Missile Defense: How to Optimize U.S. Investments


When the Chief of Staff of the Army, the Chief of Naval Operations, Deputy Director of the Missile Defense Agency (MDA), and the NORTHCOM commander say the country’s ballistic missile defense system needs to change, maybe someone should listen. There is a growing consensus that the system deployed today, which is centered on long-range kinetic interceptors, is fiscally unsustainable and trending towards operational obsolescence in the face of adversaries’ technological gains. And while the third offset strategy announced by Secretary of Defense Hagel in 2014 has been successfully implemented across other defense investments, missile defense remains a glaring — and odd — exception. As has been the case during the past several budget cycles, the proposed FY17 future years defense program (FYDP) continues to fund incremental gains to existing hit-to-kill systems without making the investments required to rapidly advance the promising, non-kinetic technologies that constitute the third offset component of missile defense.

While declining budgets constrain research into new technologies, there are at least three existing or planned missile defense investments that either do not align with a realistic threat or over-fund missions that are already well resourced. During this budget season, Congress and the Department of Defense should re-evaluate investments in the European Phased Adaptive Approach, the Israeli Cooperative Program and a proposed East Coast interceptor site to free up funds for research into more effective and sustainable alternatives.

The Third Offset and Missile Defense

Due to growing numbers and proliferation of ballistic missiles, missile defense is the ideal candidate for an offset approach, which calls for technological breakthroughs to compensate for an adversary’s greater conventional capability or numbers. Current estimates put the number of ballistic missiles outside U.S., NATO, Russian or Chinese control at 5,900. Traditional targets of U.S. ballistic missile defense — Iran and North Korea — have rapidly expanded the quantity and quality of their capabilities over the last two decades. Both have added hundreds of short and medium range ballistic missiles to their arsenals, seriously pursued intercontinental ballistic missiles (ICBM), and — in the case of North Korea — have developed a nuclear capability that could one day be miniaturized and mounted on a ballistic missile.

To counter these threats, the United States uses “hit-to-kill” systems to destroy missiles with a collision. This strategy is antithetical to a technological offset because it is one-for-one at best and relies on superior development and execution of essentially the same missile technology as what it is trying to stop.

In doing so, kinetic systems incur the same costs that offset strategies seek to avoid. By using missiles to knock down missiles, the United States commits itself to a level of precision vastly greater than that required of the threat missile, which makes each interceptor costly, both in real and relative terms. Ground-based midcourse defense (GMD) interceptors, for example, cost approximately $30 million more (inflation adjusted) than even the most advanced ICBMs, such as the U.S. Minuteman III or Trident II. And at current technology maturity levels, each intercept is uncertain — while shorter range missile defense systems have achieved higher hit probabilities, the United States would likely need to deploy four ground-based midcourse defense interceptors to intercept one ICBM.

Kinetic interceptors are becoming even less sustainable as adversaries develop coordinated salvo launch capabilities and aids to surpass missile defense systems, such as trajectory modification, missiles containing multiple warheads, and decoys. These technologies can rapidly expand the number of interceptors required to ensure no single warhead penetrates U.S. defenses, and cost the United States tens of billions of dollars to defeat. Much of this technology was standard on 1970s era Soviet and U.S. missiles, and publicly reported Israeli and U.S. intelligence assessments indicate both Iran and China are developing them today.

As Mark Gunzinger and Bryan Clark argue in a recent report, defending against these threats will require non-kinetic technologies capable of defeating larger missile salvos at a far lower cost than the “hit-to-kill” system in operation today. Specifically, Gunzinger and Clark call for a mix of shorter range, lower cost, kinetic capabilities combined with “left-of-launch” technologies, such as lasers and electronic warfare countermeasures that enable defeat of a missile before it has been launched.

U.S. military leaders agree the current approach is unsustainable and that new technologies are required. Former MDA Deputy Director, Brig. Gen. Kenneth Todorov, conceded that “the strategy is not sustainable… you can’t continue to buy these interceptors and have enough to necessarily intercept everything.” The former Army Chief of Staff Gen. Ray Odierno and Chief of Naval Operations Adm. Jonathan Greenert reiterated this point in a 2014 memo, emphasizing that “now is the opportunity to develop a long-term approach that is more sustainable and cost effective, incorporating ‘left-of-launch’ and other, non-kinetic means of defense.”

