Facing Two Critical Challenges

May 1, 1982
In assessing the current state of the Air Force from the perspective of my first year as Secretary, I believe that the progress made and future prospects are directly related to our ability to successfully meet two critical challenges. First, we must develop a viable defense program to meet an ever-expanding and menacing Soviet threat. Second, the program must be accepted by the American people and our Congress in such a way as to leave no doubt as to the need for the program or uncertainty that it will be executed efficiently. If we do nothing else, we must meet these challenges head on to prevail.

The First Challenge: Meeting the Soviet Threat

Today this nation continues to be challenged and threatened, more so than at any time in the recent past. Several factors within the context of the current international system have nurtured this threat, including the tremendous expansion in the military capability of the Soviet Union, and growing United States resource dependence. Our Secretary of State has described the first of these factors as the transformation of Soviet military power from a continental and largely defensive land army to a global offensive army, navy, and air force. Two decades of massive military spending have enabled an awesome expansion of Soviet weaponry. While the United States has been devoting less than six percent of our GNP to defense, the Soviets have been spending between twelve and fourteen percent.

More alarming than the amount of money spent or the forces acquired is the fact that this new military muscle of the Soviet Union has altered both the reality and the perception of the global military balance, and given the Kremlin increased confidence to undertake military options previously considered too risky. In recent years, we have seen an increased Soviet willingness to use their military capability either directly, as in Afghanistan, or indirectly through Cuban or Vietnamese surrogates in Angola, Ethiopia, Central American, and Cambodia.

The continuing growth of Soviet military might and the willingness to employ it presents the principal security challenge facing the United States today. The challenge is greatest in Europe, the linchpin of western security; yet it is no less real in other areas of the world. The threat, in short, is global.

The reasons for this global threat are basic and fundamental. Today, US security interests are linked to other regimes of the world on a greater scale than ever before. Third World or developing nations flank twenty-three of the thirty-one essential US foreign trade routes, upon which the economic lifeblood of the United States and Europe depends. These same Third World nations are the principal sources of the energy resources and raw materials critical to the economy and defense of the free world. This fact is a second condition in the current international environment posing a new threat to our security—resource dependency.

Over the past decade, this nation has become increasingly more dependent on foreign resources for oil—a fact that is readily known—and other critical, strategic raw materials—a fact that is not always fully appreciated.

This nation, which was once self-sufficient in oil and, in fact, was a net exporter of oil until the 1950s, must now import approximately fifty percent of its total oil requirements. The problem is more acute for our NATO allies and for Japan, and for that very reason, it must be of primary concern to us—even if we could become self-sufficient in energy.

Our dependence on foreign oil is a significant problem, but of equal if not greater concern is US reliance on imports of critical minerals and materials. Today we depend on foreign sources for approximately twenty-two of the seventy-four non-energy mineral commodities essential to the economy. In fact, the United States must import more than ninety percent of nine of the most critical commodities. Our dependency on cobalt helps illustrate this critical problem.

Today, the United States imports ninety-three percent of which comes from the African nation of Zaire. During the civil war in that nation’s Shaba Province in May 1978, the critical supply of cobalt to the United States was disrupted with a resultant price rise from $6 to $25 per pound and $50 per pound on the spot market. Perhaps not too surprising, during the six-month period preceeding this Cuban-supported conflict, the Soviet Union was purchasing most of the market’s stockpiled cobalt.

Further, it is estimated that if the supply of cobalt had been entirely cut off and we had depleted our reserves, a significant proportion of the US commercial aircraft fleet would have been grounded after a single year as a result of a major shortfall in engine spare parts. One can imagine the impact it would have on Air Force operations. For example, the F-15 and F-16 engine (F100) uses 910 pounds of cobalt. The price rise of cobalt that occurred in 1978 caused the price of each of those engines to increase by $18,000.

