2011 February


The Tanker Decision Goes to Boeing- and Smears Fly

by Gary Schmitt and Tom Donnelly

Perhaps it was inevitable. After ten years of contentious wrangling and with tens of billions of dollars going to the winner of the competition to build the U.S. Air Force’s next fleet of tankers, no matter who won there would be recriminations and charges that the fix was in. If the European Aeronautic Defence and Space’s (EADS) bid had won, Boeing’s supporters would have pointed to the fact that the European-based company’s initial low price for its plane, the Airbus 330, was made possible by unfair government subsidies. And because Boeing has won, EADS’s fans are now pointing to Boeing’s lobbying campaign on behalf of its offer based on Boeing’s 767.

But some critics of the Pentagon’s choice of Boeing’s offer have gone further, suggesting that because Boeing’s headquarters are in Chicago and Obama is from the Windy City that somehow “Chicago Politics” determined the outcome. As the Wall Street Journal editors opined: “The fuel tanker debacle has undermined a competitive and open market for defense purchases free of political pressure.” Or as one Washington Times and American Spectator writer penned even more acidly: “Boeing gets the tanker contract. I smell a rat.  A crooked rat.” Pretty serious charges, if true. But is there any evidence to support them?

The fact is, the effort to procure a new tanker­ now going on for a decade ­has been something of a mess since day one. With a tanker fleet procured during the 1950s and 60s badly in need of replacing, but a bill to do so possibly totaling $100 billion, the Air Force leadership initially hoped to square that circle by leasing 767s from Boeing rather than procuring them outright. The goal was to get planes on line sooner and for less up-front cost. Congress had its doubts about the strategy but those doubts turned to an emphatic “no” when investigators discovered that a senior Air Force official involved in negotiating the terms of the lease was using her position in those talks to, among other things, get a high-paying job at Boeing. Soon after, Congress passed legislation that required the Pentagon to conduct a formal competition to choose a new tanker and to make the procurement a regular purchase instead of a lease-to-buy arrangement.

And in the abstract, the competition made sense. However, there was one big problem: The airplane that best fit the Air Force’s standing requirements was the Boeing 767, an airframe not matched by any other manufacturer.  But Boeing and EADS, the two companies that eventually wound up offering bids, did so with airframes that are significantly different. And the proposed EADS tanker would be based on the Airbus 330, a commercial passenger jet it manufactures, which is a good deal larger and flies longer distances than the 767.

The Air Force had a Sisyphean task from the get-go. Keeping two very different planes in the competition forced the service to make the requirements vague enough, promising that any final judgment would be and could be questioned. Nor was it the case that bigger would necessarily be better. Because of the 330’s size, for example, it was judged to be too big for a number of the airfields a tanker would be expected to operate from; yet, keeping that requirement would have eliminated the Airbus from the competition from the start. It would have also angered Congress, which had insisted on the competition without fully understanding what the consequences might be. As the Pentagon began to modify its requirements to keep the EADS-Airbus bid in the game, it inevitably began to give an edge to the larger plane. Hence, when Boeing challenged the Pentagon’s choice of the Airbus in 2008, the company could reasonably claim that the rules had been changed in midstream—a challenge that the General Accounting Office upheld.

The underlying reality was that it was virtually impossible to establish a set of parameters to judge the two planes that did not favor one over the other; the real competition was over the “requirements.” Broadly speaking, if the premium was on how much a tanker could carry and what else it could do, then the larger Airbus was the preferred plane. On the other hand, if the issue was operational flexibility as a tanker and cost performance over the life-time of the plane’s use, then the smaller Boeing plane would be the pick. While Boeing supporters were worried that European government’s direct subsidies would allow Airbus to low-ball its bid, the real life-time costs of operating and repairing a larger aircraft—costs that the Air Force would have to bear—could never be offset. Few questioned that the A330 offered greater capability on paper, only whether that extra capability was needed, could be utilized operationally, or was affordable.

