Today's Contribution to the Hollow Defense Debate ...
The Washington Post Weighs in Against Tax Cut to Protect Defense Budget

August 16, 1998

Comment: #168

Discussion Thread:  #167

Reference:

[1] "Warning Signs in the Military," Washington Post, August 16, 1998; Page C06

Get Ready for a Phony Debate Over Defense Spending.

The editors Washington Post have weighed in with yet another contribution to America's hollow defense debate (see Reference 1).

They cite only three examples of deteriorating readiness (pilot retention in the Navy, spare parts shortages in the Air Force, and recruiting difficulties) and then assert the benefits of the massive Reagan buildup are finally running out.

This editorial contends these readiness problems are different from those of the 1970s, because the erosion is far less extensive, and today's forces are more capable. To be sure, the military has not yet reached the dismal state it reached in the late 1970s, but as readers of this list know, the limited impression given by these three examples understates the extent of erosion.

But they raise an interesting question: Are we seeing a re-run of the 1970s?

It is important to appreciate that real readiness issue relates to the MOMENTUM toward hollowness. The strain first started showing up in 1994 (when the Navy, for example, grounded one-quarter of its carrier air wings for lack of money in the 4th quarter of FY 1994), but then, the momentum toward hollowness was dismissed as anecdotal, because it built up slowly, and took the form of isolated reports about specific units ... until about 18 months ago, when it began to accelerate, and the picture began to coalesce. So, the first point to note is that the Post editorial incorrectly compares today's situation, which is a 'work in early progress,' to the much more mature development of the late 1970s.

More importantly, however, the editors of Post committed a crucial error when they assumed the erosion in readiness indicated the BENEFITS of the Reagan buildup are finally running out. Let's see why this error led them to the wrong answer.

In fact, decisions made during the Reagan and Bush Administrations planted the seeds for today's problems, just like decisions made during the Nixon and Ford Administrations planted the seeds for the meltdown in the late 1970s.

The Reagan buildup is more accurately characterized as a spendup. Forces did increase in size for a while, primarily because the military retained its older weapons longer, while it added ever-more complex weapons to its inventories. Retaining older weapons was necessary, because the cost of buying new weapons increased faster than even Ronald Reagan could increase the budget, and consequently production rates were too low to replace all the weapons on a timely basis. (Some people, including me, believe that the "cost growth greater than budget growth" asymmetry is an structural consequence of the endemic crony capitalism, which takes the form of the front loading and political engineering power games practiced by the players in the military-industrial-congressional complex) But whatever the cause of cost this growth, the effect was predictable: by 1990, the average age of our weapons was older in 1980, and today, forces are not only older, they are smaller they were in 1980. The only major exception to this aging trend in the 1980s was for tanks and armored personnel carriers, and that was a temporary phenomenon.

Rapidly rising unit procurement costs are the main reason why the "buildup" did not even last through the Reagan Administration, and why forces began to shrink well before anyone imagined the Soviet threat might disappear. The number of fighter airplanes in the Air Force began to shrink in 1987, just after reaching the goal of 40 tactical wings, for example. The Navy never reached its goal of 600 ships, but the fleet began to shrink in 1988. Those who think inflation-adjusted cuts in the procurement budget after 1985 caused these changes have to explain how they could occur, when the weapons bought in 1985 were not even delivered until 1988 or later.

To be sure, readiness improved dramatically during the 1980s, but even in this category, there are questions relating to the proportionality of the readiness outputs to the budgetary inputs. For example, the Air Force increased training rates from 16 to 20 hours per month for its fighter pilots, but it never met the goal of 22 hours per month, which had been established during the Carter Administration. On the other hand, between 1980 and 1990, operating tempos per force unit of most other mission areas (flying hours/aircraft, steaming days/ship, miles/tank, etc.) remained relatively constant or declined, while money spent on commodity purchases in the operating budget increased by 58% in inflation-adjusted dollars and payrolls increased by 6%. The basic reason why such small output increases flowed out of large input increases was the accumulating effect of the rapid rate of growth in operating costs, which created a phenomenon known in the Pentagon as the "rising cost of low readiness," which means that even the cost of maintaining a force a minimal readiness grew faster than budgets during the 1980s.

The higher complexity weapons bought during the spendup of the 1980s set the stage for an acceleration in operating costs in the 1990s, and that is why readiness can decline today, even though operating expenses per combat unit are now HIGHER than they were in the 1980s. The burden of peacekeeping deployments is onerous, but it is not the fundamental cause of the budgetary pressure (see Comment #100, "Why the Lilliputians are Tying Down the US Army).

