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Part 1 Defense Policy

A. TO PROVIDE FOR THE COMMON DEFENSE

1. How Much Is Enough?

The perennial question free peoples ask regarding defense is, "How much is enough?" To this there can be no precise answer. A nation's security is a function of the degree of risk a country is willing to accept. It can never be perfectly safe, and increased security requires increased costs, for freedom can so easily be lost.

In the 1930s, in the face of German rearmament, some European nations decided that unilateral restraint and appeasement were enough to keep them safe. The United States also failed to appreciate the necessity for defense preparedness to avoid war. These mis judgments proved catastrophic, and the world still wears the scars of that collective naivete.

Democratic Peoples elect leaders to decide major policy issues like "How much is enough?" On occasion, however, the electorate will convey through its votes a clear conviction on defense preparedness. In 1980, with their election of Ronald Reagan, the American people sent just such an unmistakable message: reverse a decade of neglect and increase U.S. military strength. In the years since then, with the bipartisan support of the Congress, the Reagan Administration has made substantial progress in addressing the nation's 1980 mandate for a stronger defense, which was reaffirmed in 1984.

During the past two years, however, the Congress has made deep reductions in President Reagan's defense budget. These reductions jeopardize our military progress to date, delay the achievement of a safer level of security, and increase the eventual cost of this prudent defense posture.

So it is appropriate for this 1988 Annual Report to the Congress to begin by asking -- Why have our last two defense plans been so dramatically under-funded? I think there are two reasons: (1) many feel that we have completed the task, that our military strength is regained and that we can now go on to far more popular pursuits; and (2) too many in Congress feel that the nation's only priority is deficit reduction and that the best way to achieve this is to cut defense spending, regardless of our real security needs.

During the past year some in the Congress also recognized, correctly, that if deficit goals under Gramm-Rudman-Hollings were not met, the resulting defense cuts required by that Act could be even more damaging, because these cuts would be indiscriminate and across the board. Unfortunately, some congressmen translated the specter of these automatic cuts as a mandate for even deeper cuts in defense. In such an atmosphere few either assess the impact of these reductions on our nation's security, or appear to worry about it. This naivete, to give it its kindest interpretation, is sadly reminiscent of U.S. attitudes in the 1930s. Fortunately for the United States and the free world, we are far stronger now than we were in 1980, and there is considerable additional military strength already paid for that will be delivered over the next two or three years.

All of these factors have helped guide this year's decisions as to the proper amount of the overall budget to allocate for defense. It is not physically possible in a peacetime environment for all of our defense needs to be met at the earliest possible time. There are economic production rates, manpower constraints, and many efficiency considerations to weigh in deciding the best pace for strengthening our defenses. The two-year defense budget for FY 1988/FY 1989 that we submit now continues to be a long-range plan. We propose thro this budget to keep America strong through continued steady progress toward modernization and other defense improvements. We seek to avoid the stop-and-start defense budgeting that has, too often in the past, promoted inefficiency and instability. But we do not and should not try to fool the country into believing that a politically easy, deeply cut military budget can serve the long-term security or fiscal interests of our country. We can easily afford what we need to do to keep our freedom. The real question is: Do we have the will and the resolution, and even the desire, to keep that freedom?

Most citizens realize that the safeguarding of our nation and our vital interests must be our first priority. Budget deficits and domestic program cuts can be rectified; but security shortfalls carry the risk of irreversible losses. Together, we must look beyond the immediate present. We must understand that America's security begins well beyond our shores, and that our interests are worldwide.

We must realize, too, that we cannot do the task alone, and that we need allies and friends in all parts of the world. We must recognize also the long-term consequences if our allies and friends perceive us waning in military strength and in resolve to protect our shared interests. Many would not notice the subtle erosion of our security as once-friendly nations drifted toward neutralism, or worse, accommodation to the pressures of our adversaries. But both such unfavorable developments are possible consequences of inadequate American strength and leadership. Any neglect of our own security has global consequences.

In sum, American defense budgets should be based on defense needs, not on political expediency or short-term fiscal goals. To this end, this FY 1988 Annual Defense Report to the Congress analyzes America's defense needs and presents a coherent plan for addressing those needs at a prudent and efficient pace. Our goal is to keep America safe and free, not just as safe or as free as short-term fiscal and political goals allow,

Anyone who says we cannot afford to do what we must to keep our freedom is halfway along the road to losing it.

