What to Expect When You’re Expecting a Defense Budget Masterpiece


In December of 2017, before the Department of Defense released its 2019 budget request, then-Deputy Secretary of Defense Patrick Shanahan tried to manage expectations about its contents. He argued that the National Defense Strategy, with its prioritization of competition with China and Russia, was so new that the Pentagon didn’t have time to fully incorporate its precepts into the 2019 budget submission. But, he told us, the 2020 budget request would be a “masterpiece,” fully funding the strategy’s direction to invest in the capabilities required to sustain the U.S. military’s advantage over China and Russia while finding more economical ways of prosecuting ongoing counter-terrorism campaigns.

During our time in the Pentagon, we were deeply involved with defense budgets and strategies. Now here we are, over a year later, patiently waiting for a budget request that perfectly aligns resources with the defense strategy and wondering: What would the 2020 defense budget request look like if now-Acting Secretary Shanahan succeeds in delivering on his promised masterpiece?

But first, a word on the problems the National Defense Strategy is trying to solve: U.S. defense strategy for the 70 years since the end of World War II has rested on two interdependent pillars: a constellation of allies and partners and an ability to conduct military operations globally. Allies and partners extend U.S. influence and provide bases and forces to support U.S. military operations. In return, the U.S. military’s ability to project power deters or defeats armed aggression against our allies and partners. Together, these pillars have prevented the outbreak of major wars and made the United States secure and immensely powerful. Today, both pillars are endangered by a combination of neglect, underinvestment, and concerted Chinese and Russian efforts to undermine them.

While relations with our allies and partners are a critical national security issue, the central problem for the U.S. military is the erosion of America’s conventional military advantage against China in East Asia and versus Russia in Eastern Europe. Why does this matter? The ability to deter aggression in these regions rests on China and Russia believing that the United States will intervene and that U.S., allied, and partner forces can defeat their aggression or make the costs outweigh the benefits. Nuclear threats aren’t a believable response to a limited invasion, while attacks on Chinese and Russian assets overseas aren’t likely to be painful enough to deter them from attacking their neighbors. Conventional military advantages in East Asia and Eastern Europe are the “goldilocks” solution to maintaining credible deterrence — proportional enough to convince China and Russia that the United States will intervene, but powerful enough to threaten them with the prospect of defeat.

Chinese and Russian military investments are targeting the way U.S. forces have defended our allies and partners since the end of the Cold War. Foremost among these investments are anti-access/area-denial (A2/AD) systems, such as advanced air defenses and anti-ship missiles. These weapons aren’t designed to defeat the U.S. military but rather to hold it at bay long enough that China or Russia can achieve their objectives — such as assaulting Taiwan or the Baltic states — before U.S. forces can respond effectively. The resulting fait accompli would present U.S. policymakers with an unappetizing dilemma: risk escalation through a massive counter-attack against a nuclear-armed state or accept an armed attack on a U.S. ally or partner and the consequent devaluation of U.S. security guarantees.

To thwart this approach, the new strategy requires the Pentagon to develop concepts and weapons systems that can operate in the face of Chinese and Russian A2/AD systems. The National Defense Strategy fully recognizes that reestablishing conventional military advantage is necessary, but not sufficient, to prevailing in great-power military competition. China and Russia will attempt to counter or avoid it through threats of strategic escalation — which traditionally has meant nuclear weapons but increasingly may mean cyber or other forms of strategic attack — and by destabilizing activity below conventional attacks on U.S. interests. In short, the post-Cold War era of unchecked American military superiority is over. The United States will need to up its strategic game if it wishes to sustain its security and prosperity for the next 70 years.

Strategic competition with China and Russia will require major shifts in defense budget priorities compared to the post-Cold War era. To this end, Shanahan’s focus on “China, China, China” is a useful correction to decades focused on terrorist threats and rogue regimes. For this budget to be masterpiece, it should shift investments toward prevailing in long-term great-power competitions and also balance this shift with the need to address current threats sustainably (i.e., at lower cost with fewer forces), recognizing that the former can’t happen without the latter.


First, and perhaps most important, is figuring out the balance among buying advanced equipment, building a bigger force, and keeping that force trained and maintained for war — in Department of Defense terms, the trinity of capability, capacity, and readiness. Increasing the number of soldiers in the Army or ships in the Navy is generally a political winner, since these are tangible assets that drive employment in congressional districts. As a result, the tendency is to overinvest in the size of the force at the expense of training, maintaining, and fully equipping it.

