Archive for the 'Defense Budget' Tag

(Note: This article appeared at RealClearDefense and is cross-posted by permission.)

On August 18th South Korea selected Boeing’s F-15SE Silent Eagle as the sole candidate for Phase III of its Fighter eXperimental Project (F-X) over Lockheed Martin’s F-35A and the Eurofighter Typhoon. The decision has drawn vociferous criticism from defense experts who fear the selection of F-15SE may not provide the South Korean military with the sufficient Required Operational Capabilities (ROCs) to counterbalance Japan and China’s acquisition of 5th generation stealth fighters.

In hindsight, Zachary Keck of The Diplomat believes that Republic of Korea’s (ROK)preference for the F-15SE over two other competitors was “unsurprising.” After all, Boeing won the previous two fighter competitions with its F-15-K jet. In 2002 and 2008, South Korea bought a total of 61 F-15K jets from Boeing. South Korea’s predilection for the F-15SE is understandable given its 85% platform compatibility with the existing F-15Ks.

The ROK has 60 F-15K Slam Eagles in service with its 11th Fighter Wing based in Taegu.

The ROK has 60 F-15K Slam Eagles in service with its 11th Fighter Wing based in Taegu.

However, the most convincing explanation seems to be the fear of “structural disarmament” of the ROK Air Force should it choose to buy yet another batch of expensive fighters to replace the aging F-4 Phantom and F-5 Tiger fighters. Simply stated, the more advanced the fighter jet, the more costly it is. The more expensive the jet, the fewer the South Korean military can purchase. The fewer stealth fighters purchased, the smaller the ROK Air Force.

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This article was originally featured at Real Clear Defense.

“Show me the money” is the mantra of those analyzing Chinese defense budgets, searching for every defense dollar hidden behind state-owned defense enterprises and construction projects. But perhaps what they should be asking is, “where’s the beef?”

Every traveler knows that money is only as good as what it can buy. What you find on the dollar menu on one side of the border may cost $2.05 on the other. A lack of this purchasing-power-parity perspective is a major flaw in standard comparisons of annual defense spending. Analysis of the U.S. and Chinese defense budgets should not concentrate on dollar-vs-dollar, but rather the meat of what those budgets can buy.

For a quick non-scientific assessment of defense budgets weighted by purchasing-power, we look to the Big Mac Index (BMI, no pun intended). In 1986, the Economist developed the BMI as a humorous way of gauging the accuracy of currency valuations world-wide. What started out as educational humor became a serious academic endeavor. The BMI is so effective that the infamous currency manipulating government of Argentina’s Cristina Fernández de Kirchner has passed laws regulating the sale and marketing of the Big Mac. Although the Economist has produced a “gourmet” version controlling for local factors such as differences in labor costs, it is those local market defects that make the raw BMI appropriate for defense budget analysis – the analysis is not of currency on the exchange floor, but on the shop floor.

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According to the Yŏnhap News Agency last Thursday, ROK Defense Minister Kim Kwan-jin “confirmed…that he had requested the U.S. government” to postpone the OPCON (Operational Command) transfer slated for December, 2015. Citing from the same source, the National Journal elaborated further by saying Minister Kim believed that the United States was open to postponing the transfer because “a top U.S. government official leaked to journalists” Minister Kim’s request for the delay.

Chuck Hagel and Kim Kwan-jin

Ministerial-level meeting

There may be several reasons for the ROK government’s desire to postpone the OPCON transfer. First, the critics of the OPCON transfer both in Washington and the ROK argue that this transition is “dangerously myopic” as it ignores “the asymmetric challenges that [North Korea] presents.” Second, given the shrinking budget, they argue that the ROK may not have enough time to improve its own C4I (Command, Control, Communications, Computer and Intelligence) capabilities, notwithstanding a vigorous procurement and acquisition of state-of-the-art weaponry and indigenous research and development programs for its local defense industries. Third, South Korea’s uneven defense spending, and operational and institutional handicaps within the conservative ROK officer corps have prevented South Korea from developing a coherent strategy and the necessary wherewithal to operate on its own. To the critics of the OPCON handover, all these may point to the fact that, over the years, the ROK’s “political will to allocate the required resources has been constrained by economic pressures and the imperative to sustain South Korea’s socio-economic stability and growth.” As if to underscore this point, the ROK’s defense budget grew fourfold “at a rate higher than conventional explanations would expect” due to fears that the United States may eventually withdraw from the Korean peninsula. It was perhaps for these reasons that retired GEN B. B. Bell, a former Commander of the United States Forces Korea, has advocated postponing the transfer “permanently.

