Transcripts For CSPAN3 Discussion 20240702

Discussion on defense spending. You are watching live coverage here on cspan. How do we decide how much the u. S. Should spend . I know about the federal budget but i am more confident comfortable talking about things like Social Security, the opportunity tax incentive, state local Tax Deductions and the Defense Budget. I called my colleague at brookings and put the question to him. How much should the u. S. Spend on defense . He said i just finished a 20,000 word answer to that question. So here we are. You can read all 20,000 words on our website but he has promised he will not try to read them all here. I want to start with a question i cant answer, how much does the u. S. Spend on defense . Can we get they wind up . The short answer is we spend a lot. There are a lot of ways to measure this but lets start with a few things. This is a pie chart that shows how we spent the federal budget on the fiscal year. We spent about 900 billion on disk defense. 12 of all federal spending. You can see here that the biggest slice of the budget is mandatory spending for entitlements, benefits like Social Security and medicare, and that is the growing part of the federal budget. But the defense slice is big. Particularly compared to the nondiscretionary budget, which is funding the things we talked about but the federal government does, national parks, state and local governments. Even though it is only 12 of the budget, it is pretty big. The department of defense buys more goods, services and software than all other Government Agencies combined. It employs about 2. 2 million people. That is more than all of the other executive Branch Agencies combined. The workforce is about 1. 5 million. And one third of all civilian federal employees are employed by the department of defense. Some peoples tally says we spend more on defense than or as much on defense as the next 10 countries combined, china, russia, india, saudi arabia, germany. But that may understate how much the chinese spend on defense. I dont have a table to tell us about that. Another thing to do with the Defense Budget is to do historical funding for defense in real terms, inflationadjusted terms. It shows what cbo projects we will spend based on the department of Defense Budget. That green line is what congress does. Theres so much for the space budget and then if we have a war in afghanistan or ukraine, they put that on top. It often does get builtin. The point here is you can see that defense is expected to rise in real terms over the next decade. Travis sharp was one of our speakers today and says that trend of rising defense speing presents one area where washington policy papers of both parties keep finding ways to agree. You look when you listen to the congressional debate, should we spend more on nondefense discretionary, or how much more should we spend on defense in real terms . Another way to measure the Defense Budget is looking at the share of gdp. How much effort to be put into the Defense Budget, the chart looks a little different. This is defense spending it was high during the vietnam war for obvious reasons. It has gone up and down more entities that about 3 gdp. We keep telling our allies we had to spend at least 2 of gdp. Hes going to talk about this more in detail. Let me explain about the order of the program today. Mike is going to give a 15 minute presentation of his paper on this. He is a man of many titles, but most relevant is the chair of defense and strategy and director of the center on Security Strategy and technology in our Foreign Policy program. He has been at brookings for nearly 30 years. He has a phd from princeton in public and international affairs. I will be joined on the panel with two other experts on defense spending, a senior fellow at the American Enterprise institute who has had a variety of roles in the pentagon and defense spending. She has a degree from georgetown. Also travis sharp, the senior fellow at the center for budgetary he also has a phd from princeton. Without i will turn the podium over to mike and i will be back after his presentation. Thank you, david. Good morning. It is nice to have you there. I will try to spend 15 minutes making the Defense Budget accessible to those of you who dont think about it all the time. To quote the famous book from the whiz kids of the 1960s who wrote a book with this title, david has already captured the yen and yang about how to think about this. The military budget is almost 900 billion and it does not count homeland security. It is a lot of money and more than the cold war average, even after adjusting for inflation. It is more than the peak from the cold war if you can believe that. His last chart showed it is only a little more than 3 of gdp. As mckenzie and i observed saying a moment ago, the pie chart of federal spending, 12 of the federal budget is a lot but it is less than it used to be. In the early years after world war ii, even after when we downside downsized and we were in the cold war, we were spending about half the federal budget on the military. It is entitlements that jump out , probably a lot of you when you see that chart as the big enchilada. I come at this as a perspective of how to be a cheap hawk in the 20 20s. Those of you whove been around will remember newt gingrich, after republicans had taken congress, he wanted a downsized government. Someone asked him, how does that square with you being part of the legacy of the reagan revolution and the royal apostle of president reagan had only left office a few years before . Gingrich said im am a hawk but a cheap hawk. Im not of the same political persuasion of him but i am philosophically in the same boat. I want to talk about how to be a cheap hawk. Im trying to spend enough to make sure that based on my analyses, we are in a robust position in a troubled time in Global Politics with a lot of challenges around the world. And yet trying to minimize the burden on the taxpayer and viewing the overall size of the deficit and the debt as longterm National Security challenges. The Defense Department cannot solve that problem and im concerned about our politics. I always come back to the socalled discretionary accounts, only one third of the federal budget together, defense and domestic. And try to put pressure on those to reduce spending while we leave entitlements alone and leave the revenue issue alone. That wont work. But at a time of fiscal distress in a challenge to our longterm economic foundation, it is better to be a cheap hawk then to bless every pentagon request. That is the philosophy im coming from. When you think about how to build a strategy, i think it is part of why david wanted to have this event. If you are a generalist, thinking about our role in the world and our military posture, how do you understand the basic conceptual drivers of an 850 billion a Year National Defense Program and a military that is not huge by historical standards or Current International standards, 1. 3 million active duty. About 2. 