Three things from our pod this week with Mackenzie Eaglen:
The defense budget is not “growing.” Not commensurately with inflation, not in RDT&E, not in procurement.
Wars have never been more expensive, and the threat environment is unprecedented — disinvesting in national security apparatus right now is nuts.
The GOP has abandoned its role as safeguardian of our national security. All that means is a much nastier reminder down the road — deterring conflict is much cheaper than fighting. Always.
It’s true, there’s a lot of BS wokeness in the military, and tens of billions of spending on things that are not defense. There are plans for electric tanks, and research on breast cancer, and some dollars and cents for the 12 women who took up the Biden administration’s offer to go and get an abortion somewhere. But those things are just distractions. For most of the 21st century, the United States has been disinvesting in our national security, cutting defense budgets or raising them only for those slight increases to be drowned by inflation.
America doesn’t have enough ammunition — not because of Ukraine. In every war game before Ukraine, we ran out in a week. We don’t have diverse supply chains: We buy most of our energetics from China (you know, stuff that makes stuff go boom or whoosh). We buy most of our TNT from Poland. We’ve missed recruiting targets for the military repeatedly. Our bases aren’t WWII era, some of them are Civil War era.
Is our defense budget expensive? You bet. But probably less than half actually goes to defense. It goes to pensions and health care and education and labor. We have a debt of honor to our vets, but keeping them safe and sound doesn’t do much for warfighting.
Then there’s China. Mackenzie says they’re spending way north of a trillion dollars a year investing in their military. We’re still better, but not much, and not for long. But rather than sound the alarm, our intelligence community keeps lowballing the threat from Chinese advances — nothing to see here folks. Hypersonic missiles? Space-based weapons? Nuclear subs? Pshaw.
What’s happened to the GOP, the party of national security? It’s not. Everything is an excuse not to do what’s necessary for the United States to return to a decent baseline. The border. Crime. Immigration. Ukraine. Whatever it is, the United States should be able to manage all of it. What’s absent is leadership and imagination. If Ukraine weren’t the canary in the coal mine, we wouldn’t even be admitting to the shortfalls in our defense stocks. If Ukraine weren’t happening, we wouldn’t have woken up to our crumbling defense base.
Do we need to be on the verge of losing a war to Communist China to remind America of the price of freedom? Perhaps.
HIGHLIGHTS
The world has become a much more dangerous place — Iran, North Korea, Russia, China — but we’re not spending enough on defense to keep up with inflation…?
ME: Senate Republicans pushed through two years of defense spending increases significantly above the Biden White House request because of the worldwide threat environment. The wars we don't fight are the cheapest ones. And so, yes, it's significantly expensive to deter bad problems to prevent crises from spiraling into conflicts. But that's exactly why you had this large standing military to prevent worse things from happening.
The Senate took the lead and all of Congress voted accordingly, but now with House Republicans, that all ground to a halt. Now you have Biden budgets which are not keeping pace with inflation, and as we all know, in our own pocketbooks, the lost buying power. You have the same number in your bank account, but it buys half of what it used to, the shrinkflation effect as well. The same trends apply to the military.
So what are the consequences?
ME: But the most immediate consequence is you're not as forward, you're not as globally present, which when you're not there, people make different decisions and choices, good or bad. You can't influence their decision making because they know it's going to take you a while to get there. Readiness takes a hit almost immediately. We already have an armed forces recovering from, like I said, the reduced readiness of the Budget Control Act [which cut federal spending across the board in 2011]. The Air Force, for example, cannot break out of its pilot shortage.
No matter what they throw at this problem, it's 2,000 pilots, it's significant, it's been years in the same number, the needle hasn't moved, but then what you see are the second order effects, then they stop flying their pilots as much, so flying hours get reduced, and not just virtually, but the most important in the cockpit. China is not reducing their pilots flying hours. What it means is you have less proficient, less technical, less capable forces, and then everybody knows it.
When you start cutting flying hours, the ripple effect appears five years later. For example, the Commission on Military Aviation Safety's found that in the Budget Control Act era posts sequester, we lost 224 lives and almost 200 aircraft due to increased class A mishaps. That's what happens when you don't fly.
Then finally the Army. They start cutting readiness too. They're less engaged with partners and allies to keep these crises that are simmering from becoming problems. But then they start cutting the really necessary bills, like munitions, like ammunition. Again, here I look backward to give us a sense of what's going to come. The Army cut everything in munitions in the Budget Control Act era to pay the bills. These are liquid accounts. That's why they always get raided first. Then, of course, the United States runs out of munitions in almost every war we prosecute.
Why do successive secretaries of defense tolerate this?
