Another Yawner from CBO

Another Yawner from CBO
Expert guest post by Winslow T. Wheeler, Director, Straus
Military Reform Project

The Congressional Budget Office (CBO) has just released the newest in a long
series of studies by itself, and others, about how poorly the Department of
Defense projects the resources needed to support its own defense plan. The study
explains the counterintuitive statement we have heard from one analyst for years
about the “rising cost of lower readiness.” Sadly, that only begins
to describe the problems. We provide some
comments, and a link to the
CBO study.

Comments regarding CBO’s study, “Long-Term Implications
of Current defense Plans: Summary Update for Fiscal year 2007.”

In 1983, Pentagon “maverick analyst” Franklin (“Chuck”)
Spinney testified to a joint session of the Senate Armed Services and Budget
Committees about what he called “The Plans/Reality Mismatch.” The
term referred to the failure of the Pentagon to accurately project the real
cost of the defense program it sought in its multiyear plans. The Pentagon underestimated
the actual costs of its own program each year by an order of magnitude of billions
of dollars. The behavior became known as “underfunding.”

That was almost 25 years ago. Spinney’s ground breaking study started
a cottage industry in Washington. Since then, the Government Accountability
Office, the Congressional Budget Office, and several Washington think tanks
have duplicated Spinney’s research, but with one change: each year, through
both Republican and Democratic administrations, in war and in peace, the “underfunding”
problem gets worse. At the turn of the millennium CBO measured the gap between
projected and likely actual funding needs in the Pentagon’s multiyear
plan to be $50 billion – per year. The only element Donald Rumsfeld has
added to the problem as the longest serving secretary of defense in recent memory
is to accelerate the problem. In its new study, (“Long term Implications
of Current Defense Plans: Summary Update for Fiscal year 2007″), just
released on the internet on Oct. 18, CBO finds the problem to have grown to
over $100 billion – per year. Up to 27 percent more money than the Pentagon
has been requesting may be needed to actually implement its plans.

There are many causes and elements to the problems that the Pentagon and Congress
jointly refuse to address. In one of its more interesting passages on page eight,
CBO identifies three critical elements:

• the per capita costs to operate and maintain our ground forces – even
  without the expenses of the wars in Iraq and Afghanistan – have been
  rising;
• as our weapons inventory continues to age, it also is more expensive to
  operate, and
• new weapons, being more complex, are habitually more expensive to operate
  than the systems they replace.

In each case, despite increases for these issues, their budgets turn out to
be inadequate. As Spinney warned us for years, as the costs go up, the readiness
goes down.

The same thing is happening in the Pentagon’s hardware budget. As the
costs to buy new systems skyrockets (as it has for the Air Force’s F-22
and F-35 fighters, the Army’s Future Combat System, and the Navy’s
new overweight destroyer), we tend to buy fewer items than planned and the programs
are delivered late (as for example by several years for the F-22). Thus, as
Spinney also told us, the larger, older existing inventory is not replaced,
either in total or on time. Given the added expense of the new systems, they
literally translate to an inventory that is simultaneously shrinking and aging
– at increased cost.

Some argue that the solution can only be more spending, such as that advocated
by the chief of staff of the Army, General Schoomaker. While past increases
have not been as dramatic as those he seeks for the Army, Congress and the Pentagon
have indeed been increasing peacetime spending for years. The result? The problem
gets worse.

Others argue that more realistic cost estimates and less unrealistic program
ambitions are the only way out. The problem is not “underfunding,”
it is “overprogramming.” That route to a solution has never been
attempted, certainly not seriously, clearly not recently. Is it time?

Is the study really a yawner? Of course not, but that would seem to be all
it is likely to provoke in Washington.

The way CBO describes these issues, its study (“Long-Term Implications
of Current Defense Plans: Summary Update for Fiscal year 2007″) is available
by clicking here.