1 million total employees you count civilians as he said. Even when you add in the reservists, guards women, we are up to about 3 million. That is small compared to the cold war average and even china today. It is not even that big compared to india or north korea. So to have an establishment that is fairly small in size but being asked to do a lot. Let me briefly speak to the question of what it is being asked to do. You think about building a military strategy, you have to consider who might fight against you, who might fight with you, how many of these wars you have to be ready for and what does the war look like. What is an adequate margin of insurance or safety in terms of your confidence level that you could win that war. With the ultimate goal being that we want to deter the war. Want to convince our wouldbe adversaries to stop dust it is not worth the fight against us. So theres a phrase when talking about caring for war, we want to be Strong Enough that if we wind up in conflict, our troops live in the enemy dies. When she says it it sounds better. Maybe you will hear it in a few minutes. At the core point for me is you want to have enough military capability and credibility to fight. That we will prevent the wars from happening in the first place. We are at a point in our Defense Strategy where china and russia have become our top concerns. Heaven for bid we actually fight them, we have to go back to the old line that the purpose of military forces in the future must largely be to prevent war from happening. Ideally that would always be true, but especially when youre dealing with a Nuclear Armed superpower. When you think about these general principles for dispense defense planning, against whom you fight, who would fight with you, how many wars at a time and what does the war look like, what margin of insurance or advantage do you seek so that the enemy will hopefully not want to fight you in the first place . What i would say to those of you who think we spend too much on the military, i would cement that we already have a fairly modest and minimal set of standards for how to define the answers to those questions. It is a natural Defense Strategy of 2018 and it continues with secretary austin at 122. For the cold war and after, we hypothetically envisioned being able to fight two at a time. The goal was to make sure if we get involved in a war someplace, there is a window of opportunity or a weakening of deterrence elsewhere we want to prevent opportunistic aggressors from susan on the fact that you are already engaged in one place and attacking you at the same time. That is a nice standard to have. It gives an extra margin of insurance and an extra margin in case you are wrong about how many are required to win a conflict. We are always wrong about that because military planning is an imperfect enterprise. In the first post it first bush administration, they thought beating Saddam Hussein might take five to 10 times as much pain, suffering and american casualties as it did. Luckily, we exaggerated or overemphasized or overinflated our best prognostications of what the war would look like. The Second Bush Administration made the opposite problem. Im not trying to convey a political point about objectives, it is more a point about military planning. If you get it even within 25 to 50 of the ballpark of what you think you need to win a war and it turns out to be validated, that is about as accurate as you are going to be. The capability gives you an extra margin of error. That was nice when we could do it, with the when iraq and north korea were our chief concerns. It is harder to see even the taliban, isis, i al qaeda we do not have complete success even against more limited capabilities. But today we plan on being able to defeat either russia or china, not both at the same time. If we do wind up fighting russia or china, we dont assume that north korea will try to attack at the same moment. We want to have limited deterrence against them on the peninsula. Similarly was iran. There was a planning framework for our military. Well have a little debate in a few minutes about how to sustain that strategy. We have a fairly modest set of criteria. For what it superpower needs to have. We have seen a period of two decades of conflict in which the United States did fight two wars at the same time. Not a very good job when we had to do both simultaneously against lesser photos than we are talking about today. That is the framework. Its i will give you a little background on the Defense Budget, i will pick up where david left off and remind you in Historical Perspective of where we are today. We are below the peak of the iraq and afghanistan conflicts in the size of the u. S. Defense budget once you adjust for inflation. What we are well above the cold war peaks. Colors dont buy dollars on the battlefield. They biking abilities. Its there were a million built up in the trump years. That is a buildup we had after 9 11 or during the vietnam conflict, or the reagan buildup of the 1980s. The cold war numbers range between 500 billion dollars a year and 750 billion a year. Next slide, please. To give a sense of the international perspective, david mentioned that pending on how you count it, we spent more than the next 6, 8, 10 countries combined. It is worth knowing as a matter of input who is putting resources into the military. There is good news if you put our Defense Budget in global perspective. This is hard to read. I will tell you the United States a couple of years ago was spending about 38 of the worlds total of all expenditures on armed forces. Our nato allies added in another 17 . So all of nato combined is 56 of World Military spending. It is good news and bad news. It is good news in that we are spending a lot on allies, the military. Many are not spending as much as we think they should and they all represent obligations. Have to have a Strong Enough American Military to defend all that. It is not just that the Defense Budgets add to our own but the territorial production becomes our burden as well. As if it were american soil. That is what the mutual defense path means. After some sense of resource allocation, we are going to continue this. All of our other allies around the world, another 12 of military spending. The u. S. Led coalition, nato allies, nation allies, other major Security Partners in the middle east represents about 60 of all military spending. That should give us some confidence that we are in a strong position. But should not give us any kind of overconfidence for the very reason that most of the conflicts we might find would be near the adversarys own soil. And dollars dont fight dollars. Dont have to have a defense to dust Defense Budget near us Defense Budget near us to win. Just ask the taliban. I want you to see these inputs but not think they are conclusive analyses or predictions of outcomes in hypothetical conflicts. A couple of more and im going to make some general points. This is giving a sense, we were talking on the sidelines that the 240 billion estimate of chinas know terry budget is highly debated and uncertainty uncertain by plus or 50 . It could be well into the 300 billion range. There is a study saying it could be even higher than that. But it is somewhere between one third and one half of American Military spending, easily the secondbiggest budget on earth, doubling every seven to 10 years, and probably will keep doubling every seven to 10 years. It is less than 2 of chinas gdp, but they become substantial enough and that is still a lot of money. And the war we worry about winning against china is near this. I dont think they could come close to that. If i could bring down the Defense Budget and the budget request, if you are curious about which military services spend the most, at this point it is the air force. All the air force budget includes a lot of the intelligence budget. Out of 850 billion in total u. S. National Defense Budgeting, 100 billion is the intelligence budget within the Defense Department, hidden in plain sight. Because it is now public and unclassified. Every other detail about the intelligence budget is classified. About 100 billion of that is about defense spending. Much of it is to put up satellites and maintain technical capability. The navy budget includes the marine corps. The department of the air force includes the space force, which is tiny but still expensive given the satellites. The army used to be our biggest Budget Service when it was bigger and very active in iraq and afghanistan. It has now become the smallest of the big three departments and a lot of activities have been shared across the Defense Space and represent almost 150 billion worth of spending. Finally, if you are wondering, how do we spend, this is the breakdown on the title. We spent about three to 30 billion on operations and maintenance. The reason the 23 number is higher is that it included a lot of ukraine money. 