Executive Summary
I. Introduction
II. QDR Overview
III. A Strategic Assessment
IV. Budgetary Implications Of The QDR

On May 19th, the Department of Defense (DoD) released the Report of the Quadrennial Defense Review (QDR). Mandated by the Military Force Structure Review Act of 1997, the QDR is the fourth major strategic review conducted by or for DoD since 1991.

The QDR recommends a strategy of shaping, responding and preparing. According to the report, the U.S. military must simultaneously accomplish, or be prepared to accomplish, three main tasks: it must shape the environment in ways favorable to U.S. interests; it must remain capable of responding to a full spectrum of crises; and it must transform itself to meet the very different kinds of threats that may develop over the long term. The QDR recommends only modest changes to the 1993 Bottom–Up Review defense plan. Active duty forces would be reduced by 60,000, the National Guard and reserve would be reduced by 55,000, and DoD’s civilian workforce would be reduced by 80,000. Most of the proposed active duty military and civilian personnel cuts — 117,000 out of 140,000 — are in infrastructure–related positions. The QDR also recommends modest cuts in DoD’s three largest acquisition programs. The planned buy of the Air Force’s new air superiority fighter, the F–22, will be reduced from 438 to 339, purchases of the Navy’s new multirole fighter, the F/A–18E/F, will be reduced from 1,000 to between 548 and 785, and the cross–service Joint Strike Fighter will be reduced from 2,978 to 2,852 aircraft. Finally, the QDR called for two additional rounds of base closures.

QDR as Strategy
The QDR exhibits a number of serious strategic flaws, including: a facile assessment of future threats; a reliance on outdated models for force structure analysis; a threat assessment that is defined in terms of U.S. strategy; a narrow examination of plausible strategic alternatives; an overemphasis on Cold War measures of forward presence; a major disjuncture between strategic assessment and recommended force posture; and a dependence on a vision of future warfare that is both self–referential and unrealistic.

According to Center for Strategic and Budgetary Assessments (CSBA) findings, a critical prerequisite for a strategy that better balances near– and long–term risk is an imaginative, realistic and robust vision of future warfare. Such a vision needs to be based on trends and potential discontinuities that could overthrow the status quo by dramatically changing the way battles and wars are fought, by whom they are fought, why they are fought, and how military power is measured. A transformation strategy derived from such a vision should:

• Provide for the development of, vigorous experimentation with, and institutional momentum for emerging systems and capabilities while coping with technological flux, potential false starts and complex systems choices;

• Field high–leverage systems and develop new operational concepts which could significantly enhance force effectiveness over the short term and are consistent with the long–term vision; and

• Gradually divest the force structure of “sunset” systems while hedging against catastrophic failure and regime uncertainty.

• Over the long term, the QDR’s recommended cuts in force structure, modernization programs, National Guard and Reserve personnel, and military bases could yield annual savings of some $6-7 billion. This suggests that additional infrastructure reductions capable of generating savings of some $10-15 billion a year will have to be found to make DoD’s current plan affordable within projected budgets. Both the QDR and the November 1997 Defense Reform Initiative call for significant infrastructure cuts.

• Unfortunately, if history is any guide, there is good reason to doubt that substantial savings in infrastructure activities will materialize. As a result, in order to make its plans affordable, DoD will likely have to cut its current plans by an additional $10-15 billion a year. This, in turn, might require cutting force structure by 10-15 percent more than proposed in the QDR, or making a combination of additional cuts in modernization programs and/or readiness, and more modest cuts in force structure.

• The fact that projected infrastructure savings may not materialize does not mean that they should not be pursued. However, rather than depending on these savings to make its plans affordable within projected budgets, DoD should look to these efforts as providing a hedge against the possibility that future defense budgets might fall well below the roughly $255 billion (FY 1998 dollars) a year level assumed in the QDR.

Introduction

Just as the longbow, the pike and gunpowder eventually forced the armored knight from the field, so are we now witnessing the triumph of the microchip in warfare, transforming it in ways we are only beginning to understand…. Today’s experiments, technologies and concepts are not the culmination of the Revolution in Military Affairs, but the beginning. They are the gathering of the pitchforks, Thomas Paine sharpening his pen, and the early rumblings of a revolution that will bring us a true transformation in long–term capability 15 to 25 years from now…. The technology, weapon or doctrine that looks like a sure–fire path to the future today may be overtaken and obsolete in five, 10 or 15 years as the revolution unfolds…. We must not, in our hubris, assume that we will be the sole vanguards [sic] of the new Revolution in Military Affairs.

Secretary of Defense William Cohen, June 23, 1997

Why a QDR?
The QDR was instituted because both Congress and the executive branch believed that the BUR needed to be revised to address concerns about both its strategy and affordability, as well as to reflect changed circumstances. In late 1996, DoD decided to conduct a new review to be completed in 1997, and to be conducted every four years thereafter, while Congress mandated a major review of DoD’s long-term plans in the Military Force Structure Review Act of 1996. The act called upon the DoD to undertake “a comprehensive examination of defense strategy, force structure, modernization plans, infrastructure, budget plan, and other elements of the defense program and policies with a view toward determining and expressing the defense strategy of the United States and establishing a revised defense program through the year 2005.” The QDR resulted from these executive branch and congressional initiatives.

Congress also passed legislation in 1996 requiring the administration to establish a nine–member National Defense Panel (NDP) to critique the QDR and to conduct an “independent assessment of a variety of possible force structures of the armed forces through the year 2010 and beyond.” The NDP submitted a brief preliminary assessment of the QDR in May 1997, when the QDR was released. The panel is scheduled to release its final report on December 1, 1997.

Assessing the Quadrennial Defense Review
This assessment examines two broad questions:

• Does the QDR provide a sound strategic blueprint, given the likely challenges the U.S. military is expected to face in the decades ahead?

• Is the QDR affordable in the near term and sustainable beyond the near term, given the budgets projected for defense?

QDR Overview

This chapter provides an overview of the QDR and its principal findings. It briefly describes the QDR’s analysis of the security challenges facing the United States, U.S. interests, and the appropriate strategy for protecting those interests, as well as the process by which the QDR selected its proposed defense plan as the best means of supporting the QDR’s recommended strategy. It also describes the programmatic changes actually called for in the new defense plan, and briefly summarizes the NDP’s preliminary assessment of the QDR.

QDR Analysis
According to DoD, the United States faces five major near-term and long-term challenges. In turn, the best way to confront these challenges, given U.S. interests, is through a multi-pronged strategy consisting of three main elements.

Security Challenges
The QDR identifies a range of military challenges likely to confront the United States over the next several decades. These include:

• Regional Dangers: U.S. allies and friends in key regions, especially Southwest Asia and Korea, may be attacked by hostile neighbors. According to the QDR, Iraq, Iran and North Korea remain the most likely aggressors.

• Spread of Advanced Technologies: Sensitive technologies, including nuclear, biological and chemical (NBC) weapons, information warfare capabilities, and advanced conventional weapons are, to varying degrees, likely to continue to spread to potential U.S. adversaries.

• Transnational Dangers: In addition to foreign countries, transnational groups, including terrorists, drug traffickers and organized crime, may pose a growing threat to U.S. citizens, both at home and abroad.

• Asymmetric Threats: Adversaries may forego competition in areas where the U.S. military is dominant, and instead adopt asymmetric means of confronting the United States, such as through the use of unconventional warfare, including environmental sabotage, attacks on computer-based information networks and interference with commercial communications.

• Emergence of a Peer Competitor: Although unlikely in the near-term, the QDR notes that in the period beyond 2015 a regional great power or even, potentially, a global peer competitor to the United States could emerge, with the most likely candidates being Russia or China.

• protecting the sovereignty, territory, and population of the United States, and preventing threats to our homeland, including NBC attacks and terrorism;

• preventing the emergence of a hostile regional coalition or hegemon;

• ensuring freedom of the seas and security of international sea lines of communication, airways, and space;

• ensuring uninhibited access to key markets, energy supplies, and strategic resources;

• deterring and, if necessary, defeating aggression against U.S. allies and friends.²

Shaping: According to the QDR, the United States must be able to use its military forces to help shape the international security environment in ways that are favorable to U.S. interests. Doing so involves the use of forward-stationed troops, the deployment of forces in exercises, overseas presence by naval forces, and various cooperative programs. The QDR describes the goals of these efforts as promoting regional stability, preventing or reducing the threat and likelihood of conflict, and deterring aggression and coercion.

