Cato Policy Analysis No. 10 April 30, 1982

Policy Analysis

Reagan 1983 Defense Budget:
An Analysis and an Alternative

by Earl C. Ravenal

Earl C. Ravenal, a former official in the Office of the Secretary of Defense, is a professor of international relations at the Georgetown University School of Foreign Service. He is the author of Never Again: Learning From America's Foreign Policy Failures (Temple University Press), Strategic Disengagement and World Peace (Cato Institute), and several other books and articles on American foreign and military policy.

The Problem

No federal budget -- at least, perhaps, since Calvin Coolidge -- has been good news. But President Reagan's budget for 1983 is the most provocative in living memory, and it has inspired more than the usual criticism. The criticism has about it an air of desperation, as if the deficits and the depredations will have irreversible effects on the economy, and, beyond that, on society and the future of governance in this country.

The administration now projects overall federal spending of $762 billion for 1983, $803 billion for 1984, and, at this writing, admits deficits of $102 billion and $94 billion respectively. Others, including the Congressional Budget Office, say the spending will be almost 10% higher and the deficits will be half again as high. The precise figures do not matter. In any case, they are elusive and subject to almost daily adjustments. The point is the magnitude of the nation's insolvency, and the factors that are causing it.

Among the notable features of the Reagan 1983 budget, the most egregious is the vast increase in defense spending. In terms of spending authorization (the figure I will use throughout this paper), there is a 20% increase, from $214 billion in 1982 to $258 billion in 1983. At this point, considering the extent of the insolvency and surveying the alternatives (further deep cuts in entitlements and domestic government programs, higher taxes, recourse to the money markets or to the "printing press"), even partisans of the Reagan administration have begun to part company and insist that budget-balancing moves include a "fair share" of defense cuts.

The Critics

But the critics of defense spending, old and new, fail to understand the anatomy of the defense budget -- "where the money is" -- and to that extent disqualify themselves from offering constructive alternatives. If you don't diagnose accurately, you can't prescribe effectively.

Item: Sen. Durenberger (R-Minn.) makes headlines by unveiling, after the better part of a year's effort, a detailed 195-page counter-budget that would junk some plague-ridden weapons systems (such as the Army's AH64 attack helicopter and Hellfire antitank missile, and the Navy's F/A18 fighterbomber), substitute fossil-fueled aircraft carriers, cancel some continental air defense, and neaten up the Army's force structure -- among other individual items. But this gestation of an elephant has produced a mouse: a mere $3 billion of cuts for next year, and $26 billion over five years.

Item: An editorial ("Asking for the Moon on Defense," The New York Times, 12 February 1982), echoes Durenberger and other proponents of "military reform": Cut "big-ticket" items, "increase the number of weapons systems by shifting part of the buildup to more austere, less expensive ships and planes," improve the "readiness of general purpose forces," scrap the volunteer army and move to conscription.

Item: "Democrats for Defense," a group of former high-level Carter functionaries, find their savings in building oil-fired aircraft carriers (or fewer, or smaller, ships) instead of nuclear ones, and eliminating the B-1 bomber and most continental air defense. Indeed, they have virtually given up on overall savings, since they approve the level of the Reagan defense budget (which Carter himself would have reached soon after Reagan if he had had the chance), and offer a mere rearrangement of some "priorities." (For example, they would spend even more on readiness and lift and forces for Europe.)

In some ways, the illusions of the liberal defense critics are just as harmful as the disastrous course of the administration and its hawkish supporters. Why do they hold to these minuscule and illusory critiques? The cast of mind is so pervasive that it must be more than negligence. Rather, it is a systematic self-deception that proceeds from deeply held intellectual and political positions. These critics would like to think that they can avoid the stark choices: Cutting their favored "conventional" forces, letting allies drift or fend, or cope. They want to believe that all can be put right, but that we can still defend the world in the way to which we, and others, are accustomed. What they are telling us, ironically, is that we could have containment without tears, the fruits of rearmament without the penalties.

The point is that these liberal critiques are dodges, designed to evade the need to relate defense spending to real missions and ultimately to defensive commitments. They do not address the large expenses and the large gaps.

Worse, the critiques are unstable; that is, they are easily reversed. In the grip of some crisis, or even if a sense of crisis prevails in the land, the liberals retreat from their unsound analyses and rally to the support of military intervention. It should not be surprising that they do this, because, fundamentally, they share the same premises about foreign policy and national strategy as the hawks they purport to criticize.

