1998 Military Spending:

Behind the Numbers: How the Pentagon is spending your money

The Defense Monitor, June 1997, Center for Defense Information


On February 6,1997, the Clinton Administration released its budget request for Fiscal Year 1998, which included $265 Billion for the military. While this represents the thirteenth straight year of reductions in the military budget since the Reagan Administration's spending spree, the Administration's multi-year spending plan calls for military spending to level off this year, and then actually go up. The "Peace Dividend" envisioned by many at the end of the Cold War has failed to materialize.

The President's budget calls for $1.6 trillion for the military between now and the year 2002. During that same period, the Clinton Administration and Congress have agreed that they will achieve a balanced budget. The deficit for 1997 is estimated to be $126 Billion. If Congress and the Administration do actually eliminate this annual deficit, while at the same time increasing spending for the military, drastic cuts in other federal programs become a virtual certainty.

Meanwhile, Congress has already indicated its intention to add nearly $4 Billion to the Administration's FY '98 request for the military.


How Severe is the "Budget Crunch"?

For years Pentagon budget watchers have warned that the current Future Years Defense Plan (FYDP) -- the Pentagon's multi-year spending plan based on the U.S. National Security Strategy -- is under-funded. Yet in recent years Congress has added unrequested purchases of weapons systems to the budget. Many critics feel these "add ons," which reward defense contractors based in a lawmaker's home state, have only exacerbated the Pentagon's budget shortfall. According to Pentagon Comptroller John Hamre, of the $8 Billion spending overrun by the military in Fiscal Year 1997, $3 Billion of it was due to Congressional "add-ons."

In fact, of the nearly $11 Billion added to the military budget by Congress last year, $4.6 Billion was for weapons purchases not included in the FYDP. Some Pentagon officials are concerned that continuing this practice will have a "bow wave" effect; it will commit the U.S. to even greater weapons expenditures in the future, putting extreme pressure on other areas of the military budget and adversely affecting troop readiness, repairs and maintenance of existing equipment and facilities, and basic "quality of life" programs (troop pay, housing, etc.) For example, during a recent press briefing, Defense Secretary William Cohen confirmed that between 10,000 and 12,000 U.S. service personnel and their families are eligible for food stamps.

The United States already has by far the strongest military force in the world.

The U.S. built its massive military to confront the Soviet Union and its allies.

The Soviet Union has dissolved and the Warsaw Pact is gone. The Russian military is a shambles. The U.S. and other countries are sending Billions of dollars in economic assistance to Russia. There is no other nation or group of nations nearly as powerful as the Soviet Union and the Warsaw Pact were, or as the US. is.


New Wars to Justify Old Forces

The United States is the only nation in the world preparing to wage war anywhere on the globe. In fact, we are actually preparing to fight two wars.

The Pentagon's "Bottom-Up Review" in 1993 produced a "new" military strategy to fight two Major Regional Conflicts (MRCs), at the same time, at short notice, and if necessary without allies. (Later, the requirement was changed from "two simultaneous MRCs" to "two nearly simultaneous MRCs.")

Given the rapid pace at which the post-Cold War world is evolving, last year Congress mandated that the Pentagon conduct an updated review and created a congressionally approved panel to oversee the process. The Quadrennial Defense Review (QDR) was completed on May 15, 1997. The National Defense Panel is expected to release its own report on U.S. military strategy beyond the year 2015 in December. As expected, the QDR did not eliminate the "2 MRC" requirement.


A Radical Redefinition of "National Security"

Secretary of Defense William Cohen stressed repeatedly that while the QDR was to be an assessment of what forces are necessary to meet our National Security Strategy, it had to do so with the assumption that military spending would remain constant (rather than increase) for the foreseeable future. Additional warnings about future budgetary pressures on military spending came from Pentagon Comptroller John Hamre, who stated in testimony before the House Judiciary Committee that with efforts to balance the budget, "DoD budget cuts from [Fiscal Year] 1996 to FY 2002 could range from $110 Billion to $520 Billion."

Such warnings so far seem to have fallen on deaf ears, both at the Pentagon and in Congress. No one has yet suggested how to rectify the growing imbalance between Pentagon planning, Congressionally mandated spending, and the commitment by U.S. political leaders to balance the budget. It seems clear, however, that without a radical rethinking of U.S. national security needs and how best to achieve them, the combined goals of a strong military, the Clinton Administration's plan to reinvest in domestic programs, and a balanced budget will be impossible to achieve.


What are we buying?

Tactical Aircraft Modernization: The "Budget Buster"

The U.S. military is now in the process of upgrading its fleet of tactical aircraft -- aircraft designed for direct combat in air-to-air or air to-surface (ground or sea) battles. Three aircraft are now in various stages of development or production, the F/A-18E/F, the F-22, and the Joint Strike Fighter. In all, the military services plan to purchase nearly 4,000 aircraft at an estimated total cost of $350 Billion.

1) F-22 -- An air-superiority fighter which will replace a portion of the Air Force's fleet of F-15s. The aircraft will utilize "stealth" technologies, and be able to cruise at supersonic speed without afterburners, thus saving fuel. The Air Force had planned to buy 438 F-22s until the QDR eliminated 99. The total cost of the program was estimated at $71 Billion, for an average cost of $159 million per aircraft. Revised estimates based on the QDR are not yet known.