Alas, the greed of a few Air Force and Boeing officials sparked the congressional intervention and turned the tanker replacement program into a political circus. As a result, the media coverage of the tanker competition moved from the trade press and the business pages to the subject of political reportage. And, in the current environment, it became just another datum to be fit into a conspiracy theory. But the fact is, there is no evidence that the initial decision, the appeal, or this most recent decision in favor of Boeing was a product of insider politics or shenanigans of any sort.

No doubt given the money involved and ongoing congressional interest in the tanker competition, the oversight committees of both the House and the Senate will be scrubbing this latest decision with a fine toothcomb. And given the thousands of jobs involved in Washington where Boeing will produce its tanker, and the thousands of jobs lost in Alabama where Airbus was going to manufacture its plane, it is to be expected that the senators and congressmen from those two states will look, respectively, to either defend or critique the Defense Department’s decision. And, of course, there is always a chance they will find something amiss again. But shouldn’t the Journal and others wait until they do?

And shouldn’t the coverage of the politics of the tankers be supplemented, at least, by an explanation of the military and budget realities that drove the Pentagon to make the decision it did? However, if this tangled tale must be reduced to a sermonette, shouldn’t the real moral of the story be about the overreaction by Congress to the original scandal? A simpler and wiser course would have been simply to prosecute the offenders, send them off to jail (which happened) and move on with the lease strategy that would have begun providing the replacement tankers far sooner and more affordably in light of the dire budget constraints the Air Force is now operating under. As Secretary of Defense Gates recently remarked, he’s not sure there will be sufficient money in the future even to complete the tanker buy.

Thus the real tragedy is that our pilots continue to climb into cockpits of Eisenhower-era KC-135 tankers—known in the civilian world as the Boeing 707 and a plane long ago retired from commercial service. So, while members of Congress have every right to look at how the Boeing 767 was chosen over the Airbus 330, they should nevertheless keep in mind that they were the ones most responsible for delaying the replacement of these antiques of the air and that further delays will only raise costs and risk lives.

Cross-posted from the Weekly Standard blog.

(US Air Force photo/Jet Fabara)

2012 Budget Cuts and Force Planning

by Tom Donnelly

The most damaging cuts in the 2012 defense budget may be among the hardest to detect. Tucked away in the Army and Marine Corps personnel accounts will be reductions in recruiting and retention spending that reflect the first, thin edge of the force cuts that won’t be fully implemented for a couple of years. But by then the die will have been cast, not only for America’s land forces but also for our presence in Iraq, Afghanistan and whatever other future conflict will – inevitably, whether we admit it or not – require boots on the ground.

The force cuts will take away almost all of the tardy and inadequate increases of the late Bush years; with the Iraq “surge” of 2007 came the belated recognition that the size of the Army and Marine Corps could not sustain the effort needed. Despite painful lessons to the contrary, our nation is on the cusp of a thank-God-that’s-over moment – just as the Greater Middle East, the theater where land forces have proved so essential, appears to be on the verge of the kind of democratic revolution for which so many soldiers and Marines have fought and died over the past generation.

When Defense Secretary Robert Gates addressed cadets at West Point on Friday, he told them, “When it comes to predicting the nature and location of our next military engagements, since Vietnam, our record is perfect: we have never once gotten it right.” The cuts in the fiscal 2012 defense budget are a bet that our withdrawal plans for Iraq and Afghanistan will go as planned for the next three years and that nothing new will come up. In other words, our record of perfection will remain intact.

See the original Washington Post piece, where Tom and others are interviewed about the consequences of budget cuts, here.

(flickr/U.S. Marine Corps photo by Sgt. Mark Fayloga)

Making the right reforms

by CDS Editors

In “Saving money in defense without cutting corners,” Mackenzie Eaglen and Julia Pollak demonstrate that responding firmly to our debt crisis and maintaining a strong defense are “not mutually exclusive.”