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bowl-of-white-riceMid-week brings up a few issues that we should be watching as the budget battles and the new SECDEF’s restructuring starts to shape facts on the ground.

First off the bat is the best news of the week from SECDEF Hagel. Some may say it is pocket change, but it really isn’t. More than anything else, this sets the tone and has out front who should already be there. Good start and hopefully generates some desired 2nd-order effects. Via Craig Whitlock at WaPo;

Defense Secretary Chuck Hagel said Tuesday that he has ordered a 20 percent cut in the number of top brass and senior civilians at the Pentagon by 2019, the latest attempt to shrink the military bureaucracy after years of heady growth.

Hagel’s directive could force the Pentagon and military command staffs to shed an estimated 3,000 to 5,000 jobs. That’s a tiny percentage of the Defense Department’s 2.1 million active-duty troops and civilian employees, but analysts said it would be a symbolically important trimming of the upper branches of the bureaucracy, which has proved to be resistant to past pruning attempts.

Exactly. We went through PTS and ERB while the senior levels floated at anchor. If done in conjunction with Staff restructuring, significant efficiencies on the admin side of the house at least will be in order.

Late Tuesday, Pentagon spokesman George Little estimated that Hagel’s order would result in total savings that “could be in the range” of $1.5 billion to $2 billion over five years. In a statement, he said that the number of job cuts was yet to be determined and that they wouldn’t begin until 2015.

In 2010, then-Defense Secretary Robert M. Gates ordered a three-year freeze on staffing in his office, the Joint Staff and the military combatant commands. But a recent analysis by Defense News, a trade publication, found that the size of those staffs nevertheless has grown by about 15 percent.

You can buy a lot of training for $2.1 billion in 5 years. We’ll take it.

That is the official side – and when you start taking away people’s parking spaces and personal staff – that will create a bit of friction down at the Potomac Flotilla tactical level.

On the unofficial side, the real fireworks will take place when, and I believe it will, as the concept raised by Zachary Keck at TheDiplomat continues to set its roots;

… the different services within the armed forces have long been treated with near perfect equality.

That’s at least one implication of the Golden Ratio principle of defense budgeting, whereby the three different services—the Army, Navy (including Marines), and Air Force—receive a constant and nearly equal share of the defense budget. As Travis Sharp, one of the most outspoken critics of the Golden Ratio, explains: “Since fiscal year 1948, the Army, Navy, and Air Force have on average received 28 percent, 31 percent, and 33 percent, respectively, of DOD’s annual budget. Hot war, cold war, or no war – the allotment of the services’ budgets has remained relatively constant over time.”

However, with the post-9/11 wars winding down, a potential future peer competitor emerging, and austerity taking hold, the U.S. no longer needs nor can it afford to continue obliging the military equality of the Golden Ratio.

For one thing, the shift to the Indo-Pacific, as well as the declining utility of large ground forces, eliminates the strategic rationale of holding the three armed services in equal esteem, at least when it comes to the allocation of resources.

Now THAT is something that will keep a lot of people busy for the rest of the decade.



Advertising is funny; it doesn’t so much tell you about the company that pays for it – but that that company thinks motivates its customers.

In the Chrystal City Metro stop in DC you can see two view from the defense industry. Speaks for itself … which one do you think is more effective?

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4477314924_4c82c411da_zThere is a habit in the military of holding one’s tongue for the future, when the present would profit most by speaking now.

Some keep their thoughts to themselves when they see problems, or keep them firmly behind closed doors. Others see the requirement to step from the shadows to confront in the open what others are keeping silent about.

Why are so many people in the profession of arms so quiet? The reasons are many and varied; loyalty to ones chain of command, deference to authority, orders, propriety, fear, passivity, verve, desire to retain professional viability, or just a lack of confidence in ones opinions.

When is the supported institution best served by silence, and when by open and contentious discourse? Is this a time for silence, or a time for those at the highest levels of leadership to dare to read, think, speak, and write?

Not put their name to something a person on their staff wrote; not some “It takes a village to write 3,000 words” safety-in-numbers collaboration. No – something in their own words either in their personnel by-line, or by a properly vetted “Federalist Papers” format.

