Defense 101

Understanding the Military of Today and Tomorrow

Michael E. O'Hanlon

• Publisher: Cornell University Press
• Year: 2021
• ISBN:
  9781501754494
• Topic: Politica e relazioni internazionali
• Subtopic: Sicurezza nazionale

In Defense 101, a concise primer for understanding the United States' $700+ billion defense budget and rapidly changing military technologies, Michael O'Hanlon provides a deeply informed yet accessible analysis of American military power.

After an introduction in which O'Hanlon surveys today's international security environment, provides a brief sketch of the history of the US military, its command structure, the organization of its three million personnel, and a review of its domestic basing and global reach, Defense 101 provides in-depth coverage of four critical areas in military affairs:

• Defense Budgeting and Resource Allocation: detailed budget and cost breakdowns, wartime spending allocations, economics of overseas basing, military readiness, and defense budgeting versus US grand strategy
• Gaming and Modeling Combat: wargaming, micro modeling, nuclear exchange calculations, China scenarios, and assessments of counterinsurgency missions
• Technological Change and Military Innovation: use of computers, communications, and robotics, cutting-edge developments in projectiles and propulsion systems
• The Science of War, military uses of space, missile defense, and nuclear weapons, testing, and proliferation

For policy makers and experts, military professionals, students, and citizens alike, Defense 101 helps make sense of the US Department of Defense, the basics of war and the future of armed conflict, and the most important characteristics of the American military.

1

DEFENSE BUDGETING AND RESOURCE ALLOCATION

Does the United States spend too much, or perhaps too little, on defense? Where and how does it spend that money—and to achieve what missions, in the context of existing US grand strategy and national security policy? Regardless of whether the overall budget is excessive, or adequate, how can proposals for new types of military capabilities be properly evaluated, weapon by weapon and unit by unit? Only by understanding the components of the defense budget can these kinds of questions be seriously addressed.

This chapter attempts to place the US defense budget in broad international and historical perspective, and then to break it down into useful, analytically meaningful components that can help answer such questions. While its clear focus is on the US defense budget, some of the methods and tools are relevant to other modern Western armed forces—in particular, those with similar cost structures, personnel systems, and military technologies.

Here is another way to think of the purpose of this chapter. Imagine that one is helping a presidential candidate with a different view of the world, and different set of American national security priorities than the incumbent administration, develop an alternative defense plan and budget. Perhaps that candidate believes the United States should no longer assume security responsibilities in the broader Middle East, or Korea, or even NATO—whether due to belief in a fundamentally different vision for US grand strategy like “offshore balancing,” or a more narrow challenge to existing strategy focused on certain specific interests and allies. How does one link strategy and policy to forces and budgets? What are the consequences of the former for the latter?

Answers to these questions are frequently oversimplified in the American political debate, often by those with a predetermined agenda of making the defense budget seem either high or low. For example, many who wish to defend the magnitude of Pentagon spending often point out that in recent decades its share of the nation’s economic output has been modest by historical standards. During the 1950s, national defense spending was typically about 10 percent of gross domestic product (GDP). In the 1960s, it averaged 8 to 9 percent of GDP, again including war costs and nuclear weapons costs. In the 1970s, it began at around 8 percent and wound up at just under 5 percent of GDP. During the Reagan buildup of the 1980s, it reached 6 percent of GDP before declining somewhat as the Cold War ended. In the 1990s, it then went down further, to about 3 percent of GDP. During the first Bush term, the figure reached 4 percent by 2005 and grew to 4.5 percent by 2009, due largely to the wars in Iraq and Afghanistan. National defense spending gradually declined over most of the Obama presidency. It has ticked upward slightly in the early Trump years, and again exceeded 3 percent of GDP—though budget projections as of early 2020 would see it drop below 3 percent in the coming years. As is standard when talking about the national defense budget, these figures include costs for the wars, costs incurred by military reservists as well as active-duty troops, and the Department of Energy’s expenses for nuclear weapons activities. They do not include the spending of the Department of Veterans Affairs of more than $200 billion. Seen in this overall light, current levels seem moderate.¹

