Defense Strategy & Budget in the Post-Bush Era
August 5, 2008
Author: Ashton B. Carter, Former Co-Director, Preventive Defense Project, Harvard & Stanford Universities
Belfer Center Programs or Projects: Preventive Defense Project
Aspen Strategy Group
The new president and his national security team will inherit three categories of daunting challenges in the Department of Defense.
The first category includes ongoing operations in Iraq, Afghanistan, and against Islamist extremism, none of which is going to end entirely anytime soon. To these must be added the threats from North Korea's and Iran's runaway nuclear programs, which have burgeoned in the first decade of the 21st century. And then there will be the still-unpredictable but near-certain new crises that will arise in Africa, the Middle East, or elsewhere.
Second, these immediate challenges will need to be met against the sad necessity to "reset" some of the traditional sources of American influence and effectiveness in the world. We will need to reset our global leadership by repairing alliances and security partnerships that in some cases have become badly frayed. We will need to re-earn our reputation, in the eyes of much of the world, for thoughtful deliberation in how we choose our strategic intentions and - even more worryingly - our reputation for simple competence in executing them. Both of these have been called into question in connection with Iraq. We will need to reset civil-military relations, which have become strained in the minds of many, most especially military leaders both senior and junior. In some quarters we will even need to restore our honor, which has been compromised by excesses such as Abu Ghraib, Guantánamo, and waterboarding. These are immense challenges that go well beyond the Department of Defense. It will take time to meet them, but they will be met. The project to restore the U.S. position to its rightful place will take years, but a new administration will need to begin it immediately.
But a third category of challenges for the next administration's national security leadership, less discussed in the broad public but ultimately equally demanding for the next President and Secretary of Defense, concerns the management of investment in the U.S. national security future - budgets, programs, and the match between resources and strategy - or more accurately, the current mismatch. This third category is the topic of this paper.
The Coming Defense Budget Crunch
The strategy-resources mismatch is of concern because of several factors that will impinge upon the defense budget, quickly and severely, early in the term of the next president:
- A likely leveling of the Defense top line. The American people will certainly not be demanding a "peace dividend," because they will realize there is no comprehensive peace at hand. But neither is there likely to be a continuation of the rapid upward trend that has put DOD's base budget authority 36 percent higher (in real terms) today than on 9/11, and 80 percent higher if supplemental funding is included. The Bush administration projects a slow decline in real defense spending over the next five years.
- The very real possibility that supplemental funding (now about 40 percent as large as the defense base budget itself) will be cut faster than the actual commitments in Iraq and Afghanistan can be safely curtailed. In theory, the supplementals cover the marginal cost of the wars and the baseline budget covers the ongoing costs of the military, but after six years of war the reality is much more complex. Expenditures that might appropriately have been requested even without the wars have been included in the supplementals for expediency. If the supplementals dry up, these programs - some of them new and innovative - will be forced to compete with the old program of record for survival.
- The related possibility that ground-force reset costs will be higher than currently forecasted.
- A "bow wave" resulting from a failure to take account of cost growth in weapons systems and defense services, meaning that the actual expenditures needed to fund the forces and new weapons systems programmed will probably exceed those budgeted by a wide margin.
- The inexorable encroachment of health care and other personnel and current operating costs on the portion of the Pentagon's budget that invests in future forces - procurement and research, development, test, and evaluation (RDT&E).
- The government's uncertain overall fiscal position, especially in the event of a downturn in the economy - its willingness to tax, borrow, or make cuts elsewhere to fund DOD's needs.
- Growing evidence of the need to improve acquisition practices, program management, and system engineering skills in both government and the defense industry.
Compounding these Defense Department issues are wider issues of national security capability and management, where our edge in marshaling all elements of national power is not nearly as sharp as that of our military prowess. An edge of excellence outside of the Department of Defense must be created to match the edge our military forces possess. Secretary of Defense Gates has appropriately called for such a rebalancing of U.S. capabilities. Among the challenges, which will be addressed by Dennis Blair and Michèle Flournoy later in this meeting, are:
- The continuing need to build a better capacity to protect America and its friends from violent extremism and terrorism, which requires investment outside of the Defense Department as well as within: in intelligence, law enforcement, homeland security, foreign assistance, and diplomacy.
