What Should America Spend on Defense and Why?
Just like with cheap car insurance, the United States might not see the consequences of under-spending on defense until something really bad happens. It is worth spending more today to be prepared for the challenges of tomorrow.
The debate about defense spending will likely reignite in September as Congress returns from recess and the end of the fiscal year draws near. Unfortunately, much of that debate will not be very helpful or informative.
Instead of arguing the merits of a particular military spending level, much of the debate will revolve around Democratic opposition to increasing defense spending without proportional increases to non-defense spending. The usual arguments for cutting defense spending will likely pop up as well. But what’s really needed is a more thoughtful debate. Once you get beyond the talking points and the political agendas, what should the United States spend on defense?
The Ideal Defense Budget Debate
Determining what the United States (or any country) should spend on national defense is much easier in theory than in reality. But let’s start with the theory.
The first step is determining the vital interests of the United States. What must we, as a country, protect? Almost everyone would agree that we must protect America and our citizens from attacks by terrorists or nation-states. But beyond protecting the homeland and its people, it gets more complicated. Should the United States protect its allies? International commerce and the commons in and on which this commerce happens? The human rights of individuals in other countries? These are the types of questions that need to be answered in order to determine the vital interests of the United States.
The next step is figuring out what threatens these vital interests. Some of these threats are obvious, such as nuclear war and terrorist attacks. Some threats seem to be growing, such as Russia’s aggressive actions and China’s cyberattacks. The goal should be a clear-eyed analysis of what truly threatens our vital interests today and what may threaten those interests in the future.
The third step is figuring out how to protect America’s vital interests from both the threats of today and those of the future. This will likely include elements of hard power (i.e. the military) and soft power (i.e. diplomacy, alliances, trade) used in concert to deter or, if necessary, defeat the threats. This should produce a cohesive strategy for protecting America’s vital interests. While outlining a full strategy is too large a task for this article, the most recent National Defense Panel report is a good bipartisan example that assesses vital interests and threats and then outlines a strategy.
Once you have a strategy, you need to develop the tools to implement that strategy. For the military, this means figuring out the capabilities and the capacity needed to execute the strategy. For example, protecting America from North Korean nuclear missiles may require an interceptor (a capability). But one interceptor is probably not enough — instead you need enough interceptors (capacity) to defeat all of North Korea’s nuclear missiles. While capabilities are usually pretty self-evident, questions of capacity are often more complex. Most Americans would agree that the U.S. Air Force should have the ability to defeat the best fighter aircraft of our potential adversaries. But should the Air Force be big enough to fight against more than one potential adversary simultaneously?
Answering questions of capability and capacity will lead directly to a defense budget. The U.S. Navy needs a certain number of destroyers at any given time and the average lifespan of a destroyer is known, so the number of destroyers that need to be built per year can be figured out. This process can be repeated for each military capability, which eventually produces a defense budget.
Of course, reality is not that simple. The defense budget is often constrained for economic or political reasons. The gap between what the United States actually spends and what it takes to fully resource and execute the strategy is risk. Unfortunately, risk is difficult to measure, but all too easy to ignore. A particular threat may be out of sight and out of mind, but it still exists and could still harm a vital interest of the United States. It’s similar to buying cheap car insurance. It may save a few bucks and turn out fine as long as you never have an accident. That is what it means to accept risk.
To be clear, a strategy-based defense budget should not be an excuse for a wasteful defense budget at any level. On the macro level, if the United States spends too much on defense, it is wasting the precious resource of taxpayer money and contributing to the burden of debt on future generations. The total defense budget should not be one dollar more than absolutely necessary. On the micro level, wasteful and inefficient programs prevent capabilities and capacity from being used to protect the nation’s interests. Additional reforms must be implemented so that every dollar is used efficiently and appropriately.
The Real Defense Budget Debate
So in theory, that is how a defense budget should be built. But where do things really stand? Since the imposition of the Budget Control Act in 2011, the base defense budget (excluding war costs) has gone down by 15 percent in real terms, while the threats to U.S. vital interests have, if anything, increased. The Heritage Foundation’s 2015 Index of U.S. Military Strength assessed the current capacity, capability, and readiness of the U.S. military as “marginal.”
