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Sensible Defense Cuts

How to Save $400 Billion Through 2015

SOURCE: AP/Haraz N. Ghanbari

An aerial view of the USS George H.W. Bush (CVN-77) aircraft carrier in Norfolk, Virginia. The United States currently fields 11 aircraft carriers, while no other country has even one of comparable size and power. The Pentagon could cancel procurement of the CVN-80 aircraft carrier and retire two existing carrier battle groups and associated air wings, saving $7.74 billion.

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Defense spending skyrocketed 70 percent under the Bush administration, and President Barack Obama inherited a defense budget at highs not seen since the end of World War II. There is much room for savings with military spending far out of step with the threats facing our country.

As the Obama administration and Congress try to agree on a deal to raise the debt limit, they should keep in mind that they can cut $150 billion in defense spending annually and still keep our military budget at the Reagan administration’s peak Cold War levels. Bringing the defense budget down to the levels instated by Presidents Eisenhower, George H.W. Bush, and Clinton would require reductions of $250 billion to $300 billion annually.

Here are our recommendations on how to save $400 billion through 2015 without harming U.S. national security:

Redirect DOD’s planned efficiency savings to reduce the baseline defense budget ($133 billion through 2015)

Let’s start with the low-hanging fruit. This March the Pentagon identified $178 billion in savings and efficiencies through fiscal year 2016. But it plans to reinvest $100 billion of these savings into other areas of the defense budget. No other agency could admit to spending nearly $200 billion in taxpayer dollars unnecessarily and then ask to keep more than half the savings. The Defense Department should not be given a free pass on this plan. These savings instead should be used to reduce the baseline defense budget.

Roll back post-September 11 efforts to grow the ground forces and reduce the number of civilian DOD personnel concomitant with the reduction in military end strength ($39.16 billion through 2015)

Since the September 11, 2001, terrorist attacks, the Pentagon has increased the size of the Army and Marine Corps in order to meet the demands of frequent deployments overseas in Iraq and Afghanistan. The United States is unlikely to deploy large land armies in the near future due to the tremendous cost of these wars in both blood and treasure. This is particularly true given the success of the cheap and effective Special Forces mission that killed Osama bin Laden. Rolling back 74,200 Army and 27,000 Marine positions and a corresponding number of civilian positions provides an opportunity for savings.

Reduce active-duty troops in Europe and Asia by one-third ($42.5 billion through 2015)

About 150,000 active-duty U.S. troops are stationed in Europe or Asia. The United States can reduce this presence by one-third without negatively affecting American security or interests given improved U.S. capabilities for long-range strikes and rapid troop transport. Last year the Sustainable Defense Task Force found that withdrawing 33,000 troops from Europe and 17,000 from Asia will save $80 billion over the next decade, or $42.5 billion through 2015.

Cancel the V-22 Osprey program ($9.15 billion through 2015)

The V-22 Osprey helicopter has been long hampered by cost overruns and technical problems. A May 2009 Government Accountability Office report found that “in Iraq, the V-22’s mission capability (MC) and full mission capability (FMC) rates fell significantly below … rates achieved by legacy helicopters.” There is no reason for DOD to continue sinking money into this program given the V-22’s high price tag—it costs five times as much as other models—and lackluster performance.

Reform military health care ($42 billion through 2015)

Last year the Pentagon spent about as much on military health care as the war in Iraq. DOD’s skyrocketing health care expenses over the past decade can largely be attributed to the rising cost of health care for military retirees. We argued in a recent report that DOD should attempt to restore Tricare costs to more sustainable levels by reinstituting a fair cost-sharing balance between military retirees and taxpayers and implementing a number of provisions to reduce overutilization and double coverage.

Limit procurement of the Virginia-class submarine and DDG-51 destroyer to one per year; limit procurement of the littoral combat ship to two vessels per year ($20.04 billion through 2015)

The U.S. Navy currently possesses more firepower than the next 20 largest navies combined—many of which are U.S. allies. With such an overwhelming advantage, the Pentagon can maintain U.S. military superiority while reducing procurement in a number of naval programs. Limiting the procurement of the Virginia-class submarine, DDG-51 destroyer, and littoral combat ship to two per year will reduce the costs of these expensive programs while still keeping their production lines operating.

Cut procurement of the Navy and Marine F-35 Joint Strike Fighter variants ($16.43 billion through 2015)

Since 2002, estimates of the lifetime operational costs of the F-35 have more than doubled to $1 trillion. Alternative fighter jets such as the F/A-18E/F Super Hornet continue to be effective in the Navy and the Marines, so cutting the F-35’s Navy and Marine variants—while allowing the Air Force to keep its entire buy—would help control spiraling costs in the program without compromising American air superiority.

Institute an across-the-board reduction in research, development, test, and evaluation funding ($40 billion though 2015)

The research, development, test, and evaluation, or RDT&E, budget provides funding for the development of new technologies intended to ensure the continued superiority of the American military. This spending is an important investment in the military’s future, but the RDT&E budget has grown exponentially over the past decade to the point of diminishing returns. Cutting $10 billion from RDT&E would still leave the budget significantly above historical spending levels in real terms.

Reform the military pay system as the Quadrennial Review of Military Compensation recommends ($13.75 billion through 2015)

DOD’s 2008 Quadrennial Review of Military Compensation recommended revising the formula for military pay raises to acknowledge the range of generous retirement and health benefits that service members receive. Slowly phasing in the QRMC’s recommendations would allow DOD to begin saving $5.5 billion per year in 2015.

Cancel procurement of the CVN-80 aircraft carrier and retire two existing carrier battle groups and associated air wings ($7.74 billion)

The United States currently fields 11 aircraft carriers, while no other country has even one of comparable size and power. Given this tremendous imbalance, the Pentagon could hold off building additional carriers, which cost $15 billion a pop, and consider retiring two of our existing carrier battle groups.

Cut the U.S. nuclear arsenal to 311 operationally deployed strategic nuclear weapons ($33.72 billion)

According to analysts at the Air War College and the School of Advanced Air and Space Studies, the United States could maintain effective deterrent capabilities with only 311 strategic nuclear weapons—approximately an 84 percent reduction in current levels. Phasing in these cuts—as well as some reductions in the United States’ tactical stockpile—could save about $11.39 billion per year beginning in 2015.

Additionally, cancelling select costly and technologically challenged missile defense programs administered by the Missile Defense Agency and the armed services could reduce spending by another $1.31 billion per year.

Requesting fiscally responsible defense budgets has historically been a bipartisan effort. As the United States winds down its involvement in Iraq and Afghanistan, the Obama administration has an opportunity to restore defense spending to more sustainable levels. In a forthcoming report, the Center for American Progress will provide an in-depth analysis of defense spending decisions under Presidents Eisenhower, Nixon, Reagan, George H.W. Bush, and Clinton in order to inform Congress and the Obama administration’s defense and deficit decisions.

Lawrence J. Korb is a Senior Fellow, Laura Conley is a Research Associate, and Alex Rothman is a Special Assistant at American Progress.

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