Two contradictory trends will dominate U.S. decisionmaking on defense spending over the next several years, perhaps longer. The first is the need to radically reduce the current $1.5 trillion budget deficit. So called deficit hawks have asserted that all parts of the budget, including defense spending, are “on the table.” Polls indicate that a majority of the American people naturally gravitate to cutting defense spending and foreign aid first when asked what programs they would reduce first to balance the budget. Projections of the long-term budget situation suggest that without radical steps all discretionary spending face extreme reductions.
The second trend is growing instability in the world. Juxtapose recent calls for reduced defense spending against massive street demonstrations in the Middle East, the expansion of the Pakistani nuclear arsenal, warnings of a new North Korean nuclear test, Iran’s ongoing nuclear weapons program, Hezbollah’s takeover of the Lebanese government, China and Russia’s continuing military modernization programs and global terrorism. The Obama Administration’s efforts to bring about a new era in international relations have clearly failed.
At the same time, many U.S. allies continue to reduce their defense spending and, hence, their capacities for power projection and even self-defense. As a part of its Strategic Review, the United Kingdom decided to go out of the naval air power business for a decade or more, mothballing a brand new aircraft carrier. The combination of an aging population and declining defense spending will make it difficult for NATO and Japan to mount an effective defense capability in the coming years.
Meanwhile, defense spending by prospective U.S. adversaries is rising. Fueled by high oil prices, Russian defense spending has been rising for more than a decade. Officially, Russia’s defense budget in dollar terms is now around $60 billion. China’s defense budget for 2009 was estimated to be s high as $150 billion. All this is before adjusting expenditures to reflect purchasing power parity. Also, official budgets for these two countries only reflect a portion of overall spending on defense; many defense-related activities are funded in other parts of their national budgets. Looking forward, U.S. and Russian/Chinese defense expenditures look like two trains approaching one another at high speed. The rate of U.S. spending reductions and that of Russian/Chinese defense increases means that the two sides will approach effective parity in relatively short order.
It should also be noted that with a largely conscript force and virtually no defense entitlements, both Russia and China spend far less on personnel than does the United States. In addition, force structures are extremely different; the United States has more lawyers in uniform than some U.S. allies have infantry.
Events abroad are likely to make planning for substantial reductions in U.S. defense spending very problematic. It will only take an Islamist takeover in Egypt to radically alter U.S. assumptions about the stability of the Middle East or the likelihood of war in this region. The next North Korean military provocation could prompt a massive war on the peninsula. Then there are potential flashpoints such as China-Taiwan, Russia and the South Caucasus, Russia and the Ukraine, Venezuela-Colombia, India-Pakistan, Iran-the Gulf States, Israel-Syria or the U.S-Mexican border. Finally, global terrorism has not been defeated.
Based on the information provided by Secretary of Defense Robert Gates in his January 6 press conference, it looks as though the FY2012 defense budget will mark the first actual reduction in spending in a decade. Many observers believe that this is the start of a long-term downward trend in defense spending that could see defense spending reduced by a third in current dollars over the next decade — assuming the historic boom and bust process is repeated. However, events in the world are likely to make it very difficult to follow history’s path.
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