(flickr/Gregory Jordan)

Taiwan Must Weigh Its Options

by Gary Schmitt

When your girlfriend refuses to set a date for a wedding, and does so over several years, it’s probably a good idea to start looking around for another fiancee. So it is today with Taiwan’s efforts to procure more than five dozen F-16s from the US. This is a courtship from Taipei’s end that has been going on since 2006. After nearly five years, it’s time to consider moving on.

Taiwanese Air Force officials first approached their US counterparts about the possible purchase of F-16s–the multi-role jet fighter, known as the Fighting Falcon–in the spring of 2006.

Shortly thereafter, in July, the Taiwanese government attempted to submit a formal Letter of Request to the US, the necessary first step in procuring defense material through the Foreign Military Sales process.

The administration of former US president George W. Bush refused to even accept delivery of the letter. Further efforts to submit the letter were also rebuffed and the administration of US President Barack Obama today appears just as reluctant as its predecessor to consider the F-16 sale.

There are several reasons for the US to drag its feet. In the first instance, the key factor was then-president Bush’s anger at former president Chen Shui-bian (陳水扁), whom he believed had gone back on his word not to push policies that touched on Taiwanese independence.

The unanswered question of course is would Sweden sell the Gripen to Taiwan?

Whether Bush was right or wrong in his judgment, this allowed others in the US administration who wanted to seek better ties with China to “deep six” consideration of new major arms sales to Taiwan from those first offered in 2001.

The reason Obama continues to ignore Taiwan’s request for the F-16s has nothing to do with relations between the countries two presidents. If anything, President Ma Ying-jeou (馬英九) has been fully in sync with the approach the Obama administration wants Taiwan to take when it comes to relations with China.

The problem in this instance is that the Obama team came into office with a vision of creating a wholly new relationship with China, one in which the US would welcome its rise and upon which a much deeper, long lasting strategic relationship could be built.

Obama says: “The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world.”

As such, the last thing his administration was going to do was commit itself to a major arms deal that might disrupt those ties.

To its credit, Taiwan’s government has not given up trying. Time and again, the legislature, defense officials and Ma have made it clear that they are still interested in acquiring F-16s.

As China’s air force continues to replace relatively old aircraft with modern fighters and fighter-bombers with advanced capabilities, Taiwan has every reason to push ahead with these arms purchases.

At the same time, Taiwan’s own air force has grown increasingly long in the tooth. Still on the books are US-made F-5s, French-made Mirage 2000s, Taiwan-produced Indigenous Defense Fighters (IDFs), and an earlier batch of F-16s. The F-5s date from the 1960s and 1970s, and are used mostly for training.

Meanwhile the Mirages, acquired in the early 1990s, have been difficult to keep in the air. Similarly, the IDFs are nearly two decades old and the F-16s only slightly newer. With the exception of the F-16s, none of the other jets are in the same league as China’s newly acquired fighters and, from operational use, even the 145 F-16s are wearing out.

There are also good reasons to want new F-16s. More than 4,000 of the planes have been built and sold not only in the US, but abroad as well, making it one of the best fighters ever built. It is a multi-role aircraft that can engage in both air-to-air combat and air-to-ground missions, and it remains one of the most highly maneuverable fighters to this day.

However, if the US is not going to sell the F-16s to Taiwan (or do so anytime soon), then it is imperative that Taiwan begin to look elsewhere for replacement jets if it does not want the air balance across the Taiwan Strait to deteriorate even further than it already has.

One possible option is Sweden’s Gripen. Like the F-16, the Saab-built jet is a fourth-generation aircraft. It was also initially designed for air defense, but has the evolved into an first-rate all-weather, multi-mission capable plane. Its top-end speed is comparable with other modern jets, like the F-18 or French Rafale. Moreover, the combination of the Gripen’s aerodynamic design and light weight give it superior maneuverability, along with shorter runway needs. Although having another plane in Taiwan’s air fleet that is not of US origin will complicate training and logistics somewhat, this is a problem Taiwan’s air force has been dealing with for years now anyway.

