Despite their differences, President Clinton and the Republican-controlled Congress have agreed on two things. The first is that the federal deficit should be eliminated by slashing federal spending rather than increasing taxes; indeed, both sides want to cut taxes. They have also agreed that projected levels of defense spending will not be part of any deficit reduction package. In fact, both the administration and Congress have called for increases for defense for the rest of the decade. In 1996 and 1997 alone Congress wants to add $20 billion to what the Pentagon requested, and it has established firewalls between defense and nondefense areas of the budget so that funds cannot be shifted to cushion cuts in social programs. Under the terms of the joint budget resolution Congress adopted in June, between 1995 and 2002 domestic discretionary funding will fall from $248 billion to $218 billion while military expenditures will rise from $262 billion to $281 billion.

With the demise of the Soviet threat and the emerging consensus on the need to deal with the deficit, one might have expected defense spending to bear some portion of the reductions, or at least not be increased. In the budget reduction plans of 1990 and 1993--both of which were much less severe than the current version--defense cuts played a major role. Moreover, by about a 2-to-1 margin Americans support reducing defense to bring down the deficit and oppose the Clinton-Republican plan to boost spending on the armed forces.

Proponents of a larger defense budget are quick to point out that military spending has declined for a decade and is now about 35 percent lower in real terms than in 1985. Or that the share of GDP consumed by defense (4.0 percent) is at a 70-year low. Or that the proportion of the federal budget that goes to defense is at its lowest level since Pearl Harbor. Or that the active force is smaller than at any time since the eve of the Korean War.

While all these statements are true and historically interesting, they are meaningless as a guide for policy. Defense spending should be measured against the efforts of potential adversaries and allies, not past U.S. administrations. According to figures from the International Institute for Strategic Studies, the United States will spend on national security this year more than three times what any other country on the face of the earth spends, and more than all its prospective enemies and neutral nations combined. Its $262 billion defense budget accounts for about 37 percent of global military expenditures; its NATO allies, along with Japan, Israel, and South Korea, account for 30 percent. The 15 other NATO nations will spend some $150 billion on defense in 1995. Russia, the second-biggest spender, will lay out about $80 billion, Japan about $42 billion, and China about $7 billion (though this last is subject to more than the usual debate over defense figures). The world's six rogue states--Iran, Iraq, Libya, Syria, North Korea, and Cuba--have a combined annual military budget of $15 billion.

Speaking at the National Policy Forum in May, Ronald Reagan's secretary of defense, Caspar Weinberger, illustrated just how distorted the debate has become. While acknowledging that the United States need not spend as it did during the Cold War, Weinberger maintained that Clinton was virtually disarming. But the United States will pay $15 billion more for defense this year, in inflation-adjusted dollars, than it did in 1980 at the height of the Cold War.

What accounts for this state of affairs? The military advocates and politicians who back an excessive defense budget stress three strategic and operational arguments: the new and multiple threats to U.S. interests that have arisen with the collapse of the Cold War order; what they claim is a crisis in military readiness; and a supposedly severe underfunding of agreed-on programs. All three arguments are flawed.

TWO WARS AT ONCE

The threat against which U.S. forces would be deployed has been vastly exaggerated. The Clinton military strategy, developed in the Pentagon's 1993 Bottom-Up Review of post--Cold War defense needs, postulates armed services capable of fighting and winning two major regional conflicts at the same time, one in southwest Asia and the other on the Korean peninsula. Even if one accepts the somewhat dubious proposition that two such wars will occur simultaneously, the number of U.S. troops said to be necessary to fight them is drastically inflated.

Since its unveiling, the Bottom-Up force structure has been criticized by many as inadequate to fight two major regional contingencies. These critics include highly placed politicians like Senate Majority Leader Bob Dole (R-Kan.) and South Carolina Republicans Strom Thurmond, chairman of the Senate Armed Services Committee, and Floyd Spence, chairman of the House National Security Committee. They argue that in a future Persian Gulf crisis the United States would have to send about as many divisions, tactical aircraft, and ships to the gulf as it did in 1990-91. This assumes that the Iraqi military is as strong as it was when it invaded Kuwait and that the United States would once more stand by and let Saddam Hussein conquer his neighbor, then go in alone to oppose him. But if, for example, the United States reinforced its troops on duty in the gulf, as it did in October 1994 when some Iraqi army units again moved toward Kuwait, 200,000 troops would be more than enough. Indeed, in October 1994 the dispatch of 13,000 additional troops to the gulf was enough to stop Saddam's military buildup. Adding forces from Middle Eastern and European allies would provide an extra cushion.

These same critics of the Bottom-Up force structure take at face value the Pentagon's assumption that the United States would need 400,000 troops to roll back a North Korean invasion of South Korea. This is a startling number--more people than the United States deployed in the Korean War. At the outset of that so-called Forgotten War there was no South Korean military to speak of, and four months into the conflict the Chinese sent in one million men. Today South Korea has 650,000 well-equipped and well-trained troops, and it is difficult to conceive of China sending any troops to support a North Korean attack.

In an interview published in the October 1994 issue of Naval Institute Proceedings, then--Secretary of Defense Les Aspin, who conducted the Bottom-Up Review, said the Joint Chiefs arrived at the 400,000 figure by postulating that a South Korean soldier is 70 percent as effective as an American but that a North Korean is equally effective. A more reasonable calculation would be that the average North Korean soldier, less well trained and using older weapons, is half as effective as an American and somewhat less effective than a South Korean. That would drop the demand for U.S. troops in Korea to fewer than 200,000.

Thus even if two wars were to occur simultaneously, the United States would have to deploy only 400,000 troops to both theaters--about 16 percent of the current total force of 2.5 million active duty and reserve personnel, far less than the 30 percent most strategists would deem sound. Moreover, since no enemies of the United States took advantage of American involvement in the Korean, Vietnam, or Persian Gulf conflicts to launch an attack, one can question the validity of planning for two wars in the first place.

READY OR NOT?

Another reason for the unwillingness to consider reducing the Clinton defense program is the trumped-up crisis in military readiness, or the ability of units to perform as expected. Ever since the late 1970s, when the armed forces suffered a real readiness crisis because they had been allowed to become hollow--undermined by significant numbers of unqualified and poorly trained people in the ranks--political leaders have lived in fear of appearing soft on the subject. Every secretary of defense since 1980 has said on taking office that readiness was his highest priority. Anytime President Clinton speaks about military issues, he too recites the readiness mantra.

Since March 1993, when Clinton reduced Bush administration defense-spending projections by less than two percent per year, the president's Republican critics have been warning about the looming crisis in readiness and the imminent return to the hollow military. Representative Floyd Spence argued in mid-1994 that readiness was already in a downward spiral; at about the same time John McCain (R-Ariz.), a member of the Senate Armed Services Committee, issued a report titled "Going Hollow" based on testimony by the military chiefs of the four services. Dick Cheney, Bush's defense secretary, was also writing and traveling around giving speeches about the hollow force.

Members of the Clinton administration inadvertently fanned the flames of the readiness fire. After receiving anecdotal reports of problems, new defense secretary Aspin in 1993 appointed a group of high-ranking retired officers to a readiness panel. After the November 1994 Republican congressional victory, the army leaked the news that three of its twelve divisions were not ready, and Secretary of Defense William Perry failed to note that the three were late-deploying divisions, that two of them were in the process of being disbanded, and that the problem occurred only because about $100 million in training funds had been diverted from these stateside units to support the invasion of Haiti.

Many alarmed by this fictitious crisis are unaware of what readiness means to the Pentagon, how it is measured by the military, and what caused the crisis of the late 1970s. Readiness is not a synonym for military preparedness or capability. Rather, it is only one of four components of military capability, and not necessarily the most important. Compared with the other three--force structure, modernization, and sustainability--it is the most arbitrary, subjective, transient, and easily manipulated. Thus a unit can be very ready but not capable if it is too small, too old, or unable to fight very long; the French military of 1939, among the most ready in the world, was easily overrun by the more capable German army. Readiness often lies in the eyes of the beholder: the rating officer. Finally, readiness can decline rapidly, at least on paper. For example, an army division that is fully manned and has all its equipment in good working order can be rated not ready if even one brigade misses or postpones a required training exercise.