I want to present a critique of the Reagan defense program -- its rearmament, its renewed international militance, its impetus to intervention, its ruinous domestic costs -- on the broadest possible basis. I do not found my critique on any scheme to "transfer" savings from defense automatically and wholly to government social programs. I do not have recourse to recriminations of "imperialism" or "militarism," either as purposes or motives for the Reagan program. I do not allege personal psychological warpage or ideological deformity Those are either moot or irrelevant questions. They do not contribute to an objective, analytic debate, or to an effective counter-program for the United States.

I put my argument, rather, on the basis of the capacity of our society, economy, and political system to make the extraordinary efforts -- whether conceived as "necessary" or not -- the Reagan defense program calls for; on the disproportion of these defensive efforts -- whether well-intentioned or not -- to the purposes of this nation and this society; on the tension caused between our constitution, our tradition of limited government, and the great costs and impositions needed to support an ambitious foreign policy. This is a critique of defense spending that relates to our foreign policy. The argument is simple: The defense budget is the price of foreign policy, and we can't afford our foreign policy.

This is not the standard critique, and it is easy to misunderstand. If I seem to accept the "conditional necessity" of present defense programs -- that is, their appropriate relation to the present foreign policy framework -- it is only, in the end, to reject both the defense programs and the foreign policies.

If my presentation, then, is somewhat of an anomaly in relation to most liberal critiques, it is because it constitutes an appeal to fiscal conservatives. And that brings me back to the critique of the Reagan defense budget and the basis for making cuts.

There is an integral connection, after all, between foreign spending and domestic spending -- between defense expenditures and the health of our society, economy, and political system. All activities of this society, in the end, must be financed with savings, or exactions, from private efforts and organizations. Resources have-a price; they are scarce, by definition. Our economy now lacks the resources for the renewal of our industrial base and the maintenance of our standard of consumption; for the restoration of our competitive power and the employment of our people. The needs are so great, and the impositions of four years of Reagan deficits -- some half a trillion dollars -- are likely to be so enormous, that there is really only one place where a sufficient remedy can be found, and that is in the reduction of defense spending.

Where the Money Is

The notorious bank robber Willie Sutton could have given the appropriate advice: You have to go where the money is. Critics of defense -- those who would make cuts -- would be well advised to take Willie's advice. But to get such savings in the defense budget, as I have noted, you have to know where the money is.

First of all -- strange as it seems -- the real money in the defense budget is not in the conspicuous, exotic toys -- the "big-ticket items -- particularly strategic nuclear systems such as the MX missile and the B-l bomber. Those two systems, for example, will account for $4.5 billion and $4.8 billion respectively in 1983; together, that represents 31/2% of the administration's 1983 defense request.

And equally strange, perhaps, it is not "waste" or "fat" that makes any appreciable difference. David Stockman's careless remark, to the effect that the Pentagon was a "swamp" of waste and inefficiency, might have been a reassuring swipe of rhetoric to the critics of the Pentagon. But waste and fat will come to only a few billion dollars a year in defense budgets that are going to three quarters of a trillion a year by the end of a decade. As Eugene McCarthy used to say about the Pentagon: "It isn't the fat that ought to worry us, it's the lean." And the sad fact is that what waste there is not easily recoverable. Despite some commendable efforts, in and out of the Pentagon, waste in the procurement and deployment of forces and weapons is, over time, virtually a constant. Now I hope that any audience I find will be sophisticated enough, and perhaps sympathetic enough, to understand that I am not making a case, or even an excuse, for waste. As a former Pentagon systems analyst, I should not have to make that plea. The point is, rather, that a certain level of incompetence and malfeasance is built into any human structure -- even private organizations, let alone government entities that produce no real goods, serve no real customers, and strive for no real profits. With waste distributed almost randomly throughout the categories of defense activity, you cannot expect to make surgical excisions of fat, sparing the bone and muscle of the programs. What that means is this: If you are serious about retaining defense programs, you must plan to fund the waste along with the substance or you will end up cutting the substance along with the waste.

