Prospects for National and Transatlantic Security under Austere Defense Spending

Nicholas Iaquinto

Nicholas Iaquinto was previously the Communications Coordinator / Web Developer at AICGS.

Looming on the horizon, January 1, 2013 and the beginning of sequestration’s effects are approaching closer and closer. A consequence of the Budget Control Act of 2011, budget sequestration is a series of automatic cuts of $54.7 billion annually between 2013 and 2021 to both defense and non-defense spending.  Although non-defense spending decreases on average by 6.5 percent every year, defense spending sees an average of a 9.2 percent decrease annually (see report by the Center on Budget and Policy Priorities). First, in 2013 across-the-board, percentage cuts in appropriations will result in 7.5 percent decreases in every non-exempt account. Then, every year between 2014 and 2021, automatic cuts will decrease the budget caps for each account and the Appropriations Committee will then have the flexibility to determine spending within those limits. Noting that these measures are in addition to previous recent defense spending cuts, experts are unified in the conclusion that sequestration is crippling to not only the U.S. military’s readiness capabilities and credibility as a deterrent, but also to the U.S. economy. Furthermore, in the context of Europe’s similarly deep cuts to defense in response to the Euro Crisis, transatlantic security cooperation and collective security will falter. Thus, austerity’s effects pose serious questions as to whether defense should be the target of cuts and if there are viable alternatives.

Many experts are concerned by these cuts’ effects on the U.S. military’s ability to defend national security. At a recent policy event at the Brookings Institution, Senator Kelly Ayotte stressed the fact that sequestration represents an additional round of cuts above the previous measures since the financial crisis hit. Citing total reductions of 172,000 soldiers (including 50,000 National Guardsmen or Reservists) and 38,000 Marines after recent cuts and sequestration, Senator Ayotte shared General James F. Amos’ grave assurance that “Sequestration would render the Marines incapable of conducting a single major contingency operation.” Indeed, due to exemptions, the cuts will primarily be taken from training, operations, maintenance, and modernization. However, with events, such as the USS Essex collision due to rudder malfunction and a breakdown in the chain of command, becoming more frequent in the news, it is clear that the Armed Services are already experiencing the adverse effects on readiness from a dearth of training and maintenance funding.

Modernization is also already vulnerable; as noted by Mackenzie Eaglen at the American Enterprise Institute, all branches of the military have been forced to make the most of existing equipment. Take for example the 1980s and 1990s era F/A-18C Hornet, which will now be flown an additional 4,000 hours due to delays of its replacement, the F-35 Joint Strike Fighter. The result, however, is more cases of malfunction; this same platform nearly killed two pilots on separate occasions as their engines caught fire and exploded on the USS Carl Vinson and USS John C. Stennis. In this sense sequestration would be a further danger not only to U.S. national security, but also the safety of servicemen and women.

The nature of the first year of cuts threatens ongoing projects and programs. Dr. Michael O’Hanlon of the Brookings Institution provides the following example: say a shipbuilding company has “80 percent of the funds that they would have needed…does that mean they fire 20 percent of their workforce and drive up the unit cost of the ship?” It poses a unique problem; these projects represent a considerable investment and it is wasteful to abandon it due to limited resources. This waste extends to research and development. A 2011 RAND study pointed to insufficient research, development, testing, and evaluation funding as a major contributor to excessive cost in defense manufacturing. Furthermore, Vice President of General Dynamics, Tom Davis argues that other contract and termination fees associated with canceling contracts with defense manufacturers will in fact create millions of dollars in costs for the government. In this sense, defense spending, including most notably research and development, shipbuilding, and other long-term expenses, will not only struggle to complete their project with less resources, but also in the long run be more costly than without sequestration.

By virtue of the impending significant cuts to modernization and thus contracts with defense and aerospace manufacturing firms, sequestration will have considerable effect on the U.S. economy. Making up approximately 25 percent of annual GDP increases, this industry is a crucial sector of the American economy. According to analysis from both industry experts and independent economists, the resulting cuts would mean over 1 million jobs lost, a 0.6 percent increase in the unemployment rate, and decrease in GDP growth from 2.3 percent to 1.7 percent. Worse still, the impact of these cuts are beginning to come into effect; due to the Worker Adjustment and Retraining Notification Act of 1988, similar state laws, and negotiated union contracts, employers must notify those employees who they may reasonably believe will be laid off, a minimum of 60 days (but in varying cases at least up to 120 days) prior to their termination. Those notices at the 60 day minimum will be mailed on Friday, November 2, 2012 or in other words four days before Election Day. Potentially shifting the course of the presidential election as well, sequestration will profoundly hinder the United States’ economic development or even realize many economists’ fears of double-dip recession from excessive austerity.

In the context of these effects on American national security, multi-national corporations in the defense industry, and the U.S. economy, past cuts and the impending sequestration combine with similar decreases in European defense spending to produce a dangerous effect on transatlantic security and cooperation. Twenty out of the twenty-eight North Atlantic Treaty Organization (NATO) members have cut their defense spending in the last four years. Meanwhile, similar funding problems as in United States are endemic throughout NATO. In a succinct state-by-state analysis at DefenseNews, Tom Kington and Pierre Tran enumerated the severe cuts to European defense spending and readiness through numerous examples, such as Italy’s drastic 28 percent spending decrease in 2012, Portugal’s inoperable Navy corvettes and severely underfunded Air Force, and even Germany’s reduction in both existing and planned battle tank and artillery vehicles between 21 and 48 percent. Speaking to the effect of these cuts in Germany, Lieutenant General Jürgen Schnell, a professor at the Bundeswehr University of Munich, said the German Army “will lose capabilities for high-intensity scenarios like Iraq.” Furthermore, according to Dr. Rebecca Grant of IRIS Independent Research, sequestration is likely to target joint military exercises, such as the thirteen NATO exercises in 2012, as an easy place to find savings. Meaning militaries on both sides of the Atlantic will be less able to coordinate in the increasingly coalition-based operations; this likelihood amounts to an additional decrease in capabilities.

Primarily meaning a marked decline in readiness both unilaterally and multilaterally, defense budget cuts, including sequestration, threaten both national and transatlantic security, although American and European servicemen and women will bear the most danger. Moreover, austerity in defense spending will significantly curtail economic growth and lengthen the path out of the financial crisis. In this sense, we must ask ourselves: are we willing to endure decreased security and growth to lessen the deficit to GDP ratio and sovereign debt? The answer varies greatly across divergent political ideologies; however, there is one constant in this dialogue. It will be impossible to bring government debt into control without addressing the largest and most rapidly growing segment of debt: entitlement spending. Indeed, we must then amend the above question as follows: are we willing to threaten security and growth, when defense spending is not the primary source of the crisis? Is it right to prioritize welfare over security?

Luckily there is still time before January 1, 2013 to legislate alternatives to sequestration. Likely to develop new plans as well as reconsider existing alternatives, such as the Simpson-Bowles commission plan, the Rivilin-Domenici plan, and the Joint Select Committee on Deficit Reduction (commonly known as the “supercommittee”) plan, policymakers will face increasing pressure to find alternatives as Americans become aware of and begin to feel the effects of these cuts. If the second session of the 112 Congress is unable to solve the crisis this time around, voters will elect a Congress that can. Regardless of this tendency, however, the fundamental situation remains. It is impossible to solve the crisis through defense cuts alone, and these cuts have begun to threaten our security. Is it right to prioritize welfare over security?

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies.