Written by Loren B. Thompson, Ph.D.
Secretary of Defense Robert Gates recently cited an estimate that the United States accounts for nearly half of all global military spending. What he didn't mention was that since the current decade began, America's economy has fallen from roughly a third to a quarter of global output. In other words, 5% of the world's population is generating 25% of global output while trying to sustain 50% of military spending. These numbers do not add up: defense spending will have to be brought into closer alignment with budgetary resources in the years ahead, as will entitlements, otherwise we will bankrupt the Treasury and forfeit our future.
The Obama Administration has not begun to confront this reality. It is cutting unneeded weapons systems, but simultaneously increasing the number of uniform and civilian personnel at the defense department in a pattern that precludes net savings.
Over time, the shift from a capital-intensive to a labor-intensive military posture will lock the Pentagon into long-term budgetary obligations that constrain federal options in much the same way that domestic entitlement programs do. Congress is exacerbating the problem by adding new benefits for warfighters and their dependents each year without any serious effort to assess affordability down the road.
I have written an essay about this subject in the current issue of Armed Forces Journal. It draws upon the work of Congressional Research Service analyst Stephen Daggett, former Pentagon comptroller Dov Zakheim, and others to paint an alarming picture of defense personnel trends. In constant 2009 dollars, the average cost of each warfighter has increased 45% over the past dozen years -- from $55,000 to $80,000. When growing military healthcare costs (up 150% in this decade) are added to this baseline figure, the current cost of each warfighter rises above $100,000 annually. And that's before the cost of training and equipping the fighters to do their jobs is factored in! When the totality of all necessary outlays to field a typical soldier or airman is calculated, it becomes apparent that the All-Volunteer Force is astronomically, absurdly expensive.
One of the reasons policymakers have failed to grasp this impending crisis is that the defense budget is not organized to reflect the full burden of people costs. For example, the baseline budget for fiscal 2010 (not counting supplemental war expenditures) contains $136 billion for "Military Personnel" -- considerably more than the $107 billion allocated to Procurement, but considerably less than the $186 billion set aside for Operations and Maintenance (O&M). What many people don't realize, though, is that over half of the O&M budget is also people-related outlays, such as military healthcare expenditures and pay for civil servants. The real driver of increasing O&M costs in the regular defense budget isn't "rising optempo" as frequently alleged, but rising personnel costs.
In fairness, it takes as long to develop a competent Chief Master Sergeant as it does to develop a new weapons system. Our soldiers and sailors may be the best warfighters who have ever walked the face of the earth. But quality costs money, and the federal government has arrived at a point where it simply can't afford the number of world-class warriors that the Obama Administration apparently intends to hire. The answer isn't a return to conscription, but to halt the increase in active-duty headcount and stop dreaming up new military benefits like they are campaign ribbons. If we can't do that, then Americans will come to see their military as a problem rather than a source of pride.