2) F/A 18-E/F -- A larger, more powerful version of the Navy's current F/A-18 multi-role fighter. The updated version is expected to carry a larger weapons load, but be as maneuverable as the current version. The pre-QDR Navy plan was to buy 1,000 aircraft at a total program cost of $81 Billion, or an average cost of $81 million per aircraft. Post QDR procurement will be between 548 and 785, depending on the progress of the Joint Strike Fighter.

3) Joint Strike Fighter -- An aircraft currently under joint development by the Air Force, Navy and Marine Corps. The services had planned to buy a total of 3,000 between 2005 - 2030; two-thirds for the Air Force, 640 for the Marines, and 300 for the Navy. (Post-QDR procurement slipped to 2,852.) The JSF would replace a variety of aircraft, including the Air Force's F-16 multirole fighter, the Navy's A-6 long-range attack aircraft, and the Marine Corps' AV-8B Harrier jump jet. The total cost of the program has been estimated at $219 Billion, making it the most expensive weapons program ever developed. The average cost per aircraft was estimated at $73 million prior to the QDR.

Critics of the various programs are concerned by the monumental cost of each aircraft, which, given the advanced technologies yet to be developed, are likely to grow. The cost of the F-22, for example, may still exceed the current $71 Billion cost estimate by as much as $15 Billion. The justification for these huge expenditures has been called into question, particularly given the superiority of the existing fleet of U.S. aircraft to those deployed by foreign countries.

A study by the Congressional Budget Office (CBO) concluded that during the development of these new aircraft, aircraft in the current fleet would have to be kept in service well beyond the twenty years that the Pentagon had planned to operate them. Meanwhile the General Accounting Office stated in a 1993 study that F-22 production could be delayed until 2010 without undue risk to U.S. air superiority. Thus, the Pentagon could continue to purchase new models of existing, proven aircraft, at a lower cost, while maintaining U.S. air dominance.

In a 1997 study the CBO also concluded that the three programs have already exceeded the projected $350 Billion price tag by $7 Billion. Further, CBO said that buying all three aircraft will cost between $14 Billion and $18 Billion each year from 2008 to 2014. This would consume up to 46 percent of the Pentagon's current annual budget for all weapons purchases, including ships, tanks, rifles, etc. Tactical aircraft purchases now total only about 6 percent of the procurement budget.

The U.S. is, and will remain for the foreseeable future, the world's dominant air power. Rather than committing our nation to huge expenditures for unneeded aircraft, we should continue to purchase new models of current aircraft, while continuing to develop the technologies which will be incorporated into the aircraft of the future.


Ballistic Missile Defense (BMD)

"Star Wars" is still playing in the Pentagon. No, they haven't added a cinema to the building. Rather the effort to develop defenses against incoming ballistic missiles continues. When President Reagan launched the Strategic Defense Initiative (SDI) in 1983, the goal was to build an impenetrable shield against thousands of incoming long-range ballistic missiles. The SDI program was scaled back under President Bush to Global Protection Against Limited Strikes (GPALS). GPALS was to protect the United States and its allies from hundreds of incoming ballistic missiles.

In light of the changed relationship with a post-Soviet Russia and in the aftermath of the Gulf War, President Clinton refocused the program to concentrate on Theater Missile Defense (TMD). TMD systems would protect a given theater of operation, generally meaning U.S. troops deployed abroad, against the more likely threat of short- to medium range ballistic missiles, similar to those used by Iraq.

Because of budgetary, technological, and treaty constraints, defenses against long-range ballistic missiles, referred to as National Missile Defense (NMD), are now focused on protecting the United States from accidental launch or from attack by a rogue state armed with a handful of these missiles. The Clinton Administration's plan for NMD is commonly referred to as a "3+3" plan. Currently in a deployment readiness posture, hardware is being developed so that at the end of 3 years (by the year 2000), a decision may be made as to whether or not threats warrant deployment of an ABM-compliant NMD system. Deployment would then take an additional 3 years to accomplish.

Indicative of the changes in the program, the Clinton Administration scrapped the name "SDI" and changed it to Ballistic Missile Defense (BMD). President Clinton's initial plans call for spending an additional $21.4 Billion on BMD over the next six years. Last year, the President requested $2.8 Billion for BMD; he received $3.7 Billion. His FY 1998 request, at $3.5 Billion, is more in tune with the wishes of the Congress.

Congressional critics find fault with the pace and funding requests of the BMD program under President Clinton. Many wish to pick up the tempo of both TMD and NMD regardless of technological difficulties. (For example, the interceptor being developed for the Army's Theater High Altitude Area Defense System (THAAD) has repeatedly failed to hit its targets.) These critics seek deployment of an NMD system by the year 2000. Although restricted by the Anti Ballistic Missile (ABM) Treaty to one NMD site with no more than 100 ground-based interceptors, some argue for a multiple site NMD system complete with space-based missiles.

