March 3, 1978 THE CARTER DEFENSE BUDGET I J FY 1979 INTRODUCTION The defense budget submitted for Fiscal Year 1979 represents the Carter Administration's first co mprehensive statement of its national security policy and the relation of that policy to the larger framework of this country's political and strategic objec tives. Yet beyond being indicative of operational defense priori ties as expressed in various pro g ram funding requests, the budget must.necessarily be understood as reflecting the Administration's perception'of the g.loba1 strategic environment and the capacity of the United States'to actively pursue its foreign policy interests commensurate with its military strength.

With the Carter Administration now fully in control of the budget formulation process (modifications were introduced into the final Ford Administration report last year), its defense policy ob jectives and the initiatives required to und erwrite them can best be adduced when measured against the overall budgetary direction as well as specific."line-itemi' recommendations.

This preliminary study will assess the Pentagon's FY 1979 budget from the following perspectives 1 2 The overall trend s in American defense spending over the past 10-15 years, determined not only as a func tion of total Federal expenditures and other economic referents, but also as against comparable trends in estimated Soviet military outlays during a similar period; Th e strategic rationale underlying the Carter Adminis tration's planned force composition and procurements and the emphasis accorded different indexes of mili tary preparedness: -2 3. The nature of the itemized recommendations submitted and their implication s for real growth in military spending levels, and 4. A comparative evaluation of the Carter Administration's first defense budget with its predecessor as,we.l'l,asl its impact with respect to the trends established in 1 Subsequent analyses will focus on s e parate dimensions of the budget as they relate to broader defense policy designs I. CONTEMPORARY DEFENSE SPENDING IN PERSPECTIVE By way of introduction to an analysis of the Carter defense budget, and for purposes of placing it in an appropriate context i t is necessary to outline brief.ly the parameters of recent mili tary authorization programs. Owing largely to the general lack of clarity which often surrounds evaluations of functional military spending, the question of "how much is enough" risks being a d dressed in polemical rather than substantive terms. While not discounting the "calculated ambiguities" inherent in the preparation of defense spending requests, any meangful assessment of a given budget should proceed within a framework which considers 1) the size of the budget relative to those of previous fiscal years 2) the comparative estimated military spending levels of our principal adversary, the Soviet Union, and 3) the fiscal input of defense spending relative to overall national economic activit y.

Through criticism of 'excessive' military spending seems to have abated somewhat from the volume of prior years, there neverthe less exists a popular misconception according to which national de fense absorbs an increasingly inordinate amoun't of total Federal outlays, a figure far greater than that required to satisfy legiti mate security needs. In fact, when viewed in constant (inflation adjusted) as opposed to current dollar terms, present expenditures for defense are roughly comparable tot

e.levels achieved before FY 1964. 3 DEPARTMENT OF DEFENSE BUDGET TRENDS DEPARTMENT OF DEFENSE BUDGET TRENDS BILLIONS OF CONSTANT FY 1879 61 8 BILLIONS 8 BILLIONS lBlLLlONS OF CURRENT 61 L BILLIONS BILLIONS 160 160 15 1s 11111111111111 1164 lS6l 11W 1170 1172 lS74 1 171 1S71 1171 0 FISCAL YEARS Source: FY 1979 Department of Defense Annual Report, p 366 The unrelenting growth often attributed to military spending apparently assumes a built-in constancy in the authorization re quests which reflected the incremental cos t s of our involvement in Southeast Asia. While modest aggregate growth in military appro priations has occurred over the past three fiscal years, the impact of such must be measured on a realistically proportional basis to account for a b C d e the decline in defense-related allocations in the aftermath of the Indo-China conflict, the concomitant increase during the past decade of funds earmarked for non-defense portions of the federal budget, especially for proliferating in come transfer and security progr a ms the attenuating effects. of inflation on appropria tion levels necessary to maintain even existing defense programs Congressional reductions in authorization requests and revised estimates of the magnitude of Soviet defense efforts. 4 60 50 Using the f o regoing as a yardstick for measurement, it is evident that U.S. defense spending during the past decade and a half has realized the minimal growth necessary for the protection of national security interests. When calibrated against other major spending pr o grams over the same period to determine relative economic impact, defense authorizations presently consume the lowest fractions of both the Federal budget and the Gross National Product since well before the Vietnam War. Againstf,,tbese,and other 'relee v a nt indicators, the following chart provides a useful referent 60 50 70 40 30 20 70 Source: FY 1979 Depart.ment of Defense Annual Report, p 371 The notion of military sufficiency, particularly in the ther monuclear age, is innately problematical. Though in t erpretations differ concerning the efforts appropriate to insure adequate strength at any given time, a comparative evaluation of U.S. and Soviet growth levels in defense spending since FY 1964 reveals a disparity in com mitted resources which reflects a d iminished priority accorded to overall U.S. military authorizations 5 U.S. AND SOVIET DEFENSE PROGRAM TRENDS 100 I I I I 1 I I I I I I I I I I. I I I 1964 1966 1968 1970 1972 1974 1976 1978 1980 Fiscal Year Source: FY 1979 Department of Defense Annual Rep o rt, p. 117 Assuming the relative.accuracy of the data obtained (a recent CIA report notes that the dollar cost estimates of Soviet programs arexml..j?k.e$.y-to be in error by more than 15 percent), the United States is spending approximately 35-40 percent less for defense in constant dollars than the Soviet Union. After incremental expendi tures for the Vietnam War are exempted from calculations of the defense total, Soviet military outlays have exceeded our own since FY 19