Responding: The QDR states that the U.S. military must be capable of responding to crises in order to protect our interests in those instances where efforts to shape the international environment fail or fall short. According to the QDR, the U.S. military must be capable of executing the full spectrum of military operations, including both smaller-scale contingency (SSC) operations (such as show-of-force, peacekeeping, peace enforcement, humanitarian, and limited strike operations) and major theater wars (MTWs). This MTW requirement is essentially the same as the major regional conflict (MRC) requirement articulated in the BUR. The QDR states that U.S. forces must be capable of carrying out two MTWs “in close succession” (as compared to the BUR’s “nearly simultaneous” requirement). PRIVATE

Preparing: Finally, the QDR concludes that, in addition to shaping and responding to the security environment over the 1997-2015 period, the United States must use this period to transform its military so that it is prepared to meet the very different kinds of threats that may develop over the long term, including the possibility that a peer competitor might emerge. The QDR states that to prepare for this uncertain future, DoD must:

• • Replace aging weapon systems with more modern and capable systems.

• • Exploit the “Revolution in Military Affairs” (RMA) by “harnessing new technologies to give U.S. forces greater military capabilities through advanced concepts, doctrine and organizations.”³

• • Exploit the “Revolution in Business Affairs” (RBA) to greatly improve the efficiency and effectiveness of DoD’s support infrastructure and to ensure that sufficient funding is available to carry out current modernization plans.

• • Take steps to hedge against unlikely, but potentially significant, future threats. According to the QDR, this means maintaining a broad research and development (R&D) effort, as well creating the option to deploy some new weapon systems, such as a national missile defense (NMD) system.

Path 1: Preserve the BUR’s force structure and personnel goals, but sacrifice modernization. The QDR estimates that under this option procurement funding would eventually increase to about $50 billion a year.

Path 2: Cut the BUR’s force structure and personnel goals from about 1.4 million active duty troops to 1.3 million in order to protect modernization. The QDR estimated that under this option procurement funding would eventually increase to about $65 billion a year.

Path 3: Make smaller cuts in force structure and personnel than Path 2, bringing the active duty strength down to 1.36 million, but provide more funding for modernization. The QDR estimates that under this middle path procurement funding would eventually increase to about $60 billion a year.

These three alternatives were evaluated against a range of operational challenges, including overseas presence, contingency operations, MTWs, and conflict with a future regional great power. Ultimately, the QDR concludes that the last of these, Path 3, could best support the QDR’s recommended strategy.

Recommended Changes
Based on its analysis of U.S. defense requirements, the QDR recommends a number of changes to the BUR defense plan. These changes include very modest cuts in force structure, and somewhat deeper cuts in National Guard and Reserve personnel, as well as modernization programs. The QDR also proposes to maintain a large overseas presence and keep readiness levels high, while making significant cuts in DoD’s support infrastructure. In addition, the QDR identifies a number of programs which it believes should be given a higher priority than they have received under the BUR.

Force Structure
Altogether, the QDR recommends reducing the number of active duty troops in the U.S. military to about 1.36 million, some 60,000 below the level included in the BUR. However, most of these troops would be taken from infrastructure-related positions. The QDR makes only small cuts in force structure (e.g., numbers of Army divisions, Navy carrier battle groups, and Air Force fighter wings).

Table 1: DoD Manpower

Army: Under the QDR, the Army would retain 10 active divisions, as called for in the BUR. The number of active Army personnel would be reduced by about 15,000 below the level specified in the BUR. However, according to the QDR, these personnel reductions would result from “increased efficiencies in support activities and in anticipation of further organizational changes,”⁵ and thus would not necessitate cuts in the number or size of major combat units.

Navy: The QDR recommends very modest cuts in the size of the Navy force structure, while the number of active Navy personnel would be cut by 18,000. Under the plan, the Navy would reduce its surface combatant fleet to 116 ships, 15 fewer than provided for in the BUR, and cut the number of attack submarines from 52 to 50. However, the Navy would continue to maintain 12 aircraft carriers, 11 fighter wings (10 active and one reserve) and 12 amphibious ready groups, as called for in the BUR.

Marine Corps: The QDR leaves the Marine Corps’ force structure virtually untouched. About 1,800 active military personnel would be cut. However, the Marine Corps would continue to maintain a force of three active Marine Expeditionary Forces (MEFs).

Air Force: Under the QDR, the number of active Air Force fighter wing equivalents would be reduced from 13 to just over 12. However, the QDR would increase the number of Reserve and National Guard fighter wings from 7 to 8, primarily by converting six continental National Guard air defense squadrons to support general purpose, training and other missions. The QDR makes no changes in the size of the bomber, airlift or tanker fleets. As a result of consolidating fighter, bomber and theater airlift squadrons, and various infrastructure reductions, the QDR projects that the Air Force will be able to cut an additional 27,000 active military personnel.

Table 2: Force Structure

National Guard and Reserve Personnel
The QDR calls for reducing the number of National Guard and Reserve personnel to about 835,000, some 55,000 below the level specified in the BUR. The vast majority of these cuts, 45,000, are projected to come out of Army National Guard and Reserve forces. In June 1997, officials from the Army, Army National Guard and Army Reserve reached an agreement on how to apportion 20,000 of the planned personnel reductions. Under the agreement, between FY 1998 and FY 2000, 17,000 personnel would be cut from the Army National Guard, including 5,000 in FY 1998, and 3,000 would be cut from the Army Reserve. The parties agreed to decide how to apportion the remaining cut of 25,000 personnel at a later date and to complete those further reductions over the FY 2001-FY 2002 period.⁶ According to the QDR, these reductions are possible because favorable trends in the international environment—especially the continued success of U.S. relations with the countries of the Former Soviet Union (FSU)—have diminished the need for a large strategic reserve. The QDR also proposes to accelerate the planned conversion of some National Guard combat brigades into combat support units.

Overseas Presence
Although the size of the active duty and reserve force structure would be reduced modestly under the QDR, the U.S. military would maintain roughly today’s level of overseas presence. About 100,000 military personnel would remain forward deployed in both Europe and the Asia/Pacific region. Likewise, naval, air and ground forces would continue to be rotated into and out of Southwest Asia. According to the QDR, this traditional kind of presence is critical to the successful implementation of the shaping element of its proposed strategy.

Modernization
The QDR recommends scaling back a number of different modernization programs. The main modernization programs cut as a result of the QDR are the Services’ three new tactical fighter programs: the F-22, F/A-18E/F and Joint Strike Fighter (JSF). The QDR recommends that the Air Force’s purchase of new F-22 fighters be reduced from a total of 438 to 339, that the Navy’s buy of new F/A-18E/F fighters be cut from 1,000 to between 548 and 785, and that the JSF program be reduced from 2,978 aircraft to 2,852. In addition, the QDR recommends reducing the planned purchase of Joint Surveillance Target Attack Radar System (JSTARS) aircraft from 19 to 13. In the case of the Marine Corps new V-22 tilt-rotor aircraft, the QDR recommends cutting the total program from 425 to 360 aircraft, but accelerating the production rate from a maximum of about 24 a year to a more efficient rate of 30 per year.

Notwithstanding these cuts, one of the main goals of the QDR is to protect DoD’s long-term modernization plans. Procurement funding has dropped by about two-thirds since FY 1985, the height of the Reagan buildup, to about $45 billion in FY 1997. By contrast, in recent years DoD has argued that adequately modernizing U.S. forces would require an average procurement budget of about $60 billion annually over the long term. However, for the past few years, the failure to achieve anticipated reductions in infrastructure and other operations and support (O&S)⁷ costs has forced DoD to push back the date at which this goal can be met. The force structure, National Guard and Reserve, base closure and infrastructure cuts recommended in the QDR, as well as the additional infrastructure savings recommended in the Defense Reform Initiative, are intended to ensure that this $60 billion target can, in fact, be reached within DoD’s projected topline budget of $255 billion.

Readiness
The QDR examines, but ultimately rejects, the idea of reducing the readiness of selected units in order to achieve cost savings. According to the QDR, such “tiering” of readiness levels, which would be accomplished by cutting the training of certain units, would save little money. Conversely, the QDR concludes that adopting this approach could significantly increase the risk that U.S. forces would not be ready when needed in a future conflict, especially if such a conflict were to come with little warning. The QDR also notes that several steps are being taken to help reduce the stress on U.S. personnel caused by extended deployments in contingency operations and exercises. In particular, it notes that the number of man-days required for joint exercises be reduced by 15 percent between FY 1996 and FY 1998. In addition, the QDR reaffirms the administration’s commitment to various “quality of life” programs, such as family housing, morale and recreation activities, as well as full pay raises.

