2012 Defense Strategy Review & FY 2013 Defense Budget Request: Strategy & Fiscal Constraints

2012 Defense Strategy Review & FY 2013 Defense Budget Request: Strategy & Fiscal Constraints by James L. Cook James Cook is a Professor of National Security Affairs at the U.S. Naval War College in Newport, Rhode Island. He specializes in Strategy, Force Planning and the Greater Middle East. He is an active participant in the Naval War College’s International Engagement program.

Abstract: Regardless of whether one is a supporter or a critic, some additional analysis regarding the formulation of the new defense strategic guidance is useful to better understand the rationale for changing defense priorities, the magnitude and impact of these changes within the Department of Defense (DOD), and the review process itself. Specifically, three questions warrant further examination: 1) Why was a DoD-level defense strategy review necessary, given the 2010 Quadrennial Review? 2) What are the implications of this new strategic guidance for the DoD? 3) What are the strategic risks? These questions are addressed by assessing the defense strategic guidance through the lens of strategy and its components: ends, ways, means and risk. The United States of America is the greatest force for freedom and security that the world has ever known. And in no small measure, that’s because we’ve built the best-trained, best-led, best-equipped military in history — and as Commander-in-Chief, I’m going to keep it that way.1 President Barack Obama, January 5, 2012

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n January 5, 2012, President Obama officially released Sustaining U.S. Global Leadership: Priorities for 21st Century Defense that is designed to provide strategic guidance for the Department of Defense (DoD) over the next 10 years. Observing that the United States is “turning the page on a decade of war,” Department of Defense, Defense Strategic Guidance Briefing From the Pentagon, accessed March 2, 2012, http://www.defense.gov/transcripts/transcript.aspx?transcriptid=4953

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Obama stated that the review was intended to develop and codify a “smart, strategic set of priorities” that can be implemented from a position of strength, while acknowledging that growth in the defense budget will slow in future years.2 Since its release, the defense strategy review has seen its share of supporters and critics. Many of the review’s advocates argue that the document finally acknowledges that the DoD must make the difficult strategic choices necessary to operate within a fiscally-constrained environment. One need look no further than the President’s National Commission on Fiscal Responsibility and Reform (a.k.a., the “Bowles-Simpson Commission”), the Sustainable Defense Task Force formed by Representative Barney Frank,3 or the congressional “Super Committee” that was created under the Budget Control Act (BCA) to see that the defense budget has increasingly come under fire over the last several years. According to the Stockholm International Peace Research Institute (SIPRI), U.S. defense spending accounted for 43 percent the world total in 2010, as shown in Table 1. 4

Table 1 – Top 10 Shares of world military expenditure for 2010

Ibid. The Sustainable Task Force “was formed in response to a request from Representative Barney Frank (D-MA), working in cooperation with Representative Walter B. Jones (R-NC), Representative Ron Paul (R-TX), and Senator Ron Wyden (D-OR), to explore possible defense budget contributions to deficit reduction efforts that would not compromise the essential security of the United States.” For additional information, see: http://www.comw.org/pda/1006SDTF.html 4 Stockholm International Peace Research Institute, “Background Paper on SIPRI Military Expenditure Data, 2010,” April 11, 2011 2 3

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However, the debate about the defense budget is not limited to its overall size, but also to how the DoD appropriates its resources. Currently, military personnel costs consume approximately 25 percent of the defense budget and there are concerns within the department that these costs will continue to rise and constrain its ability to procure new weapons systems or fund other competing priorities. In fact, Arnold L. Punaro, a consultant for the Defense Science Board who supports changing the military retirement system, recently observed that “if we allow the current [spending] trend to continue, we’re going to turn the DoD into a benefits company that occasionally kills a terrorist.”5 Alternatively, critics argue that the administration conducted a purely budget-driven review to a support a strategy of decline. Representative Buck McKeon (R-CA), Chairman of the House Armed Services Committee (HASC), said that “the president has packaged our retreat from the world in the guise of a new strategy to mask his divestment of our military and national defense.”6 Other criticisms include the perception that the administration is attempting to cut defense without simultaneously addressing the escalating cost of entitlement programs such as Medicare and Social Security. Senator Jeff Sessions (R-AL) cautioned against looking at defense as the primary mechanism to solve the nation’s fiscal situation, arguing that “we just can’t balance the budget on the back of the Defense Department.”7 Clearly additional analysis regarding the formulation of the new defense strategic guidance is useful to better understand the rationale for changing defense priorities, the magnitude and impact of these changes within the DoD, and the review process itself. Strategy Development At a minimum, strategy is designed to link ends (national interests), ways (concepts that describe how something might be done), and means (resources that are employed as capabilities). Additionally, the strategist seeks to identify, and mitigate, the risk that results from a “mismatch” between ends, ways and means. It should be noted that strategy is not a static endeavor, as it is developed within the context of a dynamic security environment and in consideration of available 5 Elizabeth Bumiller and Thom Shanker, “Panetta to Offer Strategy for Cutting Military Budget,” New York Times, January 2, 2012. 6 Jim Michaels, “Military Plan Spurs Debate on U.S. Role,” USA Today, January 6, 2012. 7 Jeremy Herb, “Panetta to Congress: Don’t Balance Budget with Added Cuts to Defense,” The Hill, February 28, 2012. Senator Sessions was likely referring to HASC Chairman Buck McKeon’s argument that although defense spending accounts for 20 percent of the federal budget, the DoD will absorb 50 percent of the overall spending cuts required by sequestration. For additional information, see http://mckeon.house.gov/Issues/Issue/?IssueID=9831