69. According to the CIA report I 2 our general assessment remains the same in its'essential aspects cumulative costs for the two countries over the past decade are essentially equal: the Soviet level began to exceed that of the United States in the 6 early 1970's and since then the mar g in has increased steadily Moreover, the trend of United States defense outlays during this period was different current dollar terms, U.S. outlays in constant dollars declined continuously from the Vietnam peak,of 1968 through 1976.l Despite increases in It is furthermore argued that intelligence estimates of the resources authorized for the expansion and modernization of Soviet military forces have, until recently, consistently undervalued the scope of Soviet efforts by as much as 50 percent.

In light af the sustained growth momentum of Soviet military activities (especially in an era of supposedly muted competition it is arguable that our defense budgets have, at best, been adequate to keep pace. Underscoring the "quite dissimilar trends" in compara tive defense activities between the two countries, the CIA report ob serves that, in averaging a 3 percent compound annual increase, the U.S.S.R.'s growth is distributed among nearly all the major elements of the military establishment. By contrast, the primar y sector of the U.S. budc~et to. have .realized steady growth involves allocations for personnel (including costs of the volunteer army) and associated social welfare' programs (e.g. military pensions wh.ich presently consume more than half of annual defen s e authorizations. It is against this background that the FY 1979 budget and prospective mili tary funding programs must be evaluated 11. THE NATURE OF THE DEFENSE BUDGET AND RELATED CONSIDERATIONS The defense budget is decidedly complex, and an understand ing of its true nature demands attention to several interconnected factors.

Unlike many other government agencies, where a significant frac tion of expenditures is derived from 'entitlements' not requiring regular Congressional appropriations, virtually al l of the funds spent by the Department of Defense are subject to the annual authori zation process on Capitol Hill. Thus, funding requirements for the multiple program categories involved must be formally reaffirmed under intensive Congressional scrutiny, especially where consider able increases in program outlays are projected.

The current defense budget comprises approximately 23 percent of total federal expenditures and 5.2 percent of the GNP, the lowest such proportions since Fiscal Year 19

50. Defens e-related allocations represent about one-half of the presumably controllable or discre tionary funds within the entire budget. By contrast, Professor Lawrence J. Korb of the United States Naval War College contends that 1. Cited in Aviation Week and Spac e Technology, January 23, 1978, p. 15. 7 almost none of the funds for HEW, the Veterans Administration or other agencies are controllable. These agencies must pay the claims of individuals who establish eligibility for programs like social security or the GI bill. Therefore, defense is the primary area in the federal budget in which national priorities can be established.

Several methods are employed for calculating defense spending and thus different figures are used interchangeably to account for the same budget. For example, the total obligational authority (TOA) for the FY 1979 budget is $126 billion. Though not all the money requested will be spent in the coming fiscal year (beginning October l), this sum essentially represents the aggregate cost of th e programs cited in the budget, plus funds appropriated in prior years but still unobligated however, the proposed budget amounts to $115.2 billion. When assessed in terms of outlays for the government's "national defense function the new budget amounts to $117.8 billion expenditures beyond the Defense Department's jurisdiction, involving funds for advanced research and development conducted by other govern ment agencies, such as the Department of Energy.

Of similar importance are the longer-term implications of the funds appropriated for defense in a given fiscal year, not only as they affect the development of a credible force posture, but also in their impact on the state of the national economy several years hence.

Consequently, the combined criteria applied in determining the size and distribution of defense resources (and the executive-legislation compromises and trade-offs to be anticipated) must take into account various inputs, including In actual outlays for the same period This includes military a. Estimates of the military strength of potential adversaries, the perceived momentum of their weapons programs, and the array of conceivable threats we face J b. The doctrinal basis and operational desi g n of our own national security policy, as well as the type of force structure necessary to support and/or imp1 ement it c. The need to accommodate competing service interests in a judicious and cost-effective manner without sacrificing the requisite eleme n ts of the force structure for the missions envisioned 2. Lawrence J. Korb, "The Price of Preparedness: The FY 1978-1982 Defense Program AEI Defense Review, June 1977, p. 2. 8 d e f The effects of the foregoing on inflation-adjusted estimates of the unit a n d aggregate costs of projected programs The claims of identifiable political constituencies whose productive motivation depends in large measure on the defense budget's job-creating (and sustaining potentialities Related to(e),,the fiscal considerations a t tending different sectors of the proposed budget and the sum of their costs and benefits to the entire economy These would include, in addition to hardware acquisi tion authorizations, such items as military assistance programs, foreign military sales, ex penditures for a variety of manpower programs, construction, operations and maintenance costs, etc 1

11. PRINCIPAL POLICY ASSUMPTIONS OF THE BUDGET Force posture and policy should interact on a coordinated mutually supportive basis. Policy must be reasonab ly attuned at all times to the forces in existence or those which a nation is able and willing to commit to its defense inventory. On the other hand, the force posture should be configured to assure the viability of the established policy.3 Pentagon's FY 1979 budget to be measured?