Nor, finally, would all those expert and detailed invocations of "military reform" produce the decisive savings they promise. As one editorialist has summarized the thrust of that movement: "A sensible defense policy -- one that builds weapons that are workable, reliable, and (relatively) cheap instead of overcomplicated, breakable, and wildly expensive... and that concentrates on training, maintenance, and readiness rather than on mindless procurement -- would yield dramatically more military effectiveness for the same pile of dollars." (The New Republic, 14 October 1981). And so it would -- if it could. But wishing for such weapons is not creating them. The real defect of these proposals is not what they promise, but what they can't deliver. A few military horror stories -- and there are many to choose from -- don t add up to a conclusive critique, and a handful of therapeutic adjectives are not an effective remedy. Those cheap, sensible weapons must get at their targets, and maybe get back, in an intensive battlefield environment. It is not dimwitted generals and grasping defense contractors -- the stuff of current mythology -- that are putting up the price of our forces and weapons. It is determined, capable enemies and the requisites of modern combat. Our choice, therefore, is reduced to fighting in those environments and against those adversaries. or not.

Anatomy of the Defense Budget

Where is the money, then -- money on the same scale as the budget deficits we want to cure? It is not in the individual weapons systems, the isolated line items. It is in the large aggregate forces and in the broad missions of these forces in the world -- the categories that all the microstudies cannot identify or "pinpoint." The following is a skeletal anatomy of the administration's 1983 defense request of $258 billion. The way you analyze that budget is what makes the difference; first, the types of forces, then their regional orientation.

Strategic nuclear forces, including (as they should) their full share of support and overhead, will come to about $54 billion. This figure includes the early requests for the MX missile and the B-l bomber. It is "only" 21% of the defense budget. This must surprise those who are brought up on the notion that the "bad" weapons must also be the expensive ones, that forces that kill large numbers of people must be the ones that are bankrupting us, too.

The fact that is so hard to get across to most critics of defense is that it is the popular "conventional" forces that cost most of the money. General purpose forces -- land divisions, tactical air wings, surface naval units, and lift -- account for $204 billion, 79% of the defense budget. And those are the general purpose forces we already have, not even the additional ones the Reagan administration would like to create.

Defense dollars are best expressed in terms of some of the forces they buy -- and, ironically, the rougher the estimates, the better. An Army division -- whether equipped as now or somewhat differently -- will cost over $3-3/4 billion a year to keep, and we have 16 of them. A wing of tactical aircraft -- whether filled out with those notional "rugged, simple" planes or those "fragile, gold-plated" ones -- will cost $1-1/2 billion a year, and there are 45 of these equivalents. The Marine Corps -- whether reorganized or not -- will cost over $16 billion a year. The full cost of deploying one aircraft carrier task force -- whether nuclear-powered or oil-fired -- in the West Pacific or the Indian Ocean or the North Atlantic or the Mediterranean -- will be over $11 billion a year, and our present strategy requires us to keep four or five forward. One might ask: Do these forces have to cost that much? The answer is virtually yes. These aggregates will not change much with technical tinkering -- unless we want to eliminate parts of them, and that is a choice most critics will not face.

The most important cross section we can make is a geographical attribution of these general purpose forces -- what their missions are, what allies they support, what regions they defend. Despite the protests of Pentagon budgeteers -- and there are some conceptual problems in making regional attributions of general purpose forces -- we must make them or we can't understand what our forces are for. As Secretary of Defense McNamara's systems analysts used to say in the '60s: "It's better to be roughly right than precisely wrong." Europe will take $129 billion, Asia, $39 billion, and other areas and the strategic reserve, $36 billion. Given a reasonable projection of current cost growth, over the decade to 1992 Europe will cost us $2-1/4 trillion.

What this brief anatomy lesson ought to demonstrate is that defense budgets are not for nothing -- they are for something. The dollars are to buy forces; the forces have missions; the missions are in regions where the United States has defensive commitments or putative strategic interests; the strategic involvements, in sum, are practically equivalent to the nation's foreign policy. The money, then, is ul- timately in our alliance commitments, our forward defense, our global stance. Therefore, defense budgets cannot be cut significantly without consequences for their objects: our alliances, our foreign polices. And a serious proposal to reduce the defense budget -- commensurate with the magnitude of our solvency problem -- entails reduction of our commitments, especially in Europe. If we would cut, we have to decide what we would do without.

