By David Forman
Best Defense guest columnist
Though smaller defense budgets are now as certain as death
and taxes, the real question is "just how bad is it going to be?" According to
Clark Murdock, who spoke at a recent panel hosted at CSIS, fewer dollars is
only half the issue. The more significant, though less discussed, problem is
how "weak" defense dollars have become due to internal cost growth. This
"double whammy" of fewer and weaker dollars will make cuts feel twice as bad as they look on paper.
Current Operations and Maintenance (O&M) costs are
projected to consume 80 percent of the budget by 2021, and the entire budget by
2039. Even though total force size increased only 3 percent over the last decade,
personnel costs increased 90 percent. These projections are clearly
unsustainable, but since the Defense Department can't do without people or
operations, what should it do?
Mr. Murdock recommends re-conceptualizing the defense
budgeting structure and sticking to it by asking "how much is affordable"
instead of "how much is enough." The budget should have two major categories. The
first category, "Institutional Support," should not exceed 30 percent of the
total budget and would cover training, recruiting, facilities, and
administration of the force. The other 70 percent should be allotted to the
"Operational Force" that would directly support military operations for
combatant commanders. Within the Operational Force allotment, 35-50 percent
should be spent on common core capabilities (considered the musts), and the other 20-35 percent should
be spent on strategic investment (considered the coulds).
Time will tell if the upcoming Quadrennial Defense Review
adopts these recommendations, but the panel at CSIS brought to light two
excellent points that can help minimize the gamble on this double whammy.
First, strategy development needs to become an iterative
process. As it stands now, combatant commanders take strategic guidance and
establish force requirements based on cost assumptions, but when their
assumptions price out too high, we do not adjust strategy to make it affordable
and determine where to accept more risk.
Second, military personnel compensation reform can't garner
congressional support because the focus is mainly on cuts to current
compensation. Todd Harrison of CSBA provided the freshest perspective I've seen
by referring to his report
on maximizing value from the entire
military compensation system. Instead of just cutting, we need to adjust compensation to areas of
cost-effective value to service members. Military personnel value certain
benefits more than others, but not all benefits have the same relative
government cost for perceived value. By measuring value and cost (as he did in
his report) and spending accordingly, the Defense Department can still attract
high quality personnel without consuming the entire budget.
As the next defense secretary confronts a lower top-line
budget, with or without sequestration, internal cost growth must be addressed. Now
may be the best time to re-conceptualize how defense dollars are allocated. Success
in this process will create a sustainable budgeting structure that supports an
affordable national security strategy executed by a high quality and
well-compensated military force of all-volunteer Americans.
LCDR David Forman, USN, is
a senior military fellow at the Center for a New American Security. The views presented here are his own
and do not represent those of the Navy or the Department of Defense.