Why Defense Cuts Could Hurt

The money the military spends on R&D today impacts the defense capabilities of the country decades from now.



Military spending, according to one theory of international relations, is directly tied to the necessary downfall of world powers. But as a Brookings report out last week makes clear, that doesn't mean wantonly slashing defense budgets is the way to go. In fact, there's reason to believe cuts currently on the table could have a disproportionate impact on the U.S.'s military edge.

Immanuel Wallerstein's theory of world-systems analysis holds that countries achieve hegemony by being very efficient at economic production. But maintaining hegemony involves what he calls the "expensive and abrasive" attempt to carry out a "political and military role." As soon as other states catch up in economic efficiency, the hegemonic power's "political clout" goes, and the state starts actually having to use its military instead of relying on threats. As Wallerstein explains, "Its use of military power is not only the first sign of weakness but the source of further decline."

In the current climate of budget cuts, therefore, it seems natural to want the country to scrap a few F-16s instead of, say, the public school system. Give our troops proper tank and body armor, runs the classic (and generally liberal) refrain, but ditch the "nano hummingbirds" -- and let's get rid of a few more warheads while we're at it.

Of course, it's more complicated than that, as most people acknowledge, and last week's Brookings report does a better than average job of explaining why.

This summer, when Democrats and Republicans finally reached their debt ceiling deal, it included $400 billion worth of cuts on national security. But due to other cuts on the table, we could be looking at roughly $1 trillion total. In short, it's a post-war pullback, and though the size of it, according to the Brookings report, "is not unusual by historical standards," it's happening in the midst of China's rise, North Korea's leadership hand-off, the menace of a nuclear Iran, and continuing unrest in the Middle East. But that's not even the main point of the report.

What the report highlights is that "the current wave of defense cuts is also different than past defense budget reductions in their likely industrial impact, as the U.S. defense industrial base is in a much different place than it was in the past." Cutting-edge technology is a big part of the United States' edge, both in actual conflict and as a deterrent, and thus what the signatories of the Brookings piece seem particularly concerned about is the procurement budget -- part of the so-called "investment accounts" -- along with research and development.

Right now, "Reagan-era weaponry is wearing out, and the recent increase in procurement spending has not lasted long enough to replenish the nation's key weapons arsenals with new weaponry" -- we've mainly been focusing on "filling certain gaps in counterinsurgency capabilities." Meanwhile, "unlike the period just after the Cold War, there are no obvious surpluses of defense firms, such that a natural paring process will find the fittest firms and ensure their survival."

In other words, the defense industrial base may be inefficient, but cuts won't make it fitter -- just leaner. The scary part about that is that industrial base health is a long-term thing, and the money the procurement budget is spent on today winds up determining the defense capabilities of the country much further into the future than, say, troop numbers in Afghanistan.

So how do you address that? The Brookings report puts out 10 questions to consider "as presidential candidates and other national leaders develop their platforms." They include ideas like fixed-price contracts, which signatory Dr. Robert Haffa, formerly of the Air Force and currently principal of Haffa Defense Consulting, explained to me over the phone are an attempt at making the defense industry more like other markets. But this is probably  impractical -- when companies gives estimates in competing for contracts, they really have no idea what a given plane, for example, might cost to make.

Another idea is reforming regulations to make it easier for new companies to enter the defense contracting market. "It's difficult for a firm, an IT firm particularly, to sell to the Department of Defense because of all the regulations that attach themselves to every competition the Department of Defense takes on," Haffa explained. "It takes a huge amount of proposal money just to compete for a major program, and you have to be very knowledgeable about those regulations."

Reform, of course, takes a while, and the procurement and research and development budgets are likely to be slashed precisely because, as Haffa pointed out, "that's where the fast money is. They can be cut right now and have fewer F-35s."

But the message from the Brookings piece and its signatories is that this is, in a sense, simply externalizing the time cost, because we'll be living with the consequences of quick cuts for years to come. Defense spending is more like entitlements than ideologues on either side might like to admit. Reform is tricky, and quick fixes are tempting. Ultimately, the quick fixes are a type of punt. And that's exactly what modern political systems tend to reward.