AEI On Flat Budgets: Keep the People, Reduce Force Structure

Keeping more people and reducing force structure, while focusing on innovation over invention, will ensure a well-trained and ready force if the U.S. is about to embark on a series of flat defense budgets, the American Enterprise Institute argues in a new policy paper.

The defense budget should ideally see three- to five-percent of “real growth” to preserve gains made in readiness over the past few years, according to the AEI paper, titled “Defense Budget Lessons.” But if budgets must be flat, the paper’s authors, Elaine McCusker and John G. Ferrari, say the usual tradeoffs of capability versus readiness versus capacity haven’t worked in the past and must be replaced with a new model.

“We should chart a bold, counterintuitive course,” the authors assert, which boils down to prioritizing people—numbers and training—over modernized gear and force structure, because previous emphasis on modernization at the expense of people and force structure didn’t work, according to the paper. Calling this approach a “force-focused strategy,” the authors explained that having more people will prevent wearing out the force and allow more time for training, which has suffered in recent decades. The Air Force, for example, has a chronic pilot shortage, and is wasting money preserving force structure when it doesn’t have enough pilots to fly the planes it has, it states.

McCusker was deputy undersecretary and acting undersecretary of defense (comptroller) under the Trump administration, and is now an AEI resident fellow. Ferrari is a visiting AEI fellow who focuses in defense reform and acquisition, and is chief administrator at QOMPLX, a data analytics and cybersecurity firm.  

The authors also push for innovation over invention, meaning getting more capability out of existing equipment—through new operational concepts—rather than perpetually chasing new gear, at great expense, that arrives late and is already obsolescing when it does.

“Previous approaches to budget reductions … focused simplistically on pitting either capacity against capability or near-term readiness against far-term readiness,” the authors wrote. This created a choice between “more readiness today for less readiness tomorrow,” or vice-versa. “We should not accept these simplistic choices.”

Capacity, capability, and readiness—the usual “levers” to move in adjusting to new defense budgets—should be split into two each, they said. Capability is both near-term procurement and long-term modernization; capacity is both force size (people) and force structure (equipment), and readiness is both training and sustainment.

The quick way to save defense money is to “assume away” the threat, the authors said. Wishful thinking leads to insufficient funds for the operating tempo required, “and the force struggles to keep up.” Near-term readiness “decays at an accelerated rate” in this scenario, and the authors said it’s unrealistic to assume that “Russia, the Middle East, North Korea, and an aggressive China will … sit by” while the U.S. takes a breather.

Choosing modernization over people is also a failed approach, they said, because it results in personnel inadequately trained to operate the high technology put in their hands, resulting in a series of high profile and deadly accidents, as well as “equipment that cannot be manned, and stress on the force from overuse.”

The “force-focused strategy,” the authors suggest, prioritizes “force size over structure, … training over materiel sustainment, and … innovation over invention as the modernization strategy.”

Congress and the Pentagon traditionally have cut personnel to pay for modernization, assuming more people can be recruited if needed. “While this may have been true 50 years ago, it is no longer true today,” they said. To be successful with new gear, the personnel must be exceedingly well trained and retained, and this will increase readiness.

Holding onto force structure while cutting people creates the “inevitable result … [of] a hollow force, which is the one outcome we are desperately trying to avoid,” the report observed.

The report recommends more people per system; 115 percent manning in the Army, for example, and “twice the number of crews” in the Navy for its ships.

This approach reduces stress on people, gives them time for education, training, and deployment, and is a model the special operations community uses “to great success,” according to the report.

Likewise, training is often cut on the mistaken belief it can be “bought back” relatively quickly, the authors noted, but this is not so. “Training decays rapidly but builds slowly,” usually over a service member’s entire career. Cutting force structure would reduce training costs because there would be fewer units, the authors claim.

“If tough choices are required, one can defer long-term maintenance on vehicles for a few years or allow for a slow decay of facilities, yet still be capable of fighting. But we cannot have untrained leaders and military personnel,” they argued. “The effects are corrosive and deadly.”

Innovation is cheaper than invention, and can happen faster and produce results more quickly, the authors wrote, than investing in long-term modernization. Innovation is the right choice in a period of tight budgets. “Big technological bets on the future” have been the norm, but “do not often lead to envisioned outcomes,” they said.

Industry, they noted, relies far more on innovating with existing products than inventing new ones, and the Pentagon should follow suit. The authors said they don’t advocate cutting science and technology spending, but S&T accounts should focus “solely on items the commercial marketplace will not pursue,” such as hypersonic systems, munitions, stealth, and network security. Investing in systems that “take decades to procure and field should be gone from discussions,” they said.

Hypersonics deserves research and development funding because such systems don’t yet exist, according to the report, but helicopters do, and the Pentagon “should consider whether the Army really needs to produce two new manned helicopters or [whether] it should focus on integrating autonomy on the current fleet.”

Building a 500-ship Navy “briefs well,” the authors said, but they wonder if that’s a good goal, considering the “challenges” associated with the Gerald R. Ford-class carrier and the littoral combat ship. Maybe the Navy should focus on “joint, integrated operations and affordable sustainment” instead, they said.

The authors also argue that flat budgets create an ideal time to take functions out of the military that are expensive and don’t belong there. Base exchanges, military healthcare, medical research, pensions, and commissaries may be the “third rails that are difficult to cut” in austere times, they said. But Congress should authorize and appropriate them differently, treating them as “mandatory spending rather than discretionary defense spending that competes for dollars with weapon systems and readiness.”

Things that don’t have anything to do with fighting, “such as cancer research, should be removed from the budget,” they wrote.