Defense Budget: Getting the Assumptions Right

Baker Spring / November 30, 2012

Earlier this year, the Center for Strategic and Budgetary Assessments conducted an exercise that purported to show how a smaller defense budget wouldn’t be so bad after all. However, the assumptions behind this exercise have significant shortcomings.

The exercise forced the participants to accept defense funding levels mandated in the sequestration process of the Budget Control Act of 2011, permitted them to adjust defense programs to conform to the prescribed funding levels on a selective basis—not sequestration’s across-the-board approach—and used the existing strategic guidance of the Department of Defense as a starting point.

Although there are a variety of shortcomings in the design of the exercise, there are three that relate to these core assumptions:

1. The omission of the vital interests U.S. military forces are obligated to defend and the security obligations these forces will be required to honor. Nowhere in the report on the exercise are these vital interests and security obligations discussed. What is left unspoken is the matter of whether the assigned funding levels are inadequate to defending the vital interests that have been broadly accepted by defense policy makers, in both the executive and legislative branches, for some 65 years. Clearly, this omission of assumptions indicates that any gap between them and the assumption regarding funding levels is being left unaddressed.
2. The failure to appropriately address the question of whether defense budgets at the assumed level are simply inadequate to execute any variation of the existing strategic guidance. In the real world, the existing strategic guidance cannot serve as a starting point for allocating defense resources under funding levels established by sequestration. Department of Defense leaders, both military and civilian, have been clear on this for several months. Most recently, the vice chairman of the Joint Chiefs of Staff is quoted in a news report saying that “we would have to introspectively ask the question as to whether we have to reexamine the strategy.”
3. The failure to assume that the political process, as opposed to a purely rational process, will dictate the programmatic tradeoffs under the assigned funding levels. The report states that the across-the-board application of defense budget reductions, as required by sequestration, bars the opportunity to make meaningful choices and therefore would not serve the purpose of the exercise. However, in the real world, the politicians involved may actually prefer the across-the-board approach. For example, providing discretionary authority to the executive branch to allocate defense funding reductions is effectively an open invitation to engage in a search-and-destroy mission against programs it doesn’t like. Some Members of Congress are likely to be uncomfortable ceding this kind of discretionary authority to the executive branch, particularly in areas as sensitive as maintaining a robust nuclear deterrence posture and advancing the missile defense program.

In essence, the exercise is nothing more than a budget drill. It demonstrates that thoughtful and informed participants in the exercise are able to design an overall defense program at prescribed funding levels in a logical and rational fashion. The problem is that such exercises have little utility to policy makers.

Ultimately, the problems facing the nation’s defense posture have resulted from policy disagreements, not management shortcomings. Accordingly, exercises that examine resolving these problems should include assumptions that distinguish between policy options.