2021 Budget: Cutting Old Weapons To Make Room For The New

UPDATED from budget documents PENTAGON: Despite grand strategic plans to overhaul the force to face Russia and China, budget reality means the 2021 spending plan coming out today is a “reset year,” cutting old weapons to free up funding for new technologies in 2022. It’s the latest round in the long struggle between the aspirations of the 2018 National Defense Strategy — a document every defense official has cited since its release — and congressional limits on spending.

Defense Secretary Mark Esper acknowledged the problem in a speech last week. After calling on Congress to greenlight more money — “in the years ahead, we need to get back to 3 to 5 percent real growth annually” — he admitted that, in the meantime, “we have to brace ourselves that at best, defense spending will be level.”

A leading defense budget expert was less polite. “When the services say that 2022 is really the year of NDS implementation, they are putting lipstick on a pig,” said Mark Cancian of the Center for Strategic and International Studies. “By then, the moment may have passed, since there will be a new administration.”

A Strategic Shift – In Slow Motion

The 2018 strategy demanded policy changes and a new vision of equipping the military to meet the challenges of China as a major military power and Russia as a regional disruptor. That shift, it said, required dumping old equipment and strategies and reorienting the force from interminable counterinsurgency in the Muslim world to a faster, lighter, more potent force ready to strike across the globe.

Fiscal reality, bureaucratic inertia, and the inevitable ponderousness of deep, structural changes have all gotten in the way. As a practical matter, as much as Esper and other officials emphasize long-term modernization, investment in the future force — long-term R&D and new procurement — remains about a third of the defense budget, with two-thirds going to sustain the current force — current Operations & Maintenance (O&M) and military personnel (MILPERS) pay and benefits:

In fact, the fastest-growing category of spending in the 2021 request is military personnel, while procurement actually declines:

Those factors have constrained the three annual budgets released since the National Defense Strategy was released in January 2018. All three have focused on resetting the force, and repairing ships, aircraft, and other big-ticket items that fell into disrepair under the across-the-board cuts under the Budget Control Act.

But in July, Congress and the White House reached a two-year agreement that set new spending caps for 2020 and 2021, holding the budget flat in ‘21, rising to $740 billion from this year’s $738 billion for national security spending, which includes both the Department of Defense and nuclear weapons work at the Department of Energy. Excluding Energy, funding for DoD proper actually falls slightly, from $712.6 billion (enacted) in 2020 to $705.4 in the 2021 request.

That makes next year a time of divesting and recalibrating before Esper can begin moving out on the plan. One defense official acknowledged the idea of 2021 being a “reset” year in which old weapons systems were retired in order to make room in the 2022 budget for investments in things like several new classes of ships, hypersonic weapons, missile defense, and new space assets.

Esper’s goal of getting a budget that stays ahead of inflation would demand a massive increase that most analysts don’t see happening given the runaway national debt, and uncertainties over who will occupy the White House and control Congress after November’s national elections. Even if inflation remained at two percent a year, just staying even would require a $14 billion annual increase, a far cry from the 3 to 5 percent called for by both Esper and his predecessor Jim Mattis.

In his State of the Union address last week, President Trump delivered his regular boast that “our military is completely rebuilt” under the three and a half years of his administration, a claim that finds some purchase in several years of increased spending and a more aggressive research approach for several critical next-generation technologies and weapons systems.

The fact remains, however, that the military is still mostly reliant on Cold War-era technologies and weapons systems that have been upgraded over the years, but which the Pentagon has been unable to come up with a plan to replace.

Cutting The Old, Making Room For the New

Reports indicate that the house cleaning that the ‘21 budget will try and force through Congress will include dozens of  Air Force F-16 and B-1 bombers, and the Navy will retire several ships early to clear the decks for a new frigate class and several unmanned or optionally-manned ships. 

Indications are the Navy cuts won’t be as drastic as those outlined in a December memo that suggested buying a dozen fewer ships, slashing the shipbuilding budget, and possibly decommissioning 12 more hulls over the next four years.

The Chief of Naval Operations, Adm. Michael Gilday, made a rare public appeal for a larger share of the Pentagon budget — which met with an immediate rebuttal by Army Secretary Ryan McCarthy. Now we know what they were reacting to: The Air Force’s share of the Pentagon budget grew much more than either Gilday’s or McCarthy’s — although a chunk of that will be bitten off by the new Space Force. Meanwhile, Esper has made a small down payment on his promises to cut the “Fourth Estate” of independent defense agencies.

But despite the calls for major reform, none of these changes is more than marginal: None of the four factions gained or lost even a full percentage point of the total DoD budget:

One of the “Fourth Estate” agencies under Esper’s microscope? The Missile Defense Agency.

Last week, Pentagon officials described a scrub of back-office functions that found $5.7 billion in savings. “We did a line-by-line review of the Missile Defense Agency and we actually did divest significant legacy capability,” one official said. The Pentagon told the MDA to “go through and look at some of the investments they were making that really had lessened in importance or were declining,” in order to shift money to new programs focused on defending against new generations of ballistic and hypersonic missiles being developed by China, Russia, and North Korea. 

Some of the savings at the MDA has allowed leaders to shift money to investing in the newly announced next-generation interceptor. The program kicked off last fall after the Pentagon cancelled the Redesigned Kill Vehicle program in August once it was deemed too riddled with problems to salvage.

But these investments will have to wait, as the savings were likely found too late to make it into the 2021 request. Those will likely come in later years as the department looks to make other changes, including the Pentagon’s global footprint. Esper is leading a top-to-bottom review of combatant commands, with expected cuts coming to Southern Command and Africa Command as the National Defense Strategy’s shift to the Pacific continues to move forward — slowly.

 

Story by Paul McLeary, graphics by Sydney Freedberg.