Restoring Solvency: The Military Buildup We Need

By Hal Brands and Eric Edelman

The Weekly Standard

March 6, 2017

Foreign policy, Walter Lippmann wrote, entails “bringing into balance, with a comfortable surplus of power in reserve, the nation's commitments and the nation's power." If a statesman fails to balance ends and means, he added, "he will follow a course that leads to disaster."

Today, America is hurtling toward such a disaster. Since the end of the Cold War, Washington has possessed uncontested military dominance and enjoyed it at bargain-basement prices. Now, however, America confronts military challenges more numerous and severe than at any time in decades—just at the moment its military resources are showing the effects of prolonged disinvestment in defense. American politicians boast that the nation has the finest fighting force in the history of the world. But the brutal truth today is that the United States is slipping into what Samuel Huntington—building on Lippmann's ideas—termed "strategic insolvency." American military power has become dangerously insufficient relative to the grand strategy—and international order—it must support.

That grand strategy might be described as "enlightened liberal dominance." After the Cold War, U.S. policymakers committed to averting a return to the unstable multipolarity of earlier eras and to perpetuating the more stable unipolar order. They committed to fostering a global environment in which liberal economic and political institutions could flourish and in which international scourges such as rogue states, nuclear proliferation, and catastrophic terrorism would be suppressed. And because they recognized that military force remained the ultima ratio regum, they understood that doing so would require "military strengths beyond challenge," as George W. Bush indelicately put it in 2002.

Since the early 1990s, Washington has therefore accounted for 35 to 45 percent of world defense spending. It has maintained peerless global power-projection capabilities. Perhaps most important, U.S. primacy has also been unrivaled in the key strategic regions: Europe, East Asia, and the Middle East. From thrashing Saddam Hussein's million-man military in 1991 to deploying two carrier strike groups off Taiwan during the China-Taiwan crisis of 1995-96, Washington has been able to project power superior to anything a regional rival could employ even on its own doorstep. And yet, this dominance has come at a remarkably affordable price—usually between 3 and 4 percent of GDP, as compared with 12 percent at the peak of the Cold War. In a comparatively benign international environment, Washington has had military primacy—and its geopolitical fruits—on the cheap.

Today, however, the strategic landscape is darkening and U.S. primacy is eroding. This is due to four interrelated factors.

First, great-power military competition is back. China and Russia are seeking regional hegemony and contesting global norms such as nonaggression and freedom of navigation. They are also developing the military punch to underwrite these ambitions—namely, advanced power-projection capabilities meant to bully their neighbors and anti-access/area denial capabilities meant to prevent U.S. forces from coming to those neighbors' defense.

Second, the international outlaws are more dangerous than at any time in a quarter-century. North Korea has a growing arsenal of nuclear bombs and is developing intercontinental ballistic missiles with which to deliver them. Iran is a nuclear threshold state that tests ballistic missiles while backing sectarian proxy forces across the Middle East. The Islamic State has displayed far greater military competence than any previous terrorist group and shown that counterterrorism will continue to place significant operational demands on American forces.

Third, the rapid spread of precision munitions, stealth, and other technologies that were once the sole preserve of the United States means that we now face more actors who can contest American superiority in dangerous ways. As Secretary of Defense Chuck Hagel noted in 2014, "we are entering an era where American dominance on the seas, in the skies, and in space—not to mention cyberspace—can no longer be taken for granted."

Fourth, the number of challenges has multiplied. Rogue states, jihadist extremism, great-power rivalry, instability in Europe, the Middle East, and East Asia: Today's security environment has it all.

And as the world has become more menacing, the United States has dramatically cut back its investment in defense. The triple whammy of the Great Recession, Obama-era budget cuts, and the Budget Control Act reduced annual defense spending from $768 billion in 2010 to $595 billion in 2015, a decline of nearly a quarter. Defense spending as a share of GDP fell from 4.7 percent to 3.3 percent, with the Congressional Budget Office projecting that military outlays will fall to 2.6 percent by 2024—the lowest percentage since before World War II.

