BREAKING THE BANK

The Pentagon is On Course for Fiscal Disaster

The U.S. military is planning on spending megabucks on a slew of new weapons systems—with no obvious way to pay for them.

02.17.15 10:15 AM ET

If the Pentagon was a family, the parents would be buying new cars every other year and eating out three times a week while blithely planning to put all five kids through Harvard. This is sometimes called the “bow wave” in defense circles, but that’s a euphemism for fiscal misfeasance.

A dollar-by-dollar analysis is difficult, but the picture is clear. The Pentagon is starting some very large new acquisitions; many current programs plan on spending at high rates throughout the 2020s; and there are few large projects that are due to be completed; the hundreds-million-dollar hatchlings in the near term turn into chicks with multibillion-dollar appetites over time. Take those together and spending is headed upwards.

Nuclear deterrence justifies many of the new starts. While politicians talk about minimum deterrence, the nuclear hawks have made other plans. A 2008 contract for a Common Missile Compartment committed the U.S. Navy to a future ballistic missile submarine based on the existing multi-warhead Trident missile. In 2011, there was a public debate about whether the Long-Range Strike Bomber—a new, large stealth airplane, due to enter service in the mid-2020s—would be wired for nuclear weapons: today, the B61-12 bomb is in full development and the nuclear role is central to public advocacy for the bomber. The bomber’s development cost will be close to $4 billion per year in 2020, and the $550 million cost target is just for procurement, in 2010 dollars, and is only a goal until there is a Milestone B review.

The 2016 budget starts a new intercontinental ballistic missile and a replacement nuclear cruise missile. Together with the B61-12, these cost money (in the civilian Energy Department budget, not on the Pentagon’s books) as the U.S. revamps its rusty bomb factories—more than $100 billion by 2024, according to the Congressional Budget Office.

This is not minimum deterrence: it is a force that can be uploaded with more warheads, a feature that is intended to deter any other player from restarting the Cold War race.

The 2016 budget gives a look at what current programs will cost in the 2020s. The biggest by far is $14 billion per year for production of the F-35 Joint Strike Fighter, through 2030 and beyond. The Air Force’s Boeing KC-46 air-refueling tanker runs through the late 2020s and the Air Force seems determined to make its T-X trainer (needed to replace Northrop T-38s built in the 1960s) supersonic, agile and consequently expensive. The new Ford-class carriers continue to cost more than the Nimitz class, and the Navy plans to procure two surface combatant classes in parallel throughout the 2020s.

But wait, there’s more. Every think-tank wonk and industry planner inside the Beltway and beyond it has a different version of the Third Offset strategy—the emerging plan to gain a robust technological advantage over threats of the 2020s and beyond. But all can agree that nobody knows how much the Third Offset technologies and systems will cost because nobody knows what they are.

The budget will also be crimped as personnel costs continue to outpace inflation, until the government adopts reforms to compensation. The January report of the Military Compensation and Retirement Modernization Commission produced some sensible recommendations, which will be blocked by well-funded groups representing those who do best from the current situation.

None of this is new. In 2001, the Bush administration arrived with a similarly wishful policy, including stealthy helicopters, cruisers and fighters and a plan to spend 20% of the weapons-buying budget on leap-ahead technologies. The collapse of those plans can only be partly blamed on the wars that started in 2001-03, because much of that cost was offset by a fatter Pentagon top-line: even absent 9/11, the plans were unfeasible. No lessons were learned.

The Navy has been the first service to see where the trend is going today, announcing publicly that it cannot afford to build the Ohio replacement submarine with its own shipbuilding funds and calling for a “national” fund for nuclear weapons programs. The Air Force is talking about doing the same—but in reality, the money will not come from outside the defense budget. In the 2020s, if the Pentagon wants to fully fund its new projects, it will have to spend much less than it now plans on other things—whether land forces, tactical fighters or a 300-ship Navy—and not just prune them but cut them root and branch, including personnel, bases and shipyards.

The resistance to every such cut will make Stalingrad look like a cakewalk. Instead, when the misplanned acquisitions start to max out the Pentagon’s Visa card, the response will be to stretch and delay, at enormous cost, and to kill things as a last resort after billions have already been flushed away.

Considered as a highly regressive workfare and welfare system with a secondary warfighting capability, the Pentagon is on a path to do very well indeed. But that’s not the idea, is it?