Perspectives

Avoiding a DoD Bailout

By Todd Harrison

October 21, 2009: Secretary Gates said recently: “If the Department of Defense can’t figure out a way to defend the United States on a budget of more than half a trillion dollars a year, then our problems are much bigger than anything that can be cured by buying a few more ships and planes. “ He has a point. The problems in the defense budget are much bigger than the recent debates over buying more F-22s, cancelling the presidential Helicopter, or building an alternative engine for the F-35 Joint Strike Fighter. In fact, the Department of Defense’s (DoD) problems are eerily similar to the challenges General Motors faced a year ago.

First, consider the labor cost structure of both GM and DoD. Noncash and deferred compensation for GM employees, such as healthcare and retirement pensions, accounted for 46% of total compensation in 2006—far higher than the private sector average of just 29%, as reported by the Bureau of Labor Statistics. In comparison, noncash and deferred compensation for active-duty troops in the US military is 52% of total compensation, according to the Government Accountability Office—an even higher share than GM. Military healthcare alone, not including veterans’ healthcare, costs over $47 billion each year, nearly one tenth of the DoD base budget. At the current rate of growth, these costs will nearly double every ten years.

Another similarity between the two is that both organizations are in a period of disruptive change in the competitive environment. In GM’s case, its market share rapidly eroded as gas prices climbed higher, the economy slowed, and consumers turned to smaller, more fuel-efficient vehicles. GM found itself building a fleet of SUVs and trucks that consumers did not want and could not afford. Similarly, DoD now finds itself saddled with a number of weapon programs whose capabilities are ill-suited for the types of conflict the military currently faces and whose costs have risen beyond what the Department can afford. Many of the new weapons being funded today are optimized for middle-of-the-spectrum conflicts—that is, conventional, military-on-military conflicts such as Operation Desert Storm in 1991. But adversaries are well aware of the United States’ overwhelming advantage in the middle and are instead moving to either end of the spectrum: irregular warfare on one end and high-end, asymmetric warfare on the other. The challenge for DoD, as it was for GM, is that the competition is adapting faster than it can keep up. (read more)

CSBA Events

CSBA Releases Three New Reports at a Press Briefing

On August 12, 2009, CSBA hosted a press briefing

(C-Span Video Coverage) on the release of three new reports:

• Analysis of the FY 2010 Defense Budget Request   (download report)

• Classified Funding in the FY 2010 Defense Budget Request (download report)

• Impact of the Wars in Iraq and Afghanistan on the US Military’s Plans, Programs, and Budgets (download report)

All three reports are authored by Todd Harrison, CSBA’s Fellow for Defense Budget Studies.

At the briefing, Jim Thomas, Vice President for Studies, and Todd Harrison, Fellow for Budget Studies, discussed the Administration’s defense budget request, an historical context of defense spending and projections for the future;differences from previous budgets, including what items were moved from supplemental appropriations into the base budget and the outlook for the future year defense program; program cuts and cancellations;projections for the future costs of the wars in Iraq and Afghanistan;unfunded priorities not included in the budget;classified funding in the budget and historical trends (presentation slides)

CSBA News Archives

Latest from CSBA

November 17, 2009: CSBA President Andrew Krepinevich testified before House Armed Services Oversight and Investigations Subcommittee on Afghanistan: Perspectives on U.S. Strategy. (testimony text)

October 2, 2009: CSBA released US Nuclear Forces: Meeting the Challenge of a Proliferated World by Andrew Krepinevich.

This report seeks to provide the basis for an informed and constructive debate over the role of nuclear weapons in the overall US defense posture. To this end, the principal focus is on identifying the existing and emerging security environment as it pertains to nuclear weapons. The report also offers some recommendations on how the United States might best respond to the challenges posed by nuclear proliferation, and, hopefully, create a more secure global environment. (download report)

September 17, 2009: CSBA released report An Air Force Strategy for the Long Haul. The report makes the case for placing greater emphasis on long-range, unmanned and stealthy air-breathing systems and on a more survivable space force. (download report)

September 8, 2009: CSBA released The F-22 Program in Retrospect by Senior Fellow Barry Watts.

This backgrounder reviews the F-22 acquisition program, focusing on the cost increases and schedule slippages; considers lessons learned; and offers insights on the possible future directions for the program. (download backgrounder)

September 3, 2009: CSBA released Analysis of the FY 2010 Defense Authorization Bills by Fellow for Budget Studies Todd Harrison.

On June 25, 2009, the full House passed its version of the fiscal year (FY) 2010 national defense authorization act. The Senate passed its version of the bill on July 23, 2009. The CSBA backgrounder provides a brief assessment of how these two bills compare to each other and to the administration’s request, and what issues remain to be resolved during conference.

Todd Harrison concludes in his analysis that almost all of the program cuts and shifts in funding Gates and the White House proposed have been accepted by the House and Senate in their authorization bills. (download backgrounder)

September 1, 2009: CSBA released new report Regaining Strategic Competence by Andrew Krepinevich and Barry Watts.

The report finds that strategic performance of U.S. political and military leaders has been declining in recent decades, and urges the Administration to make regaining strategic competence an overriding imperative in order to meet the security challenges of the twenty-first century.  Watts and Krepinevich identify the top ten obstacles to crafting good strategy and offer advice on overcoming these obstacles. (download report)

August 28, 2009: CSBA Fellow for Budget Studies Todd Harrison presented on the Resourcing a Full Spectrum Army During Difficult Financial Times at the G-8 Future of the Army Symposium (view presentation slides)

August 26, 2009: CSBA released Life After FCS by Research Fellow Evan Montgomery. This backgrounder offers some preliminary observations on the likely characteristics of the new program, and raises several questions that the Army will have to address as it goes forward. (download)

July 30, 2009: CSBA released Correcting Course: The Cancellation of the Future Combat Systems Program backgrounder by Andrew Krepinevich and Evan Montgomery (download backgrounder)

June 30, 2009: The Pentagon’s Wasting Assets by Andrew Krepinevich was a cover feature in the July/August 2009 Issue of Foreign Affairs magazine.  The monograph is the capstone of CSBA’s Strategy for the Long Haul initiative (read the article)

June 23, 2009: CSBA Senior Fellow Dakota Wood testified before the House Committee on Oversight and Government Reform in an open hearing on MV-22 Osprey Program (download testimony)(hearing information)

June 16, 2009: CSBA President Andrew Krepinevich joined the Defense Policy Board. The Board is chartered to provide the Department of Defense with independent, informed advise on broad policy issues. CSBA Board Chair Dave McCurdy also serves on the board.

June 1, 2009: CSBA released Reshaping America's Alliances for the Long Haul report by Research Fellow Evan Montgomery (download report )

Archives