The impact of US resource dependency is more alarming when one realizes that the Soviet Union does not have the same problem. In fact, the USSR imports fewer than a dozen strategic raw materials and is dependent on foreign sources for only half of what it needs of those materials. Further, most of the strategic materials and is dependent on foreign sources for only half of what it needs of those materials. Further, most of the strategic materials we import either come from Third World areas that are the least stable politically or must pass through strategic waterways where the Soviet Union has expanded the influence. The Persian Gulf and Southwest Asia come immediately to mind.

Reagan Defense Strategy

To meet the challenges posed by a changing international system and the threat of increased Soviet military capability, the Reagan Administration has developed a defense policy and strategy that is both realistic and affordable. Built upon strength, it is premised on the idea that to deter Soviet expansionism in Europe or anywhere in the world, we must have the will and the capability to meet the challenge head on, capitalizing on the enemy’s weaknesses while optimizing our own strengths.

We can ensure our security only if we have the capability to deter military excursions globally and, should deterrence fail, to limit the resulting conflict. This can best be achieved through a strategy of flexible response—matching response to the threat in order to deny the enemy the achievement of his objectives at any level of conflict.

To implement this strategy, we need to develop flexible, highly mobile, ready, and sustainable forces that are capable of meeting aggression in Europe, Southwest Asia, or anywhere our interests are challenged. We believe airpower has a crucial role in implementing this strategy. Its long range, speed, and flexibility permit the most efficient allocation of forward deployed and reserve forces by providing a capability to respond globally in the shortest period of time.

Air Force Programs

I believe we have made real progress in developing the forces necessary to implement the Reagan defense strategy. The Air Force is progressing toward a more capable and resilient force, better able to meet Soviet challenges and threats. As a direct result, today our nation is moving toward a more secure future. in short, I believe we are “turning the corner” away from years of neglect of our defense needs. This movement results, in part, from a President who has put a new vigor into restoring the military capability of this nation. The foundation of the effort is a dedicated and highly motivated military force led by professionals of the highest caliber, a new appreciation by the citizens of this nation for the contributions of the men and women in uniform, and, as a result, greater support within the Congress for defense programs.

In terms of our nuclear capability, the President’s announcement in October for a comprehensive strategic modernization program was a significant step toward redressing the strategic imbalance with the Soviet Union. The Air Force has significant responsibility in implementing this program. In terms of conventional forces, the priority emphasis placed on improving the readiness and sustainability of our forces is bearing fruit and the recent decision to purchase C-5B and KC-10 aircraft will give this nation the capability to meet the Soviet threat head on, wherever it occurs.

Ultimately, however, the combat capability and, thus, the deterrent value of the Air Force depends on having adequate numbers of highly qualified, motivated, and technically competent people—military and civilian, active and Reserve. For this reason, people remain my number-one priority.

I am happy to report significant progress has been realized during this past year in the people area. with the support of Congress, we have restored relative pay comparability through last year’s 14.3 percent pay raise for officers and the ten to seventeen percent raise for enlisted personnel; provided a cost-of-living allowance (COLA) for singles stationed overseas and living in government quarters; provided advance travel payments for family members in PCS moves; repealed the overseas dependent ceiling; increased the Aviation Career Incentive Pay (ACIP) by thirty to thirty-five percent and provided it to those who have more than twenty-five years of service and are in operational flying positions; increased and expanded hazardous duty incentive pay; and, finally, increased Serviceman’s Group Life Insurance coverage to $35,000.

Since assuming this office last February, I have had the opportunity to travel to nearly three dozen Air Force bases and talk to our people on three continents to learn of their needs and concerns. I found that morale is high and our people are dedicated, competent, and, above all, effective. Our recruiting efforts are moving forward splendidly. For example, during the first three months of this fiscal year, we recruited eighty percent of all the nonprior-service recruits today often spend as much time explaining to anxious parents why their son or daughter could not be accepted into the Air Force right away as they spend encouraging new recruits.