Deployment of an extremely limited ABM Treaty compliant NMD system would cost $4 - 13 Billion, according to the Congressional Budget Office (CBO). Additional interceptors and improved infrastructure at a single site would bring the cost to about $29 Billion. Expanding the NMD system to additional sites and adding space-based components, as advocated in the 1997 Defend America Act, could bring the total to $60 Billion. Operating and maintaining such a system could cost an additional $2-4 Billion annually. These costs would be in addition to the approximately $80 Billion spent on BMD efforts since the program was launched in FY 1984.

Current and projected threats do not warrant upping the tempo of NMD efforts. The only nation which can directly strike the United States today with ballistic missiles are Russia, which with the help of the United States is eliminating many of it ballistic missiles under the terms of the START Treaties; China, which only has 7 intercontinental ballistic missiles; France, one of our closest allies; and the United Kingdom, which gets its submarine-launched ballistic missiles from the United States. North Korea is often labeled a near-term threat. While this famine-ridden country may be developing medium- to long-range ballistic missile capabilities, the missile that intelligence sources point to, which no one has ever seen, would barely allow the North Koreans to someday strike one of the uninhabited pieces of rock in the Alaskan Aleutian Island chain.

Given the lack of threats, high cost, and numerous technological difficulties encountered, increasing the tempo or funding for BMD activities is both unwarranted and unwise.


Military Spending How does it Compare to Other Federal Programs?

Despite talk about declining military spending and suggestions that the military has taken its "fair share" of spending cuts, military spending still consumes a huge chunk of federal government funds. And the military budget continues to be kept "off the table" in budget balancing efforts by both the President and the Congress.

In the President's proposed federal budget for Fiscal Year 1998, the "National Defense" category of federal spending (excluding veterans programs and other military-related spending) amounts to a whopping 60 percent of all discretionary spending, the money the President and Congress can allocate and spend each year. The other category of federal spending is mandatory spending, the money the federal government spends automatically unless the President and Congress change the laws that govern it. Mandatory spending includes entitlements, money or benefits provided directly to individuals such as Social Security, Medicare, Medicaid, Food Stamps, and Federal Retirement. It also includes interest payments on the national debt.


A "Leaner, Meaner" Military

Rather than take a bold approach towards redefining how to meet our national security needs, the Pentagon is determined to find savings through acquisition reforms, improved financial management, privatization of certain functions, and reduced infrastructure in order to fund other priorities such as weapons modernization. Improving the way the military does business is an important goal, and should be pursued. Unfortunately, the Pentagon's current spending practices do not encourage such efficiencies, and the savings the military will actually achieve are unlikely to be significant.


Controlling Weapons Costs

The Pentagon assumes that costs for new weapons will not increase beyond their initial projections. In the past, however, the General Accounting Office has observed that "program cost increases on the order of 20 to 40 percent have been common on major weapons programs."


Better Financial Management

The Pentagon has faced continued criticism for its poor financial practices, and hopes to achieve some savings through better money management. Yet a recent study by the Pentagon's Office of the Inspector General reported that the Defense Department's accounting is in such a shambles that effective auditing will be impossible "most likely until the next century."



The services are counting on significant savings from streamlining their purchasing systems, through reductions of red tape, easing of regulations and buying more commercial products. They hope to save between 15 percent and 30 percent of costs. In addition, the Defense Science Board reported that $30 Billion could be saved through greater privatization of support services. According to the General Accounting Office, in the past such savings have been "generally less than projected."


Reduced Infrastructure

The Pentagon had hoped to achieve significant savings through military base closures, and together with Congress performed four "rounds" of base closures since 1988. A recent Congressional Budget Office report concluded, however, that while long term savings from such closures could be considerable and that additional closures should be pursued, the Pentagon had over estimated it's near-term savings. Originally the Pentagon projected that it would gain $3 Billion annually from the first three rounds of closures, but current estimates indicate a net loss of $48 million.


Real Solutions

What is needed now are not simply the same old attempts at reform, but deeper reductions in our military forces based on an accurate assessment of the threats to our national security, and the elimination of spending on wasteful, unnecessary weapons programs. As a first step, the Center for Defense Information has identified twelve Pentagon programs which could be terminated or scaled back significantly as part of efforts to reduce the Federal budget.


Center for Defense Information
1779 Massachusetts Ave NW
Washington, DC 20036


CDI's Selected Options for Reducing Military Spending

1. Reduce nuclear delivery systems within overall limits of START II

2. Cancel the New Attack Submarine (NSSN)

3. Reduce the number of aircraft carriers and Navy air wings to 10

4. Reduce procurement of DDG-51 Destroyers from 3 to 2 per year

5. Cancel the purchase of the Navy's F/A-18 E/F fighter and buy the current model

6. Cancel the Marine Corps' V-22 program and buy additional CH-53E helicopters

7. Cancel the Joint Strike Fighter

8. Cancel the Air Force's F-22 aircraft program

9. Buy no more than 40 C-17 transport aircraft and purchase commercial airlifters instead

10. Reduce the number of Army light divisions

11. Cancel the Army's Tank upgrade program and lay away production facilities

12. Cancel the Army's Comanche


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