The Administration's plan for NMD gives policy-makers the flexibility of deploying the system in three phases, each with different capabilities. The Administration could choose to deploy all three sequentially or halt deployment after any one of them. The first phase, known as Expanded Capability 1, would cost nearly $30 billion, CBO estimates. That figure includes one-time costs and operating costs through Fiscal Year 2015. ... Continuing on to the second stage, Capability 2, would cost an additional $6 billion, for a total of nearly $36 billion, CBO estimates. Achieving Capability 3, the most extensive and sophisticated stage of NMD deployment, would add more than $13 billion to the costs of Capability 2.

Thus, costs for the entire system would total nearly $49 billion through 2015, in CBO's view. ... Those CBO estimates do not include the costs of space-based sensors for NMD because the sensors would be used for other missions as well, and their costs are included in separate Air Force programs. CBO's estimates attempt to strike a balance between overestimating and underestimating potential NMD costs. ..

The Administration's current plan for National Missile Defense shows Expanded Capability 1 possibly being deployed at the end of Fiscal Year 2007, Capability 2 at the end of 2010, and Capability 3 at the end of 2011. However, the Administration's current Future Years Defense Program, which runs through 2005, does not include significant funds for those later phases. To begin funding the Capability 2 system after 2005 and still meet the target deployment date of late 2010, CBO estimates, would require annual spending that would surpass $3 billion in 2006 and 2007 (see Fig. 1). Moreover, that estimate assumes that the Administration decides not to proceed with Capability 3. If it also attempted to acquire Capability 3 by late 2011--as well as Capability 2 along the way--annual spending would have to exceed $6 billion in 2007 and 2008. ...

The Administration's NMD system is designed to shoot down ICBMs as they travel through space. When an enemy missile is launched, the NMD system must detect it, accurately predict where it will be during the 30 or so minutes it will be in flight, determine which of the objects sailing through space toward the United States is the actual missile (as opposed to decoys designed to confuse sensors), and finally send a computer-guided interceptor to collide with the missile's warhead. To accomplish those tasks, NMD depends on a globe-spanning system of satellites, radars, communications systems, and battle-management computers to launch and direct interceptors.

Expanded Capability 1

The Administration's plan for developing NMD calls for the first stage, Expanded Capability 1, to be fully deployed by the end of Fiscal Year 2007 (see Fig. 2). That stage is intended to defend the entire United States from attack by several tens of ICBMs that employ simple countermeasures. Because of the perceived urgency of the threat, Expanded Capability 1 will be preceded two years earlier by a "threshold" deployment of 20 interceptors located in central Alaska (see Fig. 3). That deployment also requires constructing a high-resolution X-band radar and upgrading several existing early warning radars. Moving to the full Expanded Capability 1 will involve increasing the number of interceptors in Alaska to 100.

The current system of US space-based early warning satellites (the Defense Support Program) and its replacement (the high-orbit satellites of the Space Based Infrared System, or SBIRS-high) play an important role for Expanded Capability 1. They will provide the initial warning that an enemy missile has been launched as well as a relatively crude estimate of its trajectory. That information will be used to tell the X-band and upgraded early warning radars where to search for the incoming missile. (DSP satellites cannot direct missile defenses, however, because they do not provide sufficiently high-quality tracking information. SBIRS-high is also not likely to be able to supply good enough tracking data to direct NMD's interceptors.)

Capability 2

The next stage of National Missile Defense, known as Capability 2, builds on Capability 1 and is designed to cope with more complex countermeasures, but at the price of being able to handle only a few incoming missiles. Current plans call for Capability 2 to be deployed completely by the end of 2010. To achieve the increased abilities of Capability 2, the system would add three more X-band radars at various sites around the world and more facilities to communicate with interceptors in flight.

Most important, the system would draw on 24 SBIRS satellites in Low Earth Orbit (known as SBIRS-low). Those satellites will track not only missiles under powered flight (as DSP and SBIRS-high satellites will) but also missiles that are gliding through space and thus are not giving off the bright light associated with powered flight. The number of deployed interceptors and the hardware of those interceptors would not change under Capability 2, according to current plans.