The unanswered question of course is would Sweden sell the Gripen to Taiwan? There is no way to answer that question for sure, until the government asks, but two things point to a favorable response. The first is that Sweden wants to continue to have its own military aviation industry. However, as things stand now, that is becoming increasingly difficult in the absence of overseas sales of the Gripen–and sales that have been slow to come.

Second, the leverage the Chinese hold over countries by threatening economic ties, is not nearly as significant in Sweden’s case as its exports to, and imports from, China are both less than 4 percent of total trade. Moreover, Swedes typically don’t like to be threatened or bullied.

Finally, by looking at alternative fighters, Taiwan can offer a sharp reminder to those outside the Obama administration–such as members of Congress from Texas where the F-16s are built–that delays in selling F-16s to Taiwan could cost the US jobs and profits at a time when the domestic economy could use all the help it can get. Indeed, if India selects a jet other than the F-16 in its bid to acquire a new multi-role fighter and the US government continues to delay the sale to Taiwan, then the production line for the F-16 will end soon. Simply put, Taiwan needs to up the pressure on Washington to make a decision.

Experience suggests that looking around for someone else to date might sometimes be the only way to get an old girlfriend’s attention.

Cross-posted from the Taipei Times.

(DoD photo/Master Sgt. Kevin J. Gruenwald, U.S. Air Force)

Happy Birthday, Kim Jong-Il!

by Michael Mazza

Well, I sure am glad I didn’t choose this year to finally make that trip to Pyongyang for Kim Jong-il’s birthday bash. That’s right, folks, today is the Dear Leader’s birthday! And to celebrate turning 69 (or 70, depending on whom you ask), Kim is giving away luxury items cheap knock-offs from Beijing’s Silk Street Market, a tourist trap for Western travelers and Kim’s royal court shoppers alike.

Believe it or not, this is significant. Kim is able to count on the absolute loyalty of his subordinates in large part because he has bought that loyalty with cash and luxury goods. Kim’s birthday has always been an occasion for him to grant such gifts. But thanks to sanctions—which have been tightened over the past year in response to the North’s murderous provocations—the international community (and especially the United States, South Korea, and Japan) is starving Kim of the resources he needs to keep his subordinates content.

It is imperative that the allies keep up this pressure. Over the longer term, a cash-strapped Kim will not only be unable to regale his pals with Rolexes and Mercedes, but also unable to arm the military with the weapons his generals desire. Unable to fund the needs of the armed forces or the luxurious habits of his senior officials, the stability of the North Korean regime—which depends on absolute acceptance of Kim’s authority—may begin to suffer.

By destabilizing the regime, we help create the conditions for eventual reunification, which is in the long-term interests of both the United States and South Korea. As South Korean President Lee Myung-bak and President Obama wrote in their June 2009 joint statement, “Through our Alliance we aim to build a better future for all people on the Korean Peninsula, establishing a durable peace on the Peninsula and leading to peaceful reunification on the principles of free democracy and a market economy.” In putting pressure on the Kim regime, the alliance is taking the first steps towards building that better future.

So here’s wishing Kim Jong-il a happy birthday. May his future be filled with Fauxlexes, Foakleys, and an ever-present sense of impending doom!

Cross-posted from The Enterprise Blog.

(flickr/Borut Peterlin)

Et Tu, CNAS?

by Tom Donnelly

The Center for a New American Security (CNAS) was founded to the sound of many hosannas in 2007. The organization was the brainchild of Kurt Campbell, now the assistant secretary of state for East Asia, and Michele Flournoy, who is now deputy secretary of defense and often mentioned as a potential successor to Robert Gates at the Pentagon. The day-to-day operations of CNAS used to be in the capable hands of Jim Miller, currently principal undersecretary of defense for policy. CNAS also provided a good number of lesser bodies to the Obama administration and the Defense Department.