In light of this maxim, how is the As proposed, the defense budget generally purports to Preserve the strength of United States strategic forces Enhance the combat capabilities of U.S. forces assigned to NATO Increase cooperativ e efforts with NATO alliance partners Attain more efficient management of defense resources Reflect inflated personnel costs in the military estab 1 i shmen t $4 In effect, the budget incorporates the findings of an inter agency report on the contemporary world military balance and the adequacy of implementable American policy options in specific con tingencies. Titled "Military Strategy and Force Posture Review the study was completed last June and sent to President Carter..by Secretary of Defense Harold B rown as part of a more extensive.govern ment analysis of global power relationships, know as Presidential Review Memorandum 10 3. See Korb, 2. g p. 3 4. Aviation Week and Space Technolosy, January 30, 1978, p. 18. 9 The principal conclusion is that under present conditions of essential strategic equivalence" between the superpowers, a nuclear war would be "unwinnable" in any meaningful or functional sense.

Consequently, prudent planning requires a concerted upgrading of conventional forces to redress exist ing or emerging regional im balances, especially in strategically vital areas (i.e. Europe) or those where the likelihood of conflict at the sub-nuclear level is greatest.

Though,..de t er rence obf a :surpri Se,:nuclean:.-at tack la~ge+sdaI& or limited) against the United States or its allies remains central to our national security planning and thus compels continued moderniza tion of strategic forces, thebudget places increased emphasis on war-fighting capabilities consistent with the 14 war concept. T his means that, besides engaging in a major conflict in Europe, the United States must have a mix of forces sufficient for rapid deployment and controlled response in a peripheral theater of combat, such as the Persiart Gulf.

The "significant reordering of priorities" accompanying the budget's preparation is illustrative of the Administration's philo sophical approach toward defense issues. The unprecedented Soviet buildup across the spectrum of military capabilities has had an un settling effect on policy makers. Previously stated efforts to stabilize or restrain this growth primarily through the vehicle of arms control agreements are now balanced by a commitment to strengthened operational capabilities for the 1980's.

It is in central Europe where the heig htened threat from augmented Soviet military power is most acutely perceived, and the budget is clearly geared toward improvements in our NATO force posture in the ground, air, and munitions fields. "In the present international en vironment," comments Se c retary Brown the most important measure of relative military strength is the balance that exists" between the North Atlantic Treaty Organization and the Soviet-Bloc forces in Europe Current realities do not lend themselves to complacency. Ac cording to th e International Institute for Strategic Studies in London, the military balance in the critical northern and central European areas shows the following comparison in active force levels NATO WARSAW PACT Manpower 630,000 950,000 Tanks 7,000 20,500 Atack Pla n es 1,650 1,475 Source: The Military Balance 1978, International Insti tute for Strategic Studies, London; cited in Congressional Quarterly ar 81 1978 v e p. 168 I 5. The Wall Street Journal, January 20, 1978, p. 2. lo In light of the countervailing force r atio, General George s Brown, Chairman of the Joint Chiefs of Staff, contends that I the ability of the United States to defend successfully against a major conventional at tack is open to increasing question The con ventional military balance is not reas s uring The ba ance for the future is more troubling still. i Addressing himself to the core problem of the NATO military posture, General Brown offers this assessment Early combat capability is necessary for success ful defense, but alone is not sufficient . Sus tainability is .also required. There must be the capability to continue the fight as long as nec essary to achieve our security objectives serious shortcoming in the United States military posture, and of NATO forces generally, is lack of this sustai ning capability A 7 IV. CONVENTIONAL FORCES (HIGHLIGHTS Much of the new Army and Air Force equipment proposed in the budget is thus designed to counter blitzkrieg-type enemy armored thrusts spearheaded by a combined heavy tank/air support assault.

Increase d appropriations are sought for Army and Marine Corps heli copter gunships and attack planes, artillery, ammunition, anti-tank weapons and tanks, including initial "quantity production" of the Chrysler Corporation's XM-1 main battle tank (110 units) and c o n tinued manufacture of the M-60 (508 units). Furthermore, reserve war stocks of pretpo$i.taoned :unit.-iequ;ipment: sets: in Euro,pe,are :to; be substantially supplemented to serve the additional general purpose forces that would be deployed thereina con flict. (It is also worth recalling in this context that President Carter recently pledged to increase the United States ground force contingent in NATO by 8,000 troops, though the effect of this initiative is largely symbolic).

