October 23, 2015

Obama's veto of defense bill offers conservatives opportunity to think hard about spending

By Jerry Hendrix

The Congress finds itself dealing with a veto of the National Defense Authorization Act from the president and has no reason to act surprised.

A redistributionist president, chafing under the restrictions of the 2011 Budget Control Act, wants authority to raise social and entitlement spending in an equal amount with defense.

He is gambling that conservatives will be so dedicated to protecting the nation against immediate threats from Russia, China and Iran that they will forgo their concerns about the threat to the nation’s long-term security created by a $18 trillion debt and give him carte blanche to spend on his social priorities. 

However, true conservatives should recognize, despite the protestations of Warhawks, that this is a false choice.  They can grow the size of the military in sheer numbers while still living within the budget caps through strategic shifts in acquisitions and personnel policies.

The Department of Defense has grown addicted to exquisite technologies as a solution to our national security challenges.  Certainly innovations such as precision strike, stealth and the total awareness that comes with a complex intelligence, surveillance and reconnaissance constellation have revolutionized the battle space.

However, they have price tags that leave jaws agape.

Today’s acquisition budget is almost entirely dominated by expensive, exquisite platforms such as the Joint Strike Fighter and the Ford Class aircraft carrier.

It is a simple rule of economics that when your budget remains flat and the cost per unit goes up, you are going to buy fewer platforms. However, there is another tactic in acquisition, one that has been used before.

In the early 1970s a new series of aircraft and ships were introduced in response to new Soviet threats that were both highly technical and very expensive.  The Air Force’s F-15 Eagle and the Navy’s F-14 Tomcat were procured as air dominance fighters to go up against the new Soviet MiG-25 Foxbat, but their cost per unit did not allow for them to replace previous aircraft in a one for one ratio. 

Both the Navy and the Air Force elected to simultaneously procure a “lightweight fighter” at a cheaper price per unit. This “hi-lo” mix procurement plan led to the acquisition of the F-16 Falcon and the FA-18 Hornet which helped to keep aircraft inventory numbers up in both services at a lower cost.  It was well understood that quantity had a quality all its own. 

Today we have the option of truncating the production of controversial and operationally questionable Joint Strike Fighter, and investing the savings in the extended production of cheaper and reliable Hornets, as well as new unmanned strike aircraft with the combat range to address modern threats.

At sea the Navy faces a quantity challenge on a day to day basis.  There are 18 distinct maritime regions identified by Combatant Commanders that require the persistent presence of Navy warships to maintain global security, and the 280 ships currently in the force are not enough to service this demand. 

A force dominated by $13 billion aircraft carriers and $2.4B destroyers just exacerbates the problem. Again, a hi-lo mix is the correct response. One exquisite 100,000 ton Ford class carrier could give way to three 80,000 ton carriers of simpler design. Additionally the Navy would procure only one destroyer per year instead of its present two and invested the remainder in new frigates and Joint High Speed Vessels, increasing its ship count by eight per year and growing the force by sixty ships over the next ten years.

In the area of personnel, one of the Department of Defense’s chief cost drivers, there are a number of initiatives to grow the force while lowering individual unit costs. DoD should shift the military retirement system away from the traditional 20 year, 50 percent of base pay pension and instead should offer new service members portable 401k plans so that all service members, regardless of how long they serve, can benefit from in the long term and take advantage of the long term growth of the stock market. Additionally, linking military health care to the competitive market while strengthening the services provided to disabled veterans through the Veterans Administration can lower the cost of individual service members in the aggregate.

A Base Realignment and Closure review should also be part of any fiscally conservative strategy in the current environment. Continuing to invest taxpayer money on unnecessary infrastructure borders on fraud, waste and abuse.

The stated relationship between military spending and the size and strength of our military force is a false narrative. Years of spending increases and superpower supremacy have resulted in hubris and poor budgetary and strategic choices.

Turning the spending spigot back on now would be a step backwards. Conservatives of all stripes should take the opportunity presented by the president’s veto to borrow from Churchill and say to the Pentagon, “you have run out of money, its time to start thinking.”

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