3 30 is closer to what it was next year. There has been a valuation acquiring new weaponry. About 300 billion in investment for the future, 300 billion of operations which include civilian salaries but also equipment repair, training, recruiting, many other things. Finally, almost 200 billion is for the men and women of the all volunteer force. Now i would like to enclosing of this part of the conversation, setting the stage for the conversation that will follow. I would like you to understand how i did my calculation to argue that you need small real growth. I think the agreement between Speaker Mccarthy and president biden, the default avoidance agreement that is in some degree of flux and jeopardy, as we try to Bring Congress back to town. That agreement is not quite enough for the military. One of them on stage may tell you it is not nearly enough, i think it is about 10 billion to little. One calculus she was to take the force the pentagon believes we have for the future of 1. 3 million activeduty military personnel along with the modernization agenda we believe is important for deterring china and russia and improving future capabilities. Take that budget and projected out over a tenyear period. Look at what kinds of expectations we should have about it growing faster than budgeted for. Excitations we should have about weaponry costing more to build than we think. We should not be surprised by that because modernizing weaponry is the same as inventing new weaponry. Why would you think you could set it to a schedule or the cost to . Im not trying to be the defender of every program in the defense industry, but you should expect cost to grow in some cases for technology that you dont know how to build in the program. The process invention is inevitably nonlinear and nonpreventable. A couple of more points i would make, thinking about why im a cheap hawk and why it is so hard even for a cheap hawk to find savings in the Defense Budget. Check off two or three. One is that in a personnel account, it is not a good time to figure out whether we can save a lot of money on military housing or some benefits are too generous. We pay our volunteer force well but theyre doing incredible work, they are being asked to do a lot and they dont make overtime and fewer people want to join. We have a crisis in recruiting in our all volunteer force. The next conversation is about whether we should seriously consider the draft. Before we get to that point, we should protect robust military conversations. We owe it to our men and women in uniform and we need to incentivize people to join the military and stay in it. Military readiness has reflected the maintenance budget. It is a difficult and dangerous world. Theres the potential for conflict already which means we cant skimp on maintenance, training, foreign presence abroad. I have a few specific ideas to save a few hundred million dollars, a couple billion. My old colleague who was comptroller he said finding the budget is hard to keep trying. It was not a true chilean churchill phrase but he was right. It is usually 100 a couple million here, a couple hundred million there. It is real money that is worth skipping down to pick up off the sidewalk, but it is not going to solve a dilemma about unmet needs in at hundred 50 billion enterprise. I mentioned before, we want our troops not only to be well compensated but to have the best equipping in the world so that if we fight, they live and our enemy dies. Mckenzie puts it better than i do, but we are out of time we are at a time where we must be successful in deterrence of russia and china rather than figuring out who is better after the fact once the smoke settles and the Nuclear Mushroom clouds dissipate. We dont want to get to that point. I would submit that for contingencies in the western pacific over taiwan for deterrence of our nato allies in eastern europe, we have to be at robust and look for in our current force where china and russia may perceive and achilles heel. They can knock out our commandandcontrol, our forward bases. Knockout our combat units in a way that they have a window of opportunity to successfully complete aggression in our neighborhood before we can get ourselves after dust off the map. I recognize a few savings and a cute a few cuts insert weapons. But i also think there are a few specific vulnerabilities that i want to close to make sure china and russia dont see a pearl harbor opportunity, to knock this out of the ballpark for a month or two so they can complete in aggression and hoping we dont have the commitment to vote ourselves up and come back at them. That is the most likely way deterrence could fail. Not that they cut outs logos, but they could not miss out on the flight long enough to do the phone business in their own neighborhoods before we could reverse the aggression. We dont want those achilles heels and vulnerabilities. There are some areas where the pentagon has not yet proposed enough spending to redress those concerns. This is a broad picture overview, we are getting some of the details of the discussion and im looking forward to being joined by colleagues on stage. Thanks. Great job. I want to start by reading something that jane harman and eric aleman and eric wrote on the condition the commission on national strategy. They understand this is often shorthand for defense. While spending more on defense does not guarantee we will deter china and rollback russian aggression, spanning less will almost certainly fail. But it is also true that buying incrementally more of the same mix of weapons and technology will not produce the force necessary to meet the challenges posed by an aggressive china and russia. More alone is not better, better is better. Hard to argue with that. With that, mckenzie, do you think that we could meet what you think are the defense needs of the United States with the big picture budget that mike was talking about, over the next decade or not . Thank you for taking me back to grad school this morning. We had to read the book, im not going to talk about the book. Basically i spent two years of my life answering that question alongside this guy. The answer to your question and the answer to the bed is the answer to the opeds we have more than money but we do not clean sheet anything. There is no set baseline, like for mandatory spending, with auto increases. There is no debate and discussion in congress. We just do that because we do that for what are primarily Health Care Programs. The Defense Budget has no preestablished baseline. What are the president say, and it is sometimes based on strategy, sometimes more or less than other times. On the mandatory side, the blue you had, those are essentially Health Care Programs for the most part. Within our own Defense Budget it looks just like that. It is a microcosm of federal spending that looks like a pacman. You have automatic spending, spending on autopilot that does not change yearoveryear substantially unless there is a total fundamental relight rewrite of our global strategy. There has been attempts at doing this