By contrast, those who criticize the size of the Pentagon budget often note that it constitutes more than one-third of all global military spending, and three times that of the number two global military power, China. Or they note that estimated 2020 national defense spending will exceed the Cold War inflation-adjusted average of around $525 billion by roughly $200 billion (expressed in 2020 dollars, as are all costs in this chapter). Or critics note that national defense spending dwarfs the size of America’s diplomatic and foreign assistance accounts, as well as its homeland security activities. Each of these latter two categories of federal spending that are relevant to overall national security, but not formally part of the national defense budget, costs currently in the rough vicinity of $50 billion to $60 billion a year.²

These observations are all simultaneously true. But they are contradictory, and thus inconclusive, in the aggregate. The US defense budget is and will remain large relative to budgets of other countries, other federal agencies, and even other periods in American history. Yet, at the same time, it is modest as a fraction of the nation’s economy in comparison with the Cold War era or even the first decade of the twenty-first century. As such, while informative on one level, these observations are of little ultimate utility in framing defense policy choices for the future. We must look deeper.

Only by looking more carefully at how defense dollars are spent can we decide if the budget is either excessive or insufficient. The ultimate test is, of course, adequacy for key missions the US military may be asked, often in conjunction with allies, to carry out—and wars it is expected to deter or, if necessary, to win.³

This chapter explores various ways the defense budget can be categorized, broken down, and defined. The chapter also explores issues like military readiness—how the Department of Defense ensures that its forces are ready-to-go for crises that may emerge quickly. It examines the economics of military bases, at home and abroad. Finally, it also discusses military acquisition, modernization, and innovation.

The Big Picture: Broad Definitions and Budget Processes

In 2020, before COVID struck, US federal spending was projected by the Trump administration to reach about $4.7 trillion, out of an economy it projected would reach $22.4 trillion in size. The deficit was expected to total $1.1 trillion, and the cumulative debt held by the public (including from all previous years) would reach $18.1 trillion. COVID then blew up the deficit and debt numbers in 2020, and reduced gross domestic product—meaning that publicly-held debt has now grown so much that it equals GDP. State and local expenditures currently constitute roughly another $3 trillion of GDP across the United States each year. Together, these figures mean that all types of government spending add up to almost 35 percent of GDP without the effects of COVID. The Trump administration’s projected national defense spending in 2020 of somewhat more than $700 billion constitutes just over 15 percent of total federal government spending in the pre-COVID budget, or about 10 percent of all types of US government spending combined.⁴

As noted, by official definitions, this US national defense budget does not capture all major government activities that in fact do influence American security. It includes neither diplomacy, nor foreign assistance, nor Department of Homeland Security operations, nor the Department of Veterans Affairs. It does, however, include the Department of Defense, the intelligence community, and the Department of Energy’s nuclear weapons–related activities, as well as war costs and DoD’s role in activities such as disaster relief.

The national defense budget is officially known as the 050 function in the federal budget. The Department of Defense’s (dominant) part of that is the 051 function. International affairs programs including diplomacy and foreign assistance are labeled as the 150 account; veterans’ benefits are found within the 700 function; homeland security is distributed among a range of accounts.

Because defense budget semantics can be confusing, it is essential to be precise. Sometimes, the nuances in wording are subtle enough that it is best to clarify them explicitly, rather than to assume they have been used precisely by whoever is employing the various terms. For example, the defense budget is often used to refer to funding for the Department of Defense only—now typically well over 95 percent of the total 050 budget. But the national defense budget also includes the nuclear weapons activities of the National Nuclear Security Administration within the Department of Energy. These latter costs, about $25 billion in the 2020 budget, are for monitoring and maintaining the nuclear weapons stockpile (which has been done without nuclear tests ever since 1992), sustaining the nation’s naval nuclear reactors, and carrying out overseas nonproliferation activities. The Department of Energy also cleans up radioactive sites that were severely contaminated during the peak nuclear production years of the Cold War.