- The crippling inadequacy of the non-Defense instruments of crisis intervention: civil reconstruction, political stabilization, and interagency coordination and command.
- Frayed alliances and security partnerships and a palpable diminution in U.S. moral authority and ability to persuade, as revealed in extensive and consistent worldwide polling data.
- Lack of willingness or capacity in many countries, including important allies, to share the burden with the United States by augmenting and complementing our own efforts.
Needed: A Return to Strategy in the Pentagon
It is against this challenging budgetary background and widening understanding of the non-military capabilities needed for national security that we must consider defense strategy for the future, which is the guide to investment. Strategic clarity - What kind of military do we need and why? - must make a return to the Pentagon after a period when ever-growing budgets and single-minded preoccupation with Iraq have caused it to fall out of practice.
The future is uncertain to be sure. But while there might be talk about "known-unknowns" and "unknown-unknowns," five future requirements are in fact pretty well known. They provide a sturdy basis for realistic planning and programming for Defense. The U.S. national security establishment, including especially DOD, will need to be able, in parallel, to (1) conduct irregular stability operations in difficult politico-military circumstances; (2) combat violent extremists, including radical Islamist terrorists; (3) hedge against an unlikely but possible downturn in U.S.-China relations; (4) prevent and protect against weapons of mass destruction (WMD) threats; and (5) continue to overmatch possible adversaries on the conventional battlefield.
Each of these missions requires investment in future defense forces. Each requires, in fact, very different types of investment. Since it is not easy to imagine a future world in which the need for any one of these five missions would disappear entirely, the Pentagon leadership in the post-Bush era must find a way to do them all, spreading available resources over them in a thoughtful investment portfolio.
It is also difficult to imagine having enough forces and dollars to do everything possible to accomplish each of the five missions in the portfolio. There will accordingly be some risk inherent in any investment plan to accomplish this multitasking strategy. The investment plan for Defense must therefore do what planners call "accept risk," and it must allocate that risk within each of the five mission areas and among the different mission areas.
In recent years, the long-established processes in DOD to manage risk and set budgets have been undermined. The rapid increases in the budget have obviously been beneficial in one way - adequate funding for Defense - but in other ways, they have corroded the processes and discipline that ensure that strategy and budgets align. There has also been excessive reliance on so-called "capabilities-based" planning, which can easily devolve into improving what we have rather than asking what we need.
The task of Defense leaders in the post-Bush era will be to explain the portfolio strategy and to win the support of Congress and the American people for the needed investments. The remarks that follow describe the principles that should guide Defense investments in the coming years for each of the five mission areas in the portfolio.
Conducting Irregular Stability Operations in Difficult Politico-Military Circumstances
Projected ongoing operations in Iraq (while probably diminishing), Afghanistan, and the Balkans and possible future operations in many locations (the Horn of Africa and Darfur among them) all point in different ways to this broad requirement for Defense in the future. This complex of missions - collectively called "irregular warfare" in official DOD parlance, though this term is not universal - comprises stability operations, post-conflict reconstruction, peacekeeping, counterinsurgency, humanitarian intervention, and other related types of missions. There are important distinctions among these concepts, and they need to be applied differently to each situation. But they result in a common Defense requirement - relatively large multipurpose ground forces capable of operating among civilian populations with strong self-protection and minimal harm to friendly civilians. Outside of Defense, this mission requires better U.S. civilian capabilities and interagency coordination, and outside of the U.S. government it requires international burden sharing.