although what we tend to do more often is chip away. If you could clean sheet of budget and building from scratch every year and have a whiteboard behind you there is enough money. That is not the world we live in. It strengthened slightly, particular the recruiting crisis we have several years Different Levels of severity by service. Most of the Defense Budget is not available for strategic choices and changes. It is probably less than 18 . Within that 18 to 20 can you make a lot of changes and reductions . Sure. There are consequences and benefits. I want to present the budget as it is, not as we wish it to be. We do not start with a whiteboard. We start with how they budgeted last year. Is 1 real enough or not . The cbo has done great work, they have their longterm Defense Budget reports. Depending on the account within Defense Operations and maintenance, research and development, those exceed inflation. When we have Defense Budget total growth you have under budgeted bills. You have to cover those spreads with the topline. When you asked me is 1 above and nation enough but the growth for Defense Budget just to exist on autopilot is 2 to percent above inflation, you have to cut to exist. That was bobs work line. Just to maintain the military as it is. No strategic thought. You have to cut every year to exist. Is 1 enough . As long as you are diminishing your global objectives, your mission, your manpower, and your workload. Where are you on this question . I think 1 real growth year is not enough. I think 1 to 3 is what will be necessary to afford the type of additional investments that might wind up being necessary. I will briefly sketch where that comes from. Mikes paper has a series of spending reductions that are worthy ideas, but the feasibility of implementing some of those will be difficult stop just a focus on the congressional side of things. Each year the dod proposes divestments to weapon systems and each Year Congress limits some of those divestments. That means because of constraints on congress ability to implement reforms and also one dod ability to implement reforms the savings we would get out of the proposals would be less than we would hope for. To put that differently, the expected value of the savings is probably going to be less than what is theoretically possible. Since we will save less through those types of proposals, in order to invest in those types of things mike outlined as being necessary, we will have to increase the topline. Comments on the 1 of 3 benchmark i mentioned. From 2016 to 23 the average growth in the Defense Budget has been 2. 5 in real terms, including supplemental funds. I think a 1 to 3 target is a reasonable projection that reflects some of the agreements policymakers have been reaching. I am concerned that you guys are conceding defeat before you fought the battle. If i gave you that same spiel and i said we are stuck with Social Security the way it is and it will run out of money in 2033 so there is no way we will cut benefits on old people so we have to find a way to increase spending on Social Security, or if i said to you that health care runs faster and grows faster than everything else, we need to keep pumping more money into health care, this seems like a dangerous way to run the government budget. Assume everything that is screwed up will be screwed up forever and find a way to borrow money to pay for it. I understand what you are saying, mckenzie, that if we cut the Defense Budget below 1 they would have to make some ugly choices. I wonder, isnt that the point . How are we going to get an efficient Defense Budget for an Efficient Health care budget if we dont say you guys have to figure out how to do better with this amount of money. Lets do it. Mckenzie i will fight the premise of that question which is that government is efficient. It is not. If the Defense Department were a private company they would be bankrupt, chapter 11, sued repeatedly, taken to court. David that is not my question. My question is if you give them a Budget Constraint you might have to meet at. You say they take 80 of the spending off the table, and im saying force them to take it not off the table. Mckenzie let me revisit one of the main points i am making which i hope answers your question. I talked about the limited fruitage of choices the decisionmaker has within that budget. That is what is important to focus on. There are basically eight dials or stats you can move up or move down, you are the most senior person, you are whatever. You are the chairman of the committee. Those range from more great power competition, less mid tier defense, iran and north korea, what do you want your military to specialize in more than other skill sets or service or capability. Then you have readiness, total dollars spent, and how modern is it . The military is always a blend of old and new. That is what you are working with in terms of making choices and changes. Those are big choices and changes. Fundamentally that is a fraction of total spending. He want major muscle movement. You have to make major changes to outcomes that you expect the military to achieve. I see the opposite happening. The military is the Super Walmart federal agency and it is the easy button everyone pushes for everything. It is not moving in the direction of doing last or being better at the things we want to do, china, taiwan. The House Appropriations bill that just came out, we have a bunch of other federal agencies that are good at counter drug that should be doing that. The border, fentanyl, these are all important things and i care about them. I do not want the Defense Department doing these things. I do not want the Defense Department washington can. Im not saying there is no unsacrosanct dollar in the Defense Budget. Im just saying we have to be realistic of the outcomes the dollars can achieve. Mike it is an important unit and yang. We always want the tensioned we always want the tension in the budget conversation. Some of the things i would propose would include ideas like the navy prefers to operate one crew per ship and there is logic for that and ive never been a sailor so i do not claim to understand all the details of how any ship could vary from the other ships in that class. It still strikes me we could be more efficient if we use an idea we already apply with minesweepers and submarines to have a couple of crews work the same ship. You might train in home waters on one ship and then fly across the ocean to meet up with your ship in port in korea and japan. I they we should ask the navy to do more of that. Culturally it is hard stop logistically it is hard. I am in favor of pushing them to do it and that is one of the reforms in my paper. Another one, and i know mckenzie does not like this, in the pentagon there are a lot of jobs with young strapping men and women will young men and women are doing in uniform where people sit around asks. Why not make those civilian jobs where people do not have to go through trainings, they do not have to work their way up the rank structure . There are 300,000 out of the 1. 