Along with good recruiting results have come outstanding retention rates. Our most critical problem is retaining the right numbers of quality people to support mission requirements. In this effort to retain quality people, we in the Air Force are engaged in a highly competitive enterprise with private industry. The intense competition over funds that takes place between the public and private sectors is more than equaled when it comes to people.

Surveys of people entering the service indicate that the two major motives for joining the Air Force are education and training. Those two functions we do quite well. In fact, in some respects too well. We understand all too well that once we educate and train our people, they become highly prized resources for which the private sector is willing to pay dearly. We are forced, therefore, to compete with that sector to retain these people. Today, this is not an easy task, but tomorrow it will become more difficult because of an expanding national requirement for highly qualified individuals.

The Second Challenge: Retaining Public Support

The progress we have realized toward developing a credible defense capability to meet the Soviet threat is continued and expanded in the Air Force’s FY ’83 Program. General Allen’s accompanying article discusses a number of the specifics of this program. We have high hopes that this program will find public as well as congressional acceptance, and be implemented to continue their recent progress. However, we understand that such support is not guaranteed.

Our challenge, therefore, is to assure this acceptance by retaining the support and confidence of the American people and our Congress. Such support, in light of the perception of decreases in social programs (in reality, it is only the rate of increase in spending on social programs that is being reduced), will depend upon our ability to articulate the need for defense expenditures. To do this, we must clarify the nature of the threat and show that our programs are not only the most cost-effective, but also the most militarily sound solutions. Furthermore, we must demonstrate that we can spend defense dollars wisely. The continued consensus for a strong defense developed during the past year demands that we be good stewards of the money entrusted to us, and this responsibility must be shared by everyone throughout the defense community, including the Air Force.

To help achieve this goal, a five-point Integrity and Management Improvement Program has been developed. This program will serve as an umbrella for many existing oversight, cost awareness, and incentive programs, and will add new management, emphasis, and crossfeed to obtain efficiencies at all levels of the Air Force. To be effective, however, it will require the conscientious effort and support of everyone in the Air Force, civilian and military, active and Reserve.

A major part of this program is aimed at acquisition management. In this area we are implementing a series of specific actions that we believe will result in significant savings in new weapon systems by reducing acquisition costs, decreasing acquisition time, and improving the selection management and support process. Multiyear contracts are one of the major initiatives in this area. By avoiding yearly contractual processes and retaining contractors and quality control procedures over several years, the multiyear contract produces direct and indirect savings in contract administration. For example, for the F-16 contract initiated in FY ’82, we estimate a savings of $259.5 million over the next four years.

Concluding Assessment

In The Third World War, his fictionalized account of World War III, General Sir John Hackett provides a vivid commentary on what can result if the challenges of an adequate defense are not met. He writes:

Those who argue for the reduction of defense expenditure in the countries of the West not only seem to live in a land of total make-believe, but they refuse to give the Marxist-Leninists who govern the USSR any credit either for meaning what they say (and have been saying for a long time) or for knowing what they are doing. … What they have been doing is building up huge armed forces, far greater than what would be necessary in any conceivable situation for their own defense. …

There is … a very high probability that unless the West does a good deal within the next few years to improve its defenses, a war with the Warsaw Pact could end in early disaster.

The current defense program is built upon the necessity to meet this Soviet buildup. During the past year, we have made real progress toward implementing that program. However, despite this record, the prospects for continued progress and for precluding the disaster General Hackett describes will be short-lived without continued public support. That support is contingent on each individual doing the best job he or she can. With your help, I am confident we will succeed.

Verne Orr was appointed to his post by President Reagan, with whom he served in the California state government and during the Presidential campaign and transition. He served in the Navy during World War II, and was discharged from the Naval Reserve in 1951 as a lieutenant commander. He earned a bachelor of arts degree from Pomona College and a master’s in business administration from the Stanford Graduate School of Business.