Defense Budget and Quadrennial Review Sidestep Critical Issues

March 2010

by Lt. Gen. Lawrence P. Farrell, Jr., USAF (Ret) 

The 2010 Quadrennial Defense Review and the fiscal year 2011 defense budget proposal seek to achieve some worthy goals, and echo Defense Secretary Robert Gates’ main concern about the need to prevail in current conflicts. 

Missing, however, is an acknowledgement of disconnects between program priorities and existing spending plans. A case in point is shipbuilding. There are also gaps between stated strategic priorities and actual programs, such as long-range strike. Finally, the documents are virtually silent on the dire fiscal straits the country finds itself in, huge federal deficits as far as the eye can see, and the consequences this will have on future defense budgets. 

First, the budget. The 2011 budget of $708 billion — $549 billion in the base and $159 billion for overseas contingency operations — is a $17 billion increase over 2010. It amounts to 1.8 percent real growth, not quite the 2 percent sought by Gates.

The budget has four pillars: taking care of people, rebalancing the force, reforming how the Defense Department does business and supporting our troops in the field.

Those tenets all sound great, but there is a real possibility that the budget won’t be enough. First is war costs. The 30,000-troop surge for Afghanistan already required a $33 billion supplemental for fiscal year 2010. Future war expenditures will be hard to predict. The administration included an annual $50 billion “placeholder” for war costs in the out-years, but that bill is likely to be much larger. There is continuing pressure on operations, maintenance and personnel costs, ground forces’ equipment recapitalization, and projected increases in military health care expenses.
The Center for New American Security estimates that a baseline annual budget of $578 billion is required between 2011 and 2028 to sustain existing plans and programs. This budget doesn’t quite get us there. Then there is the unpredictability of what Congress will do with the administration’s proposal. Consider past congressional stances against ending C-17 aircraft production and terminating the F-35 alternative engine development.

Another wild card is the unsustainable nature of the federal budget and its impact on defense resources.

Next is the QDR.  It tracks well with the 2011 budget, and is consistent with program terminations in the 2010 budget. The QDR has something for everyone, and most will find something to applaud. The QDR covers the waterfront of threats and strategic needs. It lays out six themes: security in complex environments, America’s global role, defense objectives, rebalancing the force, taking care of people, strengthening relationships, reforming business and implementing the QDR. The focus is clearly on the current conflicts. There is much emphasis on boosting resources for unmanned aircraft and helicopters for the current fight.

As one drills through the document, some things jump out. China is lumped with India as complexities in the environment. China is not treated as an emerging threat. Homeland defense gets prominent billing, with the Defense Department gaining a bigger role in supporting civilian authorities for domestic emergencies and disasters. And there is a departure from the traditional two major regional contingency construct for force sizing. The QDR recognizes the potential requirement to conduct multiple concurrent, large-scale operations in disparate theaters. But it breaks from this in adding the need to conduct a “wider” range of operations to include homeland defense, support to civil authorities, deterrence, current wars and “wars we may someday face.” There is some uncertainty and wiggle room in this formulation.

There is much discussion of intelligence, reconnaissance, surveillance, electronic warfare, special operations, non-state actors, countering weapons of mass destruction and improving cybersecurity. Tactical aircraft are supported, and while long-range strike is mentioned as important, not much action is planned toward fielding an actual capability.

The discussion about threats is about right, with some exceptions such as China, Iran and the U.S. fiscal imbalance. While there is a valid focus on anticipated threats, the timing planned for new capabilities gambles that we won’t have to confront a peer competitor. Although there is emphasis on special operations capabilities, there is no significant force structure adjustment.
One sees aging in Navy and Air Force platforms and the implicit surrender to decreasing force structure in both services.

The elephant in the room is the U.S. fiscal posture. The $3.8 trillion federal budget projects huge deficits — the lowest being $700 billion in 2013 — well into the future, long after the present recession is predicted to end. Recall that President Clinton’s last budget was $1.8 trillion. We have more than doubled that in just nine years. The average addition to our national debt will be $1 trillion annually. By 2019, the interest on the debt is predicted to be around $800 billion — much larger than the defense budget. By 2042, if not earlier, federal revenues are expected to cover only Medicare, Social Security and interest on the debt. All this is unsustainable.  It is quite clear that these trends will affect defense budgets sooner than imagined. 

The 2010 QDR and 2011 budget address a number of important issues, while leaving a number of crucial items hanging. The budget is still probably short of adequately funding every program in the pot. But this problem pales in comparison to the dire implications of not putting our national fiscal house in order.  

Please e-mail your comments to lfarrell@ndia.org.