At its best though; Sims, Mitchell and Connolly – there is the benchmark that we need right now.

What do those three General Officers/Flag Officers (GOFO) have in common? Well, at different stages in their careers, they were highly influential due to their very public outspokenness about what was not being done correctly in order to, in their minds, address the critical shortfall in weapons development, procurement and strategy in order to have an effective fighting force.

They put their reputations and careers on the line – while on active duty and planning to stay on active duty – in order to elevate the discussion in the open. The did this for one reason – in order to bring about a better American military.

Sims was sending letters directly to the President, used rather colorful terms to identify critical shortfalls, and was an aggressive publisher of anti-establishmentarian ideas. Mitchell beat the drum and edged across a few lines to pronounce to an unlistening and ossified parochial bureaucracy the future influence of air power upon history. Connolly had no problem aggressively explaining Newtonian physics against the Joint-fetishists of his day. Sims was rewarded, Mitchell was Court Martialed, and Connolly found himself a terminal 3-Star.

They chose the risky path – and rewarded or punished individually; their nation’s military were the better for it collectively.

There is another path – it is an honorable one as well – one that has a mixed record of success. While it is true that the higher one goes up the chain, the more perceived “power” one has and as a result has the ability to affect change, most of the time that remains just-beyond reach. That power lever is a mirage. It is a trick. It is the triumph of hope against experience.

Good people who are truly trying to do the right thing often find they have waited too long. That magic set of PCS orders, that enabling rank – it never comes. All of a sudden, they find themselves scheduled for Executive TAP, yet realize their work is incomplete.

And so we find the parting shot. Look at one of General Craddock’s final speeches as SACEUR. Look at Admiral Harvey’s parting gift, and finally, we have this.

Does the United States need a 300-ship Navy or will it over the next 70 years need seven strategic nuclear submarines on patrol in the Pacific and Atlantic oceans? Each would have 24 intercontinental ballistic missiles, all of which could carry up to five nuclear warheads.

That was the choice Vice Adm. William Burke, deputy chief of Naval Operations Warfare Systems, described Tuesday at the Congressional Breakfast Seminar Series.

Burke, who is set to retire in the next few weeks, spoke frankly about the undersea portion of the U.S. strategic nuclear triad “and its intersection with our shipbuilding plan.”

His conclusion: “If we buy the SSBN [the planned 12 replacement strategic submarines for the current 14 Ohio class now in service] within existing funds, we will not reach 300 ships. In fact, we’ll find ourselves closer to 250. At these numbers, our global presence will be reduced such that we’ll only be able to visit some areas of the world episodically.”

This topic of the impact of SSBN recapitalization in the face of a perfect storm of macro-budgetary crisis and the delayed effects of the procurement Lost Decade from poor programmatic decisions that will be the 2020’s is not new. Indeed, many of us have been writing and speaking about the need to address the coming “Terrible ‘20s” for years.

Why is it a GOFO scheduled to “retire in the next few weeks” is the one who is talking about this? On this and many other issues; you can have all the “Disruptive Thinker” JOs and sharp enlisted you can jam in a conference room, you can have scores of retired Field Grade officers pounding away at their dinner table each evening, and you can have the pundit-pondering think-tankers of the Potomac chattering until Judgement Day and it won’t have the impact of serving GOFO standing up and speaking without guile or hedge about what everyone sees, but few openly say. As long as they do not, then you will get the B-team working the creative friction.

What impact can a GOFO have as he is heading out the door? Not really that much. Like a lame-duck politician – his professional capital is spent. The cynic and critic will simply dismiss his comments as sour grapes. His natural allies will just set their jaws and mumble “too-little-too-late.” If the only issues he raise are related sequester, then he will be looked at as just a political hack.

Are these professional death-bed conversions helpful? While the decision to be silent and work behind the closed door is a valid and honorable one, in the end is it really a false economy of delayed revelation? Better late than never, or just another lost opportunity?

Sure, comments heading out the door can be helpful, important, and impactful in a fashion, but they have but a shadow of the impact they could be have had if these actions took place in the open, in high profile, years before while the GOFO were still in uniform and intended to stay as such for another tour or two.