Though purchases of anti-tan k missiles have slackened after several years of stockpiling, an accelerated buildup in artillery firepower (in particular 155 mm cannon) continues conventional war missions, funds are requested for the procurement of the Fairchild A-10 tank-killing aircr a ft, the McDonnell-Douglas Reflecting the Pentagon's evaluation of tactical air power for 6. Aviation Week and Space Technology, February 13, 1978, p. 17 7. From statement by General George S. Brown USAF Chairman of the Joint Chiefs of Staff, on the FY 197 9 Department of Defense Authorization Request before the House Armed Services Committee on February 2, 1978 11 a A-4, and the General Dynamics F-16 fighter bomber, all of which are earmarked for NATO service. Authorizations for the F-15 interceptor have be e n cut back in favor of the less expensive F-16 in a calculated cost-effective judgment, since the latter can be configured as either an interceptor or a ground attack plane capabilities (ECM) against enemy radar in combat are being modernized through conv e rsion of early-model F-111's for use in this regard.8 Acquisition funding for the McDonnell-Douglas/Northrop F-18 fighter has likewise been authorized, as have funds for the McDonnell Douglas advanced tanker/cargo version of the DC-10 jetliner to aug ment our airlift reinforcement capabilities cluded to continue modification of the Lockheed C-5A transport wing.

No funds were provided for a proposed short take-off jet (known as AMST) to shuttle European combat forces. The Pentagon is instead conducting a re view of alternative costs, including a later model of the C-130 Hercules transport. However, production is being stepped up for the new Black Hawk troop-ferrying helicopter and for updated versions of two cargo helicopters, the Army's CH-47C and the Marin e s Electronic countermeasure Similarly, money is in I I CH-53E In measures toward achieving the goal of standardization of NATO combat equipment, the Pentagon has requested procurement of the French-German designed Roland surface-to-air missile system and is likewise committed to maximizing interoperability between the United Staten' XM-1 kank and West Germanv's LeoDard 11 (includinq a decision to arm those XEI-l's produced in tne mia-Iyt5u's witn tne berman srnwwui bore 120 mm gun).

For additional protecti on against the expanding Soviet fleet of attack planes, acquisitions of anti-aircraft missiles proceed. Besides thedm-rt-.p.qgg Roland, funds are requested for medium-range Hawks hand-portable Stingers, and the new Patriot air-defense missile sys tem.

Str essing the need for systems with variable penetration capa bilities against targets at different thresholds of combat, the bud get requests a classified number of tactical nuclear (or dual-capable weapons designated for NATO missions. These include the 70 - mile range Lance, the 400-mile range Pershing, and a 2,000-mile range ground-launched version of the qrui,se. missile (which is reportedly nearing production) communications systems which will facilitate mission coordination Funds are also requested for s e veral command, control and a 9 Ibid p. 170 Congressional Quarterly, i:G:enuary 7.28 g p..k;l i a e f 12 in a conventional war environment. Active duty military manpower levels will be reduced by 20,000 in FY 1979 through what Secretary Brown calls "planne d efficiencies" in training programs. Reserve strength will decline by roughly 14,000 and civilian jobs will be cut by 13,000.

The nature and geographic distribution of the cuts in active Some portion would presumably forces still requires elaboration involve the initial phase of the Administration's troop withdrawal plan for South Korea levels are the lowest since 1964, the timi n g and scope of the force reductions could engender a negative symbolic value if perceived as a signal of retrenchment Given the fact that current U.S. manpower NAVY The United States naval shipbuilding program has been substan tially reduced in the propos e d budget (from 29 to 15 vessels development owes primarily to recurring disputes between the Navy and commercial shipyards which have resulted in huge cost overruns and delays in ship delivery, and to the Administration's still un certain conception of th e Navy's future wartime role beyond escorting reinforcements to combat areas, notably Europe This The decelerating trend in procurement requests is symptomatic of the indecision which has characterized assessments of the Navy's conventional operations capa b ilities and mission designation over a period of several years, a period which has similarly witnessed a marked expansion in Soviet naval capabilities ii DOES YO1 IYCLUOE BALLISTIC MISSILE CARRYING SUBMARINES mows IIA~O!!~T~ Fo~!ag ii Source: FY 1979 Depa r tment of Defense Annual Report, p 77 Strategic mar 13 time routes vital -0 the security and economic well-being of the industrialized West and Japan have become in creasingly vulnerable to interdiction by the enhanced Soviet flotilla of surface combatants and hunter/killer submarines. For purposes of maintaining open sea-lines of communication and to protect rein forcement and amphibious convoys against Soviet submarines and bombers the budget provides funds for eight addirional missile patrol frig ates. A nother attack submarine and three sonar surveillance vessels are-likewise sought to counter the expanding Soviet underwater fleet.

The complexity of the United States' priority interest in con trolling accessibility to vital sea lanes must be considered in assimilating operational requirements for our naval forces. The Soviet Union, which is essentially a land power, has the comparatively simpler task of effective sea denial, particularly by concentrating on designated strategic "choke points."

The remaind er of the Navy's shipbuilding plans must await a de cision on the optimal role of the naval air forces. Critics of air craft carriers allege that they are too costly and too vulnerable to the arsenal of Soviet anti-ship missiles. Increasingly cited are th e prohibitive costs of nuclear-powered vessels (nearly $2 billion each when calibrated against the limited missions envisioned. The Navy anticipates the eventual use of vertical, short take-off and landing V/STOL) combat jets which can be deployed aboard s maller, less ex pensive, conventionally powered ships to be built in large quantities.

