Closing America’s Security Deficit

The RAND Corporation has published the second report in its “Strategic Rethink” series, this one entitled “America’s Security Deficit: Addressing the Imbalance between Strategy and Resources in a Turbulent World.” It is a noble undertaking, conducted by well-respected scholars and analysts. But I’m not particularly optimistic that conditions are ripe for the strategic rethink that they seek, and that the country desperately needs.

The strategy-resources gap should be corrected by adopting a new strategy, one that pares down the United States’ permanent overseas presence, and compels other countries to take on more responsibilities for their own defense (as Japan shows signs of doing). Instead, U.S. policymakers seem willing to undertake merely incremental changes at the margins, retaining U.S. primacy, and trying to cover the strategy-resources gap with wishful thinking and unrealistic assumptions.

RAND’s summary of the report explains “currently projected levels of defense spending are insufficient to meet the demands of an ambitious national security strategy.” And its Key Finding reads as follows:

Limitations on defense spending in the context of emerging threats are creating a "security deficit."

• Fielding military capabilities sufficient, in conjunction with those of our allies and partners, to deal with the disparate challenges faced by the United States will require substantial and sustained investments in a wide range of programs and initiatives well beyond what would be feasible under the terms of the Budget Control Act.

Advocates for higher military spending have been saying this since the BCA was first passed. Those who also claim to care about the nation’s persistent fiscal imbalance typically note that the Pentagon’s budget is not the primary driver of the nation’s debt, and they would focus, first, on so-called mandatory spending (Social Security, Medicare, and Medicaid) which accounts for a far higher share of total federal expenditures, in order to find the additional money needed to close the security gap.

They are correct on the first point, the need to reform entitlements, but not on the need for more military spending.

We should be clear about what that entitlement solution would look like, and why it hasn’t yet occurred. As a practical matter, it entails telling people to accept cuts in benefits that they have been told (falsely) are theirs by right. Millions of American retirees actually believe that the money that they receive every month under Social Security, or the health care funded by Medicare, is actually their money, the money that they paid into the system during their working years.

Of course, it isn’t “their” money. The benefits for current retirees are paid by taxes on current workers.

But, leaving that aside, under the necessary overhaul, entitlement benefits will be cut, but not enough to cover the difference. Thus, higher payroll taxes, too. Bitter pills all around.

Unsurprisingly, very few American politicians have actually proposed such measures, and the few who have done so have mostly focused on reducing payments to future beneficiaries, not to those already in the system, or nearing retirement. As my colleague Dan Mitchell points out, in a moment of uncharacteristic optimism, such half-measures would be better than doing nothing at all, but it will take a major political shift before any such proposal ever becomes law.

Remember where the current anxiety over supposedly inadequate spending levels for the military all started: the Super Committee, and the hoped-for Grand Bargain of tax and entitlement reform. Then there was the failure to reach any agreement, and the BCA-imposed caps on discretionary spending (divided evenly between defense and non-defense).

But Congress has managed to work around the caps through special legislation in nearly every fiscal year since they first passed the budget-capping law in 2011. Which suggests that they weren’t all that serious about controlling costs in the first place.

So, we are back to where we started: a mismatch between our strategic ends, and the resources available to execute that strategy. And this represents a particularly difficult challenge for people like Marco Rubio and Ted Cruz who have called for huge increases in the military’s budget. Where will they find the money?

There are alternatives for solving America’s security deficit, besides simply spending more. We could adjust our strategy to our fiscal reality, and stop pretending that our money problems will magically sort themselves out.

The Obama administration hasn’t considered those alternatives, however, in part because choosing among competing strategic priorities is difficult, but mostly because Congress’s repeated evasions of the BCA have convinced the administration that actually aligning our strategy with our resources isn’t really necessary. Only serious spending discipline, enforced by a Congress committed to resolving our long-term fiscal imbalance, will prompt the strategic rethink that is long overdue.