As our Fleet shrinks and is balanced out with either sub-optimal platforms such as LCS or expensive Tiffany porcelain dolls; as our carrier decks are full of short-legged strike fighters and underarmed expensive F-35s (TBD), our deployed Sailors are burdened by a bloated, demanding, and ineffective Shore/Staff fonctionnaire cadre, and a money-sponge of a SSBN recapitalization requirement is squatting right in front of us – where are our Sims, Mitchells, and Connellys?

Do we need them? Do we have them? What do they need to do?



17th

Rise of the Declinists

January 2013

By

1-s2.0-S0003682X09001959-gr2Plans, expectation, and beautiful theories can all be changed, destroyed, or morphed in to radically different futures in the blink of an eye.

Russian Dadaists, Berlin’s avant guard, American segregationists, and in our own parochial time; those who spent their year working of the QDR in 2001; they know how it can happen.

What seems obvious in hindsight is not, for most, that obvious to those closest to it, distracted from it, or willfully floating along in a sea of indifference.

There are times, decision or pivot points for some, where the signs become clear. That steady, darkening, and thickening line starts to burn through the ambient noise. It looks familiar, it is harmonic of what you have seen before – it cannot be ignored. It demands action

You only get the Fleet your nation decides to buy, more people need to accept that … and the political and economic reality we are in.

Former Senator Hagel has been nominated to be the next Secretary of Defense. In an August 2011 interview with The Financial Times’ Stephanie Kirchgaessner, he stated the following;

The defence department, I think in many ways has been bloated.

I think the Pentagon needs to be pared down. I think we need the Pentagon to look at their own priorities.

There’s a tremendous amount of bloat in the Pentagon, and that has to be scaled back …

I don’t think that our military has really looked at themselves strategically, critically in a long, long time. Every agency needs to do that. The Department of Defence, and I’m a strong supporter of this … no American wants to in any way hurt our capabilities to national defence, but that doesn’t mean an unlimited amount of money, and a blank cheque for anything they want at any time, for any purpose. Not at all. Not at all, and so the realities are that the mess we’re in this country, with our debt and our deficits, and our infrastructure and jobless and all the rest, is going to require everybody to take a look, even the defence department, and make a pretty hard re-evaluation and review.

President Obama picked Hagel for very specific reasons, and his views above are not unknown and were part of that. Good people can agree or disagree on the substance of his argument, but that is the fact both sides will have to work with.

Next, let’s look to the uniformed side of the house. In a speech at SNA earlier this week, Vice Admiral Copeman stated the following;

Ultimately, (Copeman) warned, “if you don’t want to get hollow, you have to give up force structure.”

“Resources are going to drop. They’re going to drop significantly,” the admiral said. … “If it were my choice,” Copeman said, “I’d give up force structure to get whole. But it’s not always my choice.”

There are just a few tidbits of I&W to ponder.

In the last few years, we have heard a lot of talk about a Fleet of 313 and now 300. Many of us have been arguing for half a decade that neither is the number we should be looking at, that is not what the nation will fund; 270 to 240 is more likely.

“If we cannot have the navy estimates of our policy, then let’s have the policy of our navy estimates.”

—- Lieutenant Ambroise Baudry, French Navy

If this is the maritime Zeitgeist for the remainder of this decade, then let’s embrace it. We can’t stomp our feet and hold our breath until the Pentagon turns blue.

How do we best do it? What do we need to preserve – what should we cut – what will we have to get rid of root-n-branch?

What are our priorities?

The smart money on the future is on who the CINC is hiring, what that hire’s recent statements say about his ideas, and what our senior officers are starting to send out trial balloons on to test the winds.



It is comfortable to say, “We are 5-10 yrs behind the Europeans when it comes to our budget challenges.” – I guess.

With the expansion of the budget deficit of the last few years and no move to make a serious effort to fix it, we are much closer to 5 years, if not inside that mark.

The now quaint Fleet number of 313 of just a few years ago was never taken seriously by anyone with a basic understanding of economics even before the latest budget issues, and the interesting accounting of the Fleet of 300 that we see today is also a non-starter.

Why make such a negative statement? Simple – budgetary gravity.

Back in 2008, European military budgets were sad in any event as a % of GDP. As demographics join with the inevitable default of the Western welfare state takes place in front of us, after a few years – we have this via our friends from DefenseNews.

Make no mistake – we have not even started to align our budget with reality, so what is the benchmark that we should plan for? Don’t turn away – defense is always the low hanging fruit.