Infrastructure
As noted earlier, the QDR recommends only relatively small cuts in force structure. By contrast, the QDR seeks to make deep cuts in the size of DoD’s infrastructure, which comprises those personnel and activities that provide logistics, health care, training, and other support to DoD’s combat forces. About 61 percent of all active-duty military and civilian DoD personnel are currently employed in infrastructure-related activities. According to DoD, combat forces have been reduced substantially more over the past eight years than has DoD’s support infrastructure. The QDR proposes to reverse this trend. Compared to the BUR, the QDR calls for cutting an additional 60,000 active duty and 80,000 civilian DoD personnel. Of these 140,000 personnel, some 117,000 are projected to come out of infrastructure-related positions.⁸ The QDR apparently expects most of these personnel reductions to result from “reinventing” many DoD infrastructure functions — for example, by “streamlining, downsizing, consolidating, computerizing, and commercializing operations.”⁹ In particular, the QDR calls for making greater use of outsourcing (allowing private companies to compete with publicly owned facilities to perform various DoD support functions). As such, the QDR includes a request to Congress to repeal the statute which currently requires that at least 60 percent of all depot level maintenance be performed at public depots.

In addition to these infrastructure reductions, the QDR includes a request to Congress to authorize two new rounds of base closures, one in 1999 and another in 2001.¹⁰ According to DoD, these base closures would allow even greater reductions in infrastructure personnel and costs. Likewise, the QDR states that DoD expects to achieve further cuts in infrastructure by implementing various reforms identified by the Task Force on Defense Reform, the DoD-appointed panel of experts which released the Defense Reform Initiative report in November 1997.

Nuclear Forces
The QDR states that, while the administration remains committed to reducing U.S. nuclear forces to the levels agreed to in the START II Treaty and is pursuing deeper cuts within the START III framework, it will maintain U.S. forces at START I levels until the Russian Duma ratifies the START II Treaty.¹¹

Ballistic Missile Defense (BMD) Programs
The QDR recommends that the administration stick with its “3-plus-3" plan for developing a limited national missile defense (NMD) system. The goal of this effort is to put the administration in a position in 2000 to decide, if deemed necessary at that time, to deploy a limited NMD system that could be fielded within three years (i.e., by 2003). The QDR does, however, conclude that $2 billion needs to be added to this effort over the next several years to achieve this goal.¹² The QDR also announces some changes to DoD’s theater missile defense (TMD) programs. In particular, reflecting technical difficulties, it recommends that acquisition of the Theater High-Altitude Area Defense (THAAD) system be slowed, with the initial deployment date pushed back from 2004 to 2006.

NDP Preliminary Assessment
As required by its authorizing legislation, the NDP issued a preliminary critique of the QDR as soon as it was released.¹³ Among other things the NDP concluded that:

• Compared to the BUR, the strategy presented in the QDR provides a “much richer view of the challenges facing DoD in asymmetric warfare and smaller scale contingencies.” However, the QDR does not effectively link this strategic view with particular decisions about force structure, operational concepts and procurement.

• The QDR better recognizes the potential importance of the revolution in military affairs. However, “to the extent that the QDR views major theater warfare as a traditional force-on-force challenge, this view inhibits the transformation of the American military to fully exploit our advantages as well as the vulnerabilities of potential opponents.”

• The QDR’s proposed modest cuts in force structure and military personnel will not create significant risks to U.S. security.

• The QDR does not accord sufficient attention to the potential difficulty — caused by the proliferation of cruise and ballistic missiles, and other advanced technologies — of projecting power into forward areas in the future.

• The QDR’s recommendations to reduce the cost of DoD infrastructure activities — through, for example, the implementation of two new rounds of base closures and elimination of the 60/40 split for depot maintenance work — are appropriate and necessary to make DoD’s plans affordable. If anything, the proposals do not go far enough.

• Because of a number of obstacles, including resistance from Congress, it may be difficult for DoD to generate savings through infrastructure reductions that are sufficient to pay for the QDR’s projected increase in procurement funding.

• The QDR does not pay sufficient attention to the use of space and the potential vulnerability of U.S. space assets.

• Contrary to the QDR’s recommendation, the U.S. military should move to START II force levels even if the Russian Duma fails to act on START II this year. The United States should also quickly move ahead with efforts to negotiate a START III treaty.

A Strategic Assessment

The QDR attempted to correct — in word if not in deed — many of the perceived shortcomings of the earlier post–Cold War strategic reviews. The following are the most notable departures from the 1993 Bottom–Up Review:¹⁴

• Smaller-scale contingencies (SSCs) — the challenges future Bosnias and Haitis will pose — are no longer considered simply as lesser-included cases of major theater wars.¹⁵ Under the QDR, the U.S. military is charged with maintaining the capability to respond to “multiple concurrent” SSCs, while also retaining the wherewithal to fight and win two major theater wars in “close succession.”

• Tradeoffs between near- and long-term risk are explicitly acknowledged. The U.S. military is charged with being ready to respond to a full spectrum of near-term crises, while remaining fully engaged globally, but it now must also prepare for an uncertain future that will likely witness a revolution in warfare.

• A number of significant future challenges to U.S. interests are explicitly acknowledged for the first time: the diffusion of stealth, unmanned aerial vehicles, and information warfare capabilities; expanding access to and/or denial of space; and attempts to deny or delay U.S. forces access into a theater of operations. The QDR acknowledges that future adversaries are likely to employ asymmetric strategies to circumvent U.S. strengths and exploit our vulnerabilities.

• Threat Assessment. The QDR relies on a facile assessment of future threats. The scenarios employed — the Bottom-Up Review’s Iraq and North Korea contingencies, updated to 2006 and 2014 — are as status quo-friendly as they are unimaginative. Moreover, the analytical tools used to examine these contingencies, such as the 1970s-vintage “TACWAR” model, are hopelessly outdated. As further evidence of the Cold War mindset which shaped the QDR’s thinking about the future strategic environment, a resurgent Russia is given far more weight as a long-term peer or near-peer competitor than is a rising China.

• Assessment-Strategy Linkages. The link the QDR posits between threat assessment and strategy is tautological, with the strategic environment treated as a dependent variable of U.S. strategy. A “strategic pause” — defined as the absence of a global peer competitor or regional challenger able to defeat the U.S. military — is forecast through 2015, but only if the United States “remains politically and militarily engaged in the world over the next 15-20 years” and “maintains military superiority over current and potential rivals.”¹⁶

• Examination of a Range of Plausible Strategic Alternatives. A very narrow range of strategic alternatives was considered. And where the QDR’s strategic concepts are not simply meaningless (e.g., our “strategy” is to shape the international environment), the QDR’s general approach regarding matters of strategic choice is either:

• “False Choices” — in terms of its “feasible” foreign policy “options,” America can either “come home,” be the “world’s policeman,” or be “engaged”;

• “All-Inclusive” — Is America a maritime power with global interests or a continental power with global reach? — the QDR’s answer is both, with the Air Force also asserting that America is the world’s first “aerospace nation”; or

• “Status Quo-Friendly” — $255 billion per annum (FY 1998 dollars) in defense funding is assumed through 2015. A slightly smaller but very similar military will be able to fully meet the challenges posed by an emerging revolution in military affairs.

• Ends-Means Congruence. The QDR exhibits major disjunctures between its assessment of the future security environment and the strategy it recommends. Potential new challenges such as the diffusion of stealth, unmanned aerial vehicles, information warfare and space warfare capabilities, and “anti-access” strategies are identified, but then dismissed without having any discernible impact on strategy. Repeated reference is made to the need to exploit a revolution in military affairs, but the QDR projects a U.S. military in 2015 that is still centered overwhelmingly on short-range fighters, tanks, and aircraft carriers — measures of military power which first reached maturity during the Second World War. An eighteenth century measure of military power — 100,000 servicemen and women forward deployed in Europe and Asia — is cited as the key “shaping” instrument of U.S. strategy.

• Vision of Future Warfare. The vision of future warfare on which the QDR is based is both self-referential and “immaculate.” Current modernization plans are ipso facto synonymous with the RMA. Indeed, the so–called “RMA option” considered by the QDR appears to be little more than a strategy for buying the wrong kinds of capabilities at an accelerated rate. Several QDR-anointed “leap-ahead” systems are little more than incremental improvements to current generation systems.¹⁷ No consideration seems to have been given as to whether such incremental modernization will effectively prepare our forces to fight and win in a very different future warfare environment.¹⁸ The QDR’s vision of future warfare is “immaculate” in that it posits a future warfare environment in which the U.S. military miraculously achieves “full spectrum dominance” over all competitors through the flawless execution of new warfighting concepts.¹⁹ This vision is inherently one-sided. Adversaries, it seems, will not benefit from the information revolution or field capabilities that could allow them to counter U.S. forces.

Cold War Redux, “Option C” and Non-Strategies
The QDR provides ample evidence that DoD has yet to transcend its Cold War planning framework. Analytical tools that were used somewhat successfully during the relative certainty of the Cold War are still being applied to a future that will likely witness discontinuous change in military affairs. Traditional measures of effectiveness (e.g., forward line of own troops, or “FLOT,” movement) are still being applied uncritically to the examination of future campaigns, which may not even have a perceptible “front” at all. Long-term challenges are still cast in familiar Cold War terms, e.g., a resurgent Russia in lieu of a rising China.