3 million activeduty jobs that are like that. Im not suggesting all of them be turned into civilian jobs, but because of the efficiencies of having somebody who does not have to do the military specific tasks involved, you could cut your workforce by 20 to whatever number of jobs you decide is in that category. I would like to put pressure on dod to look for those jobs. I do not know how to calculate the exact number but i have an estimate in my paper. I think we have a lot of Nuclear Weapons capability in the United States and weve ever fight a nuclear war we have lost before we know the outcome. We also have two countries with big Nuclear Forces that are simultaneously problematic for us. One of which is willing to throw around its nuclear saver. We have to find a nuanced approach to nuclear modernization. Im in favor of building the be 21 bomber because it is important for conventional missions. I am in favor of replacing the submarine ores because you have to keep our sailors safe. I am willing to look at things like do we need a second place to build plutonium pits for Nuclear Weapons in South Carolina as we are currently planning to build for the department of energy. We need a longrange standoff weapon, and can we delay the replacement of the icbm . That is a closer call. These are the kinds of proposals i have in my paper, none of which are easy to implement. The sum total, if you did all of the reforms in my paper, you are saving 15 billion a year, which is a lot. Compared to 850 pump it is a modest percent. David what you think about this more than one crew per ship thing . They keep me on the shore and that is probably safer for everybody involved. I will steer clear of telling my c base colleagues how they should conduct their business. I want to Say Something to remind everybody of something mike said in the introductory comments. There is a classic paper by bob hale about how to generate efficiencies in the Defense Budget and the title of the paper is keep trying but be realistic. That is a good example of what is happening on stage. Life is emphasizing we need to keep trying, mckenzie and i are emphasizing we need to be realistic. That is why this dynamic is so important. I do not think you can achieve 1 to 3 growth in the Defense Budget unless you are actively pursuing the type of reforms mike outlines in his paper. The logic behind that is straightforward. How can we go to the american taxpayer and ask them to continue investing enormous amounts in defense unless we are demonstrating we are making efforts to be more efficient. The debate as to be about the specifics of some of the programs, but the tension between these impulses is essential for achieving defense acceptance. David you made a point that we have had 14 Reform Efforts in the last eight congress has. Is that there any way to change the dynamic so we do not end up with a situation where there are things that should be done that we cannot do because the 530 five members of the board of directors will not do them. Travis says they are buying weapons the pentagon does not want because Congress Wants them. Is there any political economy thing that will change this dynamic or do we have to live with it . Mackenzie there is. I have published a lot on that question. How i summarize those Reform Efforts is that zealous reformers are over focused on how the pentagon buys things, but now they buy fewer things and labor and services and i. T. And technology and software. Weapon systems are the commodity. Until reformers started to think differently and broader in scope about what covers reform, so similarly you see flow from that, the reform ideas that come, which focus on one account for weapon systems, particulate procurement. For the research and development. I would argue balance between procurement and r d ratio. Once there is a broader view of total defense investments and what can be reformed, that it opens the aperture. Here are my five takeaways that tom and i wrote about after we convened a group, we had some friends from brookings involved. We took a scalpel to the Defense Budget and that we took a step back and looked at it with members of congress. A couple of things. Serious defense reform is bigger than the purchase and acquisition of things, changing how the pentagon buys things. That is important. Now it is over reformed. Serious defense reform is the patient work of many years. Can you cut this weapon system, we cant, we are thoughtful. That is not making thought or smart that does not make you smart or thoughtful. That is a position that makes you feel good that has a good argument by someone somewhere. It does not mean you should not cot, but it requires leadership. You have to build coalitions. You have to build coalitions with other parties and other committees with jurisdiction in congress, with service organization, like the Armed Services branches so those you have to do actual work to build outreach and make a case. Then most reforms for the Defense Budget, including some michael talked about, the base closure, there is an upfront cost before you save a single dollar and usually the costs are two were three years before you reach the savings five years later. Almost no reforms tonight find that does nots 20 upfront to implement. You have to pay people to close bases. You have to do new military construction at another base if you are losing at one. Like in maine when i worked at the senators losing the hangers and we had to build other ones in florida. I can keep going down the list. Reasonable reform is not changing one line in the budget and saying im a reformer. A program in the budget. David i think from the back of the envelope i did, about 30 of the Defense Budget is personnel and personnel are expensive. We know that wages and Health Care Benefits will rise faster than the rest of the budget. We know there are some choices to be made about uniform versus civilian. Unless we will replace the armed forces with robots and ai, which i suppose we will have to talk about, how does the pentagon get its arm around that cost or that just something we have to accept . Travis i will focus on congress in answering that question. David i guess we have established that congress is the root of all evil. That is a theme. Travis from 2016 to 2023 congress added 80 billion to procurement accounts. That 80 billion amount is larger than the congressional adjustments made to the three other major defense spending accounts combined. The point of me telling you that is to emphasize something mckenzie just said, which as Congress Continues to address the Defense Budget in programmatic terms and also through r d. They take much less interest in terms of making spending adjustments to the military personnel account. What is required to make reforms to military personnel on the hill . Outcomes on the hill depend on the actions of individuals. You need policy entrepreneurs who are willing to frame problems and build coalitions in order to enact any type of meaningful change. It is worth thinking about what is the current pipeline of defense policy entrepreneurs in congress. The United States has been blessed ins the end of world war ii with having powerful and effective defense policy entrepreneurs. For various reasons relating to the political situation in the country, the political rewards associated with becoming an expert in defense policy, that pipeline of defense policy entrepreneurs has shrunk a lot. A necessary first step in thinking about how you would implement any type of reform is identifying those numbers of congress willing to lead their colleagues to Better Outcomes. It is a small list of people. David if you want to end that by declaring your candidacy for congress you can do that. [laughter] there are a lot of things on peoples minds about what is going on and i want to address ukraine. What comes to mind first, just as a layperson, ive been startled by the stories out of ukraine sound like we are refighting world war i with people in trenches. Sometimes i feel like im watching a star wars movie where the ukrainians are sending unmanned drones and hitting apartments or whatever they are trying to hit in moscow. What is it we have learned from how ukraine fights and from how the russians seem to be better at defense than offense. What