President's Corner

Impending Collision Between Military Needs and Resources

By Lawrence P. Farrell Jr.

April 2008 -The latest release of the federal budget request to Congress and the submission of the military services’ “unfunded requirements” lists are clear indicators of the serious fiscal problems the nation must confront. They also hint at an ominous financial outlook for the armed services.

Starting at the top, one notes that out-year budget projections for the entire federal government continue to increase. The projection is that the federal budget on average will rise approximately $500 billion each year. The fiscal year 2007 forecast projected a budget of $2.6 trillion by 2011. By fiscal 2008, the projection is for a $3.1 trillion budget in 2011.

Looking at the various accounts, one notes unexplainable anomalies. For example Medicare budgets are dropping from fiscal 2007 to 2008; interest on the debt also is shown to be decreasing; but there is a huge jump in the totals for Social Security and other assistance programs. Most accounts, except for defense, show large growth out to fiscal year 2012. Given the soaring projections for health care and Social Security, it is difficult to see how defense can maintain its claim on the modest growth projected for it in the federal budget.

Looking inside the defense budget, one sees a similar pattern. Annual projected increases for defense average $20 billion to $30 billion. Though the fiscal 2009 request is only a slight increase from last year’s projection, we are facing war supplementals of approximately $200 billion on top of that. A deeper look inside the defense budget shows the Air Force and Navy to be fairly level, while the Army shows significant growth, which reflects both its recap/reset needs and its planned expansion.

The unfunded requirements lists from the services are less than $5 billion for each service except the Air Force which comes in at a very large $18.7 billion.

To put all this in perspective, both the Air Force and the Army have expressed a need for an additional $20 billion per year on top of their existing base budgets. The Navy and the Marines could express similar needs. The recent disintegration of an Air Force F-15 while in flight and the subsequent grounding of the fleet highlight the difficulties of operating old equipment. These events validate all services’ claims for the absolute necessity of well-planned and continuous modernization programs.

And never have we seen the pileup of modernization programs such as we see now — several new Navy ships and fighter jet programs; the Army’s Future Combat Systems; new vehicles for the Army and the Marines; and several huge programs for the Air Force (airlift, refueling, fighters, rescue helicopter, new bomber, space). Beyond these programs of record lurk more needs not yet defined or entered into formal programs.

The Congressional Budget Office has recently released an analysis that estimates that the current spending plan for defense — the force structure and programs of record — are under-funded by $100 billion a year. When one adds in service expressed needs that are not approved, the amount grows larger.

The mismatch between defense needs and resources is only going to get worse, says the Center for Strategic and Budgetary Assessments. “Actually implementing the Defense Department’s existing force structure, readiness and modernization plans would require providing even greater increases for defense in coming years, and sustaining those higher levels of funding for decades,” according to CSBA. “Given growing concerns about the federal deficit and the high costs associated with the projected retirement of the baby boomer generation, it seems doubtful that such increases will be provided.”

Adding all this up, we see real and unmet needs for the services. All services, but especially the Air Force and the Navy, have substantial modernization requirements. The rising federal budget, the continuing budgets deficits, the weakening economy and the coming change of administrations portend challenges and uncertainty going forward. All this comes at a time when the services need several years of generous support to get well. The United States has always had a strategy of fighting in the opponent’s back yard, penetrating his territory, and maintaining the offensive. We don’t want to be pressed back to the defense, only able to protect our territory and airspace rather than carrying the fight to the enemy.

As the financial burdens in Iraq and Afghanistan decrease over time, it seems reasonable to propose that part of that reduction be overlaid into baseline budgets. In the meantime, the best hope for larger defense spending is to make a persuasive case that we need military budgets to increase as a proportion of the nation’s gross domestic product. This is obviously a tough argument to make in these times, but it is an argument that has to be made.

Please email your comments to LFarrell@ndia.org

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Impending Collision Between Military Needs and Resources

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