With more than $800 billion in stimulus spending looming like a tsunami above the domestic economy, signs of irrational exuberance abound.
"Early Towns May Get Early Stimulus Checks" cries the Press of Atlantic City, N.J. "Keys Seek Stimulus for Sewer Projects," writes KeysNet.com of Florida. "Stimulus Could Energize Green Firms" says Marketplace, the public radio program. "Obama Stimulus Could Transform County," the Star Beacon tells its readers in Ashtbula County, Ohio.
But the mood is quite different in the recently booming defense sector.
The advent of the Obama administration has the Defense Department and the military services facing a harsh reality that the "Long War" mentality of the Bush administration years had delayed.
Put simply: The military can no longer afford the pace of the Bush administration's new weapons purchases at the same time as it fights two wars in Iraq and Afghanistan, maintains operations all over the globe, expands the overall size of the Army and Marine Corps, and attempts to build missile defenses that, for now, continue to fail most field tests despite billions and billions of dollars spent on research and development.
"The spigot of defense funding opened by 9/11 is closing," Secretary of Defense Robert Gates told the Senate Armed Services Committee in testimony Jan. 27, echoing other officials and military analysts who see the budget train wreck fast approaching.
The depth of some of these changes will be clearer when, next month, there are leaks regarding the Obama administration's first defense budget proposal. Operational budgets to fund the wars in Iraq and Afghanistan will be untouched for now. But to sustain the fighting force in the field — and to “reset” the wear and tear on Army and Marine Corps equipment deployed there — major weapons systems aimed at theoretical enemies that may be decades away (or may never materialize at all) face the ax.
When Obama decried the "collective failure to make hard choices" in his inauguration speech, he may well have had defense spending in mind.
Beginning in the mid-1990s, military planners began "transforming" the U.S. military from its Cold War behemoth profile into a force more easily moved over long distances, with fewer soldiers and sailors and more high-tech weaponry.
As America has run up against the realities of occupation and guerrilla warfare — in other words, as theoretical enemies have taken real-life form — Taliban guerrillas, Al Qaeda-in-Iraq extremists, Iraqi insurgents — demands arose from officers deployed to the battlefield that the military's senior planners stop preparing for possible future conflicts and, instead, help win today's wars.
Unfortunately, that didn't happen quickly, a fact that partly explains the Rumsfeld Pentagon's reluctance to commit sufficient troops to Iraq.
Now, it's time to pay the piper.
"With two major campaigns ongoing, the economic crisis and resulting budget pressures will force hard choices on this department,” Gates told the Senate.
A career soldier who has developed a reputation for candor recently put it more bluntly: “Our procurement priorities have deviated incrementally from their pre-9/11 patterns only after the Secretary of Defense publicly pleaded with the services to 'fight the wars we're in’,” Army Lt. Col. Paul Yinling, a lightning rod for reform in the current force, said in a talk at the Marine base at Quantico.
These demands make enormous sense, and they're echoed up and down the military chain of command and by the nation's finest military analysts. The "have your cake and eat it too" days need to end.
So, what gives?
Jim McAleese, a veteran Pentagon consultant whose forecasts reflect decades of connections inside that building, has developed a presentation for military and defense industry investors that highlights how these changes will likely affect big purchase items. The presentation includes the following:
Army: The “Future Combat System,” the Army’s $10 billion a year priority transformational initiative, may face a serious slowdown as operational costs in Iraq and Afghanistan and the “reset” of equipment in those wars moves forward. But certain shifts, like one away from heavy tracked vechicles and toward a new generation of armored vehicles that have wheels and are far lighter than current Bradleys and Abrams tanks, will move forward.
Marines: The Marine Corps priority for years has been shoring up the future of its controversial V-22 Osprey tilt-wing aircraft, plagued by erratic performance, decades of design and cost problems, and restrictions in its use. The V-22, cancelled in the early 1990s when Dick Cheney was defense secretary, finally entered full production during the Bush years. The Marines insist the V-22 must survive, and they have built much of their future doctrine around its ability to take large numbers of troops quickly into battle over long distances. Still, at $119 million an aircraft, the Obama administration might be tempted to ease the V-22 into an early retirement, particularly if its history of high-casualty crashes continues.
Navy: The “DDG-1000” Zumwalt-class destroyer will likely be cancelled after the completion of just three ships, extending the less expensive Arleigh Burke class DDG-51 program. Slowdowns are likely in the production of the next generation of aircraft carriers, the so-called Gerald R. Ford-class carrier (or CVN-21), which at $14 billion for the first one and $8 billion for subsequent carriers represents a huge chunk of the Navy’s procurement spending. China's spending on submarines, however, provides a ready argument for the new Virginia-class nuclear attack submarine program.
Air Force: The simultaneous development of two high-performance fighters — the F-22 Raptor at $361 million per aircraft, and the F-35 Lighting II, at some just under $100 million per airframe — is a sore point for critics of defense outlays. The Bush administration entrenched these programs with investment and promises (in the case of the F-35) to export them to allies, including Britain, Israel, Turkey, Australia, and possibly even India. As such, these aircraft programs now appear likely to survive for decades. They replace F-15s and F-16s in the Air Force, a carrier-based variant eventually replaces Navy F/A-18s, while the vertical-take-off displaces 1970s vintage Marine Corps Harriers. But why not just buy more of the cheaper F-35s? The Air Force argues (rightly) it is far better aircraft. But is it three times better, as its price suggests? That's likely to continue to be a sore point during the Obama years.
Missile defense offers a particularly rich target for slowing costs.
The political problems raised by the regional missile shield the Bush administration wanted to site in the Czech Republic, noted last week by GlobalPost’s Bruce Konviser, pose a challenge to ties with Russia. It also will cost about $4.5 billion to field, according to estimates by the Center for Arms Control and Disarmament. More seriously, the larger National Missile Defense program, decades in the making and costing hundreds of billions to research and text since the 1980s, has long been a source of skepticism from Democrats, who cite tests that indicate the system, so far, would be unlikely to halt a missile strike on the United States homeland.
The Bush administration won some $12 billion, all told, in its final budget for the Missile Defense Agency and related programs. These will face severe scrutiny.
None of these decisions will be official, of course, until the fiscal year 2010 budget is released next month, and even then segments within Congress and the individual services will mount furious campaigns to prevent out-and-out cancellations.
Defense spending advocates like William Kristol of the Weekly Standard even view weapons programs as “stimulating.” “If you’re buying 2,000 Humvees a month, why not buy 3,000?” he writes.
But Gates isn’t buying it. “We will not be able to do everything, buy everything.”
Change has indeed arrived.