Despite the emerging consensus among military leadership that a change in technology and strategy is necessary, the FY17 Presidential Budget Request and FYDP indicate that the MDA risks locking in kinetic technologies as the strategy for the foreseeable future. Procurement appropriations for existing systems is set to increase from 10 to 21 percent of the MDA budget between FY10-21, while research, development, test, and evaluation (RDT&E) funding will decline from 88 to 66 percent over the same period. And MDA spending on advanced technology, which comprised 2 percent of the RDT&E budget in FY16, will not surpass 6 percent by FY21. Continuing down this track ensures that the United States will lack a credible defense against any adversary intent on achieving 1970s Soviet and American missile technology.

One solution would be to reprioritize missile defense within the Pentagon’s portfolio. But there are also at least three areas of existing or planned investment that provide limited missile defense utility and are consuming scarce research dollars that could be used to realign MDA’s technology and strategy with the realistic future threat. Repurposing these funds, as proposed below, could free up billions of missile defense dollars over the FYDP to invest in the technologies military leadership say are critical to an effective missile defense capability.

Re-Evaluate Phase III of the European Phased Adaptive Approach

The United States has long maintained that missile defense assets deployed through the European Phased Adaptive Approach (EPAA) are intended to defend against a growing Iranian ballistic missile capability. U.S. capabilities cannot defeat Russian ICBMs, despite the Kremlin’s concerns. But Iran’s ballistic missile threat to Europe has always been tenuous, even as Iran poses real challenges in its immediate neighborhood and invests in ICBM technology that will need to be confronted over the long term. Iran’s longest range missiles in service today have the nominal capability to reach Kiev and Bucharest, but testing results of these systems indicate highly limited reliability and accuracy. As Anthony Cordesman argues:

Iran’s use of MRBM and IRBM strikes could not be massed effectively in large numbers against longer-range area targets, and they will remain weapons of intimation that can be used largely [for]…‘terror’ purposes until they…acquire far better guidance and terminal homing capability.

Even if Iran could effectively deploy ballistic missiles against Europe, its incentive to do so is significantly undermined by the recent agreement with the P5+1. Less than a month after the nuclear agreement went into effect, Iran inked over $45 billion in trade and investment agreements with Germany, France, and Italy alone. More importantly, Europe will be the largest swing player impacting Iran’s oil exports. In 2011, before sanctions took effect, Iranian oil exports to Europe averaged 600,000 barrels per day, approximately a quarter of Iran’s total oil exports. While other nations such as China only modestly reduced Iranian oil imports, Europe eliminated them entirely. Assuming states return to similar levels of Iranian oil consumption, Europe will constitute by far the largest percent increase in Iranian oil exports and will deliver a substantial portion of the Iranian government budget, 50 to 60 percent of which is comprised of oil revenue.

Trade does not guarantee peace, but Iran needs Europe in order to justify last year’s nuclear agreement. The deal forced Iran to concede perhaps its two most valuable military assets for the next eight to 15 years — a borderline breakout nuclear capability and the ability to advance its ballistic missile arsenal through access to external technology. Iran bargained those assets away in return for economic stimulation through regained access to global markets, and European countries will provide a critical portion of that stimulation. Jeopardizing access to European markets would risk leaving Iran empty handed, stripped of both the military capability it sacrificed and the economic benefits it bargained for.

Iran’s limited ability to target European countries with ballistic missiles combined with its changing strategic calculus toward Europe opens the possibility of curtailing the EPAA.

Canceling the final Aegis Ashore site scheduled for completion in Poland by 2018 would be a logical starting point. This site is designed to defend specifically against the intermediate and longer-range ballistic missiles that appear to elude Iran. U.S. military bases in Turkey remain within range of some Iranian missiles, but these sites can be protected by EPAA capabilities already in place.