Funding for advanced V/STOL research and for procurement of two prototypes of an updated version of the Harrier V/STOL attack plane used by the Marines is included among budget requests.

However, the budget does request funds for the initial produc tion of five F-18 fighters, which can double as a ground-attack plane and thus augment carrier versatility. Purchases of the Grumman F-14 Tomcat fighter, with its superior lon g-range missil-e capability for attacking bombers and anti-ship missiles, have been reduced to 24.10 Since no decision has been reached on whether to deploy aircraft carriers against concentrated Soviet tactical air power (or Frontal Aviation") in a futur e conflict, funding has been deleted for carrier escorts armed with the Aegis anti-aircraft system, as well as for the nuclear-powered Aegis cruiser military roles are completed, the Pentagon has cancelled construction of a technologically sophisticated, f r igate-sized surface-effects-ship (SES). The budget does allocate funds, however, for preliminary war ship modernization programs which will extend the active life of the eight Forrestal-class aircraft carriers and add new missile systems I Until studies o f the nature of future shipbuilding programs and to the 23 Adams-class destroyers. 11 I' io. Ibid p. 172 11. Ibid p. 172 14 3 26 12 3 The apparent curtailment of our naval program, particularly.in the accelerated development and application of advanced tec h nologies is at least marginally reflected in the absence of certified budgetary priorities. In light of a compelling Soviet maritime threat, the proposed naval authorization requests of the Carter budget seem essen tially incapable of arresting the advers e trends of the past decade.

Unless and until there .exists a more rational linkage between the definition of operations and the combination of forces necessary to implement them, naval policy will continue to operate in something of a vacuum 3 26 12 3 V 1 3 66 168 62 4 13 48 STRATEGIC FORCES 13 70 166 64 4 13 48 Constraint marks budgetary allotments for modernization of strategic nuclear forces. The numerical levels of our current in ventories of intercontinental delivery vehicles are to remain con stant D E PARTMENT OF DEFENSE SUMMARY OF SELECTED ACTIVE MILITARY FORCES 5TRATEGlC FORCES MINUTEMAN TITAN I1 Intercontinental Ballistic Missilea POURIS-POSEIDON MISSILES Strategic Bomber Squadrons Mannad Fighter Interceptor Squadrons Army Air Defense Firing Batteri e s Land Forces SENERAL PURPOSE FORCES Army Divisions Marine Corps Divisions Tactical Air Forces Air Force Wings Navy Attack Wings Merine Corps Wings Attack b Antisubmarine Carriers Nuclear Attack Submarines Other Warships Amphibious War Ships AIRLIFT b SEA L IFT FORCES SImt8glc Airlift Squadrons T cup0 Shim (r Tank8n Naval Forces CbA GI41 RCTUAL 6-30-64 600 108 336 78 40 107 16 H 3 21 15 3 24 19 370 133 0 0 100 4CTUAL 6-30-68 lo00 54 656 40 26 81 17 4 30 15 3 23 33 371 153 0 14 130 Source: FY 1979 Department o f Defense Annual Report, p. 378 WED 9-30-79 loo0 54 656 24 6 0 16 3 26 12 3 13 73 172 65 4 13 48 Though the Minuteman I11 ICBM production line has been closed development tests will continue on the new-generation M-X mobile ICBM. I 15 The budget does not r equest funds to move the program into "full scale engineering development the stage at which actual prototypes would be constructed. Such construction has been deferred primarily because cost and 'survivability tests of the trench-tunnel!ver.s5on of the s y stem are incomplete. Alternative basing modes are being studied, and resolution of the issue this year could accelerate pro gram development and achievement of an initial operational capability IOC Plans were scrapped for development of an updated model o f the EB-111 bomber designed to penetrate Soviet air defenses in a manner similar to the cancelled B-1 The Administration also supports rescission of supplemental funds appropriated in the FY 1978 budget for construction of B-1 prototypes numbers 5 and 6 A c celerated development of air-launched cruise missiles (ALCMs) continues, how ever, with an eye toward attaining a significant stand-off capability to compensate for lack of a manned penetrating bomber. Also.proceeding are modifications of the B-52's that will carry cruise missiles through the mid-1980's and tests of wide-bodied commercial jets that might eventually assume similar missions.