have we learned from ukraine that we should keep in mind as we tweak the u. S. Defense budget . Michael i would first speak briefly to the previous conversation and partly to the defense of congress. If you look at the interaction between congress and the executive branch. Travis was looking back at some of the great reformers and senators and congressmen and women of the cold war period, i think the u. S. Military personnel policy overall is pretty good today. Their potential tweaks here and there. I put it from a budget point of view in negative terms. I do not know how to shrink the military personnel account. We are paying our men and women in uniform well and they should be proud of it. They are reasonably well compensated. They make more than 90 of their civilian counterparts. They do not make overtime work and stroll or control their own schedule, they cannot take their families with them. I am not suggesting they are overpaid by any stretch of the imagination. I think we should feel good about the compensation system. The flipside is there is not a lot of cut. One thing i thought was not particular he optimized when i got into this business 30 years ago is the way we did military pensions, and we fix that. It used to be you had to stay in for 20 years and if you did you got a very good pension. If you stated for 19 years and 11 months you got zip. To me this was a perverse set of incentives. People would stay intimate for any, someone get out before 10 because unless you will commit to 15 more years you will not get a pension anyway. Now we are doing it the 401 k style. That is the success of congress and the executive branch working together. I wanted to put the positive spin into things which comes back to this uncomfortable reality it is hard to cut the Defense Budget when you spend 50 years building up a compensation system that even though it has shortfalls has worked well for the good of the country. Ukraine, i like the way you frame it. The way i would put it is more strikes me as being like the past than futuristic. There are good debates about this. Some of my good friends and favorite scholars have written about this. There is an excellent article in Foreign Affairs about why a lot of this war still looks like world war i. Dave petraeus just wrote an article about how ukrainians may still achieve a major breakthrough with some of the new weaponry they should get in the du jour. I would lean towards the middle interpretation to the extent there is a disagreement. We will find out on the battlefield. Lesson one is you have to stay flexible and supple because the lessons are being learned by him by month. Learned month by month. You have to make sure commandandcontrol survived the initial attack. Thank goodness we help president zelenskyy and his government doing that. The cia deserves a lot of credit. They kept the Ukrainian Cyber systems robust, they kept president zelenskyy aware of the risks to his presidency. Decapitation strikes are the number one worry i would have. On the tactical battlefield these drones in these apps and let you send in russian that let you send an information about where the drones may be. They work until the russians figure out how to counter them. That is the main argument in the Foreign Affairs piece, for every measure there is a countermeasure. Earth is still protective medium against explosives. If your dog and you are still safe. You have to have ways of knowing where the enemy is. That is where the competition happens between the drones and the antidrones. That competition will continue. One side will get a bit of an advantage. So far it looks like a wash. The one exception, if you can strike hard and early with the capability enemy does not know you have an cannot prepare against you can be effective. If you leave yourself vulnerable to that strike you can be in trouble, which is why the u. S. Military posture in the western civic is still problematic. We depend on big faces on big bases to defend taiwan. We have to go to a more dice for a more dispersed system and unmanned underwater systems that can carry sensors and help taiwan acquire those capabilities to make sure the chinese do not see a pearl harbor opportunity. That is my obsession. It is about resilience that it is about improving our lethality. I am says more about improving our resilience and our survivability. David travis, do you have use on what we have you have use on what we have learned from ukraine . Is our Defense Budget prepared for this kind of technological change . Travis one implication of ukraine i think is important is i think the conflict so far has emphasized to me the need for the u. S. Military to maintain some degree of balance in the force, by which i mean david like star wars, balance in the force. Travis not becoming overly invested in the highest technology solution. We will make those types of investment. Ukraine conflict has been a conflict where lowerlevel technologies, classic technologies have often proven quite effective. The battle is moves and counter moves. Someone exploits an opportunity, the enemy shuts it down. I would be concerned about the United States getting into a position where our military forces are not able to operate alongside our allies and partners military forces of the type we are seeing in ukraine because weve gone too much into the higher End Technology which might make it difficult to be sharing information are operating alongside partners. There still plays for lower tech approaches. David mckenzie, you wrote too often policymakers serious reforms from comes from a limiting 100 of something. I will i like that and i want to make a question about what we should eliminate. Does it make sense to still build huge aircraft carriers . Are they just sitting ducks . Mackenzie i thought you were going to ask me about a different article i wrote. I do not have the books. Mike is the book writer. Excellent book writer. I had proposed illuminating the entire undersecretary of defense for personnel and readiness. Later this week i will call for the elimination of Space Command , this will break the brains of washington. I am talking organizations when i talk about elevating something. The future of the carrier is not that simple. The thinking is if x,y,z does not survive the missile range of china it is not useful in war. I do not want to get to the war. I would rather prevent it. We use our navy for presence, persuasion, distillation, competition, everything you can think of. These are carriers that do that. There arent enough of them. We have a supply and demand mismatched that is so fundamentally out of whack i am not sure how to address that. When you talk about this or that capability, i think brought in terms of deterrence, which is what we use our carriers for, and avoiding the war, which is so much more expensive than this giant military on a peacetime basis. David you want to Say Something to the audience . Michael i favor a slightly smaller carrier fleet, not letting the Combatant Commanders have as much say in how we use them. Saving them for deterrence, but also having longerrange Unmanned Aircraft flying so they do not have to be within 500 miles of china sure. They are also important for deterrence of north korea, deterrence of iraq, deterrence of others. If we wind up in a fight with china the carriers might be more useful in the indian ocean intercepting tankers for oil. If china blockades taiwan and we decide we want to break that blockade will need carriers to do so. We also may want to use carriers in the indian ocean to block chinas supply lines. We will have to get into a world of those kinds of messy ways of thinking about military outcomes