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resources. As these factors change, strategy should be reassessed and changed accordingly, in order to minimize risk.8 The United States Government generates a number of strategic documents related to national security including the National Security Strategy (NSS), National Military Strategy (NMS) and the Quadrennial Defense Review (QDR). These unclassified documents are not intended to stand on their own, but are instead designed to work together in order to provide “nested” strategic guidance for the U.S. national security apparatus and all elements of national power. The QDR is a congressionally-mandated activity that occurs every four years and requires the Secretary of Defense to conduct a review that includes a “comprehensive examination of the defense strategy, force structure, force modernization plans, infrastructure, budget plan, and other elements of the defense program and policies.”9 The most recent QDR was released in February 2010 and can arguably be viewed as a failure, since it has been superseded by another defense strategy review (without a congressional mandate) fewer than 24 months later. Additionally, this abrupt change in strategic direction will likely embolden critics that argue the QDR process is not as important as originally envisioned, or is simply unable to keep up with the rapidly-changing international security environment. So, what has changed that required a new defense strategy review? Consider some of the events that have occurred within the international security environment during the last two years: the death of Osama bin Laden in May 2011; the United States withdrawal of all combat forces from Iraq in December 2011 and its plans to remove its combat troops from Afghanistan by the end of 2014; the “Arab Awakening” and the fall of several autocratic allies that have changed the entire political landscape in the Middle East, the results of which may not be fully known until sometime in the distant future; the global economic crisis and U.S. national debt that former Chairman of the Joint Chiefs of Staff Admiral Mike Mullen recently called “the greatest threat to our national security”;10 China’s continued rise and increasing geopolitical tensions resulting from its growing assertiveness in the resource-rich South China Sea; positive signs of political reforms in Burma; North Korean President Kim Jong Il’s death and the transition of power to his son, Kim Jong Un; and continued concerns about Iran’s nuclear program that were underscored by the November 2011 International Atomic Energy Agency

8 For a more detailed examination of strategy, see Derek S. Reveron and James L. Cook, “Developing Strategists: Translating National Strategy into Theater Strategy,” Joint Force Quarterly, Issue 55, 4th Quarter 2009, pp. 21-28. 9 104th Congress, Section 923 of Public Law 104-201, National Defense Authorization Act, 1997, accessed March 5, 2012, http://www.nps.gov/legal/laws/104th/104-201.pdf. 10 Admiral Mike Mullen, Transcript from “The Hill – Tribute to the Troops,” accessed February 15, 2012, http://www.jcs.mil/speech.aspx?ID=1413

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(IAEA) report, which expressed concerns that Iran may be pursuing a nuclear weapons capability.11 Domestically, the United States continues to face economic challenges that include an unemployment rate over 8 percent and concerns about the nation’s $16 trillion debt burden. In response to these bleak fiscal realities, Congress passed the BCA that requires a $487 billion defense cut over the next 10 years. Additionally, the bipartisan Super Committee’s failure to reach agreement on $1.2 trillion in spending cuts in November 2011 resulted in “sequestration,” which is an automatic “trigger” requiring the DoD to implement an additional $500 billion in mandatory cuts beginning in FY13. From the strategist’s perspective, the significant changes in the international security environment and resource constraints resulting from the nation’s fiscal condition warrant a reassessment of the nation’s defense strategy to ensure that its ends are commensurate with the ways and available means. Ends: The NSS serves as the grand strategy document for the United States and is intended to provide direction for all government agencies and guide the application of national power (diplomatic, informational, military, and economic). In his 2010 NSS, President Obama wrote that “to achieve the world we seek, the United States must apply our strategic approach in pursuit of four enduring national interests: 1. 2. 3. 4.

The security of the United States, its citizens, and U.S. allies and partners. A strong, innovative, and growing U.S. economy in an open international economic system that promotes opportunity and prosperity. Respect for universal values at home and around the world. An international order advanced by U.S. leadership that promotes peace, security, and opportunity through stronger cooperation to meet global challenges.”12

The defense strategy review is focused on the military lever of national power and, to achieve these national interests, seeks to maintain the strongest military in the world while shifting the overall focus from winning today’s wars to preparing for future challenges. Specifically, the DoD will require capabilities and

To access the IAEA report, see http://www.iaea.org/Publications/Documents/Board/2011/gov2011-65.pdf 12 Barack Obama, National Security Strategy, May 2011, p. 7. 11