There is no serious discussion in the QDR of the apparent increasing importance of quality (human as well as technological) as opposed to quantity in war. Rules of thumb based on quantity (e.g., the infamous “3–to–1 rule,” which supposedly describes the ratio of forces required to successfully attack a defended position), while never wholly convincing, may be on the verge of becoming completely anachronistic. And yet our tools of defense analysis still rely heavily on these assumptions about war.

Campaign analysis conducted as part of the QDR was very Service-friendly. The theater of operations always had a robust forward base infrastructure (for the Army and Air Force) and a littoral area (for the Navy and Marine Corps). If the QDR scenarios are to be believed, potential adversaries in 2015 will have not learned anything from the Gulf War: strategic concepts will still be based on the Cold War dynamic of Central European massed armored warfare. The continued reliance on North Korean and Iraq contingencies as the basis for long-term defense planning seems particularly odd, given that the majority of strategic analysts do not expect the former to exist in its current state in 2006, let alone in 2014, and a similar majority believe that Iran, and not Iraq, poses the real long-term challenge in the Gulf.

The relationship between economic and military power and what constitutes peer or near-peer status is poorly explored. Nazi Germany’s production, for example, was less than half ours, while Imperial Japan’s was less than one–fifth. During most of the Cold War, the Soviet Union’s GNP was probably somewhere between one half to one quarter of ours.²² Yet each of these states proved to be far more formidable adversaries than present–day Iraq and North Korea. For nearly a century, the relative size of the U.S. economy — approximately twice that of any potential competitor — has provided America with a form of economic “escalation dominance.” Based on some projections of the Chinese economy, however, that happy state of affairs could end in the next couple of decades, with the Chinese economy potentially rivaling in size, if not in per capita GNP, the U.S. economy by 2025. Moreover, the three largest economies in the world by then could well be the United States, China and India. More broadly, this prospective geostrategic shift in the locus of global competition from Europe to Asia portends a number of major changes in the future operating environment for U.S. forces. For example, distances in Asia are far greater and access to in–theater bases may not be present at the outset of a conflict. Maritime issues, moreover, will likely be of far greater strategic salience. The QDR fails to consider the strategic implications of such a transformed international system.

Will potential peer competitors view the future strategic environment as a continuation of the Cold War? A quick look at contemporary Chinese military writings suggests that that is unlikely.²³ Yet the QDR is silent on this. Will the militaries of the twenty-first century be mirror images of each other, as they essentially were at the beginning of the twentieth century?²⁴ Again, the QDR is essentially silent on this, although there are hints at increasing “asymmetries.”

As evidence of its inherent conservatism, the QDR repeatedly defaults to “Option C” type analytic constructs. Option C is cast as the prudent, balanced, Goldilocks solution — “not too hot, not too cold, just right” — but in fact is either posed as a false choice among extremes (e.g., America’s foreign policy options are to “come home,” be the “world’s policeman,” or be “engaged”) or is one extreme masquerading as the moderate middle (e.g., a force posture option which supposedly reflects a “balance” between “near-term dangers and opportunities” and “distant threats,” but in fact is overwhelmingly weighted toward the present).²⁵

The QDR employs concepts which are either meaningless (e.g., our strategy is to “shape” the international environment), or trivializes concepts which may actually mean something (e.g., the Revolution in Military Affairs, which, according to the QDR, appears to be synonymous with “within regime,” or replacement-in-kind, modernization). And yet if there is an RMA underway, the character of presence, deterrence and warfighting could all change fundamentally. Indeed, if there is another transformation of war underway, surely it can be expected that it will exert a greater “shaping” effect on the future international system than will 100,000 troops — an eighteenth century measure of military power based on counting heads.

Intertemporal Readiness and the “Strategic Pause”
As the QDR correctly indicates, the U.S. military must not only be ready to respond today, it must also be ready for tomorrow. This tradeoff between near- and long-term readiness is always present, but is even more acute during periods of military revolution. Fortunately, the United States at present is in a more favorable strategic position than militaries usually are during such periods of discontinuous change. It faces no serious near-term challenger to its global leadership. It currently enjoys a relative abundance in the likely future societal bases of military power (both tangible and intangible), and possesses a commanding lead in the kinds of emerging capabilities that are likely to be central to the ongoing transformation of war (e.g., stealth, precision-guided munitions, multispectral sensors, wide-area network communications, high-fidelity simulation systems, etc.). The principal near- to mid-term threats the QDR projects (i.e., major theater wars with Iraq and/or North Korea) are modest, and it is highly plausible that, within a decade, they could become even more benign. And yet the QDR, after acknowledging the presence of a lengthy strategic pause in the international system — and the greater challenges that ostensibly lie beyond — responds with a strategy whose overall purpose appears aimed at making the current military marginally more efficient. That is, it settled for a “frontier strategy” when it should have boldly embraced a transformation strategy.²⁶

Transitioning to a New Force Posture
So how might the QDR have developed a strategy for transitioning to a new force posture that exploits this strategic pause and better prepares the U.S. military to meet the greater long-term challenges which likely lie ahead?

As a prerequisite for formulating such a strategy, DoD needs to develop a more imaginative, realistic and robust long-term vision of the RMA. Such a vision should be based upon trends and potential discontinuities that could overthrow the current military regime by dramatically changing the way battles and wars are fought, by whom they are fought, why they are fought, and how military power is measured.

Five trends appear to be potential drivers of a discontinuous change in warfare:

Increasing ability to strike with great precision from a distance. As multispectral sensors, data transfer and information processing systems, mobile conventional ballistic missiles, stealthy cruise missiles, and precision munitions become more advanced, more and more military targets could be held at risk. At first, only relatively large, fixed facilities such as theater airbases, ports, centralized command and control facilities, and logistics depots might be vulnerable. Subsequently, as long-range precision-strike (LRPS) capabilities evolve, mechanized ground forces, surface naval vessels operating in the littoral (e.g., carrier battlegroups, amphibious task forces), and low earth orbit satellite constellations could become threatened.²⁷

Increasing information intensity. The information aspects of war — information acquisition and denial, information strikes, information–based protection, and information–based movement — could increasingly permeate all operations. Low-observability designs and materials as well as other signature management technologies could become not only more robust, but also increasingly applied to an expanding variety of platforms, including wide-body aircraft, naval vessels, and ground forces. The emergence of war in the information spectrum could add qualitatively new means for destroying enemy assets and disrupting enemy operations.

Increasing ability to coordinate the actions of widely dispersed and dissimilar units. Information technologies could dramatically enhance the ability to command and control the actions of widely dispersed and dissimilar units, establishing the “system of systems” as the dominant military architecture of the new era. When combined with major advances in mobility systems (including personal mobility systems such as “exoskeletons”), precision firepower, and information warfare capabilities, emerging information technologies could make it possible to conduct information-intensive, highly distributed, network-based operations.

Increasing substitution of unmanned for manned systems. Besides ballistic and cruise missiles that could supplant manned aircraft as the long-range precision strike instrument of choice for many competitors, a range of other unmanned systems could assume greater roles in the future. Unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), and unmanned underwater vehicles (UUVs) could become far more capable and take on many of the missions previously conducted by manned systems. Automated systems could range from “intelligent machines” (e.g., autonomous robots), to “human-integrated machines” (e.g., exoskeletons), and “human-assisted machines” (e.g., remotely piloted aircraft).

Increasing miniaturization of combat systems. Micro-UAVs and ground-mobile “microbots,” could provide substantially increased situational awareness in close quarter environments (e.g., urban areas) as well as new forms of combat power.

These trends could spawn at least three major competitions — one strategic and two technological — that could determine the shape of warfare through the first quarter of the next century:

• Anti-Access versus Power Projection. Capabilities developed to deny access into a theater of war could make traditional power projection very risky. Surface naval forces, conventional air entry, large ground formations, information resources, and existing space assets could all be vulnerable to attack, thereby establishing the demand for new forms of power projection.

• Hider versus Finder. As information becomes increasingly central to war, the competition between "hiders" and "finders" can be expected to intensify sharply. This tension will likely place a high premium on signature reduction, mobility, dispersion, and long-range strike capability.

• Stealth/Quantity of Missiles versus Active Defense. The proliferation of high-precision, low-observable missiles could significantly limit the effectiveness of active defenses. Stealth or numbers alone could indeed be sufficient to cause such defenses to be of marginal value. This could lead to offense-dominance at the operational level of war.²⁸

The trends and potential discontinuities described above could, over the next two-to-three decades, transform war in the air, on land and at sea, and bring war fully into two new dimensions — space and the information spectrum. Air warfare could be transformed by the increasing substitution of unmanned for manned systems and by the wide application of signature management techniques. Ground forces could become dramatically smaller and more stealthy, with most of their combat power exported offshore or loitering overhead, and the ability to dominate extended sea areas using land- and space–based assets combined with the replacement of manned aircraft with missiles as the basis for naval strike could transform war at sea.