Well – you can break these reduction in to three batches.
1. Doable at 5% or less: Norway, Sweden, or Germany.
1.a. Odds: minimal.
1.b. Reason for odds: We won’t be this lucky. Norway has averaged a budget surplus for over a dozen years; different planet. Sweden and Germany already made structural changes to their government systems – Sweden in the 1990s and Germany a little more than a decade ago. As a result – the budgetary stress on the defense budget is small to non-existent from the 2008 baseline. If we act soon to address larger budgetary issues though, odds of this taking place increase.

2. Painful but workable at 5% to 20%: yes, in order to protect the economic foundation that national survival requires – a 20% cut is workable. Netherlands, UK, Poland & France.
2.a. Odds: most likely.
2.b. Reason for odds: unlike Europe, we don’t have anyone we trust that we can point to and say, “Oh, they’ll take care of the international order.” These are serious nations with a serious dedication to military requirements – but they are doing what they feel them must – as shall we. Unlike those nations though, we still have a lot of inertia to maintain a global reach; close to 5% than 20% if we are lucky. More than 20% in the face of a climbing China is just hard to fathom for the USA unless ….

3. Budgetary POMageddon at 20% to 50%: if you wait too long to act on your structural budgetary challenges – the more difficult the fix. You will take on more national security risk in order to try to keep domestic tranquility. Italy, Spain, Greece, & Ireland.
3.a. Odds: small, but not minimal.
3.b. Reason for odds: Without a two-party consensus to make such a huge cut in defense, it is hard to see larger than 20% in the next half decade outside of a complete economic meltdown. With each year we delay having a budget (Senate over 1,130 days without a budget plan) and/or a view to a plan to fix present trends, the more the odds for this option grow.

So, what could POMageddon mean to the Navy? Well – let’s go to Group 3 above – Italy. Again from our friends at DefenseNews;

Italy is considering selling or donating up to one-third of its naval fleet in a bid to earn quick cash and slash maintenance costs.

The Italian Navy would be the first off the mark wit a plan to sell or donate up to 28 vessels over the next five or six years … (out of) 82 ships and six submarines. …

So, 28 out of 88 ~ 32%.

Let’s run with the fuzzy 300 ships. A 32% reduction would be a cut of 96 ships to a fleet of 204.

What was my worse case scenario a couple of years ago, 240? That would be a 20% reduction in five years. All of a sudden, doesn’t look all that out of control … if you consider what has happened to Europe.

Let’s be optimistic and cut that in half to a 10% reduction. 270 ships in 5-years. Let’s model and plan for that and consign 300 ships with 313 ships as they hang out with all those TQL books in the storage room.



“Political Season,” like “Hurricane Season,” is upon us and it is a good time to look at some of the ramifications of the votes to come, which is exactly what we are doing this Sunday, June 3 at 5pm (Eastern U.S.) with Midrats Episode 126: National Security in the 2012 Election 06/03 on Blog Talk Radio:

Five months and a bit to the November 2012 election.

The war in Iraq is over, the war in Afghanistan is adrift – but the underlying cause of both remains. OBL is dead yet the drone wars expand.

Our traditional European allies have never been weaker in living memory. The old order in the Arab world is changing, and the western Pacific grows in focus.

A military worn out by a decade of war is also looking at decreasing resources in a sluggish economy.

Where do we prioritize? What is the best mix of strategy and programs to best prepare our military for the challenges of this century?

Which issues related to national defense will make it in to the 2012 contest? How do President Obama and Governor Romney differ in their views, plans, and priorities for our nation’s military?

Our returning guest for the full hour will be Mackenzie Eaglen, Resident Fellow at the Marilyn Ware Center for Security Studies at the American Enterprise Institute.

Mackenzie Eaglen has worked on defense issues in the U.S. Congress, both House and Senate, and at the Pentagon in the Office of the Secretary of Defense and on the Joint Staff. She specializes in defense strategy, budget, military readiness and the defense industrial base. In 2010, Ms. Eaglen served as a staff member of the congressionally mandated Quadrennial Defense Review Independent Panel, a bipartisan, blue-ribbon commission established to assess the Pentagon’s major defense strategy. A prolific writer on defense related issues, she has also testified before Congress.

Join us live by clicking here or later by downloading the show from here or from the iTunes page.



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