The readiness crisis of the 1970s resulted from the poor quality of entering recruits, low retention rates, and lack of funding in the readiness account. Today the quality of recruits is high (96 percent are high school graduates, compared with 68 percent in 1980), and retention rates are so good that the Pentagon is forcing people to leave the service before they wish. Moreover, spending on readiness is not only 50 percent higher per military person than in the late 1970s, but higher than during the Reagan and Bush years, when readiness indicators hit all-time highs. In 1995 the Clinton administration will spend $4 billion more on readiness than the Bush administration had projected.

Arriving at the final major argument for increasing military spending, some assert that Clinton's $1.3 trillion five-year defense program, unlike its predecessors, has been severely underfunded. Estimates of the shortfall range up to $150 billion in a report by the General Accounting Office, while the Pentagon admits to about $25 billion. But even if the higher figure is correct, this is not a new problem for defense planners; for example, a decade ago the Reagan-Weinberger five-year defense program was underfunded by about $500 billion. Moreover, the figure is a technical estimate based on assumptions about inflation and projected cost overruns, and Clinton has pledged to make up the difference if his inflation estimates prove overly optimistic. In December of 1993 and 1994 he did just that, adding some $36 billion to his defense plan. If today's weapons systems face cost overruns, the Defense Department will adjust as it always has, by buying smaller quantities or stretching out the purchasing period. And it is difficult to believe, for instance, that the program for the current transport aircraft, the c-17, will experience more overruns than its infamous predecessor, the c-5, which cost so much more than expected that its maker, Lockheed, needed a federally guaranteed loan to avoid bankruptcy.

OVERWEIGHT BAGGAGE

Perhaps the most important reason defense has not been subjected to the same scrutiny as other federal programs is the political baggage the White House and many members of the Republican Congress carry. While there has always been a certain amount of politics and parochialism in the defense debate, they have rarely reached their present levels.

Clinton's widely publicized avoidance of military service during the war in Vietnam and his lack of foreign policy experience made him reluctant to confront the military on money matters or other major policy issues, or to risk being perceived as weak on defense. His unwillingness to stand firm on gays in the ranks or American involvement in Bosnia set the tone early for White House dealings with the Pentagon on defense spending. In his original defense program, included in his March 1993 economic package, the president called for spending about $1.3 trillion on defense for 1994-98, or roughly $260 billion a year. But in the Bottom-Up Review the Pentagon argued that it could not meet its new objective of winning two simultaneous major regional wars with a mere $1.3 trillion. Rather than challenging the assumptions of the review or asking why $260 billion a year was not enough to oppose the rogue states that might start a conflict, Clinton promised to make up the shortfall.

In December 1993 the president added $11 billion to his defense program, and in his first State of the Union address in January 1994 he announced that there would be no further reductions in this plan. Shortly after the Republican victory in last year's congressional elections he called a press conference to reveal that he was adding another $25 billion to his defense program. Clinton's politically inept handling of the issue and his appointees' refusal to take any heat for him on it have compounded the problem.

The president's critics have made much of the fact that Clinton's $120 billion in defense cuts in the March 1993 plan were double what he promised during the campaign. But neither Clinton nor his supporters retorted that the critics were comparing apples and oranges. The campaign promises referred to defense programs through 1997, while Clinton's economic package ran through 1998, which accounted for $40 billion of the lowered figure for defense; the new administration's readjustment of the Bush program to reflect different assumptions about pay and inflation accounted for the final $20 billion. Nor did Clinton and his advisers advance the obvious comparison to the defense spending of America's friends and foes or point out that their plan kept military outlays at 85 percent of the average Cold War level, allocating more for defense in 1995 than Richard Nixon had for 1975. Finally, they did not mention that Bush shrank the five-year defense program he inherited from the Reagan administration by more than $300 billion and reduced his projected levels of defense spending each of his four years in office.

The Republicans too are victims of their own rhetoric and history. In their Contract with America--a major factor in their electoral triumph--the G.O.P. promised to restore the portions of national security funding they deemed essential to strengthening defense and maintaining America's credibility around the world, and pledged to reinstate a national missile defense system to protect against a limited or accidental nuclear attack. Because of this plank in their contract, and because they perceive Clinton as vulnerable on defense, Republicans were determined to jack up whatever number the president named for defense spending. The Republican plan sees Clinton's proposed $25 billion increase and raises him another $25 billion over the next seven years. Like Clinton, the Republicans upped the ante without specifying what programs needed to be funded or how the increase would affect national security.