In this context, President Obama has proposed increasing the base defense budget to $561 billion in FY2016, which represents a 5.8 percent inflation-adjusted increase over FY2015 defense spending. Republicans in Congress also want to spend $561 billion on defense, but plan to use overseas contingency operations (OCO) funding, or war budget, which is exempt from the Budget Control Act spending caps. In other words, the defense spending debate will not really be about defense spending. The true driving forces of the debate are the use of a budget gimmick and Democratic opposition to increasing defense spending without proportional increases in non-defense domestic spending.
While the White House and Congress propose a defense spending level of $561 billion, many believe this is still well below a strategy-driven defense budget. A Heritage Foundation analysis suggested $584 billion as a starting point, a 10 percent increase over FY2015. The bipartisan National Defense Panel argued that the last budget proposal from former Defense Secretary Robert Gates in 2012 should be the minimum defense budget. For FY2016 that would be $638 billion, which is 20 percent higher than FY2015 in inflation-adjusted dollars.
Let’s assume for a moment that the defense budget was increased to the Heritage Foundation or National Defense Panel’s preferred levels in FY2016. Where would this money come from and where would it go? Both the Heritage analysis and the National Defense Panel point out that entitlement programs are driving the national debt and must be reformed. For example, with two months of FY2015 remaining, the three major entitlement programs have already spent $108 billion more than last fiscal year. Until these programs are reformed, the budget situation will remain very challenging for discretionary spending. The Heritage Foundation analysis also proposes ways to save more than $50 billion in non-defense discretionary spending in FY2016 alone.
The reality is that imposing many of these reforms to pay for increased defense spending will be politically challenging. The tempting alternative is to either increase deficit spending or increase taxes. Neither is a wise route. Increased deficit spending (and therefore higher national debt) has been shown to hurt economic productivity. Similarly, increasing taxes also hurts economic productivity. Enacting reasonable entitlement reform and cutting non-defense discretionary programs is the best way forward. There is much debate to be had on how best to reform entitlement programs and where to cut non-defense programs, and it will not be easy, but it is the best path toward an economically strong and militarily secure country.
And where would this money go? The Heritage analysis proposes $31 billion in specific additions, primarily in preserving force structure and increasing readiness and modernization. This includes keeping the Army active duty end strength at 490,000 and the Marine Corps active duty end strength at 183,000. It also includes things like preserving the Navy cruiser fleet and accelerating F-35 purchases for the Air Force. Another obvious place to increase spending is in response to the military’s unfunded priorities lists. The FY2016 requests from each service total $21 billion and are largely focused on smaller items, such as an Army facility sustainment request for $912 million.
While these documents provide a good way to increase the defense budget by roughly $52 billion, defense spending advocates should be willing to recognize that increasing defense spending too rapidly can be wasteful. Immediate budget increases can preserve today’s force structure, increase readiness, and increase procurement quantities for current production lines. New technologies and systems, however, cannot be bought overnight and large cash infusions can actually wreak havoc. The ideal scenario is an immediate defense budget increase to preserve force structure while increasing readiness and modernization. This should be followed by a steady increase over time to allow for the development of future systems and technologies.
Whatever final defense budget number Washington settles on for FY2016, it will doubtless be well below the minimum level dictated by a rigorous, risk-informed, strategy-based analysis. Just like with cheap car insurance, the United States might not see the consequences of under-spending on defense this year. But when the accident happens, or when the threat grows so great not even Congress can turn a blind eye, the costs will be higher than if we had adequately invested in national defense today.
Justin T. Johnson is the senior analyst for defense budgeting policy in The Heritage Foundation’s Allison Center for National Security and Foreign Policy.