When this revolution is complete, the principal metrics of military power may no longer be fighters, tanks and aircraft carriers. Instead, this transformation could bring to prominence systems and forces that strike from extended-range with great precision that are stealthy and information-intensive and that are increasingly unmanned. Future units of strategic account could include: intercontinental, low-observable bombers (e.g., the B-2); submerged arsenal ships equipped with large numbers of long-range missiles; weaponized UAVs able to loiter over the battlespace for extended periods of time; network-based close combat forces; stealthy mobility forces such as airborne refuelers and transports; space control forces (e.g., space-based lasers); and information warfare forces.

This revolution, moreover, is affordable, within acceptable levels of risk, even given the relatively tight budgets in store for defense. Put another way, DoD’s transformation challenge is more strategic and cultural than financial. Exploiting the potential of this impending transformation will require an explicit strategy that:

• Provides for the development of, vigorous experimentation with, and institutional momentum for emerging systems and capabilities such as weaponized unmanned aerial vehicles, arsenal ships, roboticized and information-intensive ground forces, and information-based warfare while coping with “technological flux,” potential false starts and complex systems choice problems;³⁰

• Fields additional high-leverage systems (including developing operational concepts and forms of organization which optimize their use) which significantly enhance force effectiveness over the short-term and are consistent with the long term vision such as long-range stealth bombers and converted SSBNs with SLATACMS;³¹ and

• Gradually divests the force structure of sunset systems such as manned tactical aircraft, heavy ground forces and aircraft carriers while hedging against catastrophic failure and regime uncertainty.³²

The proposed organizational reforms contained in the November 1997 Defense Reform Initiative (DRI) unfortunately suggests a serious disjuncture between strategy and structure within the Office of the Secretary of Defense (OSD) itself that needs to be resolved before any further progress can be made. While many of the “best business practice” reforms which comprise the focus of the DRI are laudable, the proposed reorganization of OSD will likely make the challenge of transformational change far more arduous. The reorganization concentrates many new functions in the assistant secretariat that is charged with implementing the RMA, abolishes a secretariat that is likely at the core of the RMA, and bureaucratically banishes the office that has been the intellectual center of DoD’s RMA activity for more than a decade.³³ At a time when the DoD’s top leadership has emphatically stated that a core strategic objective is to transform the armed forces to exploit an impending revolution in warfare, OSD seems to be organizationally at war with itself.

Budgetary Implications Of The QDR

Among the most important factors which led the Clinton Administration to conduct the QDR were concerns about the affordability of the BUR defense plan. Even if — as argued in the preceding chapter of this report — the QDR’s recommended program and strategy do not represent the most effective means of addressing the challenges facing the U.S. military today and, especially, in the more distant future, would the proposed changes at least solve the affordability problem? Probably not. As a result of the QDR, DoD decided to scale back a number of modernization programs, make modest reductions in its planned force structure, and attempt to achieve significant savings in various DoD infrastructure-related activities (e.g., logistics and health care). These changes will help reduce the existing mismatch between DoD’s plans and likely future funding levels. The proposed changes are, however, almost certainly not sufficient to eliminate that mismatch.

In brief, CSBA finds that:

• The QDR assumes DoD will be provided funding of about $255 billion (FY 1998 dollars)³⁴ annually over the next several decades. If the changes proposed in the QDR are not implemented, it appears likely that the cost of DoD’s plans will exceed this funding level by some $20 billion or more a year soon after the turn of the century. This risk stems from the likelihood that future DoD operations and support, acquisition, and other costs will substantially exceed current estimates.

• Over the long term, the QDR recommended cuts in force structure, modernization programs, National Guard and Reserve personnel, and military bases could yield annual savings of some $6-7 billion. This suggests that additional infrastructure reductions capable of generating savings of some $10-15 billion a year will have to be found to make DoD’s current plan affordable within projected budgets. The QDR does not specify the level of savings expected to be generated by various infrastructure cuts. However, DoD’s recently released Defense Reform Initiative projects long-term savings of some $3 billion a year, primarily from the increased use of public/private competition for various DoD support functions. ³⁵

• Unfortunately, if history is any guide, there is good reason to doubt that substantial savings in infrastructure activities will actually materialize. As a result, in order to make its plans affordable within projected budgets, DoD will likely have to make reductions in its current force structure, modernization and/or readiness plans of an additional $10-15 billion a year. Moreover, from an efficiency standpoint, DoD would be better off making these additional cuts sooner rather than later.

• Assuming current modernization programs should be protected — with procurement funding increased to some $60 billion over the long term — and that readiness levels should be kept high, the most appropriate target for additional reductions may be DoD’s force structure. Achieving another $10-15 billion in annual savings would likely require making force structure reductions of roughly 10-15 percent beyond those proposed in the QDR, or a combination of additional cuts in modernization programs and/or readiness, and more modest cuts in force structure. Alternatively, it might make sense to combine further reductions in force structure with cuts in some traditional modernization programs in order to ensure that sufficient funding is available for experimentation with both new technologies and concepts of operation.

• The fact that the QDR’s projected infrastructure savings may not materialize does not mean that they should not be pursued. Indeed, these reductions should be vigorously pursued. However, rather than depending on these savings to make its plans affordable within projected budgets, DoD should look to these efforts as providing a hedge against the possibility that future budgets for defense might fall well below the $255 billion a year level assumed in the QDR.

• Although Congress appears to be unwilling to provide additional resources for defense over the long term, it has nevertheless opposed a number of the cuts proposed in the QDR. In particular, Congress has shown various degrees of opposition to the QDR’s proposals for additional base closures, cuts in the National Guard, and certain infrastructure-related reforms. The sooner Congress accepts the need for such changes, as well as deeper cuts in force structure, the more efficiently those changes can be made.

Force Structure: The additional force structure reductions called for in the QDR include cutting 15 surface combatants and two attack submarines from the Navy, converting one Air Force tactical fighter wing from active to reserve status, and eliminating two Air Force National Guard air defense squadrons (see Chapter 2, Table 2). Altogether, DoD data indicates that about 23,000 active military and civilian DoD personnel will be cut directly as a result of these and other force structure changes outlined in the QDR. In addition, some infrastructure-related jobs that provide indirect support to these units would also be eliminated as a result of these cuts. CSBA estimates that, based on the level of savings achieved through similar reductions carried out over the past eight years, these cuts will eventually yield average annual savings of about $3 billion.

Modernization: The main modernization programs reduced as a result of the QDR are the Services’ three new tactical fighter programs: the F-22, the F/A-18E/F and the Joint Strike Fighter (JSF). The QDR also recommends cutting the planned purchase of Air Force JSTARS aircraft. In addition, under the QDR the Marine Corps would accelerate its procurement of the new V-22 tilt-rotor aircraft, but reduce the total number of aircraft to be purchased. As a very rough estimate, CSBA projects that the various cuts to modernization programs outlined in the QDR will generate net savings on the order of $1-1.5 billion a year over the long term.³⁸

National Guard and Reserves: Under the QDR, DoD plans to cut about 55,000 more National Guard and Reserve personnel than called for in the BUR. CSBA estimates that, based on the level of savings achieved through similar reductions carried out in past years, the planned cuts in National Guard and Reserve personnel should eventually generate savings averaging about $700 million annually.

Base Closures: The QDR recommends that DoD carry out new rounds of base closures in 1999 and 2001. This schedule was revised by the Defense Reform Initiative, which recommends deferring the two additional base closure rounds until 2001 and 2005. DoD estimates that these two rounds of base closures could eventually generate average annual savings of some $2.8 billion. As a result of four previous rounds of base closures, DoD is currently closing about 21 percent of its Cold War domestic base structure. DoD estimates that, once completed, these closures will result in average annual savings of about $5.6 billion. Assuming this savings estimate is accurate, this suggests that achieving additional savings of $2.8 billion per year would require closing roughly an additional 10 percent of all domestic military bases, making the domestic base structure about 30 percent smaller than it was during the Cold War. Such a reduction would be roughly proportional to the post-Cold War reduction in U.S.-stationed active duty troops planned under the QDR. DoD’s projections of the net savings that will result from bases closures over the long term may be overly optimistic. DoD originally substantially overestimated the near-term net savings expected to result from the first two rounds of base closures.³⁹ Because of this uncertainty and the fact that DoD is likely to incur significant base closure costs at least through the end of the next decade, CSBA assumes that the two additional base closure rounds would yield average annual savings of about $1-2 billion in the decade following the current FYDP.

