Taxed Americana

Why the United States needs to get out of the 'indispensable nation' business.

Senator McCain is pushing Gen. Dempsey to get the United States into the fight in Syria. NSA chief Keith Alexander announces the creation of 40 new cyberwarrior teams, 13 of which are dedicated to the development of offensive cyberweapons. The urge to advance America's national security agenda around the globe, using the military instrument, continues unabated despite a defense drawdown, the potential for the defense budget to drop another $52 billion below what the administration asked for next year, and Secretary Hagel's warnings that the going is going to get tougher.

It makes me wonder if it is not time to rethink our assumptions in a fundamental way. In the 1990s, when I worked in the White House doing defense and foreign policy budgets, the Clinton staff regularly asked with wonder, "Why do we spend so much on the military?" Pretty senior people, not just the young whippersnappers like George Stephanopoulos or Rahm Emmanuel.

After a while I got to expect the question, so I would routinely carry with me a set of briefing graphics that described the U.S. defense posture and its budget. The graphics told a story about what the U.S. military did and where they did it. They weren't about waste or out of control "back office" administrative costs, or runaway pricing of weapons programs. Those all contribute to the size of the budget.

But at the heart, I would explain, we had and have a huge military establishment because, at the very core of our foreign and national security policy, we assume that the U.S. military, the United States as a whole, is responsible for everything and the military needs to be everywhere.

When I walked people through the briefing, I would point out that the American soldier, sailor, and pilot is everywhere. The U.S. military was then (and continues to be today) the only one in the world with a truly global presence. No other country has global military communications, global logistics, global intelligence operations, global basing, global transportation. No other military can deploy forces anywhere in the world, by sea or by air, fly in any airspace (in principle), sail to any part of the world. No other military even tried -- not then, not today.

It's not just about the costs of overseas basing; it's about having the personnel, equipment, and capability to do that anywhere in the world. To put a fine point on it, we have, for decades, asserted and executed the role of global system integrator. And our defense budget is expensive, fundamentally, because the military is the primary instrument for ensuring we can play that role.

This assumption is as common to our discourse as the water we drink and the air we breathe. It is hardly questioned. Just listen to the politicians' speeches and the policymakers' declarations. If there is a failing state in Syria, we must start planning to use the military to deal with it. If there is a tsunami in the Indian Ocean, the U.S. military is needed to provide assistance. If there is a bad guy oppressing his people, we need to step in with swift regime-change justice. If there are untreated illnesses on the Latin American coast, the American military has to sail a hospital ship in to comfort them. If there is an Islamic extremist surge in Mali, the U.S. military has to engage at least to the extent of supplying intelligence, transportation, and fuel, and then bulk up training programs for African militaries, along with our own military presence on that continent.

The assumption is very broad; it affects much of American statecraft and foreign policy. The success of our diplomacy and the global trading system depend on our global military presence. Our global diplomacy will fail, some argue, if the United States does not have a global military to back it up. The U.S. military is the bedrock "guarantor" of security in every region. Terrorist organizations can only be confronted by the United States, primarily through military operations.

The global "commons" depends on the U.S. military to ensure that the seas are safe, the airspace is used peacefully, outer space is not militarized (though we send much of our military communications through space-based assets). And, increasingly, the global cybercommons, it is argued, is a responsibility of U.S. Cyber Command, the leader of which is currently dual-hatted with the job of leading the National Security Agency, responsible for all that global listening and data gathering we are hearing about.

This huge capability, operating on a global basis, is rarely questioned. When it is, or when a major combat deployment on land ends, as I pointed out last week, the military "shrinks" a bit to some more normal state (especially the ground forces), awaiting some new assignment of responsibility for an event or challenge somewhere around the globe. Meanwhile, we pursue "stealth globalism," forces and intelligence operatives who work more in the dark -- as they did in the 1950s, the 1980s, and today.

All kinds of signals are now appearing that this global role is unsustainable, even counterproductive, and out of touch with the dramatic changes taking place in the world. Yet we push on, as if the assumption is still tenable.