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additional investments in order to successfully accomplish the following ten missions:13 Counter Terrorism and Irregular Warfare to disrupt, dismantle and defeat al Qaeda Deter and Defeat Aggression by any potential adversary Project Power Despite Anti-Access/Area Denial (A2AD) Challenges Counter Weapons of Mass Destruction Operate Effectively in Cyberspace and Space Maintain a Safe, Secure, and Effective Nuclear Deterrent Defend the Homeland and Provide Support to Civil Authorities Provide a Stabilizing Presence Abroad, Including Rotational Deployments and Bilateral and Multilateral Training Exercises Conduct (Limited) Stability and Counterinsurgency Operations Conduct Humanitarian, Disaster Relief, and Other Operations Table 2 – Missions Required by the Defense Strategy Review These missions will form the basis for future force structure and forwardstationing decisions within the DoD. For example, consider that the defense strategy review’s force sizing guidance is a departure from the long-standing “TwoMajor Theater War” (MTW) construct, and instead directs that the Joint Force will be capable of fully denying “a capable state’s aggressive objectives in one region...while denying the objectives of—or imposing unacceptable costs on—an opportunistic aggressor in a second region.”14 Created in the early 1990s, the twoMTW construct was designed to ensure that the United States had the necessary force structure to fight and win two nearly simultaneous major theater wars (along the lines of Operation Desert Storm) in the Middle East and the Asia-Pacific regions.15 This change in force sizing guidance is the result of an assessment that the Joint Force is unlikely to find itself simultaneously facing two “peer competitors,” at least for the foreseeable future. Consequently, much of the force structure (especially land forces) required to simultaneously fight two major theater wars can be cut and overall defense spending reduced. 13 Department of Defense, Sustaining Global Leadership: Priorities for 21st Century Defense, January 2012, pp. 4-6. 14 Department of Defense, Sustaining Global Leadership: Priorities for 21st Century Defense, January 2012, p. 4. 15 Steven Metz, “Revising the Two MTW Force Shaping Paradigm: A ‘Strategic Alternatives Report,’” Strategic Studies Institute, U.S. Army War College, Carlisle, PA, April 1, 2001, p. 1.

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The defense strategic guidance further directs that “U.S. forces will no longer be sized to conduct large-scale, prolonged stability operations” along the lines of the recent wars in Iraq and Afghanistan.16 This change is consistent with the mission to conduct “limited counterinsurgency and other stability operations.” Given the nation’s decade-long involvement in these types of manpower-intensive operations that rarely yield decisive “wins,” perhaps it is unsurprising that there is little appetite to pursue them in the future. Consider former-Secretary of Defense Robert Gates’ statement that “In my opinion, any future defense secretary who advises the president to again send a big American land army into Asia or into the Middle East or Africa should ‘have his head examined,’ as General MacArthur so delicately put it.”17 These missions and force sizing guidance are examples of the “strategic choices” that the defense strategy review made to guide future force planning decisions. They represent the strategic priorities that the DoD will pursue with its limited resources; however, they also contain risks that will be discussed later in the essay. Ways: While some of these missions may not significantly differ from previous strategic guidance (including the 2010 QDR), the defense strategy review adopts what has been termed a “pivot-but-hedge” approach that places a renewed focus on the Asia-Pacific region, while retaining presence and the ability to hedge against unexpected threats in the Middle East and elsewhere.18 President Obama claims that “the United States is a Pacific power and we’re here to stay,” although it is unclear exactly what role it will play in the region. Former National Security Advisor to President Jimmy Carter, Zbigniew Brzenski, suggests that the United States should act as the “regional balancer” and help Asian states “avoid a struggle for regional domination by mediating conflicts and offsetting power imbalances among potential rivals.”19 Although U.S. bilateral alliances with Japan, South Korea, Australia, Thailand and the Philippines will remain the “cornerstone” of U.S. commitment in the Asia-Pacific region (the so-called “hub and spoke” approach), there has been a more deliberate effort to work with regional organizations such as the Association of Southeast Asian Nations (ASEAN) and its forum for security dialogue, the ASEAN Regional Forum (ARF). In July 2010, Secretary of State Hillary Clinton 16

Department of Defense, Sustaining Global Leadership: Priorities for 21st Century Defense, January 2012, p.

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Department of Defense, United States Military Academy as Delivered by Secretary of Defense Robert M. Gates, West Point, NY, accessed March 14, 2012, http://www.defense.gov/speeches/speech.aspx?speechid=1539 18 David W. Barno, Nora Bensahel, and Travis Sharp, “You Can’t Have It All,” Foreignpolicy.com, http://www.foreignpolicy.com/articles/2012/01/06/you_cant_have_it_all, accessed Jan. 27, 2012. 19 Zbigniew Brzenski, “Balancing the East, Upgrading the West,” Foreign Affairs, Jan./Feb. 2012, p. 101. 17

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offered insights into this cooperative strategic approach when she described the importance of strengthening the “institutional architecture” of this region based on common interests. In the case of the South China Sea, this includes the peaceful resolution of longstanding territorial disputes between China and developing countries such as Vietnam and the Philippines in order to promote regional stability. Secretary Clinton, who recently established an ambassadorial post to ASEAN in Jakarta, Indonesia, said that “The United States, like every nation, has a national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea. We share these interests not only with ASEAN members or ASEAN Regional Forum participants, but with other maritime nations and the broader international community.”20 This new approach seemed to surprise China, which can more effectively leverage its economic and military power against individual countries when compared with a larger regional body such as ASEAN. The focus on the Asia-Pacific region using a more cooperative approach has resulted in new strategic initiatives and resource allocation decisions across the levers of national power. For example, the Obama administration has made progress in negotiating the Trans-Pacific Partnership (TPP), which is a free-trade pact between nine Pacific countries intended to enhance commerce and economic investment.21 China, the world’s second-largest economy, is not currently a member of the TPP, in part because of concerns regarding its trade and economic policies. Additionally, the DoD plans to rebalance Army and Marine Corps force structure and expand U.S. presence through a combination of permanent and rotational forces. This effort includes President Obama’s announcement to deploy 2,500 Marines to Darwin, Australia as a demonstration of enduring U.S. commitment to the region and the Navy’s plan to shift its forces “from the current 50-50 percent split between the Pacific and the Atlantic to about a 60-40 split between those oceans by 2020.”22 Sustaining U.S. Global Leadership: Priorities for 21st Century Defense clearly places a heavy reliance on allies and partners. Secretary Panetta noted that “we will build innovative partnerships and strengthen key alliances and partnerships elsewhere in the world.”23 However, it is important to remember that these relationships are Hillary Rodham Clinton, “Remarks at Press Availability: National Convention Center, Hanoi, Vietnam,” accessed February 1, 2012, http://www.state.gov/secretary/rm/2010/07/145095.htm 21 The nine Trans-Pacific Partnership countries are Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States. For more information, see the Office of the United States Trade Representative website at http://www.ustr.gov/tpp 22 Ko Hirano, “U.S. ‘Pivot’ in Asia Complicates S. China Sea Rows: China Experts,” Kyodo News, July 13, 2012, accessed July 19, 2012, http://english.kyodonews.jp/news/2012/07/169535.html 23 U.S. Congress, House, Secretary of Defense Leon E. Panetta Defense Budget Request – Written Submitted Statement House Armed Services Committee-Defense, February 16, 2012, 112th Congress, 2nd Session, accessed February 16, 2012, http://appropriations.house.gov/UploadedFiles/HHRG-112-AP02-WStateLPanetta-20120216.pdf 20