By the time it was deployed, Capability 2 would have the full benefit of both SBIRS-high and SBIRS-low satellites. According to the Administration's plan, SBIRS-high would continue, under Capability 2, to supply early warning information to the National Missile Defense system as well as to the rest of the US strategic forces. Those satellites' preliminary estimate of an incoming missile's trajectory would be passed to both the ground-based radars and the SBIRS-low satellites. Most likely, SBIRS-low satellites would spot the incoming missile's warhead and any countermeasures the missile released before ground-based radars could.

If all went according to plan, at least two SBIRS-low satellites would focus on the approaching warhead and determine a more precise path for it. The earlier a precise determination of an incoming warhead's path is made, the sooner the first salvo of interceptors can be fired. SBIRS-low would also record valuable information about the amount of heat given off by the object, which could prove helpful in distinguishing a warhead from decoys.

Although SBIRS-low is intended to continuously buttress the National Missile Defense system, it will also support theater missile defenses (systems designed to defend areas outside the United States from relatively short-range missiles). Both the precise tracking of SBIRS-low and its ability to distinguish warheads from decoys should
significantly aid
theater missile
defenses. Unlike
NMD, however, those
defenses are limited
in both the area they
protect and the length
of time for which
they are designed to
be deployed.

Capability 3

The final level of NMD deployment is Capability 3, which includes all of the assets of Capability 2 plus 150 additional interceptors, more radars, another communications facility, and improved software for each of the systems' components. This stage would combine the capabilities of the two earlier stages by defending the country from several tens of incoming missiles with complex countermeasures.

Some of the additional interceptors would be stationed at a second site, currently planned for Grand Forks, N.D. That would improve the system's coverage of the United States by placing interceptors closer to the East Coast. From there, they could attack warheads originating in the Middle East at farther distances from the United States--and thus earlier in the warheads' flight--than interceptors based in Alaska could. ...

Costs of the Plan

Expanded Capability 1

Acquiring the Expanded Capability 1 system would cost about $20.9 billion, CBO estimates. Including operations through 2015--if the NMD system stayed at that capability level for that long--would bring total costs to $29.5 billion. Annual operating costs after 2015 would total $600 million (in 2000 dollars).

CBO's estimate for Expanded Capability 1 is $3.9 billion more than the Administration's estimate for the same period because of different assumptions about procurement of NMD components, construction, and operations.

Differing estimates for procurement arise for two reasons. First, CBO believes that in addition to the 100 deployed interceptors, the system would need 82 additional interceptors to use in testing and to replace ones lost in accidents or engagements. The Administration puts the number of additional interceptors at 47. However, CBO's larger figure is more consistent with the experience of previous missile programs. ...

Second, CBO's estimates for procurement are higher because they assume that the Expanded Capability 1 system will experience cost growth comparable to that of both analogous strategic systems (such as the Air Force's Minuteman and Peacekeeper missiles and the Navy's Trident missile) and various tactical systems (such as the Air Force's Advanced Medium-Range Air-to-Air Missile, the Navy's Standard missile, and the Army's Patriot missile). ... (Because the Administration's estimate includes about 5 percent for cost growth, CBO's estimate reflects an increase of about 15 percentage points.)

In the area of construction, CBO estimates that building the necessary facilities would cost some $1.5 billion--or $1 billion more than the Administration estimates. Those construction costs cover the X-band radar site, command and communications facilities, 100 missile silos, access roads, housing for personnel, and other infrastructure support. CBO's estimate is based primarily on the cost of constructing the Safeguard missile defense site at Grand Forks, N.D., in the early 1970s (about $1.5 billion in today's dollars). It also takes into account similar expenses for land-based ICBMs and planning factors from DoD about relative construction costs in different areas of the country.

CBO expects that operating the Expanded Capability 1 system would cost a total of about $8.5 billion through 2015, which is some $1.5 billion more than the Administration estimates for the same period. All of the difference results from CBO's assumption that 30 operational tests will have to be conducted over the first five years rather than the 10 tests that the Administration now plans.

Eventually, operations costs for Expanded Capability 1 will reach a steady-state level of about $600 million a year (in 2000 dollars). Steady-state operations have three main components: day-to-day costs to run the equipment and keep it ready and to staff the command and communications facilities (a total of about $100 million per year); costs for an operational integration program, which would continually upgrade the NMD system to incorporate new technologies ($300 million per year); and the cost to conduct operational tests (about $200 million per year).

Those costs are based on information provided to CBO by the Ballistic Missile Defense Organization.