Much as America would like to leave the field of irregular warfare behind and return to an era of traditional military-versus-military warfare, almost two decades of post-cold war experience show that this complex of missions is here to stay. Defense must invest to keep and build its edge in irregular warfare. This will require a Defense investment effort to:
- Change the shape and perhaps the size of the Army and Marine Corps to emphasize military specialties that are currently in high demand for irregular operations but in low supply. The principal strategic challenge for the Army is to decide how much to invest in such force elements and how much to invest in more traditional force-on-force land combat capabilities; and then how to combine both types of forces into a single overall Army (to oversimplify, should the Army commingle or separate the two elements?).
- Continue to evolve the mission of the Army and Marine reserves from strategic backup for World War III, to adding value to active-duty ground forces in this mission area - selectively and, for the citizen-soldiers involved, predictably.
- Launch a comprehensive program of innovation in the technology and tactics of self-protection for U.S. forces compelled to operate with restraint in the midst of civilian populations containing hostile elements, frequently in congested urban settings. Threats such as improvised explosive devices (IEDs), explosively formed projectiles (EFPs), mortars, rocket-propelled grenades (RPGs), shoulder-fired anti-air missiles, and suicide bombers are relatively minor factors in conventional force-on-force warfare on the open battlefield, but they can be a major factor in irregular warfare. The types of investment relevant to irregular warfare range from armored combat vehicles like the Mine Resistant Ambush Protected (MRAP) vehicle to body armor, non-lethal weapons, and unmanned aerial systems like Shadow and Predator.
- Create a larger capability within Defense for training foreign security forces. Even the most interventionist U.S. administration with the most sumptuous funding of this mission area could not hope to be in more than a handful of significant stability operations at one time. Most of the time and in most places, we will be counting on stable governments and their indigenous security forces to fight insurgencies, eradicate terrorist safe-havens, prevent genocide, and in other ways ensure a peaceful and decent world. Increasing the capability of other nations to ensure security is as important as increasing U.S. capabilities.
- Enlist the help of allies and partners. There is no reason that the United States should bear the entire burden of irregular warfare operations where they are needed for international security.
- Rebalance national security investment to build civilian capabilities, as noted above and elsewhere in this meeting.
Combating Violent Extremists, Including Radical Islamist Terrorists
No one can say how long it will take to defeat or contain radical Islamist extremists bent on terrorism. But, there are reasons to believe that combating terrorism will be an enduring feature of the national security landscape long after what the Bush administration calls the "Long War" against Islamist extremism is over. The destructive power available to even small groups of extremists is growing with the advance of technology. At the same time, society is growing more interdependent and connected and thus more vulnerable to terror - physically and psychologically. These two fundamental trends are visible as far into the future as any of us can see. Whatever the lifetime of Islamist extremism, therefore, it will long remain the business of national security authorities to counter terrorism arising from other movements and groups.
But for future Defense investment, this mission points in a somewhat different direction from stability operations. The critical tasks, first of all, fall outside of Defense - in law enforcement, intelligence, homeland security, foreign assistance, and diplomacy. Within Defense, they emphasize some of the same special forces (direct action and civil affairs) and trainers of foreign security forces as irregular warfare. But a new and potentially significant development is DOD's increasing willingness to assume a role in emergency response through its Northern Command (NORTHCOM). For the first several years after 9/11, Defense steered clear of involvement in homeland security, since Defense leaders were preoccupied with Iraq and concerned that homeland security funding would be taken out of the defense budget. More recently, however, DOD has acknowledged its inevitable role in carrying out the DHS-drafted National Response Plan for at least the catastrophic cases like a nuclear explosion on a U.S. city. The Pentagon has even gone so far as to assign forces to NORTHCOM for this purpose for the first time.
Hedging Prudently against an Unlikely but Possible Downturn in United States-China Relations
China is undergoing a transformation unprecedented in history in both scale and scope. United States-China relations are overall positive and the two nations have developed a mutual dependency that would make unbridled antagonism or armed conflict tantamount to mutual assured destruction. It would demolish an economic relationship that is vital to both. It would destabilize the Asia-Pacific region where, despite enduring animosities dating back to World War II and before, prosperity and political development have proceeded at an astonishing pace for decades - first in Japan and Taiwan, then South Korea, and now South and Southeast Asia, and China itself. A U.S.-China Cold War would be wasteful for both militaries, which face other pressing and shared threats from terrorism, proliferation, and a host of regional and transnational problems. A hot war would involve a catastrophic clash between two of the planet's largest military machines and could possibly even escalate to nuclear conflict. For two governments to bring themselves to this point would be contrary to both their individual and common interests. The overwhelming evidence of recent trends suggests that the path of conflict is, indeed, very unlikely.