The explosions in the Middle East reflect historical realities which we did not create and which we cannot control, yet political leaders like Sen. McCain still bluster that we can and ought to use our military to do so. And yet our very global presence seems to exacerbate the problem; the Arab Center for Research and Policy Studies in Doha found, in a June opinion survey of 14 countries, that the United States and Israel were considered "the largest threats to Arab national security."

The finding is consistent with the conclusion drawn by CIA counterterrorism operative Michael Scheuer 10 years ago in his book Imperial Hubris, that what sustained support for al Qaeda in the region was not anti-American values or cultural reaction, but resistance to America's presence and policy in the region.

The rise of China, which the military's "Asian Pivot" is designed to contain or resist, is not something we caused. But it is inevitable, and the expansion of the U.S. military presence in the region is a double-edged sword. It may appear to reassure some of China's neighbors; it may also exacerbate precisely the military confrontation it is intended to prevent. But it is clearly built on the global assumption: Regional powers cannot resolve contentious security issues, so we must be there with a major military presence.

For decades the security assumption in Europe was that the American military presence ensured not only the deterrence of the Soviet Union, but also provided the sinews that bound the security of the European countries together. Yet, for the past 20, nay, even for the past 50 years, the United States has pushed the Europeans to bulk up their militaries; they have not only failed to do so, but their military budgets have plummeted as the Europeans make their own choices about their security interests, impervious to U.S. global demands.

And today, having learned that the global intelligence apparatus of the United States was not only gathering military and security secrets, but tapping into such un-terrorist locations as the offices of the European Union, the Europeans are asking themselves what is the cost to their security of such deep intrusion by the big brother across the Atlantic.

And despite the rhetoric about the global commons, today ships sail without naval protection (don't talk to me about pirates -- a nit on the seas compared to the global naval traffic). Aircraft fly under rules negotiated by diplomats and technical experts; they are not accompanied, each, by an American fighter jet. Aside from military communications, space is full of commercial enterprise, guaranteed by commercial rules and international agreements. And I have just noted the down-side of making the NSA responsible for policing cyberspace.

I despair, I confess, of any expectation that the Washington assumption will be reexamined. But it is worth raising the flag, because persisting in the illusion that we should, and can, be the indispensible nation, the guarantor of the system, the protector of the commons, is unsustainable, counterproductive, and even dangerous.

In a world where virtually no problem can be solved without the cooperation of all, especially inevitably rising powers like Turkey, South Africa, Brazil, India, Iran, China, and even Russia, the assumption that we have the answers and are the indispensible manager is just plain wrong; it passed its sell-by date a long time ago.

And being wrong, it can be counterproductive. We walk in with the answer, send the forces to execute the answer, and discover that we are not as beloved as we think we are.

And not being beloved, we become the force to resist, which frustrates the very purpose we set out to accomplish.

Plus, today, the entire global mission is unaffordable. No amount of increase in defense spending is going to reverse the trends I have identified. As defense resources decline, and they will decline with our fiscal and economic troubles and the end of the misadventures in Iraq and Afghanistan, we will still have the world's only global military. But it is going to have to be matched with our non-military, civilian wits, because using the military tool is not buying us the security we once thought it did.

It is time to rethink the assumptions, because the price of not doing so is too high; its ineffectiveness too obvious, and the blowback too threatening to our long-term security.


National Security

Letter of Resignation

Why won't Chuck Hagel use sequestration to strenghten the military?

Secretary Hagel has finally answered the mail, addressing the impact that a $52 billion sequester cut would have on the defense budget the president requested for Fiscal Year 2014. His July 10 letter -- which responds to a request from Senators Carl Levin and James Inhofe, the chair and ranking member of the Armed Services Committee -- is full of bad news and seriously misses an opportunity to start some real planning for a defense drawdown that is underway, with or without sequestration.

Hagel's letter is refreshing in one respect. It does not hyperventilate, unlike the rhetoric used by Secretary Panetta, for whom even one year of sequestration (currently playing in a budget theater near you) was a "doomsday" event that would reduce the United States to a "second rate power." That has not happened, so Hagel is more careful. He says that, if further cuts are implemented, "the size, readiness and technological superiority of our military will be reduced, placing at much greater risk the country's ability to meet our national security commitments." And he is cautious about its impact on strategy.

