Defense budget cuts following the pandemic will be hard to swallow

Congress has appropriated more than $2.25 trillion to counter the impact of COVID-19 on American families and the economy. It is likely to spend even more once legislators return from their recess in early May. This unprecedented level of expenditure is resulting in a massive deficit and national debt levels that are likely to exceed 120 percent of the nation’s gross domestic product, especially as GDP growth itself is no longer a foregone conclusion. In turn, there will be renewed pressure on the defense budget, which already is forecast to have no real growth in fiscal year 2021.

Interest on the national debt, which at some point will begin to rise again, will create a massive burden on annual federal budgets. The demand for increases in domestic spending will be difficult to ignore in the aftermath of the pandemic. For these reasons, it is not beyond the realm of probability that defense budgets beginning in fiscal year 2022 will not even grow in nominal terms. 

Even if the Department of Defense (DOD) had been forced to address only the reality of no real growth in defense spending — as opposed to the additional burden of minimal nominal growth — it would have had to re-evaluate its spending priorities. Historically, when DOD has been forced to undertake what it terms “cut drills,” these have been done with the greatest reluctance, and at times have been completed with little analysis of the implications of potential trade-offs. Invariably, what resulted from these efforts were reductions in spending for operations and maintenance, force level reductions, or the shedding of research and development of untried weapons and systems. On the other hand, the department and especially the armed services were exceedingly reluctant to dispense with longstanding legacy programs. 

This time, however, DOD faces a budget challenge of unmatched proportions. Defense budgets are certain to decline in real terms. Indeed, should the Democratic Party take the White House or the Senate (or both) in the upcoming elections, even deeper cuts in defense are sure to follow. Yet the threats posed by China and Russia, already projected to increase, may well prove to be even greater in the face of a weakened and disorganized West. The DOD,  therefore, will have to take seriously the need for a fundamental re-evaluation of its priorities, and not merely undertake another cut drill. 

The last time the department fundamentally shifted its focus was in the early 1990s, when its base force resulted in a 25 percent reduction in force structure, a 20 percent reduction in manpower relative to fiscal year 1990 and a 10 percent reduction in budget authority. DOD may have to consider launching an effort along similar lines if it is not to be caught flat-footed next year, as a result of either the full budget impact of coronavirus spending or the November elections, or both. 

As with the base force, force levels are a likely target for reductions. Pay and benefits, to include family housing, are untouchable because they are key to maintaining a top-level volunteer force. This is especially critical at this time because, in the aftermath of the virus’s spread within the military, it may prove difficult for the services to maintain their recruitment objectives. Similarly, operations and maintenance budgets cannot be tampered with to maintain deterrence against possible new adventurism on the part of Russia, China, North Korea or Iran.

Apart from force-level reductions, therefore, the only other candidates for cuts are research and development and the procurement accounts. Reductions in R&D, typically favored in cut drills, will be more difficult, given the need to maintain an advantage over Russia and China in the realms of hypersonics, artificial intelligence, quantum computing and other cutting-edge technologies. Procurement accounts are thus the only remaining targets for budget reductions. 

Budget cutters for years have zeroed in on the strategic nuclear triad, and current plans for its modernization offer them new targets. Global Strike Command is seeking $200 billion over the next decade to fund new bombers, intercontinental ballistic missiles, command and control and related supporting elements of the strategic nuclear triad. On the other hand, longtime opponents of spending on strategic nuclear forces will argue against the need for a new bomber, and instead will call for converting the strategic nuclear triad to a dyad of land- and submarine-based missiles. Other critics of the triad may support the bomber program and might prefer dispensing with the land-based leg in favor of the bomber and submarine legs. Budget pressures will underscore both sets of arguments.

With respect to general purpose forces, there no doubt will be a renewed call to halt all aircraft carrier procurement beyond the two Ford class carriers under construction, or at best to support construction of one more. Even President Trump at one point voiced his concern about the program. Given its skyrocketing costs, the F-35 also may find itself in the crosshairs of budget hawks. The Army recently dropped its program to develop an Optionally Manned Fighting Vehicle, its third attempt to replace the 1980s Bradley Infantry Fighting Vehicle, only to renew it several weeks later. It might have to drop it again. Finally, there have long been calls for a re-evaluation of the elements — and costs — of the nearly four-decades-old missile defense program.

Cutting procurement is always a difficult pill for the services to swallow, and this time will be no different. No doubt DOD will point to the need to maintain the defense industrial base, and workers’ jobs, as a reason for avoiding major reductions in defense procurement. That argument certainly will resonate with Congress. This time, however, the case for resisting change may be overwhelmed by the impact of a plague that has caught the nation unprepared and may well return with even greater force in the months or years ahead.

Dov S. Zakheim is a senior adviser at the Center for Strategic and International Studies and vice chairman of the board for the Foreign Policy Research Institute. He was under secretary of Defense (comptroller) and chief financial officer for the Department of Defense from 2001 to 2004 and a deputy under secretary of Defense from 1985 to 1987.