Winning the Battle, Losing the War

In U.S. President Barack Obama’s proposed fiscal year 2012 budget, released Feb. 14, the Department of Defense will lose $78 billion in spending it thought it would have over the next five years. The administration is touting the proposed cut as evidence of its commitment to overall belt-tightening; the White House claims the cuts will “[bring] defense spending down to zero real growth.”

In truth, however, it’s no such thing. The $671 billion that Defense Secretary Robert Gates requested for the Pentagon — a department “base budget” of $553 billion, plus another $118 billion for ongoing wars — may be less than he asked for last year, when you account for inflation. But the decline is the result of the shrinking costs of the Iraq war as the conflict is scaled down and soldiers return home, offsetting what is still a growing overall budget.

The $78 billion in “cuts,” moreover, are at best tenuous. They include savings from a civilian employee pay freeze that the White House had already imposed, efficiency measures in areas like health care, projected personnel reductions years down the road, delays in the development of expensive weapons systems, and rejiggered estimates of inflation rates. Some of these are unpredictable, some may never happen, and all could be reversed by the next defense secretary. And even with these “savings,” the Defense Department projects that its budget will grow in real terms for at least the next three fiscal years.

A budget that continues to grow is not one that contributes to deficit reduction. At a time when a small army of bipartisan fiscal reviews — including the president’s own deficit commission — are recommending that real defense cuts be put on the table, Gates is doing his level best to keep that from happening.

But if the 2012 budget doesn’t represent an actual reduction in defense spending, it does suggest something equally remarkable: that the upward trajectory of the Defense Department budget is reaching its inevitable end. Gates is engaged in the fiscal version of trench warfare — and he is slowly being pushed back from his position, one trench at a time, as the pressures of deficit reduction and the end of the wars that have preoccupied the United States for nearly a decade are brought to bear on the Pentagon.

Such an idea would have been hard to imagine as recently as 2008, when the service chiefs wanted to add more than $50 billion to the fiscall 2010 defense budget. But Obama was elected president and the plan was shelved before it officially reached the White House’s Office of Management and Budget; the Pentagon’s appetite diminished. Nevertheless, Gates managed to keep real growth in his budget, albeit at a lower level, in fiscal 2010 and 2011.

This year, however, the Pentagon is reaching the top of the mountain — and it’s all downhill from here. Pressure to reduce the deficit is rising on Capitol Hill; the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, has called the growing debt “the single-biggest threat to our national security.” Real cuts are coming, and the Defense Department needs to begin preparing for them.

For the services, shrinking budgets mean they will have to tackle the size of their forces and the hardware investments they plan for the future. While the Navy and the Air Force have already reduced the number of people in uniform, the Army and the Marine Corps have grown by 92,000 over the past decade. Gates has said they will lose 47,000 of those people, but not until fiscal 2015. But to rein in the budget, it will need to happen earlier. He has put on the table increasing enrollment fees for non-Medicare-eligible military retirees, but if his department faces real cuts, they are going to also have to take a hard look at restraining military pay (which has surged ahead of comparable civilian pay) and revisiting a generous retirement system. 

Military hardware investments will also need to be reviewed more deeply. The department has made a start, allowing the F-22 fighter jet and the C-17 cargo plane production programs to end. The new budget takes more steps, slowing research and delaying production on the new F-35 fighter and putting the Marine Corps version of that program on probation for two years (part of Gates’s $78 billion savings). He has proposed ending the Marines’ new Expeditionary Fighting Vehicle, but he is letting the Corps keep some of the money to invest in a new amphibious vehicle program — even though the last amphibious landing the Marines executed was at Inchon in 1950. Navy shipbuilding schedules are being stretched out, with more to come.

Gates canceled the Army’s Future Combat System vehicle program in 2009, but he let the Army have new funding to start a replacement program. So far, the procurement cuts he has made have already been replaced with smaller investments in substitute programs that will only grow in the future. Real overall budget cuts are going to force more basic choices, like cutting back severely on the F-35 and V-22 aircraft, the Virginia class submarine, and other programs. Tough choices are on the way.

