Major Weapon Systems Are Another Victim of Iraq

Despite record defense budgets, the war in Iraq continues to erode U.S. military readiness, writes Scott Lilly.

With the defense spending for the coming year threatening to push toward the three quarters of a trillion dollar mark, it is understandable that many people presume our military is building up a huge arsenal that will serve our security needs for a considerable period beyond the end of the Iraq war. After all, in the coming fiscal year we will be spending nearly twice as much on defense as we were before the 9/11 attacks—more than at any time since the end of World War II even after accounting for the effects of inflation.

But increased defense spending is not flowing into major new weapon systems such as naval war vessels or advanced fighter aircraft as many have presumed. The Iraq war is not only costing the country in terms of needed domestic investments such as better roads and more effective schools, it is also draining money from military modernization programs required to replace and upgrade aging and worn out equipment so that we can continue to defend our strategic interests around the globe.

Since Congress has deferred action until this spring on more than $100 billion of the $189 billion the president has requested for supplemental Defense Department funding for the current fiscal year ending September 30, 2008, no one knows how much we will spend for each component of the Department’s budget in the current year. We can, however, compare fiscal year 2007 spending levels with those in 2001 to get a relatively clear picture of what is driving the increased spending.

Overall, defense expenditures grew by $235 billion between 2001 and 2007 after accounting for inflation. Of that amount, $42 billion of, or 18 percent, went to higher personnel costs, $94 billion (40 percent) went to operations and maintenance, and $29 billion (12 percent) went to research and development. Only $60 billion—slightly more than 25 percent—went to procurement.

But a more damning set of figures emerge if one examines what has happened within the procurement accounts. In 2001, big ticket procurement items such as Navy shipbuilding and Navy and Air Force aircraft procurement, totaled nearly $35 billion (in 2007 dollars). Those activities accounted for about half of all defense procurement. By 2007, spending in those three categories accounted for only $38 billion, or less than 5 percent of the $60 billion inflation-adjusted increase in procurement spending.

Where is the rest of the money going? Procurement for the Army and Marine Corps grew from $12 billion in 2001 to $55 billion in 2007—an increase of 350 percent. The single category of greatest growth was “Army Procurement Other,” which includes among other things, trucks, mine protection equipment, and High Mobility Multipurpose Wheeled Vehicles. HMMWV spending jumped to about $3 billion in 2007, up from only $110 million in 2001.

Yet no one sees these purchases as a windfall for the Army. The Iraq war is chewing up equipment even faster than it is chewing our soldiers. There is significant debate as to how much of this equipment will even be worth the freight charges to bring it home.

According to a number of old hands at the Pentagon, this may be the first conflict in modern history in which the United States ends combat with military equipment in worse shape than when it started.

This may be true even with respect to the three activities mentioned earlier, shipbuilding and Navy and Air Force aircraft procurement. Nearly all of the relatively small increases that occurred between 2001 and 2007 in those three components of the military budget were for rehabilitation and replacement of transport planes, which are logging tens of thousands of hours of airtime hauling troops and equipment in and out of Iraq. And it is difficult to say at this point whether our air transport inventory will end up in better or worse shape at the end of the Iraq conflict than it was at the beginning.

Ship building has actually dipped below 2001 levels. As a result, we have slowed the rate of production at our shipyards, which has in turn significantly increased the cost to the government for each new ship that will be commissioned. The slow pace of ship procurement and the higher price the government is now paying make it virtually impossible to add the more than 30 ships the Navy claims it must have in order to reach a 313-ship level with the capacity—along with other friendly navies—to adequately patrol major world shipping lanes.

A similar story is emerging with respect to airpower. The average age of aircraft currently in the Air Force inventory is 24 years. Failure to replace aging ships, fighters, and bombers on a timely basis will mean higher maintenance costs in the near term, and a growing future liability for re-capitalizing our forces once the Iraq war is completed.

Increased defense spending is crowding out needed domestic investments, such as repairing and maintaining our roads and bridges, and improving the quality of our schools. Yet the Iraq war is also eroding the capacity of our military to project force around the world, and to deal with emerging security issues once the Iraq war has come to an end.

This is yet another hidden cost of our protracted involvement in Iraq. It should be weighed in any overall assessment of whether our efforts there are worth the price that is being paid.

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Scott Lilly

Senior Fellow