While Campbell, Flournoy, and Miller had solid reputations as “responsible” and “moderate” Democrats (the first object of CNAS’s attention was the Hillary Clinton presidential campaign), since their departure, CNAS has more frequently put the accent on the “New” part of its name. Under the new management of John Nagl and Nate Fick, CNAS first became the home of the counterinsurgency “COINdinistas” but has also been in the forefront on issues like “natural security” – that is, security the way environmentalists would think about it – and “energy security” – including how the Navy can get better gas mileage – and “soft power” in all its various manifestations.

In its infrequent work on more traditional military issues such as defense strategy and budgets or weapons programs, CNAS has tended to adhere to an analytical approach. But its just-released report on the 2012 Pentagon budget – “The Sacrifice Ahead” – comes from the heart of the Rand Paul-Barney Frank corner of the cosmos.  Fearing that the “cost of servicing the [national] debt could…put pressure on investments in America’s soft power” – yikes, the AID budget is at risk! – the study calls on the military to man up (emphasis added): “[A] base reduction of approximately 10-15 percent of the [future years defense plan] could serve as a useful benchmark because it corresponds with DoD’s approximate share of total federal spending and thus its burden of responsibility in contributing to deficit reduction.”

Where to begin with such a rationale? It certainly is as pure an expression of “everything-on-the-table” thinking as can be imagined; CNAS will brook no changes in the federal government’s priorities. (And that, in turn, is what the Obama budget intends: let’s lock in the “gains” in domestic discretionary spending and entitlements, like the health care plan, of the last two years.) But it’s also a pretty perverse reading of the military’s “burden of responsibility.” Asking soldiers and Marines to add “balancing Uncle Sam’s books” to “win in Iraq and Afghanistan” seems like a stretch. The battlefield is burden enough.

The report’s economics are also ludicrous. A 10 percent cut in defense spending would be, taking the Obama administration’s 2012 request as baseline, $55 billion. That’s a lot of money, but a piddling amount in a $3.7 trillion federal budget – and another $1-trillion-plus annual deficit – and a $15 trillion economy. If an $800 billion stimulus couldn’t “shore up the U.S. economy,” let alone create job growth, it’s hard to imagine how another $55 billion will have an appreciable difference.

The U.S. military already has made an enormous budgetary, strength and modernization sacrifice: the loss of a third or more of its force and a generation of new weapons systems after the end of the Cold War. These have also been the years when they have been called upon to make much greater sacrifices in blood. A cutting 10 to 15 percent from the military’s at-war budgets is hardly a “moderate” approach, even less a “responsible” one.

Cross-posted from the Weekly Standard.


Strategy should always guide the defense budget, not vice versa. Unfortunately, the budget submitted to Congress today by the Obama administration includes significant cuts to the Department of Defense that appear divorced from America’s current strategic reality. These cuts will increasingly put America at risk and make it more difficult for the United States to fulfill its global responsibilities.

Starting in 2009, Secretary Gates launched an unprecedented series of house cleaning measures, freeing up billions of dollars in savings in the Pentagon’s budget. The only federal agency to do this, Gates’ savings were intended to be reinvested into long overdue military modernization programs. Instead, the White House pilfered the savings and told Mr. Gates to go back and find more while domestic discretionary spending and entitlement programs were largely given a pass.

This resulted in today’s budget submission that will kill systems such as the Marine Corps’ Expeditionary Fighting Vehicle, and eventually reduce the end strength of the Army and Marine Corps by tens of thousands of troops. These cuts, with our country at war and facing future challenges from China and other potential adversaries, make little strategic sense.

Defense is simply too important to be left to budgetary shell games. Though the Obama administration may believe it is enacting prudent cost-cutting measures, ignoring our military modernization needs in a time of peace is perilous. Doing so during ongoing operations could be catastrophic. It is important to rein in spending and eliminate the deficit, but this should not occur at the expense of U.S. national security.

