Chart I.A.1 Determining Defense Needs Identifying U.S. national security Assessing the threat to these Formulating defense policy and Buying cost-effective forces, weapons, 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 I.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 account our adversaries' perceptions 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 developed by our adversaries as well (frequently much more rapidly because there are no 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? we can - 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, 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. must we appear to be, or be lacking in either the means or the resolve to deter more subtle forms of aggression. Nor But of Obviously, we should not buy more defense than necessary. 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 balance sheet of 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 deficit (predictions which, incidentally, are always wrong) is our nation's wealth, as measured by our gross national product (GNP). The best measure of affordability - the defense share of the budget is the fraction of the GNP devoted to defense. 1 - In 1961, U.S. defense spending accounted for 8.3 percent of the GNP. When President Reagan took office in 1981, the share had fallen to 5.2 percent. At the end of President Reagan's first term, defense expenditures accounted for 6.2 percent of the GNP. By the end of the current five-year plan, even if fully funded, that figure would still be less than 6 percent of the GNP. As Chart I.A.2 shows, the Soviet Union now devotes two-and-ahalf times the percentage of GNP to military purposes as the United States does. If the United States were to devote the same percentage of its GNP to its military as the Soviets do, we would be submitting a defense budget for 1988, not of $303 billion, but more than $700 billion! Fortunately, our economy is approximately twice as productive as that of the Soviet Union. Even so, the additional strength the Soviets gain from their military spending far exceeds our own every year. Chart I.A.2 A Comparison of the Defense Fraction of U.S. GNP with the Estimated Defense Fraction of Soviet GNP - Chart I.A.3 compares U.S. and estimated Soviet costs over the past 20 years for military investment programs the procurement, construction, and research and development activities that build a long-lasting stock of military assets. Chart I.A.4 shows Soviet and U.S. procurement alone. These charts clearly show the enormous gap that has emerged since 1970 between the level of Soviet defense activities and our own. With the President's leadership and Congress' support until 1985 we have managed to close much of this gap, but much remains to be done before we feel we can deter any attack by the Soviets against ourselves and our allies. Chart I.A.3 A Comparison of U.S. Defense Investment Expenditures With the Estimated Dollar Cost of Soviet Investment Expenditures A Comparison of U.S. Defense Procurement Expenditures With the Estimated Dollar Cost of Soviet Procurement Expenditures Current military capabilities of the United States and Soviet Union are a product not only of current investments, but also of the accumulated acquisitions of previous years. For a proper understanding of our relative capabilities, we must compare the stock of capital assets -- airplanes, ships, tanks, etc. in the U.S. and Soviet arsenals. The fact that the dollar value of Soviet military investment during the 1970s was 70 percent greater than our investment shapes the reality we confront today. - The growth of Soviet military procurement seems to have leveled off somewhat over the last decade. It must be noted, however, that this leveling off has occurred at a high rate of procurement, thus allowing for continued growth to the already large stock of Soviet military assets (see Chart I.A.4). In 1984, for the first time since 1969, U.S. military procurement appears to have exceeded Soviet military procurement, an important achievement. Our efforts to regain full deterrence are paying off. But as Chart I.A.5 indicates, the job is not finished. As shown, the weapons the Soviets have bought during the last 15 years have an estimated dollar cost of roughly one trillion dollars over 30 percent more than the cost of the weapons the United States bought in the period. Thus, rebuilding our stock of military assets to levels that can assure deterrence of attack by the Soviets will require our continued efforts. - Chart I.A.5 A Comparison of Accumulated U.S. Procurement With the Estimated There are, of course, many complications in these aggregated cost comparisons of U.S. and Soviet military programs. This report will focus primarily on more concrete indicators of the results of those programs: the Soviet-bloc forces in being that pose an unmistakable |