Russian Roulette

A small war on Europe's periphery raises big questions about the Pentagon's modernization priorities.

When Russian tanks rolled into the Republic of Georgia this summer, ostensibly to protect the separatist regions of South Ossetia and Abkhazia from Georgian aggression, U.S. and European officials quickly condemned the invasion. For months, Russia had been stoking clashes between Georgia and the breakaway regions, going so far as to issue Russian passports to citizens of South Ossetia and Abkhazia and support militants' harassment of Georgian citizens, Western officials say. When Georgia launched a military reprisal in August, Russian tanks and bombers immediately responded with a counteroffensive that went well beyond the defense of Moscow's allies.

While the roots of the clash are debatable (not surprising, Russia has a different take on the matter) what's not in dispute is that Russia invaded a sovereign nation and an ally of the United States. Few observers believe it is a coincidence that the only pipelines outside Russia that carry natural gas from the Caspian Sea to Europe run through Georgia.

If Russia's intentions toward Georgia are unclear (at press time, Russian troops remained in the country despite promises of withdrawal) its attitude toward other neighbors is more straightforward. When Secretary of State Condoleezza Rice and Polish Minister of Foreign Affairs Radek Sikorski signed an agreement on Aug. 20 to put 10 missile defense interceptors in Poland next year, Russian President Dmitri Medvedev said Moscow interpreted the agreement as a direct threat. He said nuclear retaliation against Poland would not be out of the question if the interceptors were installed.

When reporters questioned Rice about the missile defense agreement and its impact in light of Russia's invasion of Georgia, she said, "Russia is doing very grave damage to its reputation." If Russia was trying to demonstrate that it could use overwhelming military power against a small neighbor, destroy civilian infrastructure, tie up roads, and move at will in and out of cities, "then it's demonstrating that," she said. But Rice cautioned against overstating Russia's actions. "I don't think this is a new Cold War," she said. "Now what the relationship will look like going forward between Russia and Europe, between Russia and the United States, obviously this is a difficult time."

Moscow's words and deeds have sent a chill through former satellite states in Eastern Europe. Tomas Pojar, deputy foreign minister of the Czech Republic and the lead negotiator for a missile defense agreement with the United States reached in July, says the Crimean Peninsula in Ukraine might very well be the next target of Russian ambition. The Crimea, home to Russia's Black Sea fleet, has an ethnic Russian majority population. "We hope it's not going to happen, but we think the situation there is not very stable," Pojar told reporters at the United Nations on Sept. 5, according to excerpts published in the Los Angeles Times the following day.

What does all this mean for U.S. defense planners? What should it mean? "It's certainly a wake-up call," says retired Air Force Lt. Gen. Ronald Kadish, former director of the Pentagon's Missile Defense Agency and now a vice president with Booz Allen Hamilton. "It seems to me that we certainly weren't expecting that type of behavior. We should definitely take a different view of where we are headed."

Fred Downey, a retired Army infantry officer who spent 12 years as Sen. Joe Lieberman's senior adviser on defense and foreign affairs before becoming vice president for national security at the Washington-based Aerospace Industries Association in the spring, predicts there will be a lot of posturing about the threat Russia represents. "But for serious people, I think it's going to be a useful reminder that Iraq and Afghanistan haven't suspended history, and that there are other threats out there that go beyond irregular warfare," he says.

New Old Threats

For at least a couple of years now, tension has been growing at the Pentagon over balancing the requirements of waging troop-intensive counterinsurgency ground wars in Iraq and Afghanistan and the need to prepare for the more conventional high-intensity threats posed by a peer competitor such as China, or a resurgent Russia.

"It depends on what your interests are how you cast the Russia challenge," says retired Marine Corps Lt. Col. Dakota Wood, a senior fellow at the nonpartisan Center for Strategic and Budgetary Assessments in Washington. "If you're the [military] services, you can look at this more militant or muscle-flexing Russia as just what you were hoping for to justify continued procurement of [conventional weapons] systems," he says.