The 2020 budget request should prioritize investment in advanced military capabilities over increasing the size of the force. Any growth in force size should either be focused on defeating Chinese and Russian strategies or should enable a more cost-effective approach to counter-terrorism and irregular warfare. The budget request should deemphasize unrealistic numeric goals (e.g., 355 ships in the Navy or 386 squadrons in the Air Force) and instead should focus on developing capabilities required to sustain the U.S. military’s warfighting edge over China and Russia. Doing so doesn’t only mean buying highly advanced aircraft, ships, submarines, or ground vehicles. It requires less glamorous investments in resilient surveillance and communications equipment, forward bases that can survive enemy attacks, and stockpiles of advanced long-range munitions. Funding for research and development should increase to develop and exploit emerging technologies like artificial intelligence.

As second major change, the 2020 budget request should shift focus from the present to the future. Specifically, defense procurement should shift away from continuing to buy and maintain older legacy systems and toward investing in new programs designed for the future threat environment at both the high and low end of the conflict spectrum. While investment accounts grew by almost 14 percent between fiscal year 2018 and fiscal year 2019 budget requests, the Pentagon used much of this growth to buy a lot of “new-old” stuff — upgrading or purchasing additional units of platforms that have been in service for decades. While certain legacy purchases and upgrades might have been necessary to fill near-term gaps in 2019, the Department of Defense should focus on developing and fielding systems designed to operate cost-effectively at the low end or with the capability required to be effective against high-end competitors. For example, the Army should continue pursuing its “big-six” modernization priorities: long-range strike, ground vehicles, future vertical lift, air and missile defense, and soldier equipment. Long-range strike and cruise-missile defense should be top priorities, as these systems are in high demand in both Asia and Europe. It should resist the urge to grow the force or procure legacy systems to meet current needs. Instead, the Army should be researching and developing unmanned vehicles and manned-unmanned teaming concepts to reduce long-term manpower costs.

Third, the 2020 budget request should show shifts in a couple specific functional areas, most importantly space and nuclear forces. Plans for the Department of Defense to reorganize its space forces and capabilities have been, shall we say, dynamic. Whatever the final plan ends up being, the cost of new overhead should not detract from needed investment in next-generation space capabilities. Nor should it come from the Air Force’s budget, which is already under considerable pressure, including from necessary investment in nuclear modernization. All three legs of the nuclear triad are currently beyond their intended service life; the Defense Department must now recapitalize them more-or-less simultaneously. Further, the Nuclear Posture Review has directed DoD to develop new nuclear capabilities, such as low-yield weapons. While these new weapons may not make it through the Democratically controlled House of Representatives, recapitalizing the triad will be an enormously expensive, but absolutely crucial undertaking. Depending on how Congress and the executive branch chose to fund this effort, it has the potential to crowd out investment in conventional forces. For example, the Navy’s Columbia-class ballistic missile submarine will fill a critical need as the most survivable leg of the triad, but prioritizing it will pressurize the shipbuilding budget as a whole.

The Trump administration may have already missed its best chance to align resources to the new strategy, having largely failed to do so in their 2019 budget request when the Republicans held both houses of Congress. The Democrats’ takeover of the House of Representatives in the 2018 mid-terms and the recent record-setting partial government shutdown indicate greater scrutiny of defense spending and more budget impasses ahead. Further, the bouncing of the defense budget request’s topline from roughly $733 billion to $700 billion to $750 billion signals that even the administration itself is not of one mind on questions of defense spending. While Shanahan may not deliver his “masterpiece,” if he can show meaningful progress in most of these areas, while guarding against growth in force size or excessive legacy procurement, he will have made a meaningful down payment on building a military that can compete, deter, and win 21st century great-power competitions.



Susanna V. Blume is a senior fellow and deputy director of the defense program at the Center for a New American Security. Previously she served as deputy chief of staff for programs and plans to Deputy Secretary of Defense Robert O. Work. Christopher Dougherty is a senior fellow in the defense program at the Center for a New American Security. He was a principal drafter of the force management and planning sections of the National Defense Strategy.

Image: U.S. Navy photo