One area on which Republicans seem determined to spend additional funds is the revival of the Strategic Defense Initiative, now known as National Missile Defense. Support for strategic defense has become a litmus test of loyalty to the Reagan legacy; for Republicans, National Missile Defense is the foreign policy equivalent of abortion. Thus, almost in lockstep, Republicans in Congress are voting to double the amount currently spent on defending the United States against a missile attack and to deploy the new system early in the next century. Republicans want to throw some $40 billion or $50 billion at a multi-site continental defense system although there are serious doubts about necessity and cost effectiveness and although such a system would violate the 1972 Antiballistic Missile Treaty, negotiated by a Republican president. Even Colin Powell, former chairman of the Joint Chiefs of Staff and potential Republican presidential contender, who has been a strong supporter of the Strategic Defense Initiative, has told Republicans that a national missile defense is entirely unnecessary.

GUNS AND JOBS

Yet another political reason for not cutting military spending is that both the administration and Congress increasingly view defense as a federal jobs program. Weapons programs like the b-2 bomber, the Seawolf submarine, and the v-22 Osprey, designed to combat the Soviet threat, live on because of the temporary economic problems that taking them out of production would cause. The two sides in the debate over whether to build a system are no longer hawks and doves but those who have defense contractors in their district and those who do not.

Clinton set the tone in the spring 1992 Connecticut primary. In a futile attempt to win that contest, he endorsed the $13 billion Seawolf submarine program based in Groton, Connecticut, which President Bush was trying to cancel. The program has been kept alive on Capitol Hill primarily by the largely liberal Democratic delegation from New England, despite the strenuous efforts of Republican hawks like John McCain of Arizona. When Bob Dole became a presidential candidate he too discovered the merits of this Cold War relic.

Four years ago two members of the House Armed Services Committee, liberal Ron Dellums (R-Calif.) and conservative John Kasich (R-Ohio), brokered a compromise on the b-2 strategic bomber, which had been developed to penetrate the highly sophisticated air defenses of the Soviet Union and drop nuclear bombs. Rather than kill the program outright because the Soviet threat was defunct, Congress would authorize production of 20 of the bombers at a cost of $44 billion so that the country could recoup its investment in research and development. Even the Air Force accepted this as reasonable. But as the production line wound down the California delegation sprang into action, led by senior senator Dianne Feinstein, who inadvertently declared on the floor of the Senate that the b-2 should be saved because it delivered a heavy payroll (corrected the next day to "payload"). Congress ordered Defense to study whether the department needed 20 more of the planes to prosecute its two-war scenario. The Institute for Defense Analysis, directed by General Larry Welch, a former head of Strategic Air Command and Air Force chief of staff, concluded that the answer was no. Kasich wrote an excellent piece, published in The Washington Post, making the case against continued production of the bomber. Nonetheless, in a close vote the House decided to proceed with the next 20 bombers, at a cost of at least $30 billion. Putting the bill over the top were 17 members of the Congressional Black Caucus concerned primarily about jobs in their districts.

HARDLY STREAMLINED

Again, it is largely politics that has kept cutbacks in the Pentagon's overhead lagging behind those in its force structure. A decade ago the Defense Department had enough bases to support a total force of 12 million people. Through the efforts of the Base Realignment and Closure Commission, which met in 1988, 1991, and 1993, the number of major excess bases was halved, from 140 to 70. This year the Defense Department was supposed to close the remaining 70 bases; as its comptroller noted, it cannot live without the projected savings from the last round of closures. But with one eye on the political calendar, the Clinton administration proposed shutting only 32. When the commission added two bases in politically crucial California and Texas to the administration's list, Clinton accused the commissioners, whom he had appointed, of political motives, and directed the Pentagon not even to begin phasing out McClellan Air Force Base in California and Kelly Air Force Base in Texas for five years and then to privatize the jobs. This will make it difficult to have another round of base closures or even to achieve the full savings from the current round. The Pentagon spends about $5 billion annually on unnecessary bases.

