The "Affordability" Hustle

>Is it plausible that the world’s richest nation cannot bear up under a 30-year fighter replacement cycle?

The Government Accountability Office, that ever-flowing font of military advice, is at it again. It has sent forth a new report—“Tactical Aircraft: DOD Needs a Joint and Integrated Investment Strategy”—that takes a hard shot at service fighter plans.

The watchdog agency does not attack the requirement for USAF F-22s, Navy F/A-18E/Fs, and joint-service F-35s. Rather, it directs fire at their supposed unaffordability. As GAO puts it, “These plans are likely unexecutable, given competing demands.” It provides numerous charts and graphs making that point.

What does GAO recommend? Pre-emptive surrender. The military is urged to curtail “service-centric” programs, link arms jointly to rub out “duplication” of capabilities, and accept “efficiencies”—which is GAO-speak for “reductions.”

As usual, that kind of talk drew a crowd. The Senate Armed Services Committee, for example, promptly authorized a study of “alternatives” that, “while not necessarily satisfying all current requirements,” might “require less funding.”

Anyone with rudimentary knowledge of fighter planning will sense something wrong here. It has been about three decades since the US bought a new generation of fighters. USAF’s F-15s, F-16s, and A-10s and the Navy’s F-14s and F/A-18s began arriving in the 1970s, and the Marine Corps AV-8 shortly after. Is it plausible that the world’s richest nation cannot bear up under a 30-year fighter replacement cycle? The question answers itself.

Actually, the bigger budgets expected in the near future will reflect a more or less routine upturn in the fighter procurement cycle, which plunged in the 1990s when the services were force-marched into a long, post-Cold-War “procurement holiday.”

Today’s fighter program is modest, comprising a total of 183 F-22s for the Air Force, 462 F/A-18E/Fs for the Navy, and 2,458 F-35s for the Air Force, Navy, and Marine Corps. Plans also call for lengthening the service lives and upgrading the capabilities of a few hundred F-15s, A-10s, and other “legacy” fighters.

Those numbers are considered, at best, the minimum needed to equip USAF’s 10 air and space expeditionary wings, the Navy’s 10 carrier wings, and the Marine Corps’ expeditionary units.

The proper perspective on the size and cost of this plan can be gleaned from data contained in the GAO’s own 81-page report. For example:

The total tri-service fighter program is expected to cost roughly $400 billion, when all is said and done. If you purchased all of the fighters in a single year, it would consume just three percent of US Gross Domestic Product—not an insurmountable burden in its own right. However, nobody is talking about doing that; the cost actually would be spread over more than 20 years.
Over the past three decades, the Department of Defense has spent $534 billion to develop, procure, and modify fighters flown by USAF, the Navy, and the Marine Corps. The amount, while large, caused no financial crisis or even serious fiscal pain, though both the US economy and federal budget were far smaller.
Experts expect the period 2007-13 to be a time of great budget stress. Even so, DOD in that period will invest just $109 billion in fighters—roughly what the Army and Marine Corps will spend to add 92,000 ground troops.
Over the past decade, the tactical air forces’ share of the total defense budget stayed consistent. Counting everything, the fighter forces took in any given year roughly 11 to 12 percent of total Pentagon spending. The cost of fighter acquisition will average $16 billion per year.

Sexy hardware gets the bulk of critical attention, but it is only one part—and not the biggest part—of the fighter enterprise.In 2007, the Air Force will spend $36 billion on fighters. Of that, about a third—some $13 billion—will go to hardware. The rest is needed to fund personnel, operations, maintenance, and construction. Those are sunk costs, unaffected by new fighter acquisition.

To be sure, we don’t know anyone who thinks execution of the fighter plan will be a snap. Certainly, that is not the case in the service we know best—the Air Force. Let us stipulate that the GAO’s auditors have a certain point in their worries.

It is true that increased costs of new aircraft, caused by long fighter development times and overruns, have reduced DOD buying power; it now expects to buy one-third fewer modern fighters than it had planned. Until new aircraft are ready in sufficient numbers to replace legacy fighters, however, DOD will have to hold onto more of its old systems. They, in turn, must be sustained and upgraded, which takes money. That money, once allocated, will no longer be available to pay for new aircraft, which again drags out the schedule, starting the whole cycle anew.

Note, however, that all of the worries flow from a specific assumption about defense outlays—that the DOD “topline” is fixed and cannot be adjusted upward. The bean counter’s preferred solution in the event of cost growth is to trim a program to fit an arbitrary budget level. That is certainly one option. Indeed, that has been DOD’s favored approach for years.

However, it is only one option, and not a good one. The nation has run out of time and space for using it. The affordability hustle is just the latest distraction which could divert Congress and the US public from employing the best solution: raising the defense budget to pay for validated defense needs.

Regular readers of this page are well aware of our view, based upon hard fact, that the US today spends a relatively small share of its national wealth on defense—less than four percent of GDP. That is a fact official Washington should ponder long and hard before deciding to further cut fighter programs.

As for the GAO, it would do us all a favor if it gave the “affordability” riff a rest and spent a bit more time helping the nation determine the true cost of defense.