Over the next decade, the U.S. military will need to undertake the most dramatic shift in its strategy since the introduction of nuclear weapons more than 60 years ago. Just as defense budgets are declining, the price of projecting and sustaining military power is increasing and the range of interests requiring protection is expanding. This means that tough strategic choices will finally have to be made, not just talked about. As the British physicist Ernest Rutherford once declared to his colleagues, "We haven't got the money, so we've got to think."
A new strategic framework will be needed, one focused less on repelling traditional cross-border invasions, effecting regime change, and conducting large-scale stability operations and more on preserving access to key regions and the global commons, which are essential to U.S. security and prosperity. The bad news is that this will mean reducing the priority of certain objectives and accepting greater risk in some realms. But the good news is that with a shift in focus, truly critical U.S. interests can continue to be protected at a sustainable cost.
After the Cold War, Washington enjoyed a "unipolar moment," drawing on its overwhelming advantage in resources and technology to achieve an unprecedented level of global military dominance. Two decades on, however, that moment is fading. The U.S. economic engine is sputtering, with unpleasant implications for a Defense Department that has grown accustomed to steady budget growth.
From 1999 to 2011, annual U.S. defense spending increased from $360 billion to $537 billion in constant dollars, not including an additional cumulative $1.3 trillion spent on operations in Afghanistan and Iraq. The Obama administration and Congress have already agreed to pare back planned further increases over the next decade by a total of nearly $487 billion. In January 2013, the budgetary process known as "sequestration" is set to trigger another $472 billion in total reductions over the same period. Congress may avoid sequestration by finding other ways to lower the federal deficit, but even if it does, additional major cuts in defense spending are likely to come eventually. And if history is any guide, most of the $200 billion in "efficiency" savings over the next five years that the Pentagon is currently counting on will fail to materialize.
This means that serious belt-tightening is coming -- a process that will be made even more difficult thanks to increasing manpower costs and the decline of the country's European allies. Since its inception in the 1970s, the United States' all-volunteer military has been a source of strength, generating a highly professional force. But the recent wars in Afghanistan and Iraq have revealed the volunteer force's Achilles' heel: in order to attract large numbers of qualified personnel willing to serve in dangerous and unpleasant wartime conditions, the Defense Department has had to raise salaries and benefits substantially. Even adjusted for inflation, total military compensation has increased by nearly 50 percent over the past decade -- an unsustainable rate of growth.