Funds for the sixth Trident submari3iFwere requested as were 86 additional Trident I missiles (though production has b een slowed to meet the planned deployment schedule). Research is to continue on a kill capability. Also requested are funds for research into new con cepts for missile warheads, including advanced development of the MK 1'2-A warhead for emplacement on exi s ting ICBM's The Administration's recommendations with respect to our inven tory of strategic nuclear forces appear premised in part on an antici pated comparable restraint by the Soviet Union in the development of its own intercontinental strategic forces . The available evidence however, suggests that the United States may be engaging in a form of unilateral arms control, reflected in the .essentially static levels of budgetary resources allotted to strategic systems: (See chart on the following page Strat e gic Forces Budget Trend I longer-range Trident I1 SLBM which would presumably have a hard-target The competitive initiatives, both quantitative and qualitative undertaken by the U.S.S.R. have not only complicated an arms control equation already character i zed by dubious American concessions, but also have raised new questions about the survivability of the various components of our strategic deterrent triad. Though the strategic balance is currently defined as one of approximate "parity" in coun terpoisedd e t-errentpower, the longer-term viability of the situation demands, in the absence of reciprocal and genuine Soviet concessions a more thoughtful analysis of the follow-on requirements of our inter continental forces which is not unduly mortgaged to the ab s tractions and atmospherics of detente See chart on the following page Changes in U.S./U.S.S.R. Strategic Levels 16 I STRATEGIC FORCES BUDGET-TRERJD I BILLIONS OF CONSTANT FY 1978 DOLLARS Source: FY 1979 Department of Defense Annual Report, p 43 CHANGES IN U.S./U.S.S.R. STRATEGIC LEVELS ICBMs isoor SLBMs BOMBERS I I ,I 300 1 I I I I I I I I J 1966 1972 1979 1966 1972 1978 END FISCAL YEAR i i Source: FY 1979 Department of Defense Annual Report, p. 46 17 VI. FISCAL ANALYSIS OF T'HE BUDGET In amending the fina l Ford Administration budget for FY 1978 President Carter's defense requests amounted to $120.4 billion in total obligational authority, a cut of nearly 3 billion from the budget authority planned by Mr. Ford for the current fiscal year.

Further budget reductions were made by the Administration and Con gress, and the figure finally approved came to $116.6 billion (with 105 billion in estimated actual outlays).

The FY 1979 Defense Budget Requests $126 billion in total obliga tional authority of which $215.5 7 billion is in new budget authority requiring congressional appropriations. This exceeds the FY 1978 fig ure in TOA by $9.2 billion, though the $126 billion figure is itself 4-1O.billion less than the amount requested by the Pentagon, which was overruled in projected spending authority levels by the Office of Management and Budget.

Based upon the Pentagon's calculation of a 6.1 percent inflation rate for defense expenditures, the real (i.e. inflation-adjusted) growth in total obligational authority is app roximately two percent. By com parison, the anticipated outlays of $115.2 billion are $9.9 billion above the FY 1978 level a real increase of three percent in the base line defense figure pledge to reduce military spending by $5-7 billion and still mainta i n adequate strength, particularly in light of the sustained growth in Soviet defense spending over the last 10-15 years? A breakdown of the figures is revealing intermsof assessing both the complexity of the issue and the overall fiscal impact of projecte d defense allotments.

Though defense spending in aggregate terms has increased, Secre tary.Brown asserts that President Carter has nonetheless redeemed his campaign promise, since the Ford Administration's comparable FY 1979 projections (as well as those t hrough FY 1983, upon which the pledge was ostensibly based were $8.4 billion higher for total obligations and $5.6 billion more for spending authority than the Carter budget Does the budget as proposed vindicate then-candidate Jimy Carter's.

Though FY 198 3, the Carter Administration projects nearly $34 billion.less for Pentagon programs than did the Ford Administration Estimates are for the five-year military preparedness program which anticipates real growth levels sufficient to keep pace with Soviet def e nse programs See charts on the following page.) 18 DEPARTMENT OF DEFENSE BUDGET PROJ ECTIONS-TOA CURRENT PRICES EXCLUDING MILITARY ASSISTANCE 1801 (1 80 0 I I I I I I I 1975 1976 -1977 1978 1979 1980 1981 1982 1983 a FISCALYEARS DEPARTMENT 'OF DEFENSE BUD G ET PROJECTIONS-OUTLAYS CURRENT PRICES EXCLUDING MILITARY ASSISTANCE Ol I I I 1 I I I 1975 '1976 1977 1978 1979 1980 1981 1982 1 FISCAL YEARS 160 I 140 120 100 80 I I 0 I3 Source: FY 1979 Department- of..Defense Annual Report, p 366 I 19 Though the Carter A dministration's spending level projections for defense anticipate less aggregate growth than the Ford Adminis tration's estimates for the same period, defense spending as a per centage of total Federal outlays is still expected to increase DEFENSE SPENDIN G : AS A PERCENTAGE OF ALL OUTLAYS FY 1979 FY 1980 FY 1981 FY 1982 FY 1983 23.5 23.7 24.2 24.6 24.9 Estimate #Projection 12 Source: Office of Management and Budget The projected growth of defense spending must be kept in per spective, however. Given the ant i cipated level of increase for mili tary authorizations at the end of the five-year reierence time frame defense spending would still constitute the smallest proportions of overall federal outlays and Gross National Product since before the Korean War FY 1 9 79 defense spending has declined to approximately 5.1 percent of GNP The priorities implied in the spending levels and resource dis tribution of the FY 1979 budget attest to the Carter Administration's emphasis on upgraded general purpose forces, which co m prise over 37 percent of projected outlays. The budget is divided along the fol lowing lines (in percentages of Total Obligational Authority Conventional War Forces 37.1% Strategic Nuclear Forces 7.8% Training 20.7 Supply, Maintenance 10.0% Research 8.8% I ntelligence, Communications 6.6 Reserve Forces 5.3% Other 3.7 Source: Office of Management and Budget l3 Moreover, the Administration claims to have honored its commit ment to increase by 3 percent annually (above inflation) that portion of the defense bu d get earmarked for weapons systems, facilities and personnel in support of NATO. Secretary Brown insists that, despite allegations of having vitiated that pledge because of non-NATO related 12. Cited in The New York Times, January 24, 1978, p. 15 13. Cited in The Washington Post, January 24, 1978, p. 15. 20 procurement requests, most of the substantial increases in requests I for weapons purchases and equipment would directly benefit the Alliance Purchases of Army equipment, which Brown characterizes as a " r eal initiative" are up 18 percent in real terms). Of the budget's 9.2 billion growth in TOA from FY 1978, $4.3 billion is allocated to general purpose forces for new equipment and to improve the readiness and mobility of exixiwforces, as well as the NATO logistical infra structure. Strategic nuclear forces, by contrast, gained only $500 million in new authorization requests.

