The Liminal Moment:Rethinking National Security in an Era of

Shrinking Budgets

Johns Hopkins University Rethinking Seminar

February 12, 2014

Dr. Gordon Adams

Professor, American University School of International Service

Distinguished Fellow, Stimson Center

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Strategy and Money

“Strategy Wears a Dollar Sign”

Bernard Brodie, Strategy in the Missile Age (1959)

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Note: Topline in out-years includes the Congressional Budget Office (CBO estimate of overseas contingency operations (OCO) based on a phased drawdown to 30,000 troops in 2017 and remaining flat thereafter.

Sources: Center for Strategic and International Studies analysis of Department of Defense, National Defense Budget Estimates for Fiscal Year 2013 (Green Book), Office of the Under Secretary of Defense (Comptroller), March 2012; Congressional budget Office, Long-Term Implications of the 2013 Future years Defense Program, July 2012. Analysis by CSIS Defense and National Security Group.

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40%

50%

60%

70%

80%

90%

100%

110%

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Build-downs: Ten-Year Horizon from Peak Pentagon Budgetas percent of highest budget year

Source: FY13 Greenbook, Table 6-8, OMB Tables 32-1 and 10-1; ATRA/BCA

KoreaVietnam

Cold War

Admin's Plan

Sequester

Sequestration scenario presumes that initial savings is all taken from FY13 . Data is not available to compute "sequesterable base" or to allocate cuts to prior-year unabiligated balances.

SavingsY10 % less Y1

Korea $2.4T 31%

Vietnam $1.3T 28%

Cold War $1.0T 31%

Admin Plan $1.3T 21%

Sequester $1.8T 28%

5

$400

$450

$500

$550

$600

$650

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

nominal dollars constant FY14 dollars

National Defense in Murray-Ryan Budget Deal

Deal FY14:

$521B

BCA FY14:

$498B

FY15

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Note: Topline assumes that total federal spending from 2018 to 2040 grows at 3.1 percent above GDP (the average annual growth rate planned for 2013-2017 in the FY13 budget request).

Sources: Center for Strategic and International Studies analysis of Congressional Budget Office, Budget and Economic Outlook: Fiscal years 2011 to 2021, January 2012; Office of Management and Budget, Historical tables, February 2012. Available at http://whitehouse.gov/omb/budget/Historicals; Department of Defense, National Defense Budget Estiamtes for Fiscal Year 2013 (Green Book), Office of the Under Secretary of Defense (Comptroller), March 2012.CSIS independent analysis based on CBO federal spending projections from 2022-2040 6

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$0

$25

$50

$75

$100

$125

$150

FY80 FY 82 FY 84 FY 86 FY 88 FY 90 FY 92 FY 94 FY 96 FY 98 FY 00 FY 02 FY 04 FY 06 FY 08 FY 10 FY 12

Mili

tary

Pe

rso

nn

el (

Co

nst

ant

FY1

3 D

olla

rs)

Military Personnel Budget Authority (Incl Health) per Capita (AC Personnel)Constant Dollars (FY13, Thousands)

Source: FY13 Green Book Tables 6-8 & 7-5; CBO Long-Term Implications of the FY2013 Defense Program (Table 2-2)

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Growth in Pay and Benefits of Military Personnel: The Military Medical System

9

Growth in O&M per Active-Duty Service Member

Source: Congressional Budget Office, Long-Term Implications of the 2014 Future Years Defense Program, November 2013

10

9%

3%

3%

17%

11%37%

9%

11% Force Installations

Acquisition

Central Logistics

Defense Health

Central Personnel Admin

Central Training

Departmental Management

Other Infrastructure

Active Duty Personnel in Infrastructure Positions

Source: FY12 Defense Manpower Requirements Report

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Projection of FY 2014 Defense Budget Request by Appropriation Title

12

Example of Cost Growth in Acquisition Programs: The Navy’s Shipbuilding Program

Source: Congressional Budget Office, An Analysis of the Navy’s Fiscal Year 2014 Shipbuilding Plan, October 2013

Source: Center for Strategic and International Studies 131/21/14

Time to Make Choices

“To govern is to choose.

To appear to be unable to choose is to appear to be unable to govern.”

- Nigel Lawson, British Chancellor of the Exchequer

(1983-89)

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Making Choices Means Budget Discipline

“The budget has basically doubled in the last decade. And my own experience here is that in doubling, we’ve lost our ability to prioritize, to make hard decisions, to do tough analysis, to

make trades.”

- Adm. Mike Mullen, CJCSJanuary 6, 2011

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16

$400

$450

$500

$550

$600

$650

$700

$750

FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22

10-Year Presidential Budget Requests for Defensein billions of dollars

Source: S-11s from that year OMB Summary Tables

PB11

PB12

PB13

PB14

Murray-Ryan Deal

FE

B 2

01

0

FE

B 2

01

1

FE

B 2

01

2

AP

R2

01

3

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0

20

40

60

80

100

120

FY

85

FY

86

FY

87

FY

88

FY

89

FY

90

FY

91

FY

92

FY

93

FY

94

FY

95

FY

96

FY

97

FY

98

Cold War Builddown by Budget Titleas a share of FY85 (inflation adjusted)

Ops & Maintenance

Military

PersonnelProcurement

RDTE

Source: DOD Green Book Table 6-8

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Army

Navy

Air Force

Defense-Wide

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY

72

FY

74

FY

76

FY

78

FY

80

FY

82

FY

84

FY

86

FY

88

FY

90

FY

92

FY

94

FY

96

FY

98

FY

00

FY

02

FY

04

FY

06

FY

08

FY

10

FY

12

One-Third Rule: Pentagon Base Budget by Military Service

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It’s Not About Military Presence

“Naïve is thinking that everything is about the absence or presence of

American power and that the people of the region have no agency.”

- Tom Friedman, New York Times, 1.8.14

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Strategic Agility

Interests: Which Ones Are Worth Fighting For?

• Vital Interests:– Protecting US Homeland

– Protecting US Allies from Attack

– Ensuring Unimpeded Access to Global Commons

• Conditional Interests:– Resolving Intrastate Conflicts

– Stabilizing Governance

Key Strategic Operating Principles

• Focus on Defending Vital Interests

• Ensure Globally Superior Space, Air, Naval, and Special Operations Forces

• Reform Manpower, Compensation & Procurement Systems

• Resist Protracted Land Stability & Counterinsurgency Wars

• Reduce Yet Maintain Highly Capable Ground Forces

Summary of Changes

CurrentStrategic

Agility

Military Manpower, Active (thousands) 1,400 1,220

Civilians (thousands) 800 750

Army Combat End-strength (thousands)* 490 450

Air Force Active Fighters 1,289 950

Navy Aircraft Carriers 10 10

Marine Corps Combat End-strength (thousands) 182 160

FY15 DoD Budget (billions of constant FY13 dollars) $524 $474

*Army and Marine Corps end-strength figures do not include reductions from management reforms