Yet senseless conflicts have too often scarred history. Past experience suggests that as a matter of strategy a question remains: Will China be a friend or foe of the United States twenty or thirty years hence? This question is sometimes wrongly posed as a matter of Chinese leaders' "true intentions." But the fact is that no one, including the current Chinese leaders themselves, knows where destiny will take China as a military power. China's military future will be determined by the attitudes of its younger generation, the policies of its future leaders, its internal development and stability, and the possibility of unforeseen crises with the United States - for example, over Taiwan. There is no convincing way for Chinese leaders to persuade Americans of their country's peaceful "intentions" decades into the future. These intentions are not a secret they are keeping from us; they are a mystery unknown to all.
In this strategic circumstance, the United States has no choice but to have a two-pronged policy. The most important prong is to engage China to encourage it to become a "responsible stakeholder" in the international community. But a second prong is to hedge against a downside scenario of competitive or aggressive behavior by China. Successive U.S. administrations have struggled to sustain public support for the needed two-pronged policy - a policy that at first glance can seem self-contradictory. But there is no reason for our policy to be self-contradictory. Determination to engage should not get in the way of prudent hedging, but so also excessive hedging should not create a self-fulfilling prophecy whereby treating China as an enemy contributes to making it an enemy. And since today's Chinese military leaders also cannot know where destiny will carry the relationship, it follows that they, too, probably have a two-pronged strategy. The Chinese will be preparing militarily for the downside scenario, and their hedging will look to the United States like the leading indicator of the very competitive behavior against which the United States is hedging. And so hedging can beget more hedging in a dangerous spiral. Hedging is contagious. The China hedge in our strategy must therefore be a prudent hedge.
The dynamic of Sino-American mutual military hedging is most evident in the Taiwan Strait. U.S. policy is not to defend Taiwan no matter what, but it is U.S. policy (and law, according to the Taiwan Relations Act) to be prepared to defend Taiwan. China, for its part, will not renounce the use of force if Taiwan goes too far towards independence. So the U.S. Pacific Command and the People's Liberation Army arm, train, plan, and exercise every day for the possibility of such a confrontation. Recent developments in cross-Strait relations, notably the thaw arising out of the election of President Ma Ying-jeou in Taiwan, make such a clash less and less likely. But no one has proposed an improvement to the overall policy status quo regarding Taiwan, and as long as that remains true, this small and localized but very real arms race seems fated to continue.
For Defense, a prudent China hedge creates an investment requirement very different from either irregular warfare or combating violent extremism. The China hedge emphasizes advanced maritime and aerospace forces rather than ground forces. The China hedge is therefore sometimes adduced as the rationale for large Navy and Air Force investments such as the Virginia Class attack submarine (SSN 774), the F-22 Raptor air superiority fighter, and the DDG 1000 destroyer. But a more specific focus of prudent hedging is to frustrate Chinese efforts in counter-air, counter-carrier, counter-space, and counter-information capabilities. Through such "asymmetrical" capabilities, China's military leaders hope to find some way to puncture the U.S. military's decisive dominance in a crisis or confrontation. These Chinese efforts are quite clear -reflected, for example, in the test of an anti-satellite interceptor in January 2007. U.S. investments in a prudent hedge should concentrate first and foremost on showing China and its neighbors that such efforts will not succeed in upsetting the overall balance in the Pacific region that has given it decades of peace and prosperity.