"I think if you're going to make that case, you have to do some rigorous analysis of what Russia actually did in Georgia and how effectively they conducted military operations," Wood says. Because it takes the Pentagon years, decades in some cases, to field new weapons systems-ships, aircraft, armored vehicles-the services are almost institutionally predisposed to build better weapons to fight the last war. To the extent that Russia is seen as resurgent, it relieves some of the pressure on the services to justify current programs that were conceived for an earlier Soviet threat.

Not long after the Cold War ended and the Berlin Wall was dismantled in 1989, President George H.W. Bush began to talk of a "peace dividend." With the Cold War a thing of the past, the United States could redirect its resources away from the threat posed by the former Soviet Union to other domestic needs. Even as Bush ordered U.S. troops to the Persian Gulf to force Saddam Hussein's military out of Kuwait in 1991, the United States began cutting its forces and reducing its Defense acquisition plans.

Yet many of the same armaments planned in the waning days of the Cold War and following the first Gulf War are only now coming into service, albeit in smaller numbers than originally planned. In some cases, the services have recast the weapons as suitable for a broader range of conflicts-all in an effort to justify their staggering costs.

The Air Force F-22 is one example. Conceived as a fighter jet to take on the Soviets, the Air Force later added bomber capability to the platform to make it more versatile as the Soviet threat faded. Now, the service bills it as an advanced sensor platform as well. The only problem, critics note, is the Air Force has never deployed the F-22 in combat, despite ongoing wars in Iraq and Afghanistan. This begs the question: Is it worth the $339 million price tag (that's the estimated cost of a single plane after research and development costs are factored in) if it's not the right weapon for the wars the nation is fighting?

The Air Force isn't the only service with a problem. This summer, the Navy tried to cancel the remaining five of seven ships in its DDG-1000 destroyer program because the ships had become too expensive to justify. Congress intervened and the Navy likely will build a third ship. But after 10 years of development and $13 billion in investment, construction on the first two ships hasn't begun yet. The Army and Marine Corps also have struggled with developing key weapons.

For all the services, major acquisition programs share the recurring themes of cost overruns, schedule delays, performance problems and, ultimately, smaller buys. "With weapons systems getting as expensive as they are, you can't build a lot of them without breaking the bank," says Wood. He compares the dilemma to the kinds of decisions families make every day: "I'd like to buy a Porsche," he says, but the investment wouldn't provide the functionality his family needs. "As long as I need two or three cars at home, everybody's going to get a Ford. That's reasonable and it gets the job done, but then you have to scale back your expectations. That's hard for the services to do."

Another shortcoming of current weapons plans stems from the United States having relatively few overseas bases compared with the Cold War era, Wood says. Without large numbers of troops and equipment based in Europe as was the case during the Cold War, the United States must be able to pro-ject power across far greater distances.

The number of platforms and the range of those platforms would be an issue in any kind of fighting against Russia or China, according to Wood. "It seems that the types of platforms the services are procuring are shorter range, and because of their expense, we don't get to buy very many of them. So it would seem we are building a military that's not well-suited to the most likely future environments," he says.

'Nextwaritis'

Defense Secretary Robert Gates has publicly chastised the services for focusing on the future at the expense of winning the wars in Iraq and Afghanistan, a condition he describes as "nextwaritis." In an April address at Maxwell-Gunter Air Force Base in Alabama, Gates said, "My concern is that our services are still not moving aggressively in wartime to provide resources needed now on the battlefield. I've been wrestling for months to get more intelligence, surveillance and reconnaissance assets into the theater. Because people were stuck in old ways of doing business, it's been like pulling teeth."

And the old ways of doing business are becoming ever harder to justify. The Government Accountability Office reported in June that between 1992 and 2007, the estimated acquisition costs for major weapons programs increased almost 120 percent, while the annual funding provided for these programs increased only 57 percent. The cost of the portfolio has grown by more than $300 billion. What's more, programs experience, on average, a 21-month delay in delivering initial capabilities, which drives up the cost of maintaining legacy systems.

This spiraling cost of weapons programs will drive hard choices, says Kadish. "When you have the Congress and the budgeters and the program managers looking at resources and saying, 'If it isn't related to current combat operation, you are irrelevant in the process and, therefore, you have to come up with a new way of justifying your institutional needs for future warfare,' that's a major issue," he says.