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built on trust and cooperation that cannot be “surged” in times of crisis, but instead require time and a persistent commitment in order to mature to the level envisioned by the defense strategic guidance.24 So how might this be done? As a way to demonstrate a continuing commitment to Europe despite the planned withdrawal of some U.S. forces from the region, the United States has pledged to fulfill its commitments to NATO, including the collective self-defense provisions described in Article 5 of the Washington Treaty,25 while “promoting enhanced capacity and interoperability for coalition partners.”26 As a result, the United States has allocated an Army Brigade Combat Team (BCT) to the NATO Response Force; announced plans to forward station guided missile destroyers in Rota, Spain; and is requesting some $47.4 billion over the next five years to develop and deploy missile defense capabilities including the Phase Adaptive Approach that is being deployed to Europe to protect NATO allies from ballistic missile threats.27 The Navy appears particularly well-suited to implement this aspect of the defense strategic guidance. For example, the 2007 maritime strategy A Cooperative Strategy for 21st Century Seapower introduced the concept of Global Maritime Partnerships that emphasizes “a cooperative approach to maritime security,” in order to assure access to the global commons for the benefit of all.28 Additionally, the DoD plans to align an Army BCT with each geographic Combatant Command to foster greater regional expertise, while the FY13 defense budget request includes some $800 million for the Combatant Commanders exercise and engagement program.29 Such initiatives are critical to build partner capacity that is a key “way” to successfully execute the 10 missions presented in the defense strategic guidance. The full quote is “Although our forces can surge when necessary to respond to crises, trust and cooperation cannot be surged.” For context, see A Cooperative Strategy for 21st Century Seapower, U.S. Government Printing Office, 2007, Washington D.C., p. 8. 25 Article 5 states, “The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defense recognized by Article 51 of the Charter of the United States, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.” For more information, see “What is Article V?”, accessed February 16, 2012, http://www.nato.int/terrorism/five.htm 26 Department of Defense, Sustaining Global Leadership: Priorities for 21 st Century Defense, January 2012, p. 3. 27 From a strategy perspective, these represent “means” that demonstrate an enduring commitment to the NATO alliance (“ways”) and is consistent with Secretary Panetta’s vision and the defense strategic guidance. 28 A Cooperative Strategy for 21st Century Seapower, U.S. Government Printing Office, 2007, Washington D.C., p. 8. 29 U.S. Congress, Senate, Secretary of Defense Leon E. Panetta Defense Budget Request – Written Submitted Statement Senate Armed Services Committee-Defense, February 16, 2012, 112th Congress, 2nd Session, accessed 24

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The defense strategy review states that, “whenever possible, we will develop innovative, low cost, and small footprint approaches to achieve our security objectives.”30 As mentioned earlier, the United States is planning to reduce its permanent forward presence in Europe. Specifically, the DoD announced its intent to withdraw two brigades from Germany because the strategic landscape in Europe has changed and “most European countries are now producers of security rather than consumers of it.”31 That said, the department intends to make up for this “presence deficit” by increasing rotational training deployments of BCTs stationed in the United States to Europe. Additionally, the defense strategic guidance emphasizes the expanding role of special operations that minimizes the military footprint, while offering training and advice in order to build partner capacity. Finally, the DoD expects to place greater reliance on unmanned systems and other technology to ensure that the United States maintains necessary access to information and communication networks in space and cyberspace, especially in A2AD environments. The defense strategy review recognizes U.S. vulnerabilities in the cyber domain and the need to develop and “expand many of our nascent cyber capabilities and to better protect our defense networks.”32 The intent is to be able to provide the president with viable response options, if required. Means: Given the current state of the U.S. economy, there is little doubt that fewer defense resources will be available for the foreseeable future. Resource allocation decisions directly affect the Joint Force’s ability to execute the defense strategy and associated operational concepts such as the Joint Operational Access Concept (JOAC) that relies on air and naval power to fight and win in A2AD environments. Chairman of the Joint Chiefs of Staff General Martin Dempsey captured the importance of getting these decisions right when he wrote, “We must not misfire in defining Joint Force 2020...competing priorities must be carefully weighed in light of fiscal constraints…smart cuts are not always equitable cuts.”33 While reductions in military forces may be inevitable, this does not necessarily mean that the Joint Force will be less capable. Sustaining U.S. Global Leadership: Priorities for 21st Century Defense states that the “military will be smaller and leaner, but will be agile, flexible, ready, and technologically advanced”34 without simply requiring the military to do more with less. The FY13 defense budget Feb. 16, 2012, http://armed-services.senate.gov/statemnt/2012/02%20February/Panetta%2002-1412.pdf 30 Department of Defense, Sustaining Global Leadership: Priorities for 21st Century Defense, Jan. 2012, p. 3. 31 Ibid. 32 U.S. Congress, Senate, Statement of General Martin E. Dempsey, USA, Chairman, Joint Chiefs of Staff, Before the Senate Armed Services Committee, FY 13 Department of Defense Budget, 112th Congress, 2nd Session, accessed Feb. 2012, http://armedservices.senate.gov/statemnt/2012/02%20February/Dempsey%2002-14-12.pdf 33 General Martin E. Dempsey, Chairman’s Strategic Direction to the Joint Force, Feb. 6, 2012, pp. 6-7. 34 Leon E. Panetta, Foreword Letter to Sustaining U.S. Global Leadership: Priorities for 21 st Century Defense, Jan. 2012.