Capability 2

Although the Administration's plan for NMD indicates possibly upgrading Expanded Capability 1 to a more sophisticated Capability 2 system by the end of 2010, the Administration has not estimated the costs associated with that stage of deployment.

However, it has specified what the Capability 2 architecture would consist of as well as the areas in which most of the improvements would be made. Based on that information, CBO estimates that upgrading Expanded Capability 1 to Capability 2 would cost $6.1 billion--for a total cost of $35.6 billion for that level of National Missile Defense.

Although the number of deployed interceptors would remain the same, improving the ability of the Expanded Capability 1 system to handle complex threats (specifically, ballistic missiles with sophisticated countermeasures) would add more than $2 billion to the cost of the interceptors. (The exact technical details of moving from Expanded Capability 1 to Capability 2 have not been announced. ...) Moreover, a further 19 interceptors would be needed for integrated flight tests and operational tests, at a cost of slightly more than $0.3 billion, bringing the total increase in interceptor costs to about $2.4 billion.

DoD has indicated that the hardware for the high-resolution X-band radar and the upgraded early warning radars would not need improvement for Capability 2.

But buying three more X-band radars would cost about $1.3 billion, and constructing radar platforms and domes would cost another $0.3 billion ($100 million per radar).

Additional flights to test the upgrades made for Capability 2 would cost about $0.7 billion, CBO estimates. That figure includes seven additional integrated flight tests during 2008 or 2009 (at a cost of about $80 million each) and engineering support. In addition, CBO estimates, 12 more operational tests--which occur after a system has been deployed--would be needed between 2012 through 2014, at a total cost of about $1 billion. Those tests would allow for a rate of six operational tests per year during the first five years of Capability 2's operations.

Finally, moving to Capability 2 would increase the day-to-day operations costs for National Missile Defense by nearly $100 million a year (to support the three additional X-band radars), or a total of about $0.5 billion. Annual operating costs after 2015 would total $0.7 billion (in 2000 dollars).

The effectiveness of the Capability 2 system depends on the deployment of the SBIRS-low satellites, which, according to the Air Force, will provide the NMD system with 24-hour coverage of global threats. As mentioned earlier, CBO's estimates for National Missile Defense do not include the costs of those satellites, even though they are essential to Capability 2's success. Those costs would total nearly $10.6 billion through 2015, CBO estimates--$4.2 billion for research and development, $2.7 billion for purchase of the initial 24 SBIRS-low satellites (about $100 million apiece), $1.1 billion for operations (about $5 million a year per satellite), and $2.7 billion for purchase of replacement satellites (assuming each satellite has an average mission life of about eight years). If SBIRS-low was unavailable for any reason, Capability 2 could be achieved by using faster interceptors, deploying more forward-based radars, and developing more capable "kill vehicles" (the part of the interceptor that hits the incoming warhead). None of those changes or additions are currently planned.

Capability 3

The Administration's plan for Capability 3 of NMD calls for deploying 125 additional interceptors (with Capability 2 sophistication) by 2011, probably in Grand Forks, N.D. It also calls for adding 25 interceptors to the site in Alaska, for a combined deployment of 250 interceptors. CBO estimates that moving from Capability 2 to Capability 3 would cost more than $13.3 billion through 2015--or a total of $48.8 billion for that level of National Missile Defense.

The additional costs would come from several areas. CBO estimates that purchasing 150 more deployed interceptors and 30 more spares would cost about $3.3 billion (nearly $18 million each). Buying five additional X-band radars, stationed both in the United States and abroad, would cost a total of about $2.2 billion. Constructing the radars' platforms and domes would cost another $0.5 billion. In addition, buying an upgraded early warning radar and deploying it in Asia would cost about $0.4 billion, and building the command and communications facilities would cost about $1.4 billion. Other construction costs at Grand Forks would total about $1.6 billion (equivalent to the Alaskan site).

Adding a second site to the NMD system would increase the costs of both day-to-day operations and operational integration. CBO estimates that daily operations at Grand Forks would cost a total of about $1 billion through 2015, or an average of about $200 million a year. Operational integration at that site would start in 2008 and would total about $2.9 billion. Those estimates for day-to-day operations and operational integration are comparable to the costs at the Alaskan site. Annual operating costs after 2015 would total about $1.1 billion (in 2000 dollars).