The budgetary breakdown by services, in terms of current dollar TOA, shows the following FY 1979 FY 1978 Change Army $32.1 billion $2 8.9 billion 3.2 billion Navy $41.7 billion $39.7 billion 1.5 billion Air Force $35.6 billion $33.2 billion 2.4 billion General procurement requests subdivide as follows FY 1979 FY 1978 Change Aircraft $11.9 billion $10.4 billion 1.5 billion Missiles 4 bil l ion 4.3 billion 3 billion Ships 4.!:7 bi.llion 5.8 billion 1.1 billion Combat Vehicles 2.1 billion 1.9 billion 2 billion Weapons Other 9.6 billion 7.8 billion 1.2 billion According to Defense Department Comptroller Fred Wacker, there are 93 weapons system s slated for procurement and acquisition, and 30 presently in research and production that are considered high priority projects. 14 In spending terms, the FY 1979 budget, when adjusted for infla tion, appears to continue the downward trend of defense auth o rizations as a function of relevant economic indicators. The distribution of resources within the budget, with the exception of allocations for the improvement of general purpose forces, does not seem to offer notable initiatives See charts on the followi n g page 14. Aviation Week and Space Technology, January 30, 1978, p. 20 21 I I DEPARTMENT OF DEFENSE-BUDGET BY MAJOR PROGRAM-CONSTANT PRICES BILLIONS OF FINAMClrA h SUMMAR Y MILITARY PROGRAM Strategic Forces General Purpose Forces Intelligence and Communic a tions Airlift and Sealift Guard and Reserve Forces Research ind Development Central Supply and Maintenance Training, Medical, Other Gen. Pers. Activ CONSTANT FY 1979 DOLLARS TOTAL OBLIGATIONAL AUTHORITY FY 1977 1 0.6 43.1 8.4 1.7 6.7 11.2 12.6 25.7 FY 197 8 FY 1979 9.8 45.1 8.3 1.7 7.0 10.9 12.7 25.5 9.8 46.9 8.3 1.8 6.7 11.0 12.8 26.0 Administrative and Assoc. Activities 2.3 2.4 2.4 Support of Other Nations Excludes Map 2 .3 .3 TOTAL $122.6 $123.7 $126.0 I APPROPRIATION TITLE Military Personnel Retired Pay Operation and Maintenance Procurement Military Construction Family Housing Civil Defense Revolving and Management Funds RDT&E TOTAL CURRENT DOLLARS TOTAL OBLIGATIONAL AUT_HORITY FY 1977 25.9 8.2 32.0 27.5 10.6 2.4 1.3 1 2 FY 1978 27.3 9.2 35.0 30.3 11.4 1 . 9 1.4 1 2 FY 1979 28.7 1.0.2 38.1 32.0 12.5 2.7 1 1 I 1.6 >.i I 108.3 116.8 $126.0 Sryurce: FY 1979 Department of Defense Annual Report, pp. 386-387 22 VII. THE FY 1979 DEFENSE BUDGET SUMMARY Though the final shape of the Carter Administration's defense b udget has not yet been determined, subject as it is to Congressional review, the funding recommendations made are sufficiently illustrative of the thrust of contemporary American defense policy and its implica tions for our national security objectives.

The assumptions underlying preparation of the budget suggest varying perceptions of the nature of the Soviet threat and lead to somewhat contradictory initiatives. For example, the growth stabiliza tion of strategic nuclear forces derives in large measure from the Administration's calculus for understanding the concept of nuclear deterrence and the political utility of existing forces. Since, ac cording to the working premise of PRM-10, nuclear war under all cir cumstances is unwinnable, deterrence is main t ained so long as an important portion of Soviet industrial and population centers can be targeted and attacked by ''residual" U.S. forces (i.e those survivinq a postulated Soviet first strike A corollary of this premise is the low priority accorded civil d efense programs. Implicit is the notion that the Soviet Union essentially shares our interpretation of what coastitutes stable mutual deterrence (i.e an assured retaliatory capability), though Soviet military literature and the magnitude of enhanced war-f ighting capabilities do not corroborate this thesis.

