Defense Budget Update: No Reason to Celebrate

by Tom Donnelly

The defense press is again reporting that the White House is acceding to Defense Secretary Robert Gates’ desire to slow the rate of decline in U.S. defense spending — that’s right: slow the rate of decline, not increase.  At least things won’t be as bad as they looked like they were going to be, but they’ll still be bad, and if you think about what the real requirement is — continuing to fight two wars, trying to modernize conventional forces for new threats, including increasingly widespread nuclear proliferation — there’s very little reason to cheer.

The latest snapshot of the ongoing defense budget struggle comes from Defense News, whose intrepid editor Vago Muradian claims that the White House has agreed to add back $100 billion over the five-year defense plan that will be rolled out next spring.  Jason Sherman at Insidedefense.com has also reported that the 2011 annual budget will be increased by $14 billion to a total of about $556 billion.  Also, not surprisingly, the estimate for wartime supplemental — or “overseas contingencies,” in Obama-speak — will go up from the initial $130 billion estimate.  That’s all good news, right?

But hardly unadulterated good news.  A lot of the extra money will simply offset personnel costs that had never been captured in any previous defense budget.  The slight increase in active Army end-strength accomplished at the tail end of the Bush Administration had never been fully accounted for and had been paid for through supplementals.  To its credit, the Obama Administration shifted those funds to the baseline budget — brave accounting, but not an “increase” that results in any expansion in capability.  The “color” of money — that is, how it’s counted — is much less important than the amount of money.  Moving money from your savings to your checking account does not make you richer.

And a footnote: the cost of military personnel benefits, especially health care, is steadily driving up the price of soldiers, sailors, airmen and Marines.  Over the past decade the cost of each troop his risen dramatically.  That’s not necessarily a bad thing, as it’s probably the case that these benefits have played a part in creating a force that has proved far more resilient than anyone anticipated.  Nonetheless, cost is cost.  And, with the announcement of Obama’s Afghanistan “surge” of 30,000, total deployments for the first half of 2010 will likely rise to a higher level than at the peak of the Iraq surge in 2007 and early 2008.  The size of the active Army and Marine Corps is insufficient to keep up with wartime demands, and thus Reserve and National Guard mobilizations will continue to exceed 100,000 (thus further driving up personnel costs).

Despite the fact that personnel expenses will account for much of the rumored defense increases, Loren Thompson writes that, surely, at least some of the money will go to repair broken procurement programs.  True, but also something to keep in perspective: adding back money to the F-35 Joint Strike Fighter program will only go to offset reductions and delays previously announced, giving back part of which had been taken away earlier.  And the Quadrennial Defense Review is almost certain to contain significant forces structure cuts, such as the retirement of two aircraft carrier battle groups and a number of aircraft squadrons in both the Navy and Air Force.

At the end of the day, the only really relevant measurement of defense budgets and spending is the force, both in numbers and capability, they buy.  It would be a welcome sign if the Obama Administration were rethinking its initial assault on the Pentagon, and, given the president’s recommitment to Afghanistan and his Nobel speech praising the role of American military power as a force for freedom, order and, indeed, peace, entirely consistent with what begins to look like an “Obama Doctrine.”  But it is far too soon, and the reported defense “increases” far too small to be regarded as proof of any reordering of administration priorities.

Tom Donnelly is director of the Center for Defense Studies.

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