Unless that pressure changes un-expectedly, traditional large capital warfighting weapons-such as the F-22 fighter, Navy combatants and submarines, and missile defense-will become more vulnerable to cuts, Kadish says. "It doesn't take much analysis to say the types of things we're doing in the global war on terror, especially in Iraq and Afghanistan, are not using those types of weapons," he says.

"When you look at something like the F-22, which would be a huge advantage in a force-on-force combat scenario in a major regional war, those things will take a back seat because people will see them as not useful to the current set of combat operations," Kadish says.

Retired Air Force Col. James Tapp, now corporate vice president for business development at Northrop Grumman Corp., says the broad spectrum of capability Defense needs to continue prosecuting the global war on terror as well as be prepared to defend against peer-competitor threats will require the services to strengthen partnerships with allies, particularly in developing security forces in unstable parts of the world.

"I think there's going to be a move to help prepare partners and build partnerships across regions to reduce the amount of U.S. troops that need to be deployed overseas," Tapp says. He also believes missile defense, in which Northrop Grumman is a major contractor, will be perceived as an essential capability. "Missile defense tends to be a fairly political activity, but I think [a potential missile attack] is something most people realize we need to be able to deter," he says.

Next year, a new ad-ministration will have a chance to make a serious shift Defense spending as the Pentagon gears up to conduct the Quadrennial Defense Review-a major re-examination of future priorities as military planners see the evolving threats to national security.

Tapp expects the QDR will examine threats far beyond those of previous reviews to include things like climate change and energy and their implications for national security. "The need to assure military access around the world will remain a key priority," he says. What's more, "There's going to be a considerable amount of tension [between current requirements and future needs] as we are engaged in combat operations around the globe, which are very expensive. It's going to impact our ability to field new weapons systems."

'Four Percent Solution'

The Congressional Budget Office estimates that the Defense Department would need a steady stream of procurement funding of $120 billion to $150 billion annually to modernize the force under existing plans. Given that no De-fense budget has come anywhere close to providing that much money for procurement in more than 20 years, a number of organizations, including the Washington think tank Heritage Foundation and the Aerospace Industries Association, have proposed that Congress fund the Defense Department's base budget at 4 percent of the national gross domestic product. (The cost of combat operations would be funded above that figure as necessary.)

In an August report on Defense modernization titled "Today's Choices for Tomorrow's Readiness," AIA argues, "There is statistical evidence that an amount of 4 percent is a reasonable and affordable proportion of a growing national economy to devote to assuring the national security of the United States." By way of comparison, the 2008 base budget for Defense (before the cost of wars is factored in) is about 3.4 percent of GDP. "America currently spends a larger proportion of GDP on dining out (3.7 percent) and on clothing (3.8 percent) than on the DoD base budget," the report notes.

"We don't view 4 percent as a ceiling," says AIA's Downey. "It's a floor. The key here is adequate, predictable and stable funding."

A report by Steven Kosiak, vice president for budget studies at CSBA, notes that while 4 percent might seem reasonable by historical standards (at the height of World War II the United States spent about 37.8 percent of GDP on Defense), the national economy today is very different and there really is no objective way to determine how much the country can afford to spend on defense or in any other policy area.

"Combining the cost of the '4 percent solution' with likely future war-related costs [as projected by the Congressional Budget Office] would increase projected spending under the Bush administration's current 10-year budget plan by a total of some . . . $2.4 trillion to $3 trillion if interest costs are included. Holding all else constant (i.e. assuming no offsetting spending cuts or tax increases), this would cause a substantial deterioration of the country's fiscal outlook," Kosiak wrote.

One defense analyst, who asked not to be named, notes, "A fixed 4 percent budget allocation for Defense would be nothing more than a rich kid's trust fund for the defense industry. It would simply obviate the need for the Pentagon to make hard choices."

Even the Defense-friendly Bush administration hasn't subscribed to the 4 percent investment theory, and few people believe the next administration, whether led by Barack Obama or John McCain, would sanction such outlays.

Without more spending on new weapons or a substantially new direction that perfectly understands future threats, "We can muddle through and still be a far sight better off than any competitor," says Wood. "We've got the luxury of wasteful spending. It's like being rich enough to have all your lights on in your house all the time. It's wasteful, but you can do it."