ME: Okay, everybody who has to go solicit the president for more dollars should tell you that there are imbalances and systemic problems underneath the defense top line and where the dollars go. That they're doing this. Behind the scenes just also signals that they understand that there's something to fix, but they don't have the time. Because secretaries have to deal with Congress and allies in the White House. They're just busy.
But what it really speaks to, like I said, are all of these challenges underneath it, Dany, which is that lack of strategic flexibility. There are really only so many dollars that can get moved around. If you come in and you say, I want to be more China focused, or I want to be more middle tier power focused or on a North Korea, or I want to be more ready or more modern. Pick your strategic choice as a secretary. Your commander's intent, your choice.
Within the defense budget, you're talking about 10% that you have that's flexible funds that can be moved around. Everything else is on autopilot, and you have to make dramatic changes if you want to spend dollars differently. We don't clean sheet the budget and start from a whiteboard every year. You take last year's budget and you try to move things around.
But so many things are, like I said, basically fenced and fixed funds, partly for Congress, partly for parochial reasons, but for a variety of bureaucratic purposes. The money is largely untouchable, absent major, significant changes about our role in the world.
Do people know this in official Washington?
ME: When Washington figures out we're behind, I can assure you we're much further than we think. I'm trying to highlight here in terms of hard power and national security capabilities. We're not falling. We have fallen behind. Because the joint chiefs love to say like, "Oh, well, in a couple years it'll be really bad."
Nope, it's really bad right now. And of course the first area in which we're falling behind is total military investment. It is time to retire the tired trope that we spend more than the next insert X number of countries combined on defense. Beijing self-reports their numbers. That's a joke. It's laughable that we would even take that number seriously.
What is China really spending?
ME: Obviously they lack transparency as a regime. But finally the intelligence community put out an estimate of what they think China's defense budget is, which is almost four x what Beijing claims. And that number itself is even low. So when Mackenzie sprinkles in her calculations of things like purchasing power parity, lower cost of labor, military civil fusion, zero research in defense dollars in their military budget, unlike ours, which is a significant part of our defense budget, I can go on and on and on down the list.
I'd say their military budget's somewhere between 1.2 and 1.3 trillion, far eclipsing ours. But we just take Beijing's reported 290 billion as somehow reasonable and truth -- and obviously that's not the case --so we need more sunshine from the IC. America's spy community said that Beijing's budget is probably closer to 700 billion, but like I said, it's easily over a trillion when you factor in additional things. And they don't have to worry about continuing resolutions and government shutdowns.
What is the Chinese military investing in?
ME: I mean, they already have the largest Navy and Air Force, rocket force and sub strategic missile forces in the world. So just in terms of mass and volume, China's military's significantly outpacing ours. And yes, coincidentally, many of their capabilities look a lot like ours, meaning they were stolen. So their new aircraft carrier, their J20 fighter jet — they love to just steal America's stuff and go faster and cheaper. But hypersonic missiles is another area that China... We chose 20 years ago to take a pause and then China and Russia said, "We're going to accelerate on hypersonic weapons."
Mike Gallagher told us we also get all of our energetics from China??
ME: Stuff that blows up. So across the board, well, one, we have munitions shortfall. So the Pentagon Head of Acquisitions said recently that three or four times in the last 20 years, America has run out of munitions to prosecute its wars. You would think after time one, Marc, you would fix the problem, but nope, it just keeps happening. We don't actually fix it. Part of that challenge is what goes in these projectiles, these missiles, munitions, these mines, these things that blow up. You have to have something inside of it, an energetic. We are not just short on energetics overall, we're reliant on many different foreign countries, some friendly, some not, and we're not doing enough research on next generation energetics. There's a limited supply of certain types of this stuff.
So for example, right now we get most of our TNT from Poland. It's a molecule with a really nasty environmental waste stream. Pretty soon Poland's going to wake up and say, "Don't export your environmental garbage to us," and/or Putin's going to wake up and say, "Hey, interesting. If I take out this site in Poland, America can't fire half of its weapons." So we have an energetics problem, a shortfall, lack of diversity, lack of new development, and reliance on China. It's something that's going to require a multi-year effort and the Defense Department leadership's just waking up to it, but nobody's moving fast enough.
Is this just a one-off, energetics problem?
ME: I could write 20 more stories just like that. The single points of failure in the infrastructure with which we use to make all of the things that go boom across the United States, and China or Russia targets one of these and we're out of the war for five years. I am not exaggerating. And in fact, we did a deep half-year look at munitions, the industrial base that builds this stuff, including that factory. What we found was we tend to focus on the war games like the other think tanks or the Rand Corporation, but inside the Defense Department, they had their own war games. And what we heard was at the Pentagon, in the most secret rooms, all the war games end immediately because they take out energetics facilities in Arizona and Tennessee, and then the whole thing ends and you have to start over.