To provide for the common defense is a constitutional duty of the federal government. House Republicans should keep this in mind as they review the President’s budget and issue their own budget in the weeks to come.

Defending Defense is a joint project of the American Enterprise Institute, Heritage Foundation, and Foreign Policy Initiative.

(flickr/ U.S. Army photo by Sgt. Russell Gilchrist)

Obama’s Budget Priorities

by Richard Cleary

In an entry today in her Washington Post blog, Jennifer Rubin follows the trail of defense cuts in President Obama’s proposed budget. Defense cuts will not be made with the end of debt reduction; rather, they will allow funds to be shifted to pet domestic projects, including a $53 billion light rail project (per President Obama’s State of the Union promise). However virtuous expanded light rail access (and other similar projects) might be, the President would be wise to think twice about drawing critical funds from armed forces during wartime: the common defense is essential to the common good.

(flickr/US Army Photo by Spc. Matthew Leary)

Tipping Point in the Indo-Pacific

by Michael Auslin

EAST CHINA SEA, July 9, 2020–Sino-American relations have been spiraling down into a hostile dialectic for more than a decade. The two sides have grown increasingly uncomfortable with their complex, ever-evolving but seemingly inescapable economic interdependence. China will not relent in its aggressive, mercantilist currency policies, but the Fed and the Treasury, ever in need of Chinese capital to finance America’s debt, have never pushed the issue to the wall. The two sides have displayed their ideological differences as Chinese restrictions on civil rights continue. They have sparred, too, over points of honor and prestige in international forums and, episodically, over the future of Taiwan. But the underlying source of the current deterioration in the bilateral relationship is the competition for influence in the Indo-Pacific commons, that broad swath reaching from the western Pacific Ocean to the eastern coast of Africa, which both sides consider central to their standing in the region and to global perceptions of their power. After nearly a decade’s worth of threat-making, strained diplomatic ties and below-the-radar games of chicken, U.S. and Chinese naval ships now stand prow-to-prow in the East China Sea, minutes from battle over a seemingly meaningless incident.

When a Japanese shipping vessel collided with a Chinese navy ship on July 7, 2020, simmering tensions, as well as militaries that have been trained to react quickly to crises, bubbled over. The Chinese navy arrested the crew of the Japanese civilian ship and demanded that Japanese Maritime Self-Defense cutters leave the accident scene. A passing U.S. Navy destroyer, DDG-99, the aging USS Farragut, intervened to support America’s ally and ensure peaceful resolution of the incident. When the Chinese demanded that the Farragut leave, and trained their guns on the Stars and Stripes, Pacific Command called the White House…

Is Sino-U.S. Competition Inevitable?

No one knows what July 2020 will be like in Washington, or in the South China Sea. But with each passing month, this scenario or one like it becomes more possible, if not necessarily more likely. As rhetorical sniping continues amidst the revelation of new Chinese capabilities and increased assertiveness. Americans remain divided over what this still young pattern means. Their common narrative today begins in the mid-1990s, as China’s military modernization picked up speed. In ten years, their common narrative may begin instead in the years after 2010, when China claimed the South China Sea as a “core interest.” At that time, Secretary of State Hillary Clinton asserted that the peaceful resolution of various South China Sea territorial claims between China and Southeast Asian nations was “in the American national interest.” China rejected the U.S. position, insisting that all such matters remain bilateral in character. With Beijing officials continuing to insist that the U.S. Navy is the source of instability in the western Pacific, little in the way of diplomatic resolution, much less mutual understanding, seems so far to be possible. Very likely, then, we stand today at the crux of all future policy judgments with regard to China.

The full article is available by subscription to the American Interest.

(wikimedia commons/U.S. Navy photo by Mass Communication Specialist 3rd Class Ian Schoeneberg)
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