Budgets may reflect near-term priorities, but they also reflect long-term vision. In the op-ed below, AEI’s John Ferrari argues that, for once, looking too far ahead with its budget may have hamstrung the Pentagon’s ability to answer the security challenges of today.
While most are rightfully waiting for the National Defense Authorization Act (NDAA) and the Defense Appropriations Act to understand the military’s capacity and capabilities in the coming fiscal year, we should not take our eyes off 2024. The Pentagon is certainly not, as it is in the midst of finalizing its FY 2024 budget submission due to Congress next February.
The 2024 submission will tell us if the Pentagon plans to stay on course with its “divest to invest” strategy or if it will adopt a new one better fit for the changing realities of a world rocked by Russia’s war in Europe, an aggressive near-term threat by China against Taiwan, and pandemic-induced economic woes. It’s not too late to change tact.
The end result of the current divest to invest strategy has been a rapidly shrinking Army, fewer planes and ships, an emphasis on developing technology versus procuring weapon systems and munitions, and an overall shifting of risk into this decade while attempting to reduce risk in the 2030s. This strategic resourcing plan has now been proven false as both Russia and China appear to not want to wait until the mid-2030s to create havoc. Additionally, as inflation forces the Federal Reserve to raise interest rates further, it’s looking increasingly likely that the payments for interest on our national debt will exceed the size of the defense budget in the second half of this decade, triggering perhaps another round of sequestration-like deficit reduction spending cuts.
Taking these new risks into account, what should the Pentagon’s 2024 budget request look like? First, the funding strategy should change to “buy now and buy a lot.”
Divest to invest is based on two flawed assumptions: first, that our adversaries will wait for us to invest in the 2030s, and second, that defense dollars will be available to invest in the late 2020s and early 2030s. The Pentagon is also betting that if it doesn’t procure items at scale now that the industrial base will be resilient enough to expand on demand at some point in the future. None of this is true, demonstrating the need to dump divest to invest in the 2024 budget.
How should the budget change to meet a “buy now and buy a lot” strategy? The Pentagon should first and foremost ramp up most production lines and increase them to their maximum, especially for munitions, ships and indirect fire weapon systems. The war in Ukraine has taught us yet again that a three-year need-to-procurement cycle will probably leave us with depleted magazines and unable to rearm in a major war.
Throughout the 1930s, the Navy could afford to launch just 23 new ships. In their newest book Danger Zone, Hal Brands and Michael Beckley note that in 1940, prior to the attack on Pearl Harbor, the Navy ordered 240 ships, putting our shipyards onto a wartime footing that enabled us to quickly recover from the surprise attack. The Pentagon needs a similar plan in the 2024 budget, which would include a three-year wartime stockpile of munitions, replacement artillery and rocket weapons, and a very large, multi-year block buy of warships. In short, the Pentagon should shift $45 billion from its $130 billion research and development budget each year into procurement and sustain a new procurement level that would generate $225 billion of additional procurement over the next five years.
The Navy should receive the lion’s share of this shifted funding. Currently, in the President’s budget request for FY 2023, the Pentagon requested only fifty-one ships [PDF] between 2023 and 2027 at a cost of $133 billion. Adding $20 billion per year of the $45 billion shifted funds to the shipbuilding account would enable the Navy to buy ninety ships, rather than fifty-one with the extra $100 billion. The Navy should also purchase these ships using a five-year block buy, valued at $233 billion, giving industry the ability to scale, drive down costs, and tap into the public markets for financing certain capital investments. A similar five-year block buy for munitions should also be done.
Next, the Pentagon should take a hint from Congress and stop divesting structure – ships, planes and people – before replacement systems are ready. As my colleague at AEI has repeatedly highlighted, the Navy actually needs ships, the Air Force needs planes and the Army needs soldiers. In 2024, the Pentagon needs to at a minimum hold structure steady and, if possible, increase it. The perennial debate that our military will sacrifice capacity to increase capability is a false choice. As many note, capacity itself is a capability.
Lastly, the Pentagon should stop the hemorrhaging of its people. All of the services are in a severe recruiting crisis, the likes we have not seen since the 1970s, and the 2024 defense budget needs to have the resources to solve it. Funding needs to be allocated to raise the pay of the junior enlisted and mid-grade non-commissioned officers. Facilities need to be upgraded to stop the deterioration of both housing and workspaces. And, finally, cleaning up the environment where our families live and military members work, to avoid disasters such as the fuel farms in Hawaii and the legacy of toxic chemicals at Camp Lejeune, is imperative to keeping service members’ trust in the force.
The 2020s are emerging to be a decade of extreme volatility and a reshaping of the global world order. Russia and China are not waiting to strike and assert dominance. Inflation and interest rates are redefining the world economy, plunging entire nations into poverty and increasing disorder. A pandemic has restructured our labor force and supply chains, exposing weaknesses in both.
The strategy and budget prepared by the Pentagon in 2020 is no longer appropriate for the world we now face. We have only a few years to refill the magazines, reset the force, and prepare for a very dangerous second half of the 2020s.
Maj. Gen. John Ferrari, US Army (ret.), is a visiting fellow at the American Enterprise Institute (AEI) and is the former director of program analysis and evaluation for the US Army.