Critical to the Bush Administration’s ongoing review of national security requirements and strategy is the question of how much the Department of Defense (DoD) should spend on the development and procurement of new weapon systems. More than any other military in recent history, the US military has a tradition of investing in and relying upon advanced weapon systems and other equipment to give it a crucial edge in capabilities. Few doubt that the United States needs to continue relying on, and exploiting, its advantages in weapons technology.
There is, however, considerable disagreement over the speed with which the US military needs to “recapitalize” (i.e., replace) its existing inventory of weapon systems (i.e., its “defense capital stock”), the kinds of new systems that should be acquired, and thus, ultimately, the amount of money DoD needs to invest in research and development (R&D) and procurement. There is likewise considerable disagreement over how best to sustain a defense technology and industrial base (DTIB) capable of supporting these requirements.
THE CURRENT MODERNIZATION PLAN
Under DoD’s current modernization plan—i.e., the last Clinton Administration defense plan— over the next several decades, the Services would buy a wide range of new weapons, including the F-22, F/A-18E/F and Joint Strike Fighter (JSF) fighters, the DD-21 destroyer, the Virginia-class submarine, the Comanche helicopter, and the Crusader artillery system. CSBA estimates that fully implementing these plans would require average annual procurement budgets of nearly $80 billion (fiscal year (FY) 2002 dollars) over the next 15 years. The cost would rise to some $95 billion if it is assumed that DoD would seek to replace its existing inventory of weapon systems with next-generation systems on a one-for-one basis over the longer term (i.e., on a “steady-state” basis). By comparison, DoD now spends about $60 billion a year on procurement.
It is far from clear whether such an increase in procurement funding is affordable. Prior to leaving office in January 2001, the Clinton Administration released a revised defense budget proposal. Under that plan, $310 billion would be provided for DoD in FY 2002 and an average of roughly $305 billion annually would be provided over the following five years. However, due to cost growth in weapons acquisition and operations and support (O&S) costs, the actual cost of the current plan is likely to exceed that funding level by an average of some $40 billion a year over the long term. Given the size of projected future federal budget surpluses, it is possible that funding for defense could be increased to this level. In February, the Bush Administration announced that it had adopted the same DoD topline included in the last Clinton plan for FY 2002, and that its proposal for later years would await completion of an ongoing defense reviews. President Bush certainly could recommend an increase for defense large enough to pay for the current plan when the administration’s review is completed. However, both Republicans and Democrats appear to place higher priority on other competing policy initiatives, such as paying down the federal debt, cutting taxes and protecting or reforming Social Security and Medicare. Thus, enacting a large increase in funding for defense may be difficult.