Why a Cold War Budget
Without a Cold War?

A bottom-up analysis of our defense needs and what it will take to meet them

by Dr. Lawrence Korb, Former Assistant Secretary of Defense

from Business Leaders for Sensible Priorities website



In the decade since the unexpected end of the Cold War and collapse of the Soviet Empire, the nation has worked to establish the appropriate and realistic size and shape of the military structure necessary to protect vital national security interests. Despite the fact that the U.S. has spent over $2 trillion on national security since the end of the Cold War (more than all of our potential adversaries combined) and conducted no less than five analyses of our defense spending needs, neither conservatives nor liberals appear to be happy. The Joint Chiefs of Staff (JCS) argue that current readiness is frayed and that long term health of the force is in jeopardy. Republicans in Congress argue that President Clinton has allowed the military to become hollow. Many liberals wonder why, even after the Cold War, defense spending is still rising while social discretionary spending is declining.

The reason for this unhappiness is clear: neither the Pentagon, the Clinton Administration, nor the Congress has done a real "bottom-up review" of our interests, the real capabilities of our potential adversaries, and the forces needed to both protect our interests and defeat our opponents. The Department of Defense (DOD) will argue that it has, in fact, done this on three occasions: in 1990 when the JCS designed the Base Force; in 1993 when the Clinton Administration conducted what they called a Bottom-Up Review (BUR) of defense requirements; and in 1997 when the Pentagon's Quadrennial Defense Review (QDR) updated the BUR. But the fact of the matter is that all three reviews were merely attempts by the Pentagon to maintain force structures and military spending at levels as close to Cold War standards as politically feasible.

As the Congressionally mandated National Defense Panel noted in late 1997, these Pentagon reviews were nothing more than a rationalization for the existing force structure. Rather than looking at the real capabilities of our potential adversaries, the Pentagon studies used the U.S. military of the 1980's as a basis of comparison. It is as if Bill Clinton's military was structured to go to war with Ronald Reagan's rather than that of Iraq or North Korea.

For example, the Air Force has requested more money because the "mission capable rates" of its aircraft have declined from 80 percent in the 1980's to 75 percent today. The Navy notes that a decade ago all of its deploying ships were in a C-1 readiness status; today, some vessels are allowed to deploy in a C-2 status. The Marines point out that mission capable rates for their equipment has dropped from 90 percent to 85 percent. The Army has reduced tank training hours by 20 percent.

Even assuming that all of these problems are caused by lack of funds (and that is dubious because readiness spending per capita is higher in real terms than it was a decade ago), readiness ratings of U.S. forces are the highest in the world. And, their margin over their potential adversaries is increasing every year.

The Pentagon has been remarkably successful in its endeavor to maintain high levels of funding. The Clinton Administration had planned to spend nearly $1.7 trillion in defense between FY 1998 and FY 2003. After adjusting for inflation, defense spending in the first Clinton administration was at 88 percent of the average that the U.S. spent on defense from the end of the Vietnam War to the end of the Cold War. Defense spending in the second Clinton administration is likely to be even higher in real terms. As a result of complaints by the Joint Chiefs of Staff and pressure from Congress, the Administration wants to add $112 billion to the projected level of defense spending over the next six years. If the Congress continues its practice of adding funds to the Clinton request, the annual defense budget could be back to its Cold War average of $320 billion early in the next century. In essence, this nation would have a Cold War budget without a Cold War.

To be sure, the end of the Cold War did not mean the end of history; the U.S. does still need to have substantial military forces to carry out a variety of missions. The Armed Forces of the United States need to be prepared to deter any conventional or nuclear attacks against the U.S., our allies, and our interests. If deterrence fails, the U.S. forces need to be able to conduct military operations, be it a major war thousands of miles from our shores or keeping the peace in a place like Bosnia, alleviating human suffering in Bangladesh or Central America, or making a show of force in a crisis in the Taiwan Straits.

The United States military deters attacks against American interests by maintaining sufficient conventional forces in the active and reserve structures at home and around the globe, in a sufficient state of readiness, with sufficient mobility to respond quickly enough to defeat any potential adversary, with a minimum of casualties. In addition, this nation needs to spend sufficient funds on investment to replace worn-out equipment and to maintain a technological edge over potential rivals. Finally, the military needs to have sufficient nuclear forces to deter any nation from using their own weapons of mass destruction.