Infrastructure Savings: The QDR claims that through the adoption of more efficient business practices, including increased outsourcing and privatization, DoD should be able to eliminate some 116,000 military and DoD civilian infrastructure-related positions. The QDR does not indicate the level of savings it expects these reductions and other infrastructure reforms to generate. However, DoD estimates that the reforms outlined in the Defense Reform Initiative could yield savings of some $3 billion a year over the long term. These savings, which would be in addition to savings from more base closures, would result primarily from the increased use of public/private competition for various DoD support functions.⁴⁰

Over the years, a wide variety of studies have suggested that DoD should indeed be able to reap significant savings by making various infrastructure reforms. For example, a November 1996 Defense Science Board (DSB) study estimated that it should ultimately be possible to achieve savings on the order of $30 billion a year through infrastructure reforms. More modestly, in 1994 the Congressional Budget Office (CBO) suggested seven different options for reducing infrastructure activities that might yield total savings of some $5 billion a year over the long term.⁴¹ On the other hand, if history is any guide, DoD is unlikely to achieve even this modest level of savings. From the 1950s to today, DoD’s annual O&S costs per troop have consistently increased. Since DoD’s planned cuts in military personnel are now largely complete, this suggests that, if anything, total O&S costs are more likely to increase than to decrease in the future. In turn, since O&S costs make up the lion’s share of infrastructure costs, this suggests that infrastructure costs are also more likely to increase than to decrease in the future. The history of DoD’s efforts at infrastructure reduction over the past eight years also provides little room for optimism. Since 1989, DoD has been able to eliminate only about one infrastructure-related employee for every force-related position eliminated. By contrast, the QDR envisions cutting almost five infrastructure-related employees for every additional force-related position cut.

As a result of these considerations, CSBA assumes that the infrastructure reforms proposed in the QDR and the Defense Reform Initiative will prove as unsuccessful as past efforts, and thus yield little if any savings. This is not to say that DoD should abandon its attempts to achieve infrastructure savings. Notwithstanding the inability of past reforms to reduce overall infrastructure costs, the initiatives outlined in the QDR and the Defense Reform Initiative may succeed. At a minimum, the implementation of these initiatives might slow the rate of cost growth that has plagued many infrastructure functions in the past. But given the history of past efforts, for planning purposes, it is probably not prudent to assume that significant reductions in infrastructure costs will, in fact, be achieved. This is especially true that, as discussed later in this chapter, DoD’s plans are already dependent on one highly optimistic assumption — that funding for DoD will remain at about $255 billion a year over the long term.

Congressional Action
The level of savings likely to be generated by the QDR’s recommendations is also threatened by congressional opposition. This year both houses refused to enact legislation authorizing any new rounds of base closures. Moreover, Congress approved only a portion of the changes the administration requested to increase private competition for weapons maintenance work currently performed at publicly-owned depots.⁴² Many members of Congress also expressed opposition to the QDR’s recommendation that the size of the Army National Guard be substantially cut.

In each of these cases, Congress’ resistance has stemmed from both policy differences (e.g., over the value of Army National Guard combat units) and concerns about the effect of these proposed changes on the member’s constituents. Members of Congress have traditionally been reluctant to approve cuts in military bases because of concerns that bases in their own states or districts might be selected for closure — even though studies show that the vast majority of communities affected by past base closures suffered little or no economic loss as a result of the closures.⁴³ Fears about job losses at public maintenance depots have similarly been a strong motivating factor for many congressional opponents of increased public/private competition. In addition, Congress’ recent unwillingness to authorize additional base closure rounds was reinforced by the perception that the administration had “played politics” with the last (1995) base closure round.⁴⁴

Congress may yet approve the QDR’s recommendations for additional base closures, cuts in the National Guard and an other infrastructure reforms, but the longer it takes to do so, the longer it will be before the projected savings will materialize. More importantly, if Congress does not eventually agree to these recommendations, the QDR will ultimately yield substantially smaller savings than projected above. Specifically, the failure to implement the additional base closure rounds and National Guard cuts recommended in the QDR could reduce the savings likely to be generated by the QDR from $6-7 billion to $3-4 billion annually over the long term. Likewise, the failure to fully enact various changes need to facilitate greater privatization and outsourcing could significantly reduce the possibility that DoD might be able to achieve significantly greater savings through infrastructure reductions.

Potential Plans/Funding Mismatch
The QDR identifies a number of areas where it believes there is a significant risk that costs will grow beyond projected levels. In particular, DoD notes that by FY 2003, because of unplanned bills (e.g. for unplanned peacekeeping operations and other contingencies), unrealized savings (e.g., from higher than expected base closure costs) and new program demands (e.g., costs associated with NATO expansion), DoD’s annual costs could be as much as $10-12 billion higher than currently assumed.⁴⁵ DoD also notes that, based on historical experience, current plans might underfund “minor” procurement (which includes items such as trucks, generators and field kitchens) by $2-3 billion a year.⁴⁶ In addition, DoD indicates that, because some new weapons programs have been deferred in recent years, a modest procurement “bow wave” has been created that could add several billion dollars to the costs of DoD’s long-term modernization plans. Taken together, these areas of risk suggest that by the middle of the next decade DoD’s costs could exceed currently projected levels by some $20 billion a year. This estimate is roughly consistent with projections made by CSBA, the Congressional Budget Office (CBO) and others over the past few years.⁴⁷

The existence of such a plans/funding mismatch should not, by itself, be cause for great concern. Historically, the existence of a mismatch of this magnitude has been very much the norm for DoD, rather the exception. However, if not resolved in a timely fashion — either by scaling back plans, achieving savings through privatization and other reforms, or by adding more money — such mismatches will lead to inefficient spending. For example, DoD may waste money developing systems it ultimately cannot afford to put into production, or be forced to put systems into production only at lower, less efficient, production rates.

Projected Funding
In addition to the risk of cost growth, there is a significant risk that over the long term the funding available to DoD will be considerably less than the roughly $255 billion a year assumed in the QDR. Under the balanced budget agreement recently agreed to by the administration and Congress, budget authority for national defense is projected to decline to about $264 billion in FY 2002.⁴⁸ Assuming that about $11 billion of that funding would be allocated to Department of Energy (DoE) and other non-DoD defense-related activities, this would leave about $253 billion for DoD. And if CBO’s inflation projections turn out to be more accurate than DoD’s, the Defense Department’s budget would decline to about $250 billion in FY 2002.

Moreover, even this amount of budget authority may not be available to DoD in FY 2002. Based on CBO’s methodology for estimating outlays, CSBA estimates that, to be consistent with the budget authority levels included in the budget agreement, outlays for defense should be about $5 billion higher than indicated for FY 2002 in the budget agreement.⁴⁹ Moreover, William Lynn, director of DoD’s office of Program Analysis and Evaluation, has acknowledged that FY 2002 outlays might be as much as $6 billion too low.⁵⁰ If these estimates turn out to be correct, the administration and Congress will eventually have to either decrease the level of budget authority provided or increase the level of defense outlays allowed in FY 2002.

Under the budget agreement, the only way additional spending could be provided for DoD would be by shifting money out of nondefense programs — specifically, spending would have to be taken from federal departments and agencies such as the Environmental Protection Agency, the National Aeronautics and Space Administration, and the Department of Transportation which, like DoD, are funded through annual appropriations that must be approved by Congress. However, such a shift in discretionary spending would likely generate significant resistance, since under the budget agreement nondefense discretionary spending is already projected to undergo a cut of about 10 percent in real terms over the next five years. Indeed, given the experience of the past decade, it may be more likely that over the next five years additional spending will end up being shifted out of defense and into nondefense discretionary programs.

The prospects for defense in the years beyond FY 2002 are even more uncertain. The budget agreement sets spending caps for discretionary programs only through FY 2002. However, the agreement also includes projections for spending over the FY 2003-FY 2007 period. While much more tentative than the spending levels included in the budget agreement for the next five years, these projections provide some indication of where defense spending may be headed over the longer term.⁵¹ According to these projections, defense spending is assumed to hover at around $245 billion between FY 2003 and FY 2007. This would be consistent with future DoD funding levels on the order of $235 billion a year (assuming $10 billion a year or so for DoE and other defense-related activities), roughly $20 billion a year below the level assumed in the QDR.

It is certainly possible that DoD’s budgets will not be cut this deeply. In particular, CBO’s recent forecast, which projects that the balanced budget plan is actually likely to yield a budget surplus of $32 billion in FY 2002 (current dollars), rising to a surplus of $86 billion by FY 2007,⁵² suggests that economic growth may relieve some of the pressure for further cuts in defense. However, judging by recent history, it seems more likely that, if any of the surplus funds were to leave the Treasury, they would be used to boost funding for domestic programs or pay for additional tax cuts. In any case, any such relief is likely to prove temporary. This is because around FY 2010 large numbers of baby boomers will begin reaching retirement age, necessitating huge increases in spending on entitlement programs, especially Medicare, Medicaid and Social Security, over the following several decades — unless major and politically difficult changes are made to these programs.

