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An expert on modern warfare and strategic assessment, the Middle East and the politics of energy, Anthony H. Cordesman has held numerous senior positions in the Defense and State departments over the past 30 years. He is currently at the Center for Strategic & International Studies (CSIS) and is a military analyst for ABC News.The crisis in U.S. national security planning, programming and budgeting is not the fault of any one administration, and has often been shaped by the mistakes of the Congress and key military commanders. It has accelerated sharply over the last eight years, however, and will be a major burden for the next president.
The real cost of national security spending is likely to be 20-30% higher than is estimated in current baseline budget requests. There is no clear or coherent plan, program, or budget that reflects the fact the nation is at war and no credible mix of force plans, modernization plans, and procurement plans for the future. There are a wide range of critical areas where cost escalation poses a critical problem, where no hard choices have been made, where key programs are not fully defined or cannot be implemented, and where trade-offs will have to be made between major increases in the defense budget and current force plans.
The combined cost of war, steadily rising military manpower costs, the under-funding of operations and maintenance and a procurement crisis in every service will force the next administration to reshape almost every aspect of current defense plans, programs and budgets.
This article is an overview of a far more detailed briefing that examines the major issues and trends involved, drawing on data developed by the Department of Defense, Department of State, OMB, the Congressional Budget Office, Congressional Research Office and General Accountability Office. It deliberately avoids using independent estimates to make it clear that the data represent official estimates.
It will be regularly updated and revised during the course of the year.
The Challenges Facing the Next Administration
The crisis in national security planning, programming and budgeting has been shaped by a wide range of factors, and the briefing explains and quantifies the challenges the next administration will face in:
• Estimating and paying for the real cost of the national security program.
• Determining whether the burden on federal spending and the GDP is acceptable.
• Balancing the interaction between national security spending and the overall fiscal squeeze driven by rising mandatory spending and entitlement costs.
• Creating and funding a proper approach to the Iraq War, Afghan War and the Global War on Terrorism (GWOT).
• Creating a meaningful approach to a national strategy that is directly coupled to a well defined plan, program and long-term budget.
• Bring the overall pattern of operations and support into a well-managed and affordable path.
• Dealing with a crisis in defense manpower.
• Managing the problem of escalating military medical costs.
• Properly funding operation and maintenance (O&M) and reset costs.
• Dealing with a major crisis in defense procurement and the failure to manage military modernization.
The briefing shows that the Department of Defense's budget baseline request, as presented in the president's FY2009 baseline budget and the DOD's current Future Year Defense Program, does not include the cost of the wars the U.S. is currently fighting and there is no clear plan for even a credible supplement for FY2009. It also shows that CBO projection indicates that the real cost of the national security budget could well be some 20% higher from FY 2010 onwards than the Department of Defense currently programs and budgets.
The “good news” is that this does not mean that even if such cost rises are fully funded, they will place an unacceptable burden national security on the nation's economy and federal/public spending. The current burden remains lower than during all of the Cold War and even if a “worst case” assumption is made about future cost escalation, the burden on the GDP is likely to remain under 5%.
There will, however, be sharply growing pressure on the federal budget from rising mandatory spending and entitlements costs and national security spending -- like all discretionary spending -- will come under growing pressure if this nation continues to let its medical expenditures increase as both a portion of the federal budget and GDP.
An Unplanned Set of Wars
It is important to note that the problems the next administration will face in planning, programming and budgeting will not be driven primarily by the cost of the Iraq War, although that has been almost the sole focus of congressional and media attention and the debates between the presidential candidates.
At the same time, the planning, programming and budgeting, for the combination of the Afghan War, Iraq War and Global War on Terrorism have been badly mismanaged since FY2002, and there is no credible plan for the future. The Department of Defense does not make a public estimate and its current budget requests are hollow place holders for costs that will require a major supplemental appropriation in FY2009, and much higher spending in the outyears than forecast.
Much will depend, however, on how soon the level of U.S. effort can be reduced, how much host countries can and do take over the burden of combat and financing their own military operations and development, and on whether the next president decides to sustain a major combat involvement in Iraq. While real-world defense costs are almost certain to be much higher throughout the life of the next administration than the Pentagon currently budgets, CBO estimates indicate that it may be possible to make major reductions in the cost of the Iraq War.