What would such a force look like and how much would it cost? This force would have up to 2 million men and women in its Total Force (1.2 million active and 0.8 million reservists). The conventional component would be organized into eight active Army divisions, 15 Army National Guard brigades, nine Navy carrier battle groups and eight air wings, 20 Air Force tactical air wings with 65 planes in each wing, and three Marine divisions and three air wings. This realistic force is compared to the current force in Table 1.

About 50,000 people in this force would be forward deployed in Europe and another 75,000 in Asia, as opposed to 100,000 in each area now. There would be sufficient air and sea lift to move four Army divisions and one Marine division to an area as far away as the Persian Gulf within 30 days. Additionally, enough materials would be pre-positioned in Europe, Asia, the Persian Gulf and the Indian Ocean to enable these ground troops and the deploying Air Force wings to become an effective fighting force upon arrival. The planes, ships, and tanks would be equipped with the most sophisticated precision guided munitions that would enable them to strike military targets with a minimum of risk to the combat forces. These conventional forces would be backed up by up to 1,000 strategic nuclear weapons.

These conventional forces would be capable of fighting one major theater war while conducting a Bosnia-type peacekeeping operation and maintaining a presence in Europe, the Gulf, and Asia. The forces would adopt a posture of tiered readiness -- maintaining its forward deployed and immediately deployable forces in the U.S. in a high state of readiness (C-1 or C-2) while allowing its late deploying forces to maintain a lower state of readiness (C-3 or C-4). The cost of paying and operating this force would amount to no more than $145 billion -- $60 billion in personnel costs and $85 billion in operations and maintenance (O&M). This compares to the approximately $170 billion now being spent to maintain a total force of 2.4 million soldiers capable of fighting two major theater wars in a high state of readiness with an additional 200,000 soldiers permanently deployed in Europe and Asia.

There are some who will argue that the U.S. will unduly jeopardize its national security interests if it does not maintain the capability to conduct a minimum of two major regional contingencies simultaneously. If such an unlikely situation should occur, our 2 million person Total Force would have sufficient residual power to inflict incredible devastation on any aggressor. The Pentagon says that a major theater war would require four Army divisions, four Marine brigades, ten Air Force wings, and four Navy carrier battle groups. Our "smaller" force has twice that amount of combat capability, and our allies in these potential hotspots, e.g. South Korea, are becoming stronger than our potential adversaries, e.g. North Korea. In fact, all of the other top military forces in the world are bound by treaties to come to our defense if we are ever attacked.

Others will argue that cutting the forces in Europe from 100,000 to 50,000 could destabilize the continent with particularly devastating consequences. However, the new united Europe with its own common currency should be able to handle its own problems with a minimum of U.S. involvement. Europe in 1999 is not the Europe of 1939 or 1945. In fact, the total GDP and population of the European Union is greater than that of the U.S. It only lags the U.S. in defense spending. All the European member states combined currently spend $100 billion less in defense than the U.S., hardly an equitable burden sharing arrangement.


Military equipment wears out over time and must be replaced. Moreover, U.S. military forces need to maintain their technological edge over their potential adversaries. Therefore, the U.S. needs a robust investment budget.

Since the U.S. has such a technological edge over any likely opponent and is no longer in an arms race with the Soviet Union, it does not need to continue deploying the next generation of weapons platforms (planes, ships, and tanks) at the same hectic pace as it did during the Cold War. The U.S. military can replace its aging equipment, and actually increase its technological edge, on an investment budget of up to $80 billion a year -- $40 billion for procurement, $35 billion for research, development, testing and evaluation (RDT&E), and $5 billion for construction. This modernization budget of $80 billion is more than the total defense budgets of Russia and China combined and eight times more than the combined defense budgets of the five rogue states (Iran, Iraq, Syria, Libya and South Korea) which the U.S. considers likely opponents in a major theater war.