It shouldn't have taken Sen. Tower, a staunch defender of the Reagan defense budget, to make this point for defense critics -- and from the deck of the newly-commissioned aircraft carrier Carl Vinson at that. Speaking at Newport News, Va. in March, he said: "If Congress insists on these cuts, Congress must be able to identify which commitments we will no longer be able to honor." And he went on to say, with perfect logic: "If reductions in defense spending are forced upon us, I will attempt to cut force structure -- namely, Army divisions, aircraft wings, battle groups and the like."

But the critical syndrome is practically impervious to this logic, even though logic, which is a two-edged sword, could be put to good use. Hardly any of the defense critics seem to understand the connections that run all the way from defense dollars, through forces and doctrines and military strategies, to national strategies and foreign policies -- that is, to the defense of regions and the protection of allies. Editorialists, politicians, and experts out of office do not so much make arguments; they "position" themselves in the debate, in true Madison Avenue fashion. They ask, first and sometimes solely, how they can address important-sounding subjects and still maintain their credibility in the foreign policy establishment and the military analysis community. And the way to do this is to acknowledge gravely the unalterable necessity of maintaining the familiar alliance commitments, the familiar global status, and yet to display meticulous knowledge of how our complicated, expensive weapons systems work -- or fail to work. The formula is: Keep the expansive global missions; nitpick the hardware, and sharpshoot the "waste." But that exercise is wearing thin.

Defending Europe

True, some critics seem to talk about "cutting commitments." But they can't be serious as long as they confine their intent to disowning a few Third-World dictators or abandoning a few strategically worthless areas -- objects that are not taking any American forces now anyway. To be serious about cutting defense spending, you must talk about America's major alliances -- particularly NATO, which is costing us $129 billion a year, half of our entire defense budget.

Unfortunately, among the half-dozen critics who have begun to talk about Europe, the preponderance are hardliners who are not, as good conservatives, addressing our nation's solvency crisis, but are simply disgusted with European neutralism, nuclear pacifism, anti-Americanism, and commercial greed. They threaten to dump Europe and to concentrate on the sea lanes and the Persian Gulf, or even the Western Hemisphere. This talk finds an echo in quasi-official administration utterances, such as those of Fred C. Ikle, Under Secretary of Defense for Policy, in a roundtable in The New York Times (14 March 1982): "We want to get away from the Maginot Line mentality for the defense of Europe, which piles most of our military assets at one front...[and to make an] effort to strengthen the southern flank, to develop a capability for deterring aggression in the Persian Gulf area...[I]t is in our interest to improve Atlantic security in the Caribbean... Such proposals are intriguing straws in the wind, but there are two things wrong: First, they proceed from the wrong motives; they are often expressions of pique and spite. And they are often conditional -- that is, just bluff, to get the European allies to come to their senses and make a larger and more docile contribution to their defense.

True the Europeans can't seem to decide whether they are more afraid that the United States won't defend them or will defend them. But shaping the European debate should not be the American purpose. The underlying points are these: First, if America wishes to continue its role of global containment, it must defend Europe, and Europe, indeed, will remain the key theater. That is a fact that is decreed by our adversaries and their interests and objectives -- the adversaries we acquire, that is, through the adoption of a large part of the world as our own area of interest. But, second, there is a real difference in geopolitical and political situations on the two sides of the Atlantic, that leads inevitably to divergent strategic perspectives and divergent preferences for defense. Understanding this problem, and even sympathizing with the European perspective, will not change the policy orientations, let alone the underlying situations.

Even now, with all we are spending, neither our nuclear nor our conventional defense of Europe is whole; our allies are not confident of our protection. Our nuclear umbrella has been leaky since the attainment of parity by the Soviet Union. Conceding this, those who reflexively opt for "improving our conventional defense" have the burden of not just prescribing that we must do more but predicting that such improvement is likely to happen. That is another story. This is not to advocate the instant abrogation of the alliance -- simply to recognize that, after 35 years, NATO is like some old, unused medicine on the shelf: The bottle is still there and the label remains the same, but the contents have long since evaporated or spoiled.

A few critics seem to apprehend the true dimensions of the situation and the real dilemma that arises from it. But even they are reluctant to draw the indicated conclusions. Stephen Rosenfeld, of The Washington Post (12 February 1982), surveying Secretary of Defense Caspar Weinberger's budget submission for 1983, asks, almost plaintively: "Is there not...a middle way that is a bit better than simply an unthinking averaging out one's alarm about the Soviet threat and apprehension about an American overreaction to it? That is not simply a

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