Preventing and Protecting against WMD Threats
Weapons of mass destruction, meaning mainly nuclear and biological weapons (chemical and radiological weapons' effects being much less dangerous and correspondingly more manageable), in the hands of hostile state or non-state actors can jeopardize the way of life, if not the survival, of the United States. These weapons are therefore the highest-priority threat to national security. Overall U.S. government efforts must include prevention of the spread of dangerous weapons, protection from them if they do spread, deterrence to discourage their use, and effective emergency response to minimize damage if they are used.
Prevention is especially important for nuclear weapons, since they require unique materials (highly enriched uranium and plutonium) that can only be manufactured with difficulty. Once these materials are obtained by governments or terrorists, however, the barriers to fabricating and delivering a weapon are much lower. The grave setbacks in prevention suffered by U.S. policy in recent years - allowing North Korea to obtain a nuclear arsenal and failing to slow Iran's nuclear program - have made the nuclear threat today greater than it was just a few years ago. To these disastrous developments must be added instability in nuclear-armed Pakistan and the incomplete security of Russia's nuclear materials.
DOD plays a role in all phases of protection against WMD attack. But once again, it cannot accomplish the entire counter-WMD mission, which requires the contribution of other parts of government, by itself. And once again also, the investments DOD needs to make to play its role in this mission are different from those it needs to make for other missions like stability operations and the China hedge. In the post-Bush era, the Department of Defense will need to take the following steps to make the Department's contribution to protection from WMD:
- Fund and support the expansion (in scope and geographic application) of Cooperative Threat Reduction ("Nunn-Lugar") prevention and related programs like the Global Threat Reduction Initiative, the Proliferation Security Initiative, and the Global Initiative to Combat Nuclear Terrorism.
- Expand the role and funding of the Defense Threat Reduction Agency (DTRA), which is DOD's hub and a government-wide center of excellence for countering WMD. Its capabilities not only support the war plans of the Combatant Commanders, but underlie many arms control, threat reduction, nonproliferation, counterproliferation, WMD counterterrorism, and WMD homeland security activities of the entire government. Astonishingly, DTRA's budget has remained flat at only $3 billion since the 9/11 wake-up call, despite the clearly growing WMD dangers and the fact that DOD's budget as a whole has grown enormously in the same period.
- Review the military requirements for, and attend to the appropriate size and quality of, the nuclear deterrent. Nuclear forces tend to be ignored by senior defense managers because they play no role in the urgent problems of Iraq, Afghanistan, and the war on terror. Nor are they a budgeting priority since the entire nuclear posture only costs DOD about $12 billion per year, or one-fortieth of the defense budget - an amount that covers the Triad of strategic nuclear forces (Trident submarines, Minuteman intercontinental ballistic missiles, and B-52/B-2 bombers when in the nuclear role), the small remaining non-strategic force (shore-based submarine-launchable Tomahawk cruise missiles and nuclear gravity bombs in Europe deliverable by dual-capable fighter aircraft), and their associated command and control. But the nuclear posture is obviously critical for deterrence, for the reassurance it provides to key allies, and for the role it plays in arms control and non-proliferation policy. Its quality is also a matter of concern, as was demonstrated by the unauthorized flight of a B-52 bomber carrying nuclear weapons from Minot AFB to Barksdale AFB. Congress has mandated that the new administration conduct a Nuclear Posture Review in 2009. (The Department of Energy's nuclear weapons related activities, which cover warhead stockpile research, fabrication, and maintenance and which cost about $6.5 billion per year, also are of concern both in terms of size and quality.)
- Fund the development and acquisition of a robust suite of non-nuclear counters to the threat or use of WMD against U.S. territory, forces, and allies. While the president will always have nuclear retaliation as a possible U.S. response to WMD use, no president would wish that to be his or her first and only option. Presidents are owed a wider range of alternatives. Non-nuclear alternatives include, first and foremost, passive defenses like protective suits and vaccines against chemical and biological weapons. They also include ballistic missile defense, currently a $9 billion per year program with policy-sensitive elements like the planned deployment of ground-based interceptors and radars in Poland and the Czech Republic. Yet another category is "non-nuclear strategic strike" - SLBMs or ICBMs loaded with non-nuclear warheads and capable of striking targets almost anywhere in the world in half an hour; this alternative also has policy-sensitive elements that would need to be resolved.