H.H. GAFFNEY 
William Geist 
John King 
Malcolm Kantzler 
Having been involved in all this business for 51 years until my retirement two years ago, what on earth does this guy think DOD has been doing all that time, especially since program-budgeting was introduced by McNamara back in 1961? Most of the force numbers for any and multiple scenarios are pure inventions — that is, all numbers for future scenarios are inventions, usually by some dumb major in the basements of the Pentagon (or worse, by the Regional Commanders, who haven’t the slightest idea what a dollar is). But as we see, the real objective in this, a Heritage Foundation paper, is to dismantle the U.S. social safety net (even though their concept was originally the basis of the now VERY SUCCESSFUL Affordable Care Act). But the big, big enemy for Heritage lurking in the background, the most awful threat to American and its wealth (now 63 percent in the hands of the One Percent) is the deficit and debt. Put it another way, there is no economics in any of the calculations (inventions) of this article. What the country really needs is growth and jobs, not defenses against almost-nonexistent North Korea nuclear missiles, and the immediate best way is “fiscal policy” (a dirty word for Heritage’s monetarists) and huge investments in infrastructure, innovation, and education. We can actually do both those and defense, considering zero interest rates and the fact that no country that prints its own money has ever defaulted on its debts. By the way, I sat in on the discussions of the National Defense Panel, critiquing the QDR, a few years ago. I have never witnessed more fantastic and irresponsible war-mongering.
Isn’t there a certain amount of logic in all of this analyzing of data? I mean, why isn’t there a clear line between what’s needed, not needed, wasted, not wasted and so forth? And I’m not just talking about social programs or DOD, but EVERY AVENUE FOR FEDERAL SPENDING. Furthermore, if there is some murkiness among those logical avenues, why are we still wanting to curb economic production at the expense of social programs when sufficient & disciplined economic production would most likely warrant those programs useless?
In other words, spend the money on economical production so that the DOD, social entitlement programs and other avenues of federal spending are not so dependent upon tax dollars, but their own economic successes. And if there are no economic successes associated with their ability to be efficient and economically competent, then they need no longer to exist right? Or at least demand our tax dollars. Either spend wisely on what’s necessary for economic growth in your own depts. or don’t ask to to throw tax payer money away at it, as we continually do with these entitlement programs riddled with caveats. If you can’t be responsible enough with your own economic success to not warrant more, but less tax payer money in the future, then there should be absolutely no reason to continue wasting tax payer dollars on them.
I’m sick of the amount of taxes being spent in comparison to the quality of economic and social life in this country. No where else does it take this much money to do have of the things we do with it. The amount of waste is no doubt our biggest driver of debt. Not because it’s all wasted, but because the logic used in arriving at the number of tax dollars needed to fund something is full of inconsistencies as it applies to fiscally disciplined economics. Again, focus more on economic efficiency, and less on how much money they can throw at entitlement programs and other extremely wasteful economics.
I’m sorry that WOTR posted this same-old, same-old, the-Pentagon-budget-isn’t-big-enough nonsense. If you had spent 30 years working inside that behemoth you’d know they are one of THE most wasteful departments in the federal government! Absolutely NO engineering discipline when its comes to acquisitions development production; NO control over major defense contractors running up the bill (How much is an aircraft carrier and long range bomber?); NO control over their appetite to be everywhere, all the time, doing everything, for all those other welfare recipient countries (most of which are wealthy — think NATO, Japan, Taiwan, Australia, Saudi Arabia); and planning to cut safety net programs when we all know the Pentagon is the biggest welfare queen of all! Your claim from the Heritage Foundation that increased deficit spending is harmful to economic productivity but failure to recognize that your wishful proposal to substantially increase defense spending with borrowed money (because the entitlement programs and non-defense budget probably won’t be cut) and while the defense budget will go up isn’t, is typical think-tank nonsense, not representing the real world. There are many things DoD can do, but won’t, to help themselves. Fully integrate NATO forces into a PERMANENT unified command structure under American control. And make them pay up and DOUBLE that contributed force structure. Like that insurance policy, shift one-third of American forces into the Guard and Reserves and change training to 3-months a year, so they can be called up for that “car accident” when it happens. But otherwise reduce our worldwide footprint to show the world we’re not a warmonger, and give our taxpayers some relief. Basically, time for some better analysis and better discussion.
Johnson and The Heritage Foundation he works for are components of the military-industrial complex (MIC), and their job is to “sell” MIC objectives and funding; therefore, they will always come out in support of more spending, more bases, more threats and more conflict.