Unfortunately, since the end of the Cold War the U.S. military has continued its Cold War practice of rushing new generations of weapons systems into production to stay ahead of its putative rival. But, since the collapse of the Soviet Union there is no competing super power, and, as in the other areas of military capability, the U.S. is in a modernization of arms race with itself. The Air Force is developing approximately 340 of the high performance Stealth Fighter, the $64 billion F-22 to replace the F-15 and F-16, and the $46 billion Navy 548 F/A-18 E/F to replace the F/A-18 C/D. This is occurring even though the existing F-15, F-16, and F/A-18 C/D tactical fighters are already the best in the world and likely to remain so for the next several years.

This same phenomenon is occurring in ships and tanks. In this decade alone, the Navy is buying three Sea Wolf submarines at a cost of over $13 billion and now plans to buy 30 new attack submarines at a cost of $64 billion. They are doing this even though its current SSN-688 Los Angeles class submarines are still superior and have many years of useful life left. The Navy also continues to buy Nimitz Class Carriers at a cost of $5 billion each, even though it does not need to maintain as many carriers forward deployed and lacks a legitimate blue water adversary. Similarly, the Army is spending $700 million a year to upgrade its M1-A1 main battle tanks even though they are far superior to anything in the world. Even the normally frugal Marines are not exempt from this procurement phenomenon. Rather than relying on helicopters to transport their troops from ship to shore, they want to purchase the V-22 tilt rotor Osprey at a cost of $81 million per unit for 458 units. This is more than the cost of the world's most sophisticated fighter, the F-15, which costs $50 million per plane. The Army also wants to purchase the sophisticated Commanche (RAH-66) helicopters for $37 million apiece, or $48 billion for 1,292 of these helicopters.

Because these next generation weapons are so expensive, the U.S. military cannot replace its aging equipment on its current $100 billion investment budget. For example, by 2002, 75 percent of the Air Force planes will be 20 or more years old. But, if the Pentagon adopted a more realistic buying strategy, it could actually modernize its force more rapidly at a lower cost. The Air Force should continue to buy F-15's and F-16's instead of the F-22 and the Navy F/A-18 C/D's instead of the F/A-18 E/F. The Air Force could purchase seven F-16's or four F-15's for the price of one F-22, while the Navy could buy two F/A-18 C/D's for the price of one F/A-18 E/F. Both services could then wait for the Joint Strike Fighter (JSF) which is scheduled to go into production in 2003. The JSF, which will be bought by all the services, is better that the existing generation of tactical aircraft, and its projected cost of $219 billion for 3000 planes, or $73 million per plane, is much less than the F-22 ($188 million) and the F/A-18 E/F ($84 million).

Although the Navy does need more ships, it does not need to buy two new carriers, 30 advanced submarines, and 57 sophisticated destroyers. It should purchase more missile-firing frigates and develop arsenal or missile-firing ships. These vessels will be capable of firing hundreds of Tomahawk missiles against the likes of Sadam Hussein and Osama Bin Laden at a much lower cost than carrier-based planes. The Marines need new ways to get to shore, but helicopters like the CH-53 would do just as well as V-22's. Likewise, the smaller Army does not need to purchase nearly 1300 Commanche helicopters.

Since the services have already spent considerable sums of money on developing these new highly sophisticated weapons, the military could buy some of them so that the taxpayer will receive some return on the investment. These super sophisticated weapons could serve as "silver bullets" like the fifty 117-A Stealth fighters that bombed Baghdad in 1991, the 100 B-1 bombers, and 20 B-2's that the U.S. has in its inventory. Under an $85 billion investment budget, the U.S. could afford up to 100 F-22's, 200 F/A-18 E/F's, 100 V-22's, 500 Commanche Helicopters, 15 new attack submarines, and 30 DDG-51 destroyers. In addition, a $30 billion RDT&E would keep our forces on the cutting edge of technology. These changes in conventional investment programs and the savings are displayed in Table 2.

There are also some areas where the Pentagon should invest more money. It should spend an additional $2 billion a year on buying faster sea-lift, more Civilian Reserve Air Fleet (CRAF) planes, and more refueling aircraft. These lift enhancements will cure the existing shortfalls in military lift and enable DOD to deploy its forces more rapidly to any potential trouble spots.