stuff carriers can still have a role but it might not be up against the shore of china. David this has taken a depressing turn. I will turn to questions. If you have a question raise your hand or stand up to the microphone and find you. Tell us who you are and remember that questions end with a question mark. A couple over here. What are you go right on the aisle . We will take two or three at a time. My name is john and i work for capital one. The overseas operations account i think about it in the context of something that is there to account for almost one time costs in addition to the base. It got me thinking about the discussion about upfront costs affecting real reform. Sometimes in addition to the constituents who did not want to change things there is sometimes a money aspect, we cannot spend that because we do not have the money. Is there any appetite for establishing an account for one time costs to implement to save money for the future and for more trust you can attach roi. He was to make a much better use. David to the gentleman in the blue. Sean, National Defense magazine. I think you have rightly knocked congress through the discussion. One big piece of this that is low hanging fruit would be not continuing resolutions that result in purchasing power loss, delays, inefficiencies. What can be done to get that message across that that is the easiest thing to gain efficiency and budget power in defense . My name is caroline reed. We all know cold war spending came to a head with of all of the berlin wall and after that came peace dividends. I am wondering what your opinions are on what Global Conditions you would need to see before we could ever take a look at decreasing defense spending, or should it continue on this deterrence path, increasing forever . David great questions. The first question comes up on the domestic side. Is there something we can do to encourage congress to spend money on things i will pay off in the long run, even if they cost in the short run. Will anyone take that one . Travis one idea that i was kicking around last year, which is borrowed from something kicking around in the 1980s was creating a reserve account, that would be money set aside to deal with the unpredictability inherent to Inflation Forecasts in defense spending, which is been a huge issue for the last few years. Inflation has been moving around a lot. The Defense Budget is structured around is some ssent about an asian. If the assumptions are wrong you may have less money available in terms of purchasing power, or you can have too much. The idea behind the reserve account is you set aside money depending on where inflation turns out. If it turns out you do not need to spend more to make up for inflation the money stays in the account. It creates a way of dealing with the inflation issue i think would be more rigorous and have Better Outcomes than alternatives. That is one of those types of proposals i think merits consideration. David what about the notion, can congress somehow structure its scoring so you do not get penalized for doing things that cost money in year one or two that save money in year eight through 10 . Mackenzie i like the idea a lot. No one is looking at it, or at least im not hearing any chatter about it, but it is not a bad idea. I argue for breaking the Defense Budget in two, more like how the states work capital and investment where you have capital and operating budgets, a clearer picture of what true military capability. Not necessarily kill. What is the tip of the sphere capability to fight and win when needed and that machinery and bureaucracy that is everything else, the annual budget, because of course Capital Expenditures are longerterm, it takes five years to get to this building, to get whatever. That gave a much more clearer sense of where the dollars go because you can think of is going towards aircraft carriers. Ill have to take a second question. I have long advocated that congress paychecks should be sequestered for each day passed the start of the is come near batch at the start at the start of the fiscal year. It would probably get their job done sooner if there were some consequences. Michael what are the downsides of operating on a continuing resolution for the Defense Budget . Mackenzie how much time do we have . David not much. Michael you cannot start new programs because all you can do is continue what is underway. If youre trying to be subtle, learn lessons from ukraine, and react, then your delayed six months. When you try to get into longerterm maintenance accounts , what mackenzies college has advocated, multiyear munitions purchases, all of those things that would allow you to do longerterm planning become hostage to this process. It interferes with strategy and Good Business administration and economics. David is there any hope we can have a piece dividend in my lifetime . Michael not for us. We are too old. It will take 10 to 30 years to settle the state of great power relations to a happier course. I am violating yogi berras cardinal principle of never predict the future, it is easier to predict the past and safer. Either we have the means to stabilize relationship with china over time, but i think it will take one to three decades. You and i are in our 60s. Our odds are modest for seeing a big piece dividend in our lifetime. Now at brookings, formerly assistant secretary of defense. Mike, you did a wonderful job of putting our spending in the context of other nations. I think it is worthwhile. I am asking if you were the other panelist would elaborate on the challenges involved in taking advantage of dispense of defense spending in other nations. As you are thinking about how much is enough and what should be done, could you talk a little bit leveraging spending. David with the commission on the national Defense Strategy. We have a structure that was built for the past 30 years, and not necessarily that applies to the defense threats we are likely to face over the next 20 or 30 years. Earlier this week the deputy secretary of defense announced a thoroughly significant change in the approach to purchase up to 2000 of thomas vehicles that would be used in a fundamentally different way. Can the department do that . David going to the easy questions now. Leveraging our allies. Michael i will reiterate a point made before. Our allies are our greatest asset but also in extension of our commitment. We have 60 strategic allies and partners around the world. One third of all countries on the globe we either have a formal treaty in which we say we will treat their territory like our own for all defense purposes , or something close to that. Mostly in northeast asia and the broader middle east. What that means is we have a lot of places we might have to fight and hopefully deter. Im amazed at the strength of our coalition. When i was in grad school before the cold war ended the cold war was underway but it had not yet ended. All of the theorists i read were talking about the likelihood once the cold war ended there would be new blocks of power that would form because people want to balanced against each other. We have not seen that. We have seen people want to get in to the u. S. Alliance system, even as we made mistakes in our Foreign Policy. In vietnam, in how we fought in iraq and afghanistan. People still believe democracy is a better form of government because it is transparent and we change power and we have all of these allies. We keep growing our alliances in ways that have exceeded what i would have preferred. The allies are hugely helpful because they constitute 30 of World Military spending but they give us 60 more places we have to worry about around the world. It