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request reduces end strength by 5.5 percent over five years, but these cuts are not proportional across all of the services as the brunt of these force structure reductions will be borne by the Army and Marine Corps, which seems logical if the focus is no longer on counterinsurgency (COIN) operations that are manpower intensive. The Army will be required to reduce its end strength from 570,000 to 490,000 active duty troops and eliminate a minimum of eight BCTs, while the Marine Corps will see its authorized end strength decrease from 202,000 to 182,100 marines and eliminate six combat battalions.35 The FY13 defense budget request also streamlines the Air Force in accordance with the new strategic guidance. While the bomber fleet is largely protected from budget cuts, the service decided to retire selected fighter, mobility and intelligence, and surveillance and reconnaissance (ISR) aircraft for a total of 286 airframes over the Future Years’ Defense Plan (FYDP).36 The budget request funds the next generation bomber and air-to-air refuel tanker, in addition to increasing remotely-piloted aircraft Combat Air Patrols to 65 with the ability to surge to 85 patrols, if required. However, the Air Force also plans to impose cuts to the F-35 Joint Strike Fighter (JSF) program through a slowdown in procurement, while eliminating six of 60 Tactical Air Squadrons that primarily affect the A-10 Thunderbolt close air support fleet. A recent service “white paper” explained that the service chose to retire more A-10s [5 squadrons] “as a result of guidance to size our forces for one large-scale combined arms campaign with sufficient combat power to also deny a second adversary” and is a direct consequence of the decision to depart from the two-MTW force sizing construct discussed earlier. The document went on to state that, “multirole platforms provide more utility across the range of the potential missions for which we are directed to prepare.” Finally, the Air Force announced plans to retire 27 aging C-5A and 65 of the oldest C-130 aircraft in the fleet, leaving 275 strategic airlifters and military transport aircraft available that are deemed sufficient to meet the requirements of the new defense strategy.37 Given the administration’s focus on the Asia-Pacific region that is largely a maritime theater, sustaining a strong Navy that will ensure a credible forward presence and is able to successfully penetrate enemy defenses in an A2AD environment makes strategic sense. In recent Congressional testimony, the Chief of Naval Operations Admiral Jonathan Greenert said that “about 50 U.S. ships are Department of Defense, Budget Proposal Requests Smaller, More Modern, Agile Force, accessed Feb. 29, 2012, http://www.defense.gov/news/newsarticle.aspx?id=67167 36 Department of Defense, Air Force Strategic Choices and Budget Priorities Brief at the Pentagon, accessed March 1, 2012, http://www.defense.gov/transcripts/transcript.aspx?transcriptid=4969 37 Department of the U.S. Air Force, USAF Force Structure Changes: Sustaining Readiness and Modernizing the Total Force, Feb 2012, pp. 3-4. 35

