It has become almost a cliche in Washington to deplore the sorry state of defense budgeting. At the end of the Bush administration, the Pentagon's messy finances persuaded even nonpartisan defense analysts to use harsh words to describe the status of Department of Defense (DOD) ledgers. The International Institute for Strategic Studies recently warned of an "acute planning and budgetary crisis," (1) while Anthony Cordesman of the Center for Strategic and International Studies (CSIS) called the current Future Years Defense Plan (FYDP) a "poisoned chalice" for the Obama administration. (2) Despite reaching some of the highest levels in real dollars since the end of World War II, DOD's current forecast nevertheless underestimates the real amounts needed to fund today's and tomorrow's military--as it is currently envisioned in the department's programming documents. Thus, the Obama administration faces either making significant changes to plans or appropriating markedly larger amounts to defense spending over the next 4 years.
In its latest review of planned defense expenditures, the Congressional Budget Office (CBO) estimated significant shortages in each of the main categories of the defense budget:
Operations and Maintenance (O&M); Military Personnel; Procurement; and Research, Development, Testing, and Evaluation (RDT&E). When all "unbudgeted" costs are considered (which include the costs of operations in Iraq and Afghanistan, in a scenario involving U.S. troop levels declining by 2014 to about 35 percent of their current number), CBO estimates that over the 2008-2013 period, DOD will require $642 billion on average per year, about 24 percent more than the $489 billion estimated by the previous administration. (3) Moreover, CBO also warns of a multitude of worrisome factors, such as the rising costs of entitlement programs and the uncertain state of the American economy, which will limit the amount of funding available to DOD in the near future. (4)
With a large increase in funding unlikely, it seems reasonable that President Barack Obama will attempt to solve the Pentagon's financial problems by seeking a closer match of budgetary resources with the overall defense and national security strategy. Ideally, the administration should be able to choose from among competing priorities those that are most needed and eliminate the less relevant options to free up funds to make its plan affordable and sustainable. Should this happen, it would be one of the few times in history when the American defense planning process made a great deal of strategic sense. The reasons are twofold: first, the Pentagon's budgeting priorities are similar to the course of a big ship, where small rudder changes are all that is possible; and second, military procurement plans are more often than not rather impervious to policy direction.
Despite the sorry state of the previous administration's plans, it would be overly optimistic to hope for a dramatic overhaul from President Obama; the institutional inertia is just too powerful. The best that could be realistically demanded of the national security team is to integrate at least some of the hard budgetary choices into a coherent strategic framework that truly connects means with ends and takes into account both the internal and external factors determining the future of U.S. defense policy. This article is dedicated to providing such a concise analytical framework and suggests some of the critical questions that should be considered during the process preceding the first Quadrennial Defense Review (QDR) of the Obama administration.
The article is grounded in a theoretical understanding of war and strategy strongly influenced by Clausewitzian thought. Thus, an appropriate depiction of future challenges must necessarily employ a holistic understanding of conflict. Descriptions of future war that fail to take into account both its operational grammar and its policy logic are incomplete at best and dangerously misleading at worst. …