And so this is an extreme vulnerability for America that really needs to be addressed, and it gets to Dany's question earlier about military infrastructure. The state of our bases and places from which you launch forces or build anything including weapons, it's not even World War II era in many cases. It's Civil War era buildings. And report after report finds marines were supposed to fix airplanes. They're told not to have a tow accident, because they have to keep moving planes between hangar bay doors that'll actually open. That's the state of the infrastructure, but you wouldn't know it from Washington's debates.
Plus, the military is not actually spending all of its money on defense, right?
ME: So the single biggest item on the Defense Department's balance sheet reflects any large organization in America and it's the cost of labor, the total cost, which of course is much bigger than direct salaries, what people see on their pay stub every Friday or whenever they get paid. It is the deferred and in-kind benefits that we provide our armed forces, which are significant. There's a lot of this spending that you're referencing, Dany, that's for retirees inside the defense budget, which of course then we need to have this broader debate about where the dollars are parked, because I would like our core military budget to reflect war fighting capability, things that have direct combat relevance even.
Healthcare does have direct relevance to winning a war or sustaining a war with mass casualties. That's not the kind of money we're talking about. The healthcare is obstetrics and geriatrics. That's the primary fields of work for medicine and domestically here for the military. I would love to, well, one, just have broader awareness that it's not all F-22s and F-35 joint strike fighters. It's mostly just paying people to perform work. That's at least half the defense budget by our calculations, Dany, and you and I have looked at this over there. It's probably closer to 55%.
Aren’t we ramping up our industrial base?
ME: I see pockets of ramping up to rebuild the manufacturing workforce, the technical workforce, that helps create the arsenal of democracy on a daily basis. I see attention to issues like how we still hand-roll some certain types of munitions and how could you do that better and faster? Sunshine is coming on a lot of problems that can be addressed now to help if it were needed in a few years. But like I said, it's only in pockets. So for example, I see the army, their acquisition chief, he says basically, "We're an army at war to resupply Ukraine, but also just to get well as an army," and that's great. There's no other service that's talking like that. The Navy and the Air Force, nobody's at war. Obviously, I understand this is an intensive ground force campaign primarily in Ukraine, but nothing is limited to one domain. It's space, it's sea, it's air, it's everything. It's cyber.
Is Ukraine lessening our ability to support Taiwan or fight China?
ME: The short answer is no. The nuanced answer is we're taking some risk and some capabilities, but we're also fixing the problems in the replenishment of those stocks. We're finding ways to go better, faster, and cheaper. Bring in new materials, for example, add new machinery and tooling, so lines that when they crank five years from now and for a different reason, they have advanced manufacturing incorporated. So it's a mixed bag, but for the most part the answer is no. What we are sharing with Ukraine, it's not that we wouldn't use it. It's that we have enough of a buffer to be comfortable with doing so, and we have enough allies and partners contributing to that replenishment of our own stockpiles and Ukraine's. I actually would take this gamble over not doing anything, because then we wouldn't have known the problems to fix ahead of time. If Taiwan, if we had needed to respond to Taiwan quickly, we wouldn't have been able to do so, absent the lessons learned from Ukraine.
WTH is wrong with the GOP? It used be the trusted party on national security?
ME: I don't wax poetic about Americans and history. Generally speaking, Republicans and Democrats have always been reluctant to use a force for the use of force. They want to pull up the drawbridges and just be left alone. I get that. And lastly, the further you are from a really bad event touching your own life, your own community, your own home, the easier it is to just lapse into complacency, that this is how it always is, that safety is just sort of a birthright. And so I think all of those are at play. Leadership really is the define... And I know it's the easy answer, the easy button, the way out, but there's no substitute for the bully pulpit.
Full transcript here.
SHOWNOTES
10 Ways the US Is Falling Behind China in National Security (AEI, August 9, 2023)
Congress Is Freezing at a Crucial Moment for Munitions (AEI, September 19, 2023)
Beyond Monopsony: Pentagon Reform in the Information Age (AEI, 2023)
The US Military Relies on One Louisiana Factory. It Blew Up. (Wall Street Journal, April 26, 2023)
Inflection Point (RAND, 2023)
Congress avoids government shutdown, drops Ukraine aid (Defense News, September 30)
Statement from Secretary Austin on the Passage of a Continuing Resolution (September 30, 2023)
Congressional Budget Office 2023 Long-Term Budget Outlook (June 28, 2023)
$11 Billion for Defense Is About to Vanish (Wall Street Journal, September 28, 2023)
Defense Secretary Austin’s salary cut to $1 under GOP budget plan (Defense News, September 27, 2023)
Rep. Bowman under investigation for pulling fire alarm as McCarthy compares it to Jan. 6 (NBC, September 30, 2023)