Conclusion
Given the likelihood that DoD’s current plans will experience significant cost growth and the risk that projected infrastructure savings will, as in the past, fail to materialize, it will almost certainly prove necessary for DoD to scale back its force structure, modernization and/or readiness plans more deeply than the QDR recommends — even assuming a DoD budget of $255 billion a year can be maintained over the long term. A prudent approach would be to cut those plans by a further of $10-15 billion over the next five years or so. Together with the force structure, modernization, and National Guard cuts, and base closures included in the QDR, these additional reductions would leave DoD with a plan that, over the long term, might well be affordable within the QDR’s assumed budget level.⁵³ Achieving savings of this magnitude would likely require making further force structure reductions of roughly 10-15 percent (beyond those proposed in the QDR).⁵⁴ Alternatively, somewhat smaller cuts in force structure could be combined with additional cuts in modernization programs and/or readiness.

If, contrary to past experience, the infrastructure savings called for in the QDR actually materialize, DoD may eventually be able to “buy back” some, or conceivably all, of the additional force structure cuts recommended in this analysis. However, a more likely possibility is that over the long run political pressure to keep the federal budget balanced, without either raising taxes or cutting domestic (especially entitlement) programs, will cause DoD’s budget to fall well below the roughly $255 billion a year funding level assumed in the QDR, eventually necessitating still deeper cuts in DoD’s plans. As such, it is probably appropriate to view infrastructure savings as, at best, providing a limited hedge against the prospect that even deeper cuts in force structure, modernization and/or readiness plans will ultimately be required, rather than as a means to avoiding further cuts altogether.

DoD claims that any significant reduction in its planned force structure would leave it incapable of waging, and quickly and decisively winning, two major theater wars (MTWs) in rapid succession — the central strategic requirement set out in the BUR, and essentially reaffirmed in the QDR. However, other analysts have expressed the view that DoD could maintain a two-war capability even with smaller forces than are currently planned.⁵⁵ Even if this is not feasible, it should be possible for such a force to carry out a somewhat less ambitious strategy (e.g., “win-hold-win” or “one MTW-plus”) that would still meet the most critical U.S. security requirements. More importantly, absent at least a modest additional reduction in the size of the force structure, it will likely prove impossible to modernize adequately U.S. forces and conduct the kind of vigorous experimentation effort needed to ensure that the U.S. military is capable of countering the far more serious challenges that may exist 15-20 years from now.

1. On March 17, 1997, for example, Secretary of Defense William Cohen stated that the QDR was “going to be strategy–driven, principally with the understanding we are living in a constrained budgetary environment.” He added that he would not accept any “salami–type, across–the–board kinds of cuts.” One of the review’s principal architects, former Deputy Secretary of Defense John White, outlined the QDR’s purpose and scope on October 18, 1996: “What does the QDR need to be? It needs to be a fundamental stock taking. It must examine every aspect of our defense program: what we do, why we do it, how we do it, and how we pay for it. It must first assess enduring U.S. goals and interests, then forecast the security environment, assess potential threats to American interests and identify opportunities to advance them…. The QDR will not just go through the motions. The goal is not to rationalize and protect what we have now. The goal is to visualize and pursue what we will need tomorrow.”

2. Secretary of Defense William S. Cohen, Report of the Quadrennial Defense Review (QDR), Department of Defense, May 1997, p. 8.

3. QDR, p. 14.

4. This figure does not include funding for Department of Energy defense activities and other non-DoD defense-related programs. Unless otherwise noted, all cost and funding figures in this report are expressed in FY 1998 dollars.

5. QDR, p. 29.

6. Robert L. Goldich, “The Army Reserve Components: Strength and Force Structure Issues,” CRS, July 15, 1997, pp. 5-6.

7. O&S activities are funded through DoD’s military personnel, operations and maintenance (O&M), military construction, and family housing accounts. About half of the funding in the military personnel account and most of the funding in the O&M, military construction and family housing accounts is allocated to infrastructure activities.

8. These infrastructure-related personnel reductions include about 37,000 of the 60,000 active-duty military personnel projected to be cut under the QDR.

9. QDR, p. 54

10. DoD’s November 1997 Defense Reform Initiative reaffirmed the need for two new rounds of base closures, but recommended delaying the two rounds until, respectively, 2001 and 2005.

11. This could lead to some significant additional budgetary pressure, since the FYDP currently assumes that the United States will reduce its nuclear forces to START II levels.

12. Moreover, even with this added funding the schedule and technical risks associated with the program are projected to remain high.

13. Letter to Secretary of Defense William Cohen from Philip Odeen, chair of the National Defense Panel, May 15, 1997.

14. For a critique of the Bottom–Up Review, see Andrew F. Krepinevich, The Bottom–Up Review: An Assessment, (Washington, DC: Defense Budget Project, February 1994). The other two post–Cold War strategic reviews are the 1991 Base Force and the 1995 Commission on Roles and Missions of the Armed Forces. As the Clinton Administration’s previous strategic blueprint, the BUR is the point of departure for the QDR.

15. SSCs are defined in the QDR to include show-of-force operations, interventions, limited strikes, noncombatant evacuation operations, no-fly zone enforcement, peace enforcement, maritime sanctions enforcement, counterterrorism operations, peacekeeping, humanitarian assistance, and disaster relief.

16. Report of the Quadrennial Defense Review, p. 5.

17. Systems described as “leap-ahead” by DoD include: the Army’s Comanche armed reconnaissance helicopter; the Navy’s New Attack Submarine and F/A-18E/F multirole fighter; the Marine Corps’ V-22 Osprey tilt rotor aircraft; the Air Force’s F-22 air superiority fighter; and the Air Force/Navy/Marine Corps Joint Strike Fighter. (Department of Defense, “FY 1998 Defense Budget Briefing Slides,” February 6, 1997.) The stealthy F-22, for example, is a far greater “leap” in fighter capabilities than does the F/A-18E/F. While each of these systems represents a significant advance over those they are intended to replace, the stealthy Comanche and F-22 may be most consistent with capabilities that will likely be emphasized by the emerging military revolution. Over the long-term, the NSSN seems most likely to be the most important to the United States strategically.

18. There is also scant mention in the QDR of the strategic benefits DoD expects to gain from its evolving joint warfighting capabilities. There is no discussion, for example, of the implications the Navy’s increasingly sophisticated, long-range, land-attack missile strike capabilities could have on Air Force force structure or vice versa.

19. The future warfighting vision on which the QDR is based is Joint Vision 2010. The “immaculate” warfighting concepts on which its overarching concept of “full-spectrum dominance” include: “information dominance,” “precision engagement,” “dominant maneuver,” “full-dimensional protection,” and “focused logistics.” If one were to take DoD’s future warfighting concept literally, one could conclude that U.S. forces expect to be able to “know” everything they wish to know about a future battlespace, to strike with great accuracy anything they wish to strike in it, and to move unimpeded to positions of decisive advantage anytime they want while they are protected completely from any enemy harm and supported seamlessly.

20. Gigi Whitley, “Fogleman: QDR Failed to Revolutionize U.S. Military Force Strategy,” Inside the Air Force, Vol. 8, No. 21, May 23, 1997, p. 7.

21. A transformation strategy comprises the plans and actions which, in their totality, are intended to anticipate, induce, sustain and exploit revolutionary changes in military capabilities.

22. If the resources of allies were considered, the economic gap between the U.S. and the Soviet Union would have been even greater.

23. See Michael Pillsbury, ed., Chinese Views of Future Warfare (Washington, DC: National Defense University Press, 1997).

24. One could hope that a form of Chinese “carrier battle group envy” might cause them to divert substantial resources to the development of a surface blue–water navy.

25. Three final alternative force postures were considered by the QDR: one which would sustain current force structure at the expense of modernization; one which would reduce force structure by about 20% to increase investment in modernization by about $15 billion per year; and one which would ostensibly strike a balance between the two. Earlier in the QDR process, options entailing 10%, 20%, and 30% force structure cuts were placed on the table, but then reduced to 0%, 10%, and 20%, respectively, after confronting strong opposition from the Services. The middle option was subsequently softened further into an infrastructure vice a force structure cut (i.e., one which retained 10 Army divisions, 20 Air Force fighter wings and 11 operational carriers), essentially becoming synonymous with the status quo option.

26. A frontier strategy places primary emphasis on preservation of the strategic status quo. A frontier strategy is the preferred course of action when near–term dangers are high and the rate of change is slow.

27. Increased transparency could be evident even in dense, urbanized terrain (e.g., via “see-through walls” radar and sniper detection systems).