At about the same time the administration was playing politics with base closures, it missed another opportunity to streamline military operations. Early last year, under pressure from Congress, the Pentagon established a commission to analyze the roles and missions of the armed forces, essentially unaltered since 1948. Even though the nature of the threat and the nature of warfare have changed significantly in the last half century, the commission, headed by Deputy Secretary of Defense John White, found no duplication or overlap in the four armed services in such areas as close air support, space warfare, air strikes deep behind enemy lines, and defense against enemy aircraft and missiles. General Merrill McPeak, then the Air Force chief of staff, told the commission in the fall of 1994 that the division of roles and missions among the services was outdated and that the current defense program had more than enough money if the Defense Department would only organize itself rationally. But his fellow chiefs dug in their heels against major changes, and even McPeak's successor declined to support his position. The commission members, apparently not wanting to challenge the chiefs, contented themselves with a few bromides on privatization and jointness.

Finally, there are the unneeded units in the Army National Guard, which Clinton and Congress have conspired to retain. When the Cold War ended in 1990 the Bush administration wanted to cut the Army National Guard by roughly the same proportion as the active army, but the National Guard Association mounted a furious lobbying campaign on the Hill to forestall the cuts. During the 1992 campaign Clinton endorsed the association's position, and his Pentagon has maintained 42 combat brigades in the guard even though the Joint Chiefs' war plans, which formed the basis for the Bottom-Up force structure, call for only 15. The extra 27 brigades and 100,000 people cost about $3 billion annually.

HOW TO SAVE $40 BILLION A YEAR

In this year's debate over the size of defense appropriations, Speaker of the House Newt Gingrich (R-Ga.) stated that the present military budget is far above what is necessary to defend the nation. But, Gingrich says, the excess is a premium the United States pays to carry out its role as a world leader. The question then is how much above defense needs that premium should be.

The Clinton defense program, which will cost about $260 billion a year, calls for maintaining a total force of 2.5 million people, 1.5 million active and 1 million reserve. There will be 19 ground divisions, 12 carrier battle groups with 346 ships, 20 air wings, and 184 bombers. This conventional force will be backed by 3,500 strategic nuclear weapons.

This is the force considered necessary to win two major regional conflicts. However, taking a more realistic view of the threats in the Persian Gulf and Korea, the total force can safely be reduced to 2 million (1.3 active and 700,000 selected reservists), which could support 15 ground divisions, 9 carrier battle groups with 300 ships, 20 tactical air wings, and 150 bombers. In addition, the United States should lower the number of strategic nuclear weapons in its arsenal to 1,000. These manpower and force structure reductions alone would save about $15 billion a year. Readiness spending per military person can be pared down from Cold War levels because there is no longer danger of a sudden massive attack on U.S. forces. These two changes could save about $10 billion a year.

Spending on modernization can also be reduced. Given the technological edge of current U.S. weapons systems, there is no real need to procure larger numbers of next-generation weapons like tactical aircraft. For example, because the military can perform its mission of maintaining air superiority with upgrades of existing planes, instead of buying all 400 f-22 Stealth fighters for $72 billion as currently proposed, the United States should produce only 50 to 75 of the planes. This will enable the Pentagon to remain on the cutting edge of technology, and the planes will be available for sophisticated missions, as were the 55 f-117s bought in the 1980s and used so successfully in the gulf war. Similarly, since the Seawolf will be built, the United States can delay the follow-on Centurion-class submarines and keep the Los Angeles-class submarines in service to the end of their useful life. Finally, National Missile Defense can be retained as a research program, and if proliferation of nuclear weapons and ballistic missile technology makes deployment necessary, a $5 billion single-site system augmented by space-based sensors will be more than sufficient. These measures would save at least another $5 billion annually.

Completing the base closure process, rationalizing the roles and missions of the four services, and taking such commonsense steps as privatizing two-thirds of the maintenance work at the Pentagon instead of the current one-third could easily save another $10 billion.

Together these actions could lower defense spending by some $40 billion a year, bringing the annual defense budget down to about $220-$225 billion. It would take time to get there from here, so the savings would not come all at once. But if the nation reduced defense spending by $20 billion a year from its projected levels, the savings over seven years would be enormous. This would also free up funds to buy more airlift and sealift as well as more minesweepers and to invest in new concepts like missile-firing ships.

An annual defense budget of about $225 billion would be in keeping with the American public's preferences and the need for deficit reduction. It would also give the United States the wherewithal not only to defend itself but to play the role of world leader envisioned by Speaker Gingrich. It is not a dearth of money or forces, after all, that keeps the United States out of messy conflicts like the Balkans, but lack of leadership and will.

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