fathom. The Pentagon’s budget this year is the highest since World War II — and accounts for almost half of what the world’s militaries spend.

But with the nation drowning in debt, it isn’t difficult to see how the financial burdens of superpowerdom may be too much to bear. The United States, some experts warn, would be wise to restrain military spending in order to regain its financial strength.

DoD summary prepared for press briefing, 01 February 2010. Hosted on the Commonwealth Institute website.
http://www.comw.org/qdr/fulltext/FY11budgetsummary-dod.pdf

Winslow T. Wheeler. Straus Military Reform Project, Center for Defense Information, 01 February 2010.

Greg Mello. Los Alamos Study Group, 01 February 2010.
http://www.lasg.org/press/2010/press_release_1Feb2010.html

Project on Defense Alternatives Briefing Memo 46, 26 January 2010.
http://www.comw.org/qdr/fulltext/Assessing_the_2010_QDR.pdf

Excerpt:

Today’s military is stressed by having nearly 25% of the full time military overseas, including 16% in overseas operations.

How does the QDR seek to reduce the stress of overseas stationing and deployment?

In recent years large counter-insurgency campaigns have demanded much of the military’s attention and energy.

Is the QDR preparing for more of the same in the future? At what scale and frequency?

Chris Hellman, National Priorities Project, 29 January 2010.

Sources and Methodology: Much of the information contained here comes from various media accounts or discussions with analysts and congressional staff.

Introduction: The Obama Administration will release its budget request for Fiscal Year 2011 on Monday, February 1. At the same time, the Defense Department is expected to release an additional emergency supplemental funding request to cover the FY 2010 costs of the Afghanistan “surge” not covered by the “Overseas Contingency Operations” funding included in the Fiscal Year 2010 Defense Appropriations Act (H.R. 3326). [See “Funding for Wars in Iraq and Afghanistan” below.]

Total “Top Line” Spending: $580 Billion [Function 050] – [NOTE: These totals do not include the cost of military operations in Iraq and Afghanistan.] Unlike most years, the Pentagon’s Fiscal Year 2010 budget request did not project Defense Department [Function 051] future year funding. The Office of Management and Budget (OMB) projected $541.8 billion for Fiscal Year 2011. Previously the Administration had pledged to hold Pentagon spending at $534 billion plus inflation. More recently, however, it has been reported that defense spending will grow by a total of $100 billion, plus inflation, over the next five years. Estimating 2 percent inflation (roughly $11 billion), and adding an additional $10 billion (assuming that the $100 billion in new spending over five years will be weighted toward the “out” years) means a nominal increase of roughly $21 billion, or $555 billion for defense [Function 051]. In addition, OMB projected a further $16.6 billion for nuclear weapons-related activities of the Department of Energy [Function 053] and $7.1 billion for miscellaneous defense activities [Function 054], for a total defense spending level of $579 billion [Function 050].

Funding the Wars in Iraq and Afghanistan – Prior to Fiscal Year 2010, funding for military operations in Iraq and Afghanistan were funded outside the annual defense budget through special supplemental appropriations. After taking office the Obama Administration pledged that it would end this practice and, beginning with its FY 2010 budget request, would include funding for ongoing military operations in the annual request. As a result, the FY 2010 request included $130 billion for “Overseas Contingency Operations (OCO).” Subsequent to that, however, the Administration decided to send “surge” of an additional 30,000 U.S. troops to Afghanistan. As a result, the Pentagon’s funding request will consist of two parts – a small $30-$35 billion supplemental request for additional FY 2010 funds to cover the cost of the “surge,” and a larger $165 billion request for OCO in FY 2011.

Including the additional funding for military operations in Iraq and Afghanistan, total defense spending in FY 2011 could exceed $745 billion.

Program Terminations – The Pentagon will again seek to terminate weapons programs that are either under-performing, those for which there is no requirement, or those which don’t fit with the Department’s strategic vision. The Pentagon will not seek additional funding for the C-17 transport aircraft or the second engine source for the Joint Strike Fighter (JSF), both of which it sought to terminate in FY 2010, but for which Congress appropriated unrequested funds. In addition the Pentagon will reportedly not seek funding for the Navy’s CG(x) cruiser replacement program, or its EP-3 reconnaissance aircraft replacement program.

“Winners” – The Army will invest heavily in helicopters, including the CH-47 “Chinook,” the family of UH-60 “Blackhawks,” and the development of a heavy-lift helicopter. The request will contain funding for the Air Force’s oft-delayed airborne tanker program. Funding will continue to grow for a broad range of unmanned systems, both aerial and ground-based.

Missile Defense: Steady-State at $9 Billion – The FY 2011 request is likely to be at or slightly below current funding levels. In addition, the Pentagon will likely continue efforts to reorient missile defense away from long-range development of a national system, and increase focus on systems at or near operational capability such as the Navy’s program based on the AEGIS system and the Standard-3 missile.

Shipbuilding: Steady State – The Navy will continue to spend roughly $14 billion on shipbuilding. This will include funding for two DDG-51 destroyers, two Littoral Combat Ships (LCS), two “Virginia” class submarines, one “San Antonio” amphibious assault ship and two other ships – possibly an LHA replacement vessel and/or T-AKE supply ships. Development funding will also be included for the “Ohio” ballistic missile submarine replacement program.

F-35 Joint Strike Fighter: Slight Increase – Despite recent Pentagon reports detailing problems with the F-35 aircraft, the Pentagon is continuing its efforts to accelerate the program, although not quite as rapidly as anticipated. While Congress funded 30 aircraft in FY 2010, the Pentagon is requesting 42 aircraft for FY 2011 in its base budget, plus one additional aircraft in the “OCO” accounts. Previous plans had called for funding 48 F-35s in FY 2011.