Moreover, as some commentators have pointed out, countries hosting U.S. ballistic missile defense sites are more interested in having a U.S. troop presence on their soil than they are concerned about an Iranian ballistic missile attack. In that sense, the United States may be better off providing different types of tactical systems better aligned with security concerns in those countries, as it has already begun to do through the $3.4 billion European Reassurance Initiative.

The Poland site will cost nearly $850 million, including construction and procurement of SM-3 Block 2A missiles, most of which has not yet been spent. Including recurring costs of maintaining the site, the United States could likely free up over $1 billion across the FYDP by cancelling the site.

Maintain Funding of the Israeli Cooperative Program at Requested Levels

Congress can realign this second area of investment within enacted missile defense budgets. The Israeli Cooperative Program — comprised of the RDT&E and associated procurement costs of the Iron Dome, David’s Sling and Arrow program — has provided Israel an effective missile shield against a variety of missile, rocket and artillery threats. Since 2010, it has also received an average congressional funding increase of 176 percent of MDA’s request.

These dollars fund critical capabilities that protect Israeli civilians from Hezbollah’s rockets, ISIL in the Sinai, and an increasingly capable and aggressive Iran. The commitment to expanding funding has broad Congressional support.  But the Israeli program has many of the same deficiencies as the U.S. program, including a reliance on expensive and obsolescing kinetic technologies that Iran is already trying to surpass. Nor does the Israeli system directly support U.S. missile defense — each program has varying to no levels of co-production, and at this time there are no plans to incorporate the technologies into the U.S. ballistic missile defense systems.

Instead of continuing to fund these programs well above the Pentagon’s request, Congress could expend these extra dollars towards MDA’s less mature, non-kinetic missile defense technologies that could provide both the United States and Israel a more effective, integrated and comprehensive missile shield. Repurposing the extra Israeli program dollars could net an additional $257 million in FY17 and an estimated $1.02 billion over the FYDP.

Reject Proposed East Coast Ground-Based Midcourse Defense Site

The final reinvestment would involve rejecting the continental interceptor site (CIS), which could provide additional security against an Iranian ICBM and the potential capability to shoot and assess interceptor hits before firing others. While the site provides utility, the MDA and military leadership have been united in opposition to funding the site over other missile defense priorities. As the NORTHCOM Commander, Adm. Bill Gortney, stated in testimony, “If the threat manifested itself from Iran today I have the ability to engage it today. So if I had one dollar to invest I’d put it to where we could engage in those capabilities that get us on the correct side of the cost curve.” The building costs of the site are expected to exceed $3 billion, not counting costs of site selection, environmental impact assessments, and the potential movement of significant sensor systems such as the Sea-based X-band (SBX) radar to the east coast. The military consensus on the non-necessity of the site should trump any of the political interests keen to bring a high-tech military installation to a home-state base.


The Pentagon and Congress need to prioritize development of non-kinetic missile defense technologies given the increasing probability they would be required in a future war. Affordably executing that transition while maintaining current kinetic capabilities will require carefully assessing existing and planned missile defense investments. European missile defense capabilities, extra Congressional funding of the Israeli program, and planned investments in an east coast site should be at the top of that list.

And the time for repurposing those funds appears right. The third offset strategy’s defense-wide investment in promising technologies provides an opportunity to rapidly advance development of missile defense applications, and the military consensus for change provides an opportune moment to realign missile defense spending towards R&D.  The threat is becoming more capable and dispersed, and the United States needs a missile defense system that can evolve to counter it.


Geoff Curfman is a management consultant with three years of experience advising the Department of Defense, including a year-long project focused on the U.S. ballistic missile defense system. Geoff previously completed a master’s degree in international relations at the London School of Economics and worked at two think tanks in Washington, DC, focused on U.S. foreign policy in the Middle East. This fall, Geoff will be starting the first year of his J.D. program at the Georgetown University Law Center.

Ryan Hall is a management consultant with a year of experience advising the Department of Defense, focused primarily on the U.S. ballistic missile defense system. Ryan previously served five years as a Marine Corps ground-intelligence officer, deploying to Afghanistan, the Middle East and East Asia. Ryan graduated from the University of Michigan with a degree in History focused on the Middle East, and will be starting an MBA at Georgetown’s McDonough School of Business in the fall. 

Image: Missile Defense Agency