2/ Formulating A Defense Budget

The Department of Defense (DoD) uses a sound and reasoned process to determine our nation's military needs, which in turn drives the composition and scope of the defense budget we submit to the Congress. It is a complex endeavor involving thousands of people and, properly done, it takes many months. It requires both a careful analysis of facts and the ability to make informed judgments as we look forward over the next five years.

The major steps of this analytical process are displayed in Chart I.A.1 and are also reflected in the organization of Part I of this report.

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The logic of defense planning is clear. The need for military forces arises from U.S. security interests and commitments. These interests are threatened by adversaries in ways that could create contingencies that U.S. forces must then be able to meet. Defense policy judgments on the best way for the United States to respond are translated into requirements for specific forces designed to provide the necessary capabilities at the lowest cost.

The most complex and demanding step of this process is the last, in which actual defense needs are determined and programs are designed to fill those needs. As described in Chapter 1.C., U.S. long-term interests, broad national security objectives, and our basic defense strategy of deterring aggression have remained relatively stable and enjoyed broad bipartisan support throughout most of the post-World War II era. In contrast, the most contentious -- and dynamic -- step in the process remains deciding what military capabilities we need to support our defense strategy, which evolves in anticipation of, or response to, the ever-increasing threat capabilities posed by our adversaries. No exact answers emerge from this process. But one lesson is clear: U.S. weaknesses discourage our allies and encourage our foes. Our analyses are complicated by several factors.

Obviously, all of these budget processes are complex: First, we face inherent uncertainty about the future. The weapons we are buying today will provide the backbone of U.S. military forces well into the 21st century. Against which potential adversaries will these weapons be needed? How strong will our enemies be? What weapons will they use? What capabilities will our allies and friends have? While we attempt to analyze numbers and capabilities of opposing divisions, aircraft, tanks, and ships, such calculations are only

approximations -- not infallible guides to our real needs. In the face of uncertainty, prudence requires that one hedge against the risk of being wrong. This is not a field in which we can afford many mistakes.

Second, we seek to achieve our objectives not by the use of force, but rather by deterring an adversary from using his forces against us. Therefore, our strategy and forces must take into

erceptions and calculations. In a world in which the elements of military power are ever changing, and where the calculus of deterrence remains imprecise, this remains a demanding task.

Third, the United States cannot resolve its defense requirements without considering the possible reaction of our allies and friends, and the possible responses of our adversaries. Our weapons acquisition and force structure decisions also affect our opponents' decisions about their military forces.

Fourth, in acquiring weapons, we do not select from a fixed menu. The extraordinary pace of technology generates new weapons options almost continuously. But their design, testing, and acquisition take from 7 to 12 years. Since new weapons can be de

• Since new weapons can be developed by our adversaries as well (frequently much more rapidly because there ai funding restraints imposed by public opinion), prudence requires that we invest across the spectrum of research and development. Thus we regularly face the difficult problem of tradeoffs between investing in today's capabilities or in tomorrow's possibilities, with all its attendant uncertainties, risks, and costs; but with the certain knowledge that the USSR never ceases its massive research, development, and deployment of ever-more modern weapons systems.

3. What Level of Security?

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In formulating a defense program, what level of security should we seek? We realize that it is impossible to achieve absolute security. Yet, given our nation's wealth, quality of life, and values, we can -- and must -- strive to reduce the risk of aggression against our nation, our allies, and our friends. Our military strength must not be, nor appear to be, inferior to that of the Soviet Union, which represents by far the greatest threat to our security. Such an inferiority would prove disastrous for us and all we represent. Nor must we appear to be, or be lacking in either the means or the resolve to deter more subtle forms of aggression.

Obviously, we should not buy more defense than necessary. But of all that we Americans buy, we can least afford to shortchange defense. It provides an essential shield for our freedom, our prosperity and, ultimately, our very survival. To shortchange our security is to place all that we value at risk. All Americans need to recognize the unavoidable tradeoff between defense and risk. The less defense we provide, the more risk we must accept.

How should we determine the affordability of a defense budget? Some would do it on the basis of the federal government's annual

f expenditures and revenues: if a large deficit looms, say because a sluggish economy is reducing revenues and increasing outlays, then the full defense budget is seen as less affordable by those whose principal emphasis is on minimizing the deficit. A more appropriate starting point than the predicted

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