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deployed in the Asia-Pacific region every day.”38 The commitment to power projection and forward presence is reflected in the decision to retain 11 aircraft carriers and ten air wings in the fleet, while protecting “our highest-priority and most flexible ships, such as the Arleigh Burke destroyers and the Littoral Combat Ships.”39 Although the FY 13 defense budget request plans to retire seven aging Ticonderoga-class cruisers and will result in the loss of 16 ships from the fleet, Secretary of the Navy Ray Mabus said that the Navy’s shipbuilding plan maintains a “flexible, balanced naval force” and “delivers a fleet with the same number of ships by the end of the FYDP…as we have today [285 ships].40 Additionally, forward basing in Japan, Singapore, Guam and Hawaii can help offset the overall size of the fleet by reducing transit times across the Pacific Ocean. As previously discussed, special operations are a critical way to implement the defense strategy and the Special Operations Command (SOCOM) represents one of the largest areas of expansion within the DoD over the last decade. In fact, since September 11, 2011, SOCOM has more than doubled in size and budget and currently has close to 60,000 active duty, National Guard, and reserve personnel.41 The defense strategy review and FY13 defense budget request appear to continue this growth trend in order to ensure that additional resources are available as SOF roles and missions increase. One need look no further than the Navy SEAL raid in May 2011 that resulted in the death of Osama bin Laden, or the January 2012 hostage rescue in Somalia to appreciate the value of these unique special operations capabilities. However, General Martin Dempsey recently observed that one of the lessons of the past ten years of war is that “special operating forces have demonstrated their versatility and their capabilities, not just in the counterterror realm, but also in the building partner capacities and security force assistance.”42 In his Chairman’s Strategic Direction to the Joint Force, General Dempsey highlighted that “specialized capabilities, once on the margins, will likely move to the forefront” of defense priorities as areas such as networked special operations, operating in cyberspace, and ISR become increasingly central. Additionally, he said U.S. Congress, House, Statement of Admiral Jonathan Greenert, Chief of Naval Operations, Before the House Committee on Appropriations on FY 2013 Department of Navy Posture on 1 March 2012, 112th Congress, 2nd Session, accessed March 5, 2012, http://appropriations.house.gov/UploadedFiles/HHRG-112-AP02WState-JGreenert-20120301.pdf 39 Department of Defense, Major Budget Decisions Briefing from the Pentagon, accessed March 1, 2012, http://www.defense.gov/transcripts/transcript.aspx?transcriptid=4962 40 U.S. Congress, House, Statement of The Honorable Ray Mabus, Secretary of the Navy, Before the House Committee on Appropriations on 1 March 2012, 112th Congress, 2nd Session, accessed March 5, 2012, http://appropriations.house.gov/UploadedFiles/HHRG-112-WState-RMabus-20120301.pdf 41 Mica Zenko, “Defense Spending, Special Operations, and Secrecy,” Council on Foreign Relations, accessed March 1, 2012, http://blogs.cfr.org/zenko/2012/02/16/defense-spending-specialoperations-and-secrecy/ 42 Bill Gertz, “Pentagon Planning Downgrade in Afghanistan Conflict, Freebeacon.com, accessed March 2, 2012, http://freebeacon.com/pentagon-planning-downgrade-in-afghanistan-command/ 38

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that “we must leverage cutting-edge information technologies to ensure a secure and collaborative command and control [C2] network.”43 Finally, a smaller U.S. military footprint should require fewer bases at home and abroad in order to eliminate unnecessary or redundant infrastructure and overhead. Secretary Panetta has called for two rounds of Base Realignment and Closure (BRAC) in 2013 and 2015, respectively, which is an inherently political and contentious endeavor, given its potential impact on jobs and other equities in Congress. Senator Carl Levin recently said that “before we consider another round of BRAC, the department ought to take a hard look at whether further reduction in bases can be made overseas, particularly in Europe.”44 While some overseas reductions make sense in light of the defense strategic guidance, it is unlikely that all of the unnecessary infrastructure lies abroad, considering the magnitude of the pending troop and other defense cuts. Secretary Panetta is well aware of the political implications associated with BRAC, given his background as a former member of Congress. He recently said that “as somebody who went through the BRAC process in my own district, I recognize how controversial this process is for members and for constituencies…and yet, it is the only effective way to achieve needed infrastructure savings.”45 Risk: General Dempsey recently observed that “any strategy and any budget that supports any strategy has risks.”46 No strategy is considered complete without a risk analysis to determine the ability of the organization to carry out the tasks and missions specified by the strategy. The strategist seeks to identify risk and provide mitigation measures in order to assist the decision maker in achieving a level of “acceptable risk.” There are a number of implicit risks (economic, military, diplomatic and technological) associated with Sustaining U.S. Global Leadership: Priorities for 21st Century Defense that suggest the strategy is too vague or overly ambitious. General Dempsey said that “the primary risks lie not in what we can do, but in how much we can do and how fast we can do it.”47 For example, consider NATO and the current fiscal situation in Europe where there is no guarantee that the alliance’s members will “step up” and increase their defense spending to fill the General Martin E. Dempsey, Chairman’s Strategic Direction to the Joint Force, Feb. 6, 2012, p. 6. David Alexander, “Lawmakers Skeptical of Cuts in 2013 Defense Budget,” Reuters, Feb. 14, 2012. 45 Karen Parrish, “Panetta: Military Leader Unified Under Budget Request,” DoD News, accessed Feb. 15, 2012, http://www.defense.gov/news/newsarticle.aspx?id=67188. 46 Transcript of Interview with Gen. Martin Dempsey, Fareed Zakaria GPS, accessed March 1, 2012, http://transcripts.cnn.com/TRANSCRIPTS/1202/19/fzgps.01.html 47 U.S. Congress, Senate, Statement of General Martin E. Dempsey, USA, Chairman, Joint Chiefs of Staff, Before the House Armed Services Committee, FY 13 Department of Defense Budget, 112th Congress, 2nd Session, accessed March 1, 2012, http://armedservices.house.gov/index.cfm/files/serve?File_id=cd6a568465b5-4cae-9a1f-08548675fad1 43 44

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void as the United States withdraws some of its forces from the region, given the global economic crisis that has hit the “Eurozone” particularly hard. Indeed, the trend seems to be in the opposite direction and is an issue of strategic concern. In June 2011, Secretary Gates said that total European defense spending declined by nearly 15 percent in the decade following 9/11 and that only five of 28 NATO members exceeded the two percent of Gross Domestic Product (GDP) spending on defense recommended by the alliance (see Table 3).48 Europe’s bleak economic outlook risks what Norwegian Defense Minister Espen Barth Eide calls “a further weakening of the core ability to defend ourselves.”49