28. Defense could, correspondingly, dominate at the strategic level, leading, in some cases, to protracted or strategically irresolute wars. Offense- or defense-dominance at the tactical level will likely be highly situation-dependent.

29. Access to space will likely be ubiquitous in the future. Broadband communications traveling through distributed satellite constellations, coupled with the widespread availability of advanced encryption algorithms, could largely guarantee access to survivable and secure communications paths. A wide range of potential adversaries could also have access to precision location data and high-resolution satellite imagery, which could enable them to locate friendly and hostile forces to within several meters and employ stand-off weapons with great precision, especially against fixed targets. This may not be enough to prevent even niche space competitors, however, from seeking to deny the United States the use of its space systems to support terrestrial operations through information warfare, air–and space-based jammers, direct-ascent, anti-satellite weapons (ASATs), and nuclear weapon–released, electromagnetic pulse radiation.

30. Technological flux — rapid change among emerging systems — is frequently present during periods of revolutionary change in warfare. Areas of potential technological flux might include UAVs, local and wide–area networks, arsenal ships, etc. False starts — emerging systems that appear to have revolutionary potential but later turn out to be far less effective than expected — are also a common occurrence. Terminal missile defense systems may prove to be a false start, turning out to be, for example, ineffective against barrage attacks or stealthy cruise missiles. Systems choice problems — the challenge of selecting among diverse systems that perform the same warfighting function — could be particularly acute among long-range precision strike systems (e.g., stealth bombers, arsenal ships, weaponized UAVs, land-based missiles, and perhaps, space-to-ground strike satellites) and network–based close combat forces.

31. SLATACMS are submarine-launched versions of the Army Tactical Missile System. Such systems, in operationally meaningful numbers, may not only provide high strategic leverage in the near- to mid-term, i.e., by making major theater wars during the period of strategic pause less stressful and providing “strategic slack” for other forms of combat power to transform more aggressively, but also could have high potential to migrate successfully through the entire period of revolutionary change in warfare.

32. A catastrophic failure might constitute a successful challenge to U.S. dominance in space or in undersea warfare. Regime uncertainty refers to uncertainty about the scope and timing of the transition from one military regime to the next.

33. The assistant secretary for strategy and requirements — the secretariat charged with implementing the RMA — has, in effect, been given the responsibilities that were previously the purview of the abolished assistant secretary for international security policy. In addition to overseeing DoD implementation of the RMA, formulating defense strategy and reviewing all war plans, the newly created assistant secretary for strategy and threat reduction will be responsible for nuclear strategy, counter–proliferation policy, arms control negotiations and denuclearization, and security relations with the newly independent states of the former Soviet Union. The reorganization eliminated the assistant secretary for command, control, communications and intelligence at a time when information is the central driver of strategic change. The most misguided idea to come out of the DRI, however, is the proposed banishment of Andrew Marshall’s Office of Net Assessment — the locus of the most innovative and insightful thinking on the revolution in military affairs within DoD for more than a decade — to the National Defense University.

34. This figure does not include funding for Department of Energy defense activities and other non-DoD defense-related programs. Unless otherwise noted, all cost and funding figures are expressed in fiscal year 1998 dollars.

35. This estimate does not include the savings projected by the Defense Reform Initiative to result from two new base closure rounds, since these additional closures were already proposed in the QDR (and thus are included in CSBA’s $6-7 billion savings estimate).

36. It is unclear what level of savings DoD expects the QDR-proposed changes to yield. DoD has indicated that it expects at least $6-7 billion in annual savings to result from the QDR’s recommended reductions in force structure, DoD infrastructure costs, and modernization plans. This estimate apparently does not include an additional $3 billion in savings projected in the QDR to result from additional base closures. Report of the Quadrennial Defense Review (Washington, DC: DoD, May 1997), p. 62.

37. The Defense Reform Initiative recommends a variety of infrastructure reforms. The Defense Reform Initiative’s report provides long-term annual savings estimates for two particular changes: two new rounds of base closures ($2.8 billion) and the increased use of public/private competition for various DoD support functions ($2.5 billion). DoD estimates that, taken together, all of the reforms outlined in the report will yield annual savings of some $6 billion a year over the long term.

38. Among other things, the magnitude of the net savings generated by the QDR’s modernization cuts will depend on what steps DoD takes to compensate for the planned reductions (e.g., the extent to which existing aircraft will be upgraded and modified to provide them with longer useful service lives).

39. DoD originally estimated that BRAC I and II would result in net savings of, respectively, $850 million and $2.9 billion over the six-year implementation period. Currently DoD estimates that BRAC I will result in net costs of $500 million during this period, while BRAC II will yield net savings of only $1 billion. Altogether DoD now estimates that the first four rounds of base closures will have six-year implementation costs of about $24 billion and result in gross savings of some $29 billion over this period, for net savings of about $5 billion. Congressional Budget DoD’s tendency to overestimate near-term savings from the first several rounds of base closures was largely due to its underestimating of environmental cleanup costs and overestimating of revenues from base land sales. Congressional Budget Office (CBO), Closing Military Bases: An Interim Assessment (Washington, DC: CBO, December 1996), p. xviii.

40. It is unclear how much if any of these savings are already assumed in DoD’s long-term plans.

41. CBO, Easing the Burden: Restructuring and Consolidating Defense Support Activities, July 1994, p. xii.

42. The House’s version of the FY 1998 defense authorization bill would have retained the current requirement that at least 60 percent of all depot maintenance work be performed at publicly-owned facilities, while the Senate bill would have changed the public/private split to 50/50, as requested by the administration. The House version of the bill also included language that would have had the effect of essentially preventing any work from being sent to the privatized-in-place depot maintenance facilities in Sacramento, CA and San Antonio, TX. The final FY 1998 defense authorization bill, which the administration considered vetoing (but ultimately signed), represents a compromise. For example, the act changes the public/private split for depot maintenance work to 50/50; however, it also broadens the definition of depot maintenance (and thus the number of activities protected by the 50 percent floor for public depot work) and requires that private companies using closed depots include the market value of those facilities in their bids.

43. See, for example, George H. Siehl, “Military Base Closures Since 1988: Status of Employment Changes at the Community and State Level,” Congressional Research Service (CRS), February 26, 1997.

44. Specifically, the administration has been criticized for deciding to privatize-in-place the Air Force’s air logistics centers in Sacramento, CA and San Antonio, TX rather than close these facilities and transfer their work either to other public depots or private sector commercial activities as recommended by the 1995 Base Realignment and Closure Commission.

45. It is unclear from the QDR report whether this figure is expressed in current dollars or FY 1997 dollars.

46. Ibid.

47. See, for example, Steven M. Kosiak, Analysis of the Fiscal Year 1998 Defense Budget Request (Washington, DC: CSBA, March 1997), p.5.

48. On June 5, 1997 the House and Senate passed a congressional budget resolution (CBR) that incorporated the spending levels agree to by the president and congressional leaders. For further information on the new budget agreement, see, Steven M. Kosiak, “Defense Spending Under the Balanced Budget Agreement,” CSBA, June 6, 1997.

49. Budget authority represents the amount of funding available to be obligated (e.g., through the signing of contracts for goods and services, or the hiring of personnel), while outlays represent the amount actually spent to pay for goods and services as those obligations are “liquidated” (e.g., in the form of progress payments to contractors, and pay checks for DoD civilian and military personnel). Because there is a time lag between when funds are obligated (e.g., contracts are signed) and when those obligations are liquidated (e.g., payments are made), for any given year defense budget authority and outlays levels typically differ somewhat.

50. According to Lynn, the changes recommended in the QDR might reduce the outlay shortfall to $5 billion in FY 2002. Tony Capaccio, “Pentagon Faces A $6 Billion Outlay Problem In 2002,” Defense Week, June 2, 1997, p. 5.

51. These projections were included in part because some assumption had to be made about discretionary spending after FY 2002 in order to measure the impact proposed tax cuts might have on the deficit over the FY 2003-FY 2007 period. Congressional leaders have agreed that the tax provisions allowed under the agreement will be written so as to keep the federal budget in balance through at least the five years after FY 2002.

52. CBO, The Economic and Budget Outlook: An Update, September 1997, p. 28.

53. The additional reductions need to make DoD’s plans affordable would probably be closer to $15 billion than $10 billion if Congress ultimately rejects the administration’s request for additional base closures and cuts in the National Guard.

54. If made in an across-the-board “salami-slice” manner, such a reduction might include, among other things, eliminating one or two active Army division, one or two Navy carrier battle groups and one or two active Air Force fighter wing. However, it would probably make more sense to cut some types of forces more deeply than others.

55. See, for example, William Kaufmann, Assessing the Base Force (Washington, DC: Brookings Institution, 1992).