The effects of this budgetary buzzsaw have been severe. Readiness and modernization have suffered, and all the services are at or near post-World War II lows in terms of end-strength. The U.S. military is now significantly smaller than the 1990s-era Base Force, which was designed as "a minimum force that constituted a floor below which the nation should not go if it was to remain a globally engaged superpower."

This combination of increasing threats and decreasing capabilities is having profound implications. For one thing, it ensures that U.S. forces will face far harder fights should conflict occur, whether against Iran, North Korea, Russia, or China. American forces might still win—albeit on a longer timeline, and at an appalling cost in lives—but then again, they might not. Reports by the RAND Corporation have cast doubt on whether NATO can actually defend the Baltic states from a Russian assault, and if the United States would prevail in a conflict with China over Taiwan. The prospects are even worse should the United States have to fight or deter in several regions at once.

As the shadows cast by U.S. military power grow shorter, American alliances are likely to be undermined, adversaries emboldened, and the stability of the international order imperiled. The United States is rapidly reaching the point of strategic insolvency, with all the resulting dangers.

So how should America respond? Great powers facing strategic insolvency have three options. First, they can reduce their commitments. For example, the United States could walk away from guarantees to the Baltic states or Taiwan. But such retrenchment has historically worked best when the overstretched hegemon can transfer its burdens to some friendly power. Today, there is no liberal superpower waiting in the wings. The beneficiaries of an American pullback would be precisely those hostile powers that U.S. strategy seeks to constrain. Retrenchment is a recipe for aggression and instability.

Second, U.S. officials could simply live with greater risk. They could gamble that the nation's enemies will not test vulnerable commitments. But while hoping that exposed commitments won't be challenged might work for a while, there is enormous risk that those guarantees will eventually be tested and found wanting, with devastating effects on America's position and credibility. Another possibility would be to employ riskier approaches—such as nuclear escalation—to sustain commitments on the cheap. But relying more heavily on nuclear weapons would hardly be credible. If Washington balked at paying for the conventional forces needed to defend Taipei or Tallinn, would it really fight a nuclear war on their behalf?

This leaves a final option—to dramatically increase defense resources, bringing capabilities back into alignment with commitments. This Reagan-like buildup would require permanently lifting the Budget Control Act caps to provide increased resources and budgetary stability. It would require not just procuring more existing capabilities, but also investing aggressively in future capabilities. It would entail recapitalizing the atrophying U.S. nuclear triad and investing in a "high-low" mix of assets to enable effective operations against threats ranging from jihadists, to rogue states, to great-power challengers. And crucially, greater resources must be coupled with innovations in how to project power where it's needed.

Several recent proposals give a sense of this approach, including the bipartisan National Defense Panel's report in 2014 and proposals by Senate Armed Services Committee chairman John McCain and the American Enterprise Institute. The McCain budget calls for $430 billion in new money over five years, resulting in a defense budget of $800 billion by 2022; the AEI proposal advocates a $1.3 trillion increase over 10 years.

How viable is this option? Critics offer three primary objections. The first is that a major buildup is unaffordable. The second is that this approach would simply spur arms races with American adversaries. The third is that it would incentivize continued "free-riding" by U.S. allies. None of these arguments is persuasive.

Although a multiyear buildup would be expensive, it would hardly be unmanageable. Even the most aggressive buildup would push defense spending only to 4 percent of GDP; the United States has supported far higher defense burdens without compromising economic performance. Nor does defense drive federal spending or deficits to the extent often imagined. Defense consumes around 16 percent of federal spending; mandatory domestic entitlements consume 49 percent. America's fiscal solvency will hinge on its ability to control entitlement spending and generate greater revenues, not on whether it spends 3 percent or 4 percent of GDP on defense.

It is also hard to see how increased U.S. defense spending could trigger arms races with Russia or China, because these countries have already been competing militarily with Washington for years. Finally, as for free-riding, America has historically been most successful at securing increased allied contributions when it, too, has been willing to do more for the common defense.

A Reagan-style military buildup is therefore the best way to reassure allies, deter adversaries, and stiffen the hard-power backbone of the global order. "Peace through strength" is not a catchphrase; it is good strategy. And though not cheap, the price is affordable for a wealthy superpower that has benefited so much from its military primacy—and certainly cheaper than the price of strategic insolvency.