To make matters worse, when the Cold War ended, decision makers, like their predecessors at the end of the Vietnam War in the early 1970s, planted the seeds for higher future budgets by launching a modernization program made up of a new generation of even higher-cost weapons [see my report on the Defense Budget Time Bomb at the hot link under my signature]. These weapons are now beginning to move from research and development into production. The transition to procurement means that procurement budgets will have to start increasing rapidly for the next eight to ten years. The growth of procurement requirements is known as a procurement bow wave, and this bow wave is building up, just like the earlier one did beginning in 1975. In this regard, the following comparison of the actual budget changes caused by the drawdowns and the predicted budget changes of the future spendups of the post Vietnam period to the post-Cold War period are suggestive, to say the least:

First the Budget Drawdown - in Actual Budgets

Peak - to - Trough (constant dollars) Vietnam 1968-1975 Cold War 1985-1997 Tot. Budget: -31% -35% Procurement -51% -64% Operations -25% -22%

Now the Hoped-For Spendup - in Planned Budgets (in current dollars because 1977 plan cannot be deflated)

Post Vietnam 1977-1981 Post Cold War 1997-2002 (Date: Jun 75) (Feb 97) Tot. Budget: +20% +11% Procurement +54% +54% Operations +13% -1%

To paraphrase, Santayana, those who don't remember history may be condemned to repeat it.

Maybe the reason we have a modernization plan (54% growth in procurement bow wave) that can not buy enough equipment to modernize the force on a timely basis (like that of the late 1970s) and a rapidly deteriorating readiness posture (like the one that emerged in the mid 1970s) is because the post-cold war drawdown and planned spendup exhibit the same pattern of distorted budget priorities as did their post-Vietnam predecessors. If anything, the lower rate of budget growth now projected for future operating budgets (-1% versus 13% projected in 1975), coupled with the rising cost of low readiness (a consequence of the more expensive weapons bought during the 1980s), suggest the possibility of a more serious meltdown in the years ahead.

Bear in mind, the plans of the mid-1970s needed a Ronald Reagan to bail out their consequences in the 1980s. Does anyone believe there will be a another equivalent spendup to bail out the future consequences of today's budget shambles after 2002, particularly when one considers (1) the fact that the Defense Department's accounting records can not even be audited, (2) there is no threat to justify such budget increases, and (3) expenses for social security and Medicare will have to rise rapidly just to keep up with demographics, even if we assume these programs (particularly Medicare) get much more efficient?

Although the editors of the Post acknowledged the mismatch between plans and resources, but they did not suggest the possibility that our readiness problems might be self-inflicted wounds created by a struggle to avoid the changes brought about by the end of the Cold War. Instead, they posed only three business-as-usual alternative: (1) you could promise greater efficiencies by closing bases and reforming management [the Pentagon says it is doing this], (2) you could let readiness slide while devoting more resources to developing weapons for the future [the budgetary allocations in the above table suggest that the Pentagon is trying to do this], (3) or you could protect readiness by cutting back and consolidating future arms purchases [the only suggestion even hinted at is a consolidation of the three unaffordable tactical fighter programs].

Its hard to see how such wishy washy recommendations will change anything, but when they concluded we "should honestly acknowledge the risks in any such approach," and that it would be "irresponsible to ignore these readiness warning signs," the real game became clearer: the Post doesn't want a tax cut, because we may need higher defense budgets to protect business-as-usual.

And that, dear reader, is today's contribution to the Hollow Defense Debate.

Don't you think the United States would be better off if the government started examining the fundamentals of why we have a modernization plan that can not modernize the force, why we have readiness problems, and why we have an unauditable bookkeeping system? Then, we might be able to honestly acknowledge the real risks of protecting the cold war status quo.

[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:

Warning Signs in the Military Washington Post Editorial, August 16, 1998; Page C06

Excerpts:

...

There are, in fact, key differences between today's armed forces and the degraded units of the post-Vietnam era. First and foremost, the force today remains far readier and more capable; the signs of deterioration today are real, and troubling, but much less extensive. But a second key difference is the absence of political outcry as to the decline in military spending.

...

The very different political atmosphere in turn reflects a third key difference: the end of the Cold War. Mr. Reagan cited the Soviet threat as the first rationale for his buildup. Today, many liberals and conservatives alike question why the United States can't slash military spending more -- why it has to spend more than double what Russia and China combined devote to their armed forces. Yet these same skeptics in many cases expect the U.S. armed forces to be ready for action when they see fit -- to end genocide in Bosnia or starvation in Somalia, to restore democracy in Haiti, to build a missile defense for North America.

...

The bottom line is that no democracy wants to spend money on its army in an era of relative peace, but such peace is much less likely to endure if the United States fails to maintain a strong and ready force. A tax cut now would intensify competition between domestic and national-security spending just as the military is showing signs of being squeezed about as much as it can stand. Congress and the administration both would be irresponsible to ignore those warning signs.

Copyright 1998 The Washington Post Company