Table 3 – Defense Spending as a Percentage of Gross

Domestic Product50 Additionally, Poland has expressed fears that U.S. defense cuts might make it more vulnerable to Russia over the planned U.S./NATO missile shield. A senior The five NATO member states are the United States, United Kingdom, France, Greece and Albania. To access the entire transcript from Secretary Gates’ speech titled The Security and Defense Agenda: Future of NATO, see: http://www.defense.gov/speeches/speech.aspx?speechid=1581, June 10, 2011. 49 Craig Whitlock, “Shrinking Defense Budget Weakens NATO,” Washington Post, Jan. 30, 2012, p. 2. 50 Press Release, Financial and Economic Data Relating to NATO Defense, North Atlantic Treaty Organization, March 10, 2011, accessed July 23, 2012, http://www.nato.int/nato_static/assets/pdf/pdf_2011_03/20110309_PR_CP_2011_027.pdf 48

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Polish government official was recently quoted expressing concerns over the U.S. shift in focus away from Europe, “From Poland's point of view, the worst-case scenario is that Russia, sensitive to this issue, as a retaliation places various elements in Kaliningrad while the missile shield, now reviewed by Americans, never comes true.”51 Clearly, both the economic and security situation in Europe bears watching as it may affect how fast or fully the Obama administration is able to pivot to the Asia-Pacific region. Another risk is that the defense strategic guidance might cause China, which recently announced plans to increase its military spending by 11 percent in 2012, to react in ways that could make the Asia-Pacific region more unstable. People’s Liberation Army (PLA) Major General Luo Yuan recently argued that the United States intends to contain the rise of China when he wrote, “Who can believe that you are not directing this at China? Isn’t this the return of a Cold War mentality?”52 Additionally, Wang Junsheng, an expert on Asian Studies at the Chinese Academy of Social Sciences said that the Philippines’ recent decision to allow more U.S. troops on its soil sends a “clear but wrong” message that the United States supports a confrontation with China on the South China Sea.53 Finally, China’s Vice President Xi Jinping urged that “ultimate caution should be given to major and sensitive issues that concern each country’s core interests to avoid any distraction and setbacks in China-U.S. relations.”54 The defense strategy review’s emphasis on technology risks repeating the experience of the Clinton and George W. Bush administrations, where the DoD embraced technological innovations such as “network-centric warfare” and “transformation” that required less manpower. In fact, Dan Goure, a defense analyst at the Lexington Institute recently observed that “there really is a ghost-of[former Secretary of Defense Donald] Rumsfeld feel to the Obama strategy, because the administration has come to realize that the number of ground units ultimately matters less than how mobile and lethal they are.”55 Unfortunately, the wars in Iraq and Afghanistan demonstrated how difficult it can be to rapidly fill the ranks with quality troops and experienced mid-level leaders during combat. A related risk surrounds the question, “Despite the administration’s reluctance, what if the U.S. finds itself fighting in a COIN environment again sometime in the future?” Consider that the George W. Bush administration came 51 Gabriela Baczynska, “Poland Fears U.S. Defense Cuts Make it Vulnerable to Russia,” Reuters, Jan 24, 2012. 52 Chris Buckley, “China Top Military Paper Warns U.S. Aims to Contain Rise,” Reuters.com, accessed Jan. 11, 2012, http://www.reuters.com/article/2012/01/10/us-china-usa-defenceidUSTRE8090BT20120110 53 Chui Haipei, “Philippines sends ‘Wrong Signal,’” China Daily, Jan. 30, 2012, p. 10. 54 Wu Jiao and Zheng Yangpeng, “U.S. Must be Objective, Xi Says,” China Daily, Jan. 17, 2012. 55 James Kitfield, “Rumsfeld Redux,” National Journal, Feb. 18, 2012.

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into office back in 2000 with a similar focus on the Asia-Pacific region that was largely abandoned after the events of 9/11. Given the contemporary international security environment described earlier, it is far from certain that some unforeseen crisis could not similarly disrupt the Obama administration’s pivot-but-hedge strategy. Additionally, for those who think COIN is now anathema to U.S. strategic thinking, consider Brookings Institution senior fellow Michael O’Hanlon’s observation that “we convinced ourselves of a similar argument about COIN after Vietnam, only to be unready for Iraq and Afghanistan a quarter-century later.”56 To mitigate this risk, the defense strategic guidance introduced the concept of “reversibility” that allows the Department of Defense to make a “course change” by managing the Joint Force “in ways that protect its ability to regenerate capabilities that might be needed to meet future, unforeseen demands.”57 Presumably, much of this reversibility capability will reside in the Reserve Component (RC) as part of the DoD’s Total Force construct, which seems logical given that the DoD has relied heavily on the mobilization of RC forces over the last decade. Specifically, since 9/11, over 825,000 RC members have been mobilized or served on active duty, including deployments to Iraq and Afghanistan, in addition to protecting the homeland. In addition to large manpower requirements, stability operations require certain specialized skill sets that are not always required in conventional operations. Many of these hard-earned skills are perishable and may be lost over time without instilling them into the next generation of troops. Former Undersecretary of Defense for Policy Michèle Flournoy highlighted this risk and the department’s reversibility efforts when she observed, “Even if we no longer size our Army and Marine Corps for multi-year stability operations such as those in Afghanistan and Iraq, we are establishing ways to retain key expertise and the lessons learned.”58 The National Guard and the Army Reserve will be critical in retaining those hardearned skills in the event that they are required again in the future. Thus, the major challenge going forward will be to find the appropriate mix of active and reserve component forces, skill sets and capabilities in order to execute the defense strategy. The reversibility concept also relies on the ability to “surge” the industrial base, if required. However, one of the risks recognized by the defense strategy review concerns the challenge of maintaining a strong industrial base in the face of significant defense budget cuts. In some cases, defense contractors and suppliers rely on the government as their primary customer, while Secretary Panetta has 56 57

Michael O’Hanlon, “Benefits of a One-War Posture,” The Washington Post, Jan. 6, 2012, 15. Department of Defense, Sustaining Global Leadership: Priorities for 21st Century Defense, Jan. 2012, pp. 6-

7.