- Formulate realistic responses to a situation in which terrorists obtain a nuclear weapon or detonate one. DOD would be only a part of a broader government-wide response, but its roles include developing nuclear detectors and forensics, stepping up to DOD's inevitable role in cleanup, and holding responsible (if appropriate) the government from which terrorists obtained the nuclear weapon or fissile materials.
Continuing to Overmatch Possible Adversaries on the Conventional Battlefield
For much of the post-cold war period, the single mission that had the most influence on the size of U.S. forces, and thus the Defense budget, was the requirement to be able to conduct two major regional wars simultaneously. The two wars that planners had in mind were against Kim Jong Il's North Korea and Saddam Hussein's Iraq. The reason to have enough forces to win both wars simultaneously was that if the U.S. military was entirely consumed by fighting North Korea, for example, Saddam Hussein might be emboldened to choose that moment to launch his own war. The two-simultaneous-war construct resulted in an analytically derived number of units of ground, air, and naval forces required in the scenarios and thus in the Defense budget. In reality the two-war requirement never exactly matched available budgets, and the construct was continually amended by both the Clinton and George W. Bush Defense leadership (by conceiving the two wars as overlapping but not strictly simultaneous and by ignoring or trimming the need for postwar occupation and stabilization). But it nevertheless had a powerful influence on where DOD spent its money.
Each of the two war scenarios underpinning Defense planning through the first post-cold war decade has changed dramatically.
On the Korean peninsula, South Korea's ground forces have strengthened and North Korea's have weakened, to the point where a large infusion of U.S. ground forces to halt and reverse a North Korean invasion is not needed - naval and air forces and information systems would comprise the distinctive and decisive U.S. contribution to defeating North Korea's armed forces. The unfortunate aftermath of the invasion of Iraq makes clear that planning for territorial wars should take into account the need for ground forces in the post-conflict period for stability. But in a war on the Korean peninsula, South Korea would probably insist that its ground troops be the mainstay of order in the North during the reunification process. The U.S. role in a war on the Korean peninsula would therefore be to contribute airpower, naval power, and information to the combat phase. The capabilities needed to do this have much in common with those needed for the China hedge.
The second of the two major conventional war pillars of the 1990s planning construct - Saddam Hussein's Iraq - is gone. Its replacement might seem to be Iran. But Iran is more likely to challenge the United States with tactics other than territorial invasion of the kind Saddam Hussein mounted against Kuwait in 1991: irregular warfare and terrorism through Hezbollah and certain Palestinian factions, selective efforts to puncture U.S. overall dominance (e.g., concealment and deception against U.S. attack from the air, jamming of GPS), and nuclear weapons aboard long-range missiles. The military counter to Iran therefore looks more like the previous four missions - respectively, irregular warfare, countering violent extremists, hedging against China, and countering WMD - than like traditional conventional force-on-force warfare.
In view of these fundamental changes in the threats motivating the traditional two-war construct, there is a need for a new construct in this mission area to size it in the context of DOD's overall force and budget planning and investment. As a global power with global interests and unique responsibilities, the United States must maintain the capability to defeat aggression in more than one theater at a time. But the new two-war strategy cannot be based any longer on two particular wars of a conventional sort but on the widest range of possible plausible scenarios.
Given that Defense must be prepared to accomplish all five missions and that resources will be limited, it is essential to devise the smartest and most parsimonious approach to accomplishing each of them. It is also important that everything we buy make a vital contribution to at least one of these missions.
Even under the best of circumstances, the U.S. Department of Defense in the post-Bush era will inherit a Defense program that has not been aligned with the budget; a strategy not matched to resources; a need to restore and reset American influence and effectiveness on the world stage; and threats in Iraq, Afghanistan, North Korea, and Iran that have not been managed or resolved. This daunting inheritance can and will be overcome, but it will take years of strong leadership.
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