READINESS TRAP SPRUNG (II)? - Defense Intelligentsia Leads Stampede
into Howling Wilderness of the Post-Information Era

August 10, 1998

Comment: #165

Discussion Thread:  #s 48, 49, 121, 131, 159, and all commentaries on readiness.

References:

[1] George Wilson, "New Pressures Mount to Boost Defense Spending or Cut Global Commitments," LEGI-SLATE News Service (Aug 3) (Attached)

[2] Michael O'Hanlon, "America's Military, Cut to the Quick," Michael O'Hanlon Outlook, Washington Post (Aug 9) (Attached)

One of my major goals in producing these commentaries is to increase the general appreciation of the domestic political pressures to increase the defense budget.

These pressures have nothing to do with any threats our nation faces. They really reflect a struggle to protect cold-war business-as-usual in a centrally-planned political sub-economy governed by the factional politics of protecting a non-competitive defense industry. The effects of these power games are the real drivers of the defense budget, as explained in the three reports available at the hot-link below my signature block. Bear in mind, no one in the Pentagon or in the think tanks has been able to rebut the analyses or conclusions presented in these reports.

The central cause of the continuous pressure to increase defense spending is an unsustainable circular economic relationship wherein costs always grow faster than budgets, even when budgets increase, as they did in the 1980s. The incestuously amplifying relationship wherein cost growth begets cost growth emerges out of the coupled effects of a political and psychological bias to buy ever more complex and expensive weapons, regardless of any changes in the threat, and a political economy that rewards cost growth. The bureaucratic practices of front loading and political engineering fuel these circular economics by (1) downplaying the future consequences of current decisions while (2) building a patronage network (by spreading contracts to as many congressional districts as possible) to paralyze the discretionary power of decision makers to change it, once they understand they have bitten off more than they can swallow.

The results of this system are very predictable in terms of their general structure: The increasing complexity drives up the cost of buying new weapons, which is offset by decreasing production rates, which, in turn, slows the rate of replacement, and thereby increases the average age of the inventory of existing weapons. The ever-more complex weapons entering the inventory, coupled with steadily rising age of the older weapons (also a consequence of increasing complexity), combine to drive up operating costs. The rising cost of maintaining forces in even a low state of readiness sucks money out of the modernization budget, which amplifies the effects of the aging problem, and thereby increases the pressure to bail out the modernization program by robbing the readiness budget. The results are shrinking forces, older forces, and chronic low readiness. Finally, the only way to protect the status quo is to hide these internal dynamics in a surreal world protected by a blanket of corrupted numbers -- that is, an unauditable accounting system and a planning system that is so biased by optimistic assumptions (like the phony cost savings produced by cosmetic "reforms" and "learning curves" that don't match reality) that planners and decision makers can pretend the future will be different from the past.

But eventually reality must intrude, and when this happens, the only way to mitigate (but not reverse) the rate of decay is to increase the budget and reduce commitments. Just look at the evolution of strategic planning scenarios over time: In the mid 1950s, we planned to fight two and one-half wars simultaneously. A "half" war being a major regional contingency, like Korea. By early 1970s, the planning scenario was reduced to one and one-half wars, where it remained, even though the global communist threat was supposed to have increased between 1975 and 1985 (which is why the Carter and Reagan administration launched the greatest peacetime spendup in history). In fact, notwithstanding the spendup in the 1980s, most categories of equipment got older during the 1980s, and forces begun to shrink in 1986, well before anyone foresaw the collapse of the Soviet threat. The collapse of the global threat in the early 1990s happened just in time to rationalize yet another inevitable reduction in the planning scenario, this time to two "half wars," now dignified the more imposing label of major theater wars. So, over the long term, the age of equipment increased steadily and forces shrunk, while the severity of the planning scenario was adjusted downward to match the "strategy" to the evolving reality. Note that the content of the Pentagon's menu for more complex, higher cost weapons continued into the post-cold war era as if nothing had happened.

Today, we have reached the absurd state wherein a "low cold war" budget of $265 billion can not modernize a and maintain a much smaller, combat-ready post-cold war force structure. Bear in mind, this force structure is supposedly configured to fight two regional wars simultaneously against some combination of Iran, Iraq (who hate each other), and North Korea (which may be collapsing), while maintaining some capability for peacekeeping. These "threats" spend a total of less than $8 billion, or less that one-thirtieth of the U.S. defense budget.

Does any one see a problem here?

It now appears the faction which benefits from these destructive trends (i.e., the military and civilian personnel who benefit from buying the weapons, the defense industry that survives by selling the weapons, and the members of congress whose districts receive the cash flows) is about to stampede the rest of Congress and America (including the soldiers who are paying the price for these weapons in terms of reduced readiness) into another spasm of budget increases and/or scenario reductions.

The attached article by veteran defense reporter George Wilson [Ref #1] describes accurately how the game plan is evolving naturally out of an emerging coalition of those players who will benefit by preserving business as usual. Wilson describes how their independent actions are laying the ground work for a national debate during the upcoming Presidential campaign over the emergence of a "hollow military" and the consequent need for increases in the defense budget and/or another reduction in commitments.

