Between the now lamented government shutdown and the potential sequestration cuts slated for January, we are avoiding serious discussion about meeting the future needs of our nation while still addressing our deficit and debt problems.
It isn’t for a lack of alarm bells. Ever since the 2011 Budget Control Act was passed, the aerospace and defense industry has warned of the long-term dangers of meat ax budget cuts. These cuts threaten to hollow our military force and delay modernization of our nation’s air traffic control system, important NASA space programs and the badly needed replacement for the polar-orbiting weather satellites. Sequestration is already slowing economic growth and doing significant damage to our aerospace and defense industrial base. Further cuts can only make the situation worse.
In our industry, large manufacturers count on small and mid-sized supply chain companies to help them produce state of the art military systems and equipment. For those suppliers, the next round of sequestration will be just the second blow to a critical sector of the economy already weakened by previous budget reductions and a failure to recognize the link between American military strategy and the capabilities required to execute it.
The Defense Department has well thought out plans for how it will defend the United States and our allies well into the 21st century. They include a long-term, strategic decision to “rebalance toward the Asia-Pacific region” – an approach requiring the critical technological and industrial capabilities to project and sustain power across vast distances.
Clearly, this strategy must be matched by a long-term commitment to effectively manage the defense industrial base, broadly defined as the commercial firms that design, develop and produce the advanced weaponry and defensive systems on which America’s military relies.
A new report by the non-partisan Center for Strategic and Budgetary Assessments says that unfortunately a long-range vision for the defense industrial base is still a secondary consideration among policymakers.
“What might a strategic approach to managing the U.S. defense industrial base look like?” asks the report.
Author Barry Watts has the answer: “First, the guiding principle should be determining what design and production capabilities to retain in the long term rather than focusing on what programs to pare down or eliminate in the short term.”
And yet the paring down continues. The Budget Control Act established two major cuts to projected defense spending from fiscal years 2012 to 2021. First, it directed an initial cut of $487 billion over ten years, starting in fiscal year 2012. On top of that, it established a trigger mechanism that now appears likely to reduce defense spending by more than $50 billion each year.
These twin reductions would result in cuts of almost $1 trillion over a ten-year period. Although we were assured by leaders of both parties that these cuts would never happen, they are now the law of the land.
It is difficult to imagine how any mission-critical programs would be spared, regardless of declared strategic priorities. Modernization cuts will likely consist of delayed funding of new weapons systems and equipment. Cancellation of existing programs will leave the U.S. military dangerously exposed in the future.
Critics are fond of complaining about the perceived high unit costs of our state-of-the art defense systems. But delaying these programs and reducing procurement rates will only drive up unit costs. Such a situation threatens to create a procurement death spiral, in which higher prices lead to even smaller buys, which lead to even higher unit costs.
Perhaps more importantly, slashing procurement threatens the industry’s ability to deliver vital capabilities in the future, when a crisis develops somewhere around the globe and the Defense Department comes knocking on our door.
By the time a global or regional threat requires the Pentagon to “buy back” its lost years of modernization, however, it may be too late. Instead, the nation must prepare for the next conflict by ensuring sustained technological superiority over our adversaries. We simply cannot maintain the world’s best military capability if we continue, each year, to cut every line item in the defense budget indiscriminately.
The American people are defended not only by what the military does today, but also by vigilance, a clear assessment of threats, and a strong, well equipped military that can respond rapidly to world crisis. These objectives can only be accomplished through the preservation of America’s defense industrial base. And the health of the base should be considered before the next indiscriminate budget cuts take hold.