Assessing the 2011 Defense Cuts

Assessing the 2011 Defense Cuts

How much defense-budget cutting is too much?

Some things just seem to come in cycles. Before 2008, some economists speculated that perhaps we’d found a way to soften the magnitude and pain of recessions—and then we got the great recession. Similarly, some anticipated that defense spending would plateau around 2010 or 2012. Sure, war costs would eventually decline, and while the gravy train might not last forever, there would be no precipitous decline for the base or “peacetime” budget this time—in contrast to what happened after World War II, Vietnam and the Reagan buildup.

Wrong again. The U.S. defense budget, or 050 account in the federal budget, peaked at $739 billion in 2011. That included $160 billion in war costs, about two-thirds for Afghanistan and one-third for Iraq. With Iraq ending early in fiscal year 2012 and Afghanistan gradually scaling back, the 2012 projection was $120 billion in war costs. Accordingly, the Obama administration’s intent last February was to request about $700 billion for 2012—showing restraint in the core budget, which would remain almost flat (not quite matching inflation) and reaping $40 billion in war savings. But after the budget drama of the spring, summer and fall, the 2012 figure will now be $662 billion.

With the August cuts implied by the Budget Control Act, subsequent budgets will not keep up with inflation. As war costs decline further, total defense budgets could fall to the $600 billion range by mid-decade. And with sequestration in the offing, that number could be less than $600 billion in 2013 and $550 billion or less by 2015.

This is all still a huge amount of money, of course. But how much cutting is too much? All the numbers are big, but some may be adequate for a sound national-security strategy, while others may not.

Some argue that the United States is in decline, and that we should get used to the idea, scaling back our international obligations and defense budgets accordingly. The declinists are correct in some narrow ways: as a percentage of global economic output, American GDP is less than before and will remain that way. But economic output is a narrow and ultimately incorrect way to assess the country’s overall international position. On balance, declinists are more wrong than right. Or perhaps the better way to look at it is that they may still be proven wrong: in the past, Americans responded to the crises and challenges of the day with appropriate action. When part of comprehensive deficit reduction, defense reductions can be an important part of restoring the nation’s economic fundamentals, ensuring a robust foreign and national-security policy in the decades to come.

The United States has achieved many if not most of its post-World War II aims. The world we see today is a reflection of its foreign-policy successes, not its failures. Most of the world’s wealth and strength is found among America’s allies or friendly neutrals. The international system works well for most major countries, and even would-be challengers like China or Russia are unlikely to see much benefit in challenging it fundamentally. By embracing its successes—and the diffusion of global power that they have helped produce—the United States can probably do what no global superpower has ever done before: remain strong even as power disperses somewhat. Its responses must be proportionate to the challenges ahead and neither inadequate nor excessive.

There is significant risk of doing this wrong, so we should not favor military cuts for their own sake. Cuts make sense only as part of a broader national effort of deficit reduction and economic renewal. There is no sound national-security logic to enacting defense cuts if entitlement policy, tax policy and other federal programs remain unchecked while the Pentagon is offered up as a sacrificial lamb in an unbalanced deficit-reduction effort. Done as part of a general national agenda of shared sacrifice, however, defense cuts of the requisite magnitude may be feasible without requiring strategic retrenchment.

Saving 8 to 10 percent in the annual peacetime defense budget of the United States—arguably the Pentagon’s fair share of a serious deficit-reduction effort—would be hard but not impossible under a shared-sacrifice philosophy. Over ten years, that would translate into $400 billion to $500 billion, to use the decennial accounting popular since the August 2011 debt deal between President Obama and Congress. These cuts would go beyond those already expected as part of a gradual reduction in the nation’s costs for waging war abroad.

It would be a mistake to place the full burden of around $50 billion in additional annual savings, beyond those already identified by Secretary Gates, within any one area of the defense establishment. The future risks facing the United States, and thus the future missions of the American military, are too disparate and hard to predict. We might adopt a one-war framework for sizing ground forces (with additional capacity for smaller missions), reduce the navy fleet from 285 ships to about 250, find a cheaper way to maintain 1,550 strategic nuclear warheads (the New START treaty’s limit) with fewer Trident subs and ICBMs, and implement more judicious weapons modernization plans.

Such cuts, according to my calculations, would avoid going too far. We can avoid salary cuts for our troops and any display of weakening resolve toward East Asia or the Persian Gulf. We can modernize so that our most promising new technologies will adequately equip the forces most likely to fight in key regions. We can retain ground forces large enough, even after the Afghanistan campaign winds down, to carry out another war (heaven forbid) without having to let down our guard in every other part of the world by stealing forces from other theaters.

Alternatively, defense cuts of 15 to 20 percent, implied under sequestration by ten-year savings plans that approach $1 trillion, would require not only reforms of military health care and retirement but also, according to my best estimates, pay cuts as well. They would force us to choose between stabilizing the Persian Gulf and devoting attention to the western Pacific/East Asia region. They would probably require outright cancellation of some weapons programs that, while expensive, buy important capabilities in areas such as precision strike and stealth, a capacity that sustains our current advantage over would-be rivals and redresses existing Achilles’ heels. American military superiority over others is, despite all our foibles and failings, an unambiguously desirable feature of the current global-power balance—not only for our own interests but for the overwhelming majority of other countries in an international system that despite many other challenges is mostly free of interstate war.

Budget cuts of 15 to 20 percent would require us to reduce ground-force levels to substantially below 1990s levels, a capacity later proven inadequate for the challenges of the following decade. They would leave the navy too small to respond to protracted crises in both the western Pacific and the Persian Gulf, even using more innovative methods of ship deployment. There might no longer be competition for contracts in shipbuilding and aircraft manufacturing, with defense contractors going under at a time when there are often just two or three firms capable of building a given product. Twenty percent cuts would squeeze budgets so much that if new needs or vulnerabilities in America’s military became apparent, we might be unable to respond.

If we got lucky internationally and the world stayed fairly peaceful, the sky might not fall even after dramatic reductions in American military strength. But if dark clouds loomed abroad, we would have trouble facing more than one challenge at a time and would have to hope we could address and eliminate its cause fairly quickly. Alas, such a world is highly optimistic and not within our power to ensure.

Pundits argue that the 2012 presidential election will focus primarily on the domestic economy. But if the question of how much defense is to be cut—$400 billion or closer to $1 trillion over ten years—remains unresolved, there will be no greater issue as we approach election day.

Michael O’Hanlon, director of research and a senior fellow at The Brookings Institution, is the author of The Wounded Giant: America’s Armed Forces in an Age of Austerity (Penguin, 2011).