Money and Strategy, Strategy and Money

April 19, 2011

Standard and Poor’s decision to downgrade the U.S. long-term credit outlook highlights how much is at stake in the budget debate. Bipartisan experts agree that no effort to tackle the debt is serious unless it includes defense spending, which is at a high in real terms since the end of the Cold War.  A serious review includes not just “efficiency” savings but also a review of strategy, roles and missions – recognizing that, as defense expert Gordon Adams notes, “Money has always driven strategy and strategy has always influenced money.”

Excessive indebtedness makes America vulnerable; smart Pentagon cuts are part of fostering American power. Last year, Chairman of the Joint Chiefs of Staff Admiral Michael Mullen said, “I think the biggest threat we have to our national security is our debt.” Bruce Bartlett, an economist who served in the Reagan and George. H.W. Bush administrations, notes the role smart cuts to Pentagon spending must play: “No one is saying the defense budget is the sole source of the deficit, but the fact is that it has risen from 3 percent of the gross domestic product in fiscal year 2001 to 4.7 percent this year. That additional 1.7 percent of GDP amounts to $250 billion in spending – almost 20 percent of this year’s budget deficit. And according to a recent Congressional Research Service report, the cost of wars in Iraq and Afghanistan alone accounted for 23 percent of the combined budget deficits between fiscal years 2003 and 2010.” The explosion of defense spending makes the U.S. more vulnerable, says a new report from the Center for a New American Security: “Over time, the economic consequences of indebtedness may crowd out investments in a U.S. military that undergirds international security; render the United States more vulnerable to economic coercion; and erode America’s global stature and soft power. Relieving U.S. indebtedness demands preventive action by American society and government – including DOD.” [Michael Mullen, 7/6/10. Bruce Bartlett, 10/8/10. CNAS, 2/11]

Neither the President’s nor Paul Ryan’s budget proposals make true “cuts” to defense; real deficit reduction will demand consideration of options for going further. Defense News explains that the $400 billion in “cuts” to defense spending in President Obama’s budget are from proposed, not actual, funding: “The goal will be to hold growth in the defense base budget below inflation, which would save $400 billion by 2023, according to the White House. This deficit reduction effort is in addition to the savings generated from ramping-down overseas contingency operations, the White House said.”

Experts agree that it is possible to make meaningful cuts without compromising U.S. national security. As Romesh Ratnesar laid out in TIME, “In the past several months, a number of analysts in Washington from across the political spectrum have drafted proposals to cut military spending by 10% to 15% over the next 10 years. Though they differ in programmatic details, these proposals have some common themes: they all assert that we can make meaningful defense cuts without compromising U.S. military primacy.” Those proposals include the Sustainable Defense Task Force and the president’s bipartisan deficit reduction commission, both of which laid out a menu of options for cutting up to $1 trillion from the defense budget over the next decade. Distinguished Fellow at the Stimson Center, Gordon Adams, noted on NPR, “Defense is strong. We have a dominant military capability today, dominant in terms of being able to deploy global air power, global ground forces, FEMA, Navy everywhere in the world. Our information, communications, logistics, infrastructure outpace any other nation in the world, or most of them combined, and will, even if we cut as much as $1 trillion over the next 10 years out of the currently projected defense budgets.”  [Defense News, 4/13/11. Romesh Ratnesar, 4/12/11. SDTF, 6/11/10. Bipartisan Deficit Commission, 12/10. Gordon Adams via NPR, 4/18/11]

“Efficiency savings” won’t do the job – a coherent approach must combine a look at efficiency and a serious review of strategy.  President Obama explained in his speech at George Washington University, “We need to not only eliminate waste and improve efficiency and effectiveness, but conduct a fundamental review of America’s missions, capabilities and our role in a changing world.” The National Journal’s James Kitfield explains that, “In other words, not just do a cost-cutting, bean-counting exercise where you cut 10 percent from all the major accounts, but you actually sort of rationalize your roles, your missions. You know, I think that’s the right way to go. And it will, I think, engender a debate — first time we’ve had one since 9/11 — about what it means to be this big, indispensable superpower because, as I wrote last year, it’s becoming unaffordable. We talked about indispensable nation, but we’re becoming an unaffordable nation. We’re underwriting global security. We have troops, besides fighting three wars, in 120 countries on any given day… And that’s not sustainable. So there’s going to have to be a very fundamental debate about what really is — what risks we’re willing to take to do less. And that’s something that Gates said very clearly. He wants this debate to be about, what are we doing now that you are willing for us not to do? And what risks will you want to accept for us not doing that?”

Given the short timetable for the review the president ordered, Gordon Adams advises that, “They would do well to pick off some of the priority areas of concern, and focus in on them: is it about nukes, is it about missile defense, is it about forward deployment, is it about counterinsurgency? What are the three or four areas you want to focus on? And they’ll need help from the White House and the guidance to do that and focus their two month effort some key priority areas. My own view is that the area that is most likely to come into question in such a review is the counterinsurgency mission. That’s one that really drives the department now and it’s not clear they’re going to want to let it drive it in the future.” [President Obama via Navy Times, 4/13/11. James Kitfield via NPR, 4/18/11. Gordon Adams via Defense News, 4/17/11]

Genuine leadership looks at strategy and budget together.  Lawrence Korb who served as assistant secretary of defense and Pentagon budget chief in the Reagan administration, explains, “No country can buy perfect security no matter how much it spends, and any attempt to do so will eventually reach the point of severely diminishing returns.” As Gordon Adams makes clear, “Money has always driven strategy and strategy has always influenced money… The reality is you always have a relationship between the two.” [Lawrence Korb and Laura Conley, 10/7/10.  Gordon Adams via Defense News, 4/17/11]

What We’re Reading

British military officers will be sent to Libya to advise rebels fighting Colonel Muammar Qaddafi’s forces, the UK government said.

Syrian security forces used gunfire and tear gas to scatter anti-government protestors in the city of Homs, following a day in which 25 people were killed there.

Yemeni security forces opened fire on anti-government protesters gathered in the capital, Sanaa, eyewitnesses say.

French authorities barred an Italian train loaded with Tunisian migrants and European activists from entering the country.

Nigerian President Goodluck Jonathan was declared the winner of the presidential election yesterday, as rioting swept across the Muslim north after the results were announced.

A leaked UN report states that tens of thousands of civilians were killed and war crimes possibly committed by both the Sri Lankan government and the Tamil Tigers during the final months of Sri Lanka’s civil war.

Cuba says it will allow people to buy and sell their homes for the first time since the communist revolution in 1959.

Taiwan announced it will improve the defense capability of its 200 coastguard troops stationed near the Spratly Islands.

A Finnish nationalist party has taken nearly a fifth of votes in Finland’s general election, with potential consequences for EU willingness to bail out troubled economies.

The remains of Chile’s former President Salvador Allende will be exhumed as part of an inquiry into rights abuses, a court ordered.

Commentary of the Day

Peter Godwin explains that using the ouster of Laurent Gbagbo in the Ivory Coast as an example to African dictators may not be effective in some parts of the continent.

Brian Whitaker argues that the violent strategies of the Syrian regime in quelling unrest are self-defeating.

Brian P. Klein and David S. Abraham write that Japan’s ability to rebound from its triple disaster in March will require more than just rebuilding; it will demand restructuring, from energy and farm policy to decentralization of power.

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