The problem is, however, that the Afghan War has long been underfunded and continues to escalate. The rising cost of the Afghan conflict might offset any savings in Ithe IOraq War.
No Real Force Plans, Budgets and Path for Modernization
The broader problems in planning, programming and budgeting have been shaped by many factors, but one is the decoupling of efforts to define U.S. strategy and goals from the creation of specific force, modernization and readiness plans to implement them. This decoupling of strategy from any attempt to define workable plans is made worse by a failure to forecast costs and create credible long-term spending plans.
These failures now can only be corrected by the next administration. Tying strategy, plans, programs and budgets together will have to be a nearly “zero-based” exercise. It is also one that must go far beyond the Department of Defense. As many studies have shown, the U.S. needs a new partnership between the Department of Defense, Department of State and other civilian departments and agencies. Such a partnership can ultimately only be effective if the new form of “jointness” involved is supported by a truly national plan, program and budget for all aspects of national security.
The Defense Manpower Affordability Issue
Rising military manpower costs are a critical part of the problem in rising operating costs, but the problems go far deeper. Many of what are supposed to be wartime costs are almost certain to become de facto military entitlement costs that will continue indefinitely into the future.
The U.S. has also made cutbacks in force size and military manpower, as well as career civilians, that current efforts to increase Army and Marine Corp end-strength only begin to address. The strains of over-deployment on a relatively small total volunteer force already threaten the ability to recruit and retain the proper mix of force quality and quantity.
The Operations, Maintenance and “Reset” Crisis
DOD's current baseline budget projections for operations and maintenance costs make no allowance for ongoing wars and are little more than absurd. There also is no clear plan, program and budget for dealing with the growing “reset” problem of coping with wartime losses and wear and how to make trade-offs between existing equipment, modifications and improvements and new systems.
The Modernization and Procurement Crisis
Procurement problems so permeate every service and affect so many critical programs that it is brutally apparent that DOD has no real world spending plans, and is indulging in a “liar's contest” in terms of costs, the timelines for major programs, their probable effectiveness, the numbers it can actually procure, and the force trade-offs between modernization and force cuts.
Even if one ignores key issues in effectiveness and availability, work by the GAO shows that the cost of the defense major acquisition portfolio rose from $790 billion in FY2000 to $1.6 trillion in FY2007, and outstanding commitments rose from $390 billion to $858 billion. The average cost escalation in Research, Development, Test and Evaluation (RDT&E) costs over the first cost estimate rose to 40% over the eight-year period, and total acquisition costs rose 26%. The share of programs with more than 25% cost escalation rose from 37% to 44% and the average delay in delivering initial capability rose from 16 months to 21 months.
Work by both the GAO and CBO indicate these problems are likely to escalate steadily in the near-term unless the next administration acts quickly to control them, and reshaping an affordable and effective procurement program may well take at least the full term of the next president. This may well involve major program cancellations, and further hardship for defense industry. It certainly means a need to establish far more realistic standards for estimating program costs, schedules and deployment times and effectiveness; far tighter standards of program management; and far tighter control over the kind of changes in specifications and design that do so much to raise cost and increase program delays.
This article was adapted from a summary of Cordesman's longer national security critique. To read Cordesman's entire briefing, click here.
POSTED BY: cashpoor (May 16, 2008 06:42 PM)
See they may not "seem" to have a plan to refresh America after the "global war on terror". But they do, its called the Amero dollar, and sending our liberty bell off to China for recycling. Welcome to the NWO people, wake up! This has been in the books for a long time, stop pretending its not true.
POSTED BY: MS (May 17, 2008 06:53 PM)
Thank you for pointing out a serious economic threat to this country that almost no one wants to hear about.
POSTED BY: CMSGT (August 11, 2008 11:01 AM)
A re-evaluation of the balance of forces is essential.
Currently fighting a war with Guard and Reserves is backwards.
The U.S. must understand that a strong standing military (Regulars) is essential.
The regular military must be manned to the sufficient levels to fight the 1 and 1/2 war scenario and to fight the war they planned and have trained for. Only when force levels fall below sustainable levels augmentation by the reserves who begin increasing their level of training to bring them to peak capabilities and deploy replacing regulars with reserves trained in the same specialty (one for one). Bring back the draft if a stop loss level is reached.
Leave the Guard to protect the interior of the country from infiltration at all times and do not deploy to an actual war zone.
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