On Capitol Hill, the annual budget appropriations process funds most DoD operations each year through a defense appropriations bill—but that bill contains somewhat less than the full DoD budget. That is because there are separate, smaller defense appropriations bills for military construction and family housing; altogether, these bills fund the entirety of the Department of Defense.

It is also important to know the distinction between budget authority and outlays. This distinction exists for all forms of federal spending, including within the national defense budget. Outlays amount to actual spending—checks written by the Treasury and cashed by individuals or corporations. Budget authority, by contrast, is new legal power to enter into contracts, granted to DoD by the Congress through appropriations bills. It can loosely be thought of as putting money into the Pentagon’s hands, which is then gradually committed and spent over the ensuing months and years, as contracts are signed and products delivered. Budget authority that is provided for a given fiscal year may be spent very quickly, as with salaries for troops. Or it may be spent slowly, as with contracts for aircraft carriers and other large types of equipment (which take years to build and are paid for in installments).⁵

A given year’s national security budget authority tends to exceed outlays when defense budgets are rising, and to fall below outlays when budgets are declining. For example, for 2020, the Trump administration requested discretionary budget authority of $750 billion and projected that outlays would be $726 billion. (Congress ultimately approved $746 billion out of the $750 billion request, when all emergency funding is included.) Put more simply, not all money that is authorized and appropriated for a given year is spent that same year, and thus changes in outlays lag those in budget authority. (On rare occasions, money that is authorized and appropriated may not be spent at all, if a given program is canceled partway through—though in such situations, the funds will often be reallocated to other programs intended to provide analogous capabilities.) It is outlays that are relevant in calculating the nation’s deficit in a given year.

Another nuance: most defense funding is considered discretionary, meaning it must be provided each and every year by the Congress. It is not mandatory spending, such as Social Security, Medicaid, and Medicare entitlements (which do not need to be approved afresh each year). However, modest amounts of defense funds, of the order of a few billion dollars a year, do count as mandatory spending and thus do not require annual reauthorization. Sometimes they can even be negative for a given year, since they include certain kinds of trust funds and user fees.

Each year the Department of Defense builds a new detailed budget proposal, for the following budget year, as part of the annual congressional budget process. That process was essentially developed in modern form with the passage of the Congressional Budget and Impoundment Control Act of 1974. (But in fact the obligation for the executive branch to submit a budget proposal to Congress each year dates back to the Budget and Accounting Act of 1921. The obligation for Congress to fund the government dates back, of course, to Article I of the US Constitution.)

In principle, this is roughly how the budget process is supposed to work—though there are many exceptions and imperfections to the system, which has functioned much less smoothly in recent years.⁶ Early in the calendar year, the president submits a budget request for the entire government to the Congress for the fiscal year that will begin that same October (for example, the request for fiscal year 2020, beginning October 1, 2019, was submitted in March 2019). That presidential request often places particular emphasis on the discretionary accounts, since it is those that must be passed by October 1 to prevent a government shutdown (sometimes averted through temporary funding even in the absence of proper yearlong budgets).

In principle, action next turns to the congressional budget committees in each house. Then, the full House and Senate approve their own separate resolutions setting broad government funding levels by category; they then agree on a compromise resolution to guide each going forward. These budget resolutions do not have the force of law, however, and are not always employed.

Attention then turns to the authorization committees and appropriations subcommittees. (Across the whole government and budget, there are total of twelve appropriations subcommittees in each chamber, which receive technical aid in the process of writing their bills by the Congressional Budget Office [CBO] as well.)⁷ The appropriations bills actually provide the money. Authorizing committees, by contrast, provide the legal foundation for the appropriations, as required by law (though, in some cases, authorizations are provided on a multiyear basis or at a different point in the calendar year than appropriations). The House Armed Services Committee, Senate Armed Services Committee, House Defense Appropriations Subcommittee, and Senate Defense Appropriations Subcommittee are the key players at this stage. Then, each chamber passes its own overall defense bills, after which the House and Senate seek to compromise on any differences w...