Now contrast Wilson's description of REALITY to what passes for an "analysis" in Reference #2. Its author, Michael O'Hanlon, a well-known defense intellectual in the Brookings Institution, who as recently as last Fall was insisting in open debate that there are no readiness problems, shows evidence of the intellectual panic that is beginning fuel the stampede to bigger budgets. Read it carefully and ask yourself, "What is this man really saying?" Is he talking about real problems or is he positioning himself to fit better into the changing atmosphere of political correctness that are being shaped by the pressures Wilson so accurately describes?

O'Hanlon's incisiveness reveals yet another reason why we are headed towards a hollow military and larger budgets and/or reduced commitments. We are going to have a hollow defense debate shaped by the timid intellects of followers posing as leaders.

Welcome to the howling wilderness of the post-information era.

[Disclaimer: In accordance with 17 U.S.C. 107, the following material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only.]

Reference 1:

New Pressures Mount to Boost Defense Spending or Cut Global Commitments

by George C. Wilson LEGI-SLATE News Service

WASHINGTON (Aug. 3)

Excerpts:

New pressures are mounting inside and outside the government for President Clinton either to increase defense spending or reduce U.S. military commitments around the world.

Congressional concern about an underfunded military escalated late last week when the Senate demanded that President Clinton give Congress a detailed report on the ability of the armed forces to carry out the national strategy of fighting two big wars almost at once.

At the same time the Senate made its demand to the president, the Center for Strategic and International Studies, a pro-defense think tank, was mapping out a campaign designed to raise the Pentagon budget by as much as $60 billion over the next three years.

...

Last week's Senate action involved passage of an amendment sponsored by Sen. Kay Bailey Hutchinson, R-Texas, which listed in unusual detail the stresses and strains afflicting the Army, Navy, Air Force and Marine Corps. It declared the "sense of Congress that defense appropriations are not keeping pace with the expanding needs of the armed forces."

...

For one thing, a move to break the budget agreement to raise the caps would be opposed by many lawmakers. For another, if the caps were raised for defense, there would almost certainly be a drive to raise the caps on nondefense programs, provoking cries of reckless spending by a Congress which promised to balance the budget and shore up Social Security.

...

Goure said his briefing has a simple message: there is no way to pay for the forces and weapons needed to carry out the nation's two-war strategy with under projected budgets. The nation must either increase defense spending by $20 billion a year for each of the next three years or keep funding at projected levels and cut the size of the present-day military in half, while reducing its global commitments.

(Copyright 1996-1998 LEGI-SLATE, Inc., All rights reserved.) Photographs provided courtesy of The Washington Post Company

Reference 2:

America's Military, Cut to the Quick By Michael O'Hanlon Outlook, Washington Post Sunday, August 9, 1998; Page C01

Excerpts:

...

Conservatives will find it harder to develop a political consensus for national ballistic missile defenses--even though a highly expert independent commission has just determined that a missile threat to American territory could appear much more quickly than commonly believed. Liberals will find it harder to sustain support for U.S. participation in peace operations and humanitarian missions, and to keep funding activities to improve the security of fissile materials and nuclear weapons in Russia.

And those concerned about the long-term technological capabilities of the U.S. armed forces will have a hard time sustaining military research and development budgets when funds are insufficient for more immediate concerns.

...

Why can't the Pentagon tighten its belt a little more? After all, as its critics correctly point out, the United States is the world's overwhelming military power, accounting for one-third of total global defense spending. Our major allies together chip in another third. China and Russia each spend just one-fifth the U.S. total, while countries like Iraq, Iran and North Korea muster only $5 billion a year or less. Contrast that with U.S. nuclear weapons-related spending, by itself still $35 billion a year, according to a recent Brookings Institution study led by Stephen Schwarz.

...

It is true that Republicans often overstate their case by claiming that today's military is becoming as "hollow" as it was after the Vietnam War. That is fundamentally incorrect, as anyone who has watched the armed forces in action from Bosnia to Iraq should know.

By most measures--number of training hours, reliability of equipment and so on--today's force is actually as good and as ready as our military was in the 1980s. But critics are right that today's force is working hard even in peacetime, and that its overall state of readiness has declined in the past few years. Of particular concern recently are difficulties with the recruitment and retention of key personnel (especially highly skilled individuals such as pilots and technicians).

...

Thanks to the Reagan buildup, as well as to cuts in the size of the military made possible by the end of the Cold War, the nation has been able to enjoy a "defense procurement holiday" this decade. Instead of allocating a quarter of the Pentagon's budget to purchasing new equipment, as has been the case historically, we have only needed to devote about one-sixth to that purpose. Such a policy is not sustainable given that most military equipment is designed to last no more than 20 to 30 years.

Under current Pentagon plans, annual military spending to purchase hardware will soon have to increase by at least $20 billion from its current $45 billion level. Not all of the weapons it desires are truly needed in this era.

...

Michael O'Hanlon, a fellow at the Brookings Institution, is author of "How to Be a Cheap Hawk" (Brookings).

Copyright 1998 The Washington Post Company

Defense Economics and Acquisition Reform and Readiness