The industry — the second leg, after the military itself, of what I’ve called the “iron triangle” that has rendered defense spending difficult to cut for generations — has already begun to react to the shrinking funding. Rumors have the Northrop Grumman shipyard in Virginia on the market for a buyer. Lockheed has laid off workers in several states, as have the contractors on the programs that have been ended. But the industry is more forward-thinking than the Pentagon; it has been planning for a slowdown for the last couple of years. Defense Undersecretary Ashton Carter has said that the Pentagon expects a wave of mergers in the industry, which they hope will be limited to second- and third-tier companies, not the big kahunas like Boeing, Lockheed Martin, Northrop Grumman, General Dynamics, Raytheon, and L-3. (Fewer big players would mean fewer competitors, however, which would make it even harder for the Pentagon to control its costs.)

Congress is the third leg of the iron triangle — and here’s where things get interesting. Normally, the defense budget gets a pretty free ride on the Hill, especially when troops are deployed in combat overseas. But the situation is different these days, and the pressure on the defense budget has already started. Inside the defense “stovepipe” on the Hill — the armed services and defense appropriators — voices are being raised, including that of Howard “Buck” McKeon, chair of the House Armed Services Committee, to hold the line, or even increase the proposed defense budget. But the pressures of deficit reduction, expressed by Tea Party members in the Republican majority, are growing, and they are being heard by the GOP leadership. As the House’s continuing resolution is being debated this week, the test will be whether the current version, which would cut Gates’s fiscall 2011 budget request by $16 billion, is sustained, despite the Pentagon’s pressure. House Majority Leader Eric Cantor, meanwhile, has made it clear that defense cuts are on the table, and influential conservatives such as Richard Armey, Grover Norquist, and David Stockman have been urging lawmakers to seriously consider them.

Gates has warned that such cuts are shortsighted, that too often Americans have dropped their guard, letting the defense budget fall and the forces shrink, only to be caught by surprise by new military entanglements and then have to rebuild them in a hurry. He needs a new in-house historian. The last time the United States was genuinely surprised in a conflict was more than 60 years ago, in Korea. Since then, the United States has lost one war (Vietnam) and won another (the 1991 Gulf War), and embarked on two regime-changing invasions of ambiguous outcome (Iraq and Afghanistan). But all of these were wars of choice; they were not surprises.

So build-downs can be managed, and need to be, for an effective force to emerge. The United States has done this before. From 1995 to 1998, defense spending came under pressure from President Bill Clinton’s deficit-reduction efforts and the reduced demand for military preparedness that followed the end of the Cold War. Defense resources fell over 35 percent in constant dollars in those years; the force shrank by 700,000, the Defense Department’s civilian workforce shrank by 300,000, and the procurement budget fell by 50 percent. The country not only survived, but retained enough military resources — and managed their 1990s build-down prudently enough — that when coalition forces invaded Iraq in 2003, Saddam Hussein’s vaunted military was barely a speed bump in the way into Baghdad.

So it can be done — and doing so could provide incentives for streamlining the Pentagon in a way it hasn’t had to for more than a decade. As Mullen himself acknowledged on Jan. 6, “The budget has basically doubled in the last decade. And my own experience here is that in doubling, we’ve lost our ability to prioritize, to make hard decisions, to do tough analysis, to make trades.” Gates’s $78 billion reduction over the next five years is a very small down payment on this needed transformation — about 2 percent of currently projected defense budgets.

That transformation can be managed in a way that provides for U.S. security and preserves the most globally dominant military in history. Even if the Pentagon were to trim its projected budget by 15 percent over the next ten years, the U.S. military would still be the only force in the world capable of deploying ground forces globally, sailing all of the world’s oceans, and flying all of the world’s skies — and the only military with global intelligence, communication, logistics, and transportation capabilities. Its research and development budget would exceed the entire defense budget of virtually any other country. And its special forces alone would be larger than the entire militaries of more than 100 countries. In short, the U.S. military can lose weight without losing much capability at all.