Issues over the Horizon

Reality Check for Defense Spending

By Bruce Held and James T. Quinlivan

Bruce Held is a RAND policy researcher with expertise in military acquisition. James Quinlivan is a RAND operations researcher with expertise in defense strategy and planning.

Regardless of which party wins the White House, the next administration will start Day 1 with a daunting task: establishing its national security priorities in the face of a declining military budget.

Over the last 70 years, U.S. defense spending has risen and fallen every 18 to 20 years, reflecting alternating periods of conflict, peace, and varying administration priorities (see the figure). Following that trend, defense spending began to grow again in the late 1990s and accelerated after 9/11. Riding this tide, current Pentagon planning assumes continued high levels of funding, including a larger army, a return to a 300-ship navy, and new technology in each service.

But the days of high defense budgets are numbered. The pressures that have historically led to cuts in defense budgets have reemerged. Voter fatigue with ongoing conflicts will pressure Congress and the White House to reduce military spending, just as a sputtering economy will spread thinning tax revenues over a growing number of claimants. The discretionary government programs that have seen little to no growth in recent years, such as infrastructure investment, will likely demand more funding attention. The retiring baby boomers will demand more from the Social Security and Medicare programs.

All of this may well prove vexing to the new administration, but it will nonetheless be expected to provide straight answers to tough questions: What are our biggest national security threats? How do we confront those threats? What is the military’s role in our democracy?

The answers will be influenced by available resources and the condition of the military. If history is any guide, and absent an extraordinary event, defense spending will decline significantly over the next decade. Managing this decline will require careful balancing of the risks and responses to the nation’s security requirements as well as reevaluating the size and configuration of the armed forces and defense agencies.

Over the Past 70 Years, U.S. Defense Spending Has Risen and Fallen Every 18 to 20 Years
Over the Past 70 Years, U.S. Defense Spending Has Risenand Fallen Every 18 to 20 Years
SOURCE: National Defense Budget Estimates for FY 2008, U.S. Department of Defense, March 2007, Table 6-1, pp. 62–67.

The military’s daily task list is not growing shorter. The Cold War era demanded basing forces on the periphery of the Soviet Union, and many of those forces remain in place. Newer requirements are rooted in the response to the 9/11 attacks and reflect commitments to the global war on terror. In between are demands required by the potential for major combat operations in diverse locations. Meanwhile, new military tasks are added as new threats are discovered: a potential military response to a rising China, countering the proliferation of weapons of mass destruction, and working with new military partners in former communist states and in the emerging world. But it is unreasonable to expect that the military can do more with less, so the question will become: What things should no longer be done?

The challenge is real. But a new administration and the pending Quadrennial Defense Review offer a unique opportunity to reexamine how the country should maintain military effectiveness in a time of limited resources. What is needed is a reassessment of the rules of the game: a redetermination of the real and most important dangers to the country and how to shape and size the military capability.

Eight years ago President Bush submitted his first budget at a time when the defense department’s spending trend was up. In presenting his request, the president said, “A budget is much more than a collection of numbers. A budget is a reflection of a nation’s priorities, its needs, and its promise. This budget offers a new vision of governing for our nation.” The sentiment remains true, and it will be the true measure of change for a new administration. square