The U.S. currently spends over $30 billion a year on its strategic nuclear forces. This is in excess of 10 percent of its total defense budget and makes little sense in an era when the U.S. and the former Soviet Union are no longer practicing mutual assured destruction. Indeed, the problem is not that the Soviets will launch a strategic nuclear weapon against the U.S. but that its nuclear weapons, fissile material, or technology will make its way to a rogue nation.

At the present time, the U.S. and Russia have both ratified the Strategic Arms Limitation Treaty (START I) which limits both sides to 7,500 strategic nuclear weapons. The U.S. has ratified START II, which cuts the number to 3,500. Unfortunately, the Russian Duma has not. However, Russia will not be able to afford anywhere near 7,500 weapons; its Deputy Prime Minister estimates that they can only maintain several hundred. The U.S. argues that it cannot cut its force below START I levels until the Russians ratify START II. And it continues to buy strategic nuclear weapons. For example, the QDR plans for the U.S. to buy over 400 new Trident D-5 submarine- launched ballistic missiles. This is absurd. The U.S. should unilaterally announce that it is cutting the number of weapons to a level no greater than 1,000 and invite Russia to follow. This number is more than enough to destroy any possible targets and deter any nation contemplating the use of weapons of mass destruction.

Even maintaining about 1,000 strategic nuclear weapons and related programs including nuclear waste management and environmental remediations should cost no more than $15 billion annually.


There is no doubt that the U.S. needs to be concerned about attacks from ballistic missiles either against our troops in the field (Theater Missile Defense, or TMD) or against U.S. territory (National Missile Defense, or NMD). Over the past 15 years, DOD has spent $50 billion trying to construct a defense against ballistic missiles. Even with the collapse of the Soviet Union, the Pentagon still spends the same amount each year as it did during the Reagan years, when the President initiated his Strategic Defense Initiative (SDI). The billions have yielded no tangible success to date.

For FY 1999, which began on October 1, 1998, the Pentagon had planned to spend about $4 billion on BMD research and development, approximately $3 billion was supposed to go for TMD, and $1 billion was slated for NMD. BMD is now the largest single investment program in DOD. Nonetheless, the Republicans in Congress want the deployment of BMD accelerated and added another $1 billion to the program for FY 1999. This was done in spite of the fact that the Chairman of the Joint Chiefs of Staff (JCS) said that putting more money into the program will not produce a product sooner. In fact, the whole BMD program should be funded at no more than $3.0 billion a year -- about $2.5 billion for TMD and $0.5 billion for NMD. The Army's Theater High Altitude Air Defense System (THAAD) has failed all five of its tests because the Pentagon has felt pressure to produce results quickly. Cutting funding for THAAD would allow it to be developed in a slower, more thoughtful manner.


Secretary of Defense William Cohen estimates that keeping unnecessary bases costs the Pentagon and the taxpayer about $3 billion a year. Cohen would like to put the savings into buying unneeded tactical weapons like the F-22. The savings should be returned to the taxpayer as soon as the bases are closed.

Each year the Congress adds a number of programs to the military budget. These earmarked or special interest items, which range from $400 million for six unrequested C-130 Aircraft to $14 million for work on the "Northern Lights," amount to about $4 billion a year. The defense establishment would wish to see the money spent on unnecessary systems like the F-22, but these funds, too, should be returned to the taxpayer.


A force costing $225 billion a year would give this nation more than enough military capability to protect our interests and apply military power where needed. If this $225 billion force is given enough money to keep pace with inflation, our military will actually increase its margin of superiority over its potential adversaries.

There is no doubt that the U.S. disarmed too rapidly in 1919 and in 1945. But, this is not 1919, nor 1945. We should not make the opposite mistake and not disarm at all after the Cold War. Trying to determine how much to spend on defense on the basis of what we spent in the Reagan years, or as a percentage of GDP or the federal budget, is illogical. We disarmed after World War I and II. Our adversaries did not. That was the problem. Since the Cold War, the rest of the world has disarmed while we have not. Would the U.S. be any less secure if President Clinton had spent $100 billion less on defense in his first administration or spent $200 billion less in his second? I think not. But the country would be a lot better off.


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