He does not say that the Defense Department would have to abandon Panetta's Defense Strategic Guidance, which laid out the so-called pivot to Asia 18 months ago, but he does argue that the sequester would, "even with flexibility, substantially limit our ability to implement [budget] cuts in a way that fully protects the tenants [sic] of the DSG."

But, in a way, Hagel's approach is even more dramatic than Panetta's. Panetta asked for flexibility to manage the cuts; Hagel doesn't bother. He doesn't warn of using a "meat axe" to do the job of a scalpel; he just says that sequester-level cuts would be damaging, flexibility or not. Specifically, he says even if Congress went so far as to set aside any current limits on internal Pentagon funding transfers, "DoD would not be able to mitigate the significant and detrimental impacts associated with sequester levels."

When he gets to the specifics of those impacts, however, the letter is curiously empty of analysis and misses the big opportunities he has to truly change how the Pentagon does business, and, in doing so, focus its funding on the forces and equipment he says he needs.

There are three big problems here -- problems he has focused on before -- but he does not offer options to actually manage them.

First of all, there are the "military people" questions. He warns that even if DOD had the flexibility to save money on people (military pay and benefits are exempt from the sequester), reducing the size of the force beyond current plans would not produce big savings in 2014, largely because people would have to be paid to leave. Moreover, he says, Congress would have to lift restrictions it put on lowering the size of the Army and the Marine Corps -- so, over to you, Congress. Force reductions will happen in a drawdown, and they will go deeper than currently projected, so it is high time to think about how to do that and start now, however minimal the first year savings. Hagel's letter does not do that.

Instead, the secretary writes that a 10 percent cut in military personnel spending would force DOD to stop adding new people, stop moving people around, stop bonuses, and freeze promotions. That all sounds pretty draconian, but Hagel does have choices -- they're just tough ones. How about no pay increases for the force, or a change in the compensation formula so that performance is rewarded, rather than time in rank? Hagel doesn't discuss it. What he does say is that, if Congress insists on raising military pay 1.8 percent, instead of the 1 percent increase the administration asked for, it will make FY 2014's budget problem harder, should the sequester hit. This is true.

Hagel also skips over the big, underlying personnel challenges: fixing the retirement system and lowering health care costs. Again, we have "over to you, Congress" -- just give us the health insurance (TriCare) fees we asked for (something Congress has already made clear it is not going to do), or the FY 2014 problem will be worse. Again, true, but how about putting forward a more serious health care reform proposal that could save real money, like consolidating the services' health care infrastructures?

That brings us to the second big basket of budgetary concerns: the Defense Department's "back office." Only Hagel calls it something different: "operations and readiness." This is really an important language issue. The politics of sequestration are now totally wrapped around the two hot-button issues of military readiness and civilian furloughs. But if you focus there, you are not managing the back office problem; you risk waving the Washington Monument at the Congress.

Secretary Hagel goes for the Monument: Operations and Maintenance (O&M) funding, he says, "finances much of the cost of training and readiness, both of which have already been severely affected by the FY 2013 sequester." DOD needs more funds for readiness next year to make up for declining readiness this year.

This assessment is well into anecdotal territory. The Air Force has stopped flying "about one third of its combat-coded squadrons" and, with the sequester, would have to "significantly reduce training at more than half of its active flying units." But there are no data here, no clear definitions of what the measurements of Air Force "readiness" really are. Just the suggestion that moves of this kind will "reduce deployable combat power" (by how much and in what way?), "contribute to accidents" (how much and in what way?), and "hinder morale" and retention (data on past correlations here?). You see what I mean -- foreboding language, anecdote, and we're outta here.

But, O&M not only pays for training and that elusive "readiness" thing, it also buys a large  DOD back office -- the administrative overhead that eats something like 42 percent of the Pentagon budget, according to the Defense Business Board. Hagel focuses on readiness and training, but he, as with many past secretaries (Gates is an exception), finds it hard to tackle this core expense, and it is a big one. Health is part of it, but only part.