is a good thing for our gratis strategy which is raised on the idea we should not let eurasia attend to its own matters because that did not work well before world war i or world war ii. The grand strategy is important but it should not be seen as something where the allies contributions way in and of us additional assets. They know we have their back at they know it will be hard to convince them, short of abandoning the alliance that will help at the security challenges. The places where we most credibly threaten abandonment are the places where they already spending the most. Donald trump do not like south korea but south korea is an amazingly good ally that spends a lot on its military. Some of our middle eastern strategic partners, they not be the best government but they tend to spend 5 or 8 of their gdp on the military. Some spend too much, but they are burden sharing and sometimes using those forces against their own people. It is a mixed bag. On balance we will have to view the allies as a mixed bag in financial terms, but a huge asset in grand strategic terms. David Anthea Thomas vehicles question . And the Autonomous Vehicles question . Travis can we produce a large number of unmanned vehicles . Yes. The lightning bug during vietnam was one of the first Unmanned Systems that went on to play an Important Role in the vietnam war. The lesson in that case was the air force had to create exceptions to standard Acquisition Policy and had to form Close Relationships with the industry in order to be able to generate these capabilities rapidly to respond to the operational environment. Can we do the same thing with the collaborative combat . Senior leaders are saying the right things and recognizing what is needed. There is a lot left to do. David it seems challenges with new technologies is not only procuring them, but also trying to figure out how you reorganize your operations to take advantage of them. The history of technology is that incumbents are the ones who struggle to do this. How much of a threat to the way the pentagon is organized is the growth of Autonomous Vehicles, ai, and all of the stuff that requires a different approach to using people and thinking. Travis it will require a lot of big changes. Redesigning squadrons. Having pilots of manned aircraft operating alongside a thomas vehicles. These are huge changes. As a case of military innovation , you need Senior Leaders setting the tone from the top to let the rankandfile understand if they are taking actions to achieve these goals that will be consistent with their advancement in the organization system. The air first deserves credit for providing exactly that. David i think we have some more. My name is roger and i am an editorial contributor to the hill newspaper. Im one of the few people in the room who claims no expertise whatsoever on the subject. It has been very informative. David i am with you on that one. Like most laymen i tend to reduce the question two simple propositions. In economic terms, what you usually ask is if im going out to dinner i look at the menu, if i look at a house to buy, what do i pay for and what do i get . You can slice and dice the Defense Budget many ways but the average person would be most comfortable with a geographic slicing and dicing of the Defense Budget. That never comes up among professionals. If i could pose the question, i think it would be informative for those of us who have no expertise by saying if we spend 1 trillion a year in defense, probably 250 billion is for europe, 200 50 billion is for east asia, 250 billion is for the middle east. Everything else is for the rest. If you had to address the question and the impossible way for an expert and say geographically, how much do we spend on defending our borders, how much do we spend of the budget defending our territory and then pretend you had to answer the question, lets extend that, how much more should we spend for this that or the other thing . Michael i love the question. My colleague when i started at brookings 30 years ago attempted to do what you pointed out in the last book he wrote. It was after the cold war had ended so he tried to adapt a little bit to the new world at that point. China had not risen the way it has now. I was glad he did it and ive repeated his percentages in my own book, defense 101, that i proceed to talk about why it is so hard to answer the question on the terms you just requested because the forces we have abroad, the 1. 3 million u. S. Military 1. 3 million u. S. Activeduty. About 200,000 are brought on any given day. There in japan, korea, germany, poland, and that countries in the middle east. Then there is a few hundred here, a couple thousand there, places like australia, singapore, the netherlands. Most of those 200,000 do not cost us more to have abroad than they do if we had kept them at home. The allies pay for a lot of the cost. The cost to us is less than 10 from the cost of a unit or person. It is not the basis abroad, it is the fact we have these commitments. Worse in the event of crisis or conflict. Then you can start asking if we do not have a commitment to south korea, which is a geographically challenging place to defend for a four, mental power. And we had this debate in 1950 whether we should try to defend south korea stop we decided know until the day north korea invaded. It was a complete swing and thinking. The forces we have and south korea are about 30,000 daytoday. That is a tiny fraction of our defense capabilities. A little over 2 . If you want you can say we spend 2 of our annual budget on south korea even those forces could swing elsewhere. Even those forces are somewhat fungible. The bottom line is korea represents more than a 15 billion commitment per year in our defense establishment because we would need hundreds of thousands of u. S. Troops to win a war there. We are only planning to fight and win one more at a time. If we did not worry about korea we stopped worry about aranda, russia, china. You said the green commitment is no longer there, the south koreans have asked us to leave, lets make a clean departure. I would say on whether that 30,000 contingent can be demobilized. Otherwise i do not think the hundreds of thousands of troops we would have used to read orson korea, i do not think those forces can be demobilized because they might be needed for other contingencies. We are already doing defense planning on the cheap with a one war standard. It is a complicated questions. When you wind up asking how much could you save if you illuminated this or that ally, usually winds up being small. Final point. If you went to a fortress america approach, defending our homeland alone, yes we can do that on the cheap until and unless eurasia decides to fight itself and wins and has the ability to fight with us the way hitlers would have liked to have been world war ii. If you think we can ignore eurasia and only protect ourselves, you can probably do that with 25 as much money. The problem is you dont know when and if something from eurasia is going to strike at you. That is the question i think is fundamental. If you answered that differently than we have since world war ii you could have a much smaller Defense Budget. I think you have a much more dangerous world. David on that cheery note, please join me in thanking mike, travis, and mckenzie. [applause] this video will be on our website so you can watch it over and over again. I am sure mike would be happy to talk with anybody about the specifics in his paper, which is also on the website. If i could ask you on your way out to take the coffee cups in your feet and put them in the receptacle, our staff would appreciate it. Thank you