Similarly, despite rhetoric to the contrary, the apparent re straint in developing technologically advanced strategic systems reflects a perhaps unwarranted faith in the eventuality of reciprocal mutuall y advantageous arms control agreements. In lieu of such agree ments, the budgetary reductions in (and outright cancellations of certain systems with potentially high bargaining value in the SALT negotiations (as well as.operationa1 effectiveness as deploy e d forces have been undertaken without sufficient consideration of either their substantive or symbolic significance. The Administration has justified cancellation of the B-1 bomber program and delayed development of the M-X and Trident I1 missile systems in a manner which emphasizes fiscal prudence and efficient management independently of the larger stra tegic context of responsible policy-making.

Critics contend, moreover, that the systems upon which the credibility of our deterrent posture is to rely (e .g. multiple launch-mode cruise missiles) risk being sacrificed in the arms con trol talks ostensibly aimed at stabilizing the superpower strategic relationship. The combined effects of these measures may ultimately produce a disincentive to meaningful an d equitable arrangements.

What is imperative is that strategic arms limitation agreements do not foreclose technological developments or "exploitation of stra tegic nuclear technologies which allow the United States to compensate for Soviet advantages 1'5 15. Aviation Week and Space Technology, February 13, 1978, p. 18 23 Secretary Brown asserts that The issue is how to make it clear to the Soviets that they cannot gain any military or political advantage from their strategic forces Insistence on essential equivalence guards against any danger that the Soviets might be seen as superior even if the perception is not tech nically justified.16 Yet perceptions do not require technical justification to assume the nature of political realities. The inevitable obs o lescence and vulnerability of weapons systems that are the products of investments made in the 1950's and 60's cannot be viewed as devoid of political significance in the face of the accelerated modernization and expan sion of Soviet military forces. To i nsist on essential equivalence while exercising relative restraint in our own force modernization programs is to jeopardize the tenuous balance between policy and force structure alluded to earlier.

From a fiscal standpoint, delayed production of systems t hat are expected to be introduced into the operational inventory or used as bargaining chips" in arms control negotiations will almost invariably resu1t.h a continual upward revision of estimated program costs ad justed for inflation. Moreover, the notion of fulfilling a campaign promise for the sake of personal credibility may prove vacuous at best and dangerous at worst if, in the process, vital security in terests re rnp-romi.se.d As-a recent editorial poignantly concludes The implications of the arguab l e disparity between dollars and rhetoric are largely politi cal. The fact is that, after a year of leader ship, the president simply has discovered that his responsibility for maintaining the country's defenses the credibility of its military capacity and the health of its alliances can not be reconciled with the assurances of sweeping Pentagon budget slashes so glibly,made 15 months and more ago in the heat of political contest.1-7 The Carter Administration's defense budget (like its predecessor does unde r take noteworthy initiatives to upgrade general purpose forces, but the, substantive value of such efforts depends on a sense of time-urgency (given the critical lead-time factor in weapons development to rectify existing military disparities and enhance f orce credibility for potential political leverage. This must be sustained by judicious procurement requests and an expanded research and development base.

Furthermore, the apparent tendency to respond to sectors in defense planning can be counterproductive to the policy objectives 16 The Christian Science Monitor, February 3, 1978, p. 1 e 7-7 y z 17. Cit9.d in Current'News Februa>y .13, 1978, p. 2E Kansas City Times January 33, Z978.) 24 enunciated. Strengthening the NATO force posture while downgrading na v al shipbuilding efforts, despite the ominous emergence of a Soviet "blue-water" navy capable of increased power projection, may represent less a manifestation of priority distribution within the context of a rational strategy and more an ad hoc response t o a threat which is invariably perceived as divisible The recommendations incorporated into the FY 1979 defense budget require their elaboration over time. The debate over budgetary direc tions, as part of a more general assessment of the contemporary U.S f orce posture, will inevitably focus on the priorities established as well as the adequacy of committed resources in pursuit of specified ends. Comments General Brown In light of the extensive growth in the mili tary capabilities of the Soviet Union, it is questionable whether what has been done is enough to assure the security and well-being of our coun try in the coming years.18 The Carter budget has been criticized by some as not addressing itself fo.r.ce.%ullyenough to the scope and magnitude of our def e nse needs, particularly in the development of those advanced technologies which provide the United States with the means for an effective response to potent external challenges A definitive evaluation of the authorized FY 1979 defense program must await e l aboration of the policy initiatives for which a credible force posture is an indispens able.basis. If, however, the Carter defense program feeds a perception of declining American military strength and lack of resolve in pro tecting security interests, ou r capability for effective deterrent action would be measurably eroded and the prospects for tention and further clashes of interest with the Soviet Union and other potential adversaries would be correspondingly heightened.

John G. Behuncik Congressional Fellow National Security Affairs 18. Aviation Week and Space Technology, February 13, 1978, p. 18