There are all those uniformed personnel performing jobs that could be done more cheaply by civilians, or not at all. They are squirreled away doing things like financial management, personnel management, supply management, retail sales, even redundant education activities. Thousands of them, performed by uniformed personnel who are not combat troops. According to McKinsey, these folks make up one of the worst "tooth-to-tail ratios" in world militaries. Removing the military from such functions and tasks, and rooting out some of the tasks themselves is a tough job. Arnold Punaro, the DBB's chair, has said, "You have to go to war every day to make progress in reducing overhead."

Looking at O&M as "back office" and not "readiness" is an important change in perspective. There are two kinds of non-uniformed people, and in his letter Hagel only mentions one of them: civil servants. Hagel says he wants to avoid furloughs next year, but says that will mean going to reductions in force, or RIFs, which eliminate civil servants. OK, if the civil service has to shrink -- and it does -- which people get RIFed? There is not a hint of a plan for the back office in his letter, and civil servants are half of his back-office civilian workforce.

Wait, there's more back office than the uniforms doing civilian jobs and the civil servants. I'll let you in on a little-discussed secret. There is another bunch of back office folks: contractor personnel. Prepare to be staggered: There are about as many contractors working for DOD and the services as there are civil servants -- about 700,000. That estimate comes from Pentagon Comptroller Bob Helm, testifying before the Senate's defense appropriations subcommittee on June 11 this year. Hagel passes over this shadow civil service in silence. What are they doing and where? Why is the taxpayer paying them to do it? And how about skinnying down this group before we go to RIFs and forced departures for the uniforms?

Fixing the back office could produce real savings -- funds Hagel could start scooping up, if he asked for flexibility on the sequester, to commit to the troops and equipment he thinks he needs. Seize the time now, while the drawdown and sequester give you the leverage, Mr. Secretary, or this back office problem will haunt you (as it has other secretaries and will future ones) the way the man on the stair did in William Hughes Means' poem of 100 years ago:

Yesterday upon the stair
I met a man who wasn't there
He wasn't there again today
Oh, how I wish he'd go away

Hagel's letter deals with the third basket, too: buying equipment or "defense investment." Here, Hagel seems to be making a pitch to the contracting community and the members of Congress who live in the world of contracting. And it sounds pretty scary. He says DOD will have to cut investment funding (procurement and research and development) perhaps 15-20 percent in FY 2014 if the sequester happens, affecting "funding for hundreds of program line items, large and small." The message is clear: "we would be forced to buy fewer ships, planes, ground vehicles, satellites, and other weapons."

Man the ramparts, mobilize the stakeholders; this must not stand. And he could be right, procurement (and even research) dollars will fall. They have already declined more than 20 percent from the FY 2010 peak, as they always do in a defense drawdown, sequester or not.

In fact, some context may help here. In the four years after peak investment spending at the end of the Korean War (1952), DOD procurement budgets, in current dollars (the right comparison, because he is talking about real, annual dollars here) fell 77 percent over three years, an average of nearly 26 percent a year. After the Vietnam War, it fell 33 percent, or an average of 11 percent per year. After the end of the Cold War, going out four years, to capture most of the decline, it fell nearly 46 percent, an annual average of 11 percent.

So a 15-20 percent decline in one year in the procurement budget would be higher than the last two drawdowns, but lower than Korea. This is, after all, a drawdown, at the end of combat. Procurement dollars can and should be going down. There are always lots of reasons, some good, for saying these dollars should not decline, but they do, and they will. And there will, as there always are, be consequences for the industry and its labor force.

That's the job of planners at DOD: to think about the ways to manage a decline in resources in ways that preserve capability that is needed, and focus on the missions, forces, and equipment that provide adequate security. And do so in an era of declining budgets.

While Secretary Hagel seems to appreciate this reality -- hence some of the less hyperbolic language -- the letter does not yet tackle the tasks that need to be done to manage defense in this fiscally-constrained world. And, defending his budget, he willingly gives away the one tool he could most use: flexibility.

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