Dave Majumdar, “Flournoy: U.S. Able to Fight More Than One Conflict at a Time,” DefenseNews, accessed Feb. 1, 2012, http://www.defensenews.com/article/20120130/DEFREG02/301300011/Flournoy-U-S-Able-FightMore-Than-One-Conflict-Time 58

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referred to the defense industry as our “partner in the defense acquisition enterprise.” Clearly, the DoD desires to retain the highly-specialized skills necessary to produce technologically-advanced weapons systems in the future because once these skills are lost as the workers transition to other non-defense related projects, it is difficult to quickly regain them in the event of a national emergency. So how can this risk to the defense industry be mitigated? One option is to increase commercial weapons sales that support the defense strategy’s goal of working more closely with allies and partners, while increasing their capacity to provide security for themselves. There is continued global demand for U.S. technologies and recent examples include the pending foreign military sale of 84 Boeing F-15 advanced fighter jets and associated support totaling some $29.4 billion to Saudi Arabia, a $3.5 billion sale of Lockheed Theater High Altitude Air Defense systems to the United Arab Emirates, and the anticipated sale of 36 single-engine Lockheed F-16 aircraft to Iraq.59 Additionally, defense contractors including Raytheon, Boeing and Lockheed Martin have informed their investors that export sales may make up for declining domestic defense spending. In fact, Jim McNerney, Boeing’s chairman and chief executive officer recently said that “we foresee significant upside potential in international markets, which we expect will generate 25 percent to 30 percent of revenues within just a few years and offer an opportunity to offset domestic reductions.”60 Finally, the government could always step in and provide direct financial assistance to defense industrial companies that are facing financial difficulties. Acting Undersecretary of Defense for Acquisitions, Technology and Logistics Frank Kendall alluded to this possibility when he said that “interventions will be rare…but we have to be prepared to intervene where it makes sense, where we have to.”61 Conclusion Returning to the three questions raised at the beginning of this article, it seems clear that both the White House and the DoD felt that a defense strategy review was necessary due to several significant changes in the international security environment, in addition to the imposition of resource constraints resulting from a weak domestic economy. Additionally, the national security implications of the Katelyn Noland, “Contractors Benefiting from Spike in Foreign Military Sales,” Executive Biz, 4 Jan 2012, accesses March 5, 2012, http://blog.executivebiz.com/2012/01/contractors-benefiting-fromspike-in-foreign-military-sales/. 60 Gopal Ratnam, “Defense Contractors Look Abroad as U.S. Defense Spending Shrinks,” Bloomberg.com, accessed Feb. 1, 2012, http://www.bloomberg.com/news/2012-01-26/u-s-defensecompanies-look-abroad-as-pentagon-spending-slows.html 61 Kevin Baron, “Defense Companies May Reap Pentagon Bailout,” National Journal Daily AM, Feb. 7, 2012. 59

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defense strategic guidance are significant and wide-ranging as it makes some difficult decisions that will affect DoD priorities, force structure and the positioning of the Joint Force over the next decade. Clearly, there are a number of challenges looming on the horizon that represent strategic risk to the defense strategy and U.S. national security. As mentioned earlier, unforeseen changes in the international security environment could abruptly redirect the DoD’s focus from the Asia-Pacific to another region of the world. Finally, implementing the required personnel cuts of approximately 100,000 service men and women without “breaking” the all-volunteer force will undoubtedly cause some level of turmoil within the services. General Raymond Odierno believes that “we’re going to be an Army in transition. We’ll be in transition for the next five or six years.”62 Marine Corps Commandant General James Amos believes that, in a tough economy, “those Marines who finish their first enlistment after four years, it’s going to be more competitive to be able to stay in the Marine Corps.”63 Despite these formidable challenges, the good news is that the administration has an articulated defense strategy that establishes priorities and makes some difficult strategic choices. Additionally, it appears that the senior military leadership has “bought into” the new strategic guidance, along with its budget and force planning implications. The next step is to secure the necessary resources to effectively execute the strategy and manage the requisite changes in the Joint Force described above, while simultaneously maintaining readiness and the ability to “confront and defeat aggression anywhere in the world.”64

62 Phil Stewart, “U.S. Army Chief at Ease With Smaller Force, Eyes Asia,” Reuters, accessed Feb. 27, 2012, http://www.reuters.com/article/2012/01/26/us-usa-army-downsizingidUSTRE80P07K20120126 63 Gina Cavallaro, “Amos: Marines Will Feel Drawdown’s Squeeze,” MarineCorpsTimes.com, accessed February 17, 2012, http://www.marinecorpstimes.com/news/2012/02/marine-amos-congressdrawdown-budget-021612/ 64 Leon E. Panetta, Foreword Letter to Sustaining U.S. Global Leadership: Priorities for 21 st Century Defense, January 2012.

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