The US Congress’s perennial budget battles rarely result in anything particularly interesting – recent developments include a “long-term” six-year infrastructure funding plan and a piecemeal bipartisan energy strategy – but every once in a while, something big happens. Most recently, 2011 saw the passage of the Budget Control Act, which ushered in a policy known to the public as “sequestration”.
The 2011 Budget Control Act’s sequestration was and remains a simple and disastrous bit of budgetary policy. It mandated across-the-board cuts in “discretionary” spending, without touching the toxic third rail of “mandatory” spending. To paraphrase The Breakthrough Institute and Innovation and Information Technology Foundation’s excellent report, Taking on the Three Deficits, the Budget Control Act undercut productivity growth by cutting funding for long-term “productive investments”, such as infrastructure and technology. Meanwhile, it left “consumptive spending”, such as entitlements and welfare, largely untouched. These transfer payments don’t do much to boost productivity growth.
This Act was born amid partisan chaos. Ascendant Tea Partiers seeking to “starve the beast” and drain funding from federal programs and war-weary Democrats demanding cuts in defense spending brokered an uneasy and unwieldy compromise. The deal satisfied no one, slashed funds for most of the Executive Branch departments (including the Intelligence and Defense Communities) and totally ignored the most pressing budget question of the last century—how to responsibly downsize the entitlements budget so that Social Security and Medicare can be maintained without sucking up a whole two-thirds of Uncle Sam’s yearly expenditures. By reducing productivity investments, the Budget Control Act may have actually made it harder for the United States to maintain growth sufficient for the revenues necessary to accomplish the Act’s original purpose: to eliminate the federal deficit and balance the budget. Talk about the road to hell being paved with good intentions.
But long-term national fiscal health, productivity and credit are not the only national strategic priorities that have been harmed as a result of sequestration’s misapplied selective austerity. In the short term, underinvestment in military readiness and capabilities has weakened American strategic posture amidst a world replete with growing and changing threats. Sequestration has constricted defense funding even as competitors and threats have multiplied in the three major theaters of Eurasia, and as new “chessboards” like cyberspace, outer space and biological warfare have grown more volatile and dangerous.
The most recent manifestation of this constricted funding has been the open battles in the Department of Defense between advocates of funneling sparse funds into strategic assets (like bomber squadrons, blue-water warships and cyber-warfare capabilities) and those who support channeling those funds into small-war assets, capable of fighting wars not unlike the counterinsurgency missions in Iraq, Afghanistan and North Africa that have been happening over the past two decades.
Secretary Ashton Carter and Undersecretary Bob Work fall into the “Strategic Assets” camp, foreseeing an era of calculated competition and potential great power conflicts in which the best deterrence will be strong, conventional military capabilities. They want to give the next president planes and ships to move around on the Grand Strategic chessboard to parry China’s island-building efforts in the South China Sea, Russia’s forays increasingly closer to NATO airspace and Iran’s infantry buildups in Eastern Iraq.
Meanwhile, Navy Secretary Ray Mabus and Army Secretary-to-be Eric Fanning fall into the “Small Wars” camp. They are not necessarily old guard reactionaries “fighting the last war” (the Iraqi and Afghan insurgencies) in a new, transformed age, as the saying goes. “The last war” is almost certainly likely to be the next war, too, as the crumbling of Muslim societies unleashes social instability that can be tamed, in the short term, only by counterinsurgency tactics. America will more likely than not be sucked into more Syrias and Iraqs moving forward, and it’s important that it has the embedded special forces teams, drone capabilities and littoral combat ships necessary to fight neocolonial-style missions wherever they’re needed.
What a world, where the United States military is so fiscally constrained that it fights amongst itself over which threat to counter—instability, militancy and terrorism, or classical great power rivalry. The US really should be investing enough in its own defense that it is not forced to make such a choice.
As we move forward into the 21st century, America will likely face more and more complicated threats on both “chessboards”, and more importantly, those chessboards are likely to blend together. For example, most Iranian power projection in the last few years has been in the form of covert support for militants in Syria, Iraq, Yemen and other locales. Meanwhile, the Russian invasion of Crimea and Ukraine was prefaced by unconventional “little green men” who professed no nationality, marching over international borders. Chinese island-building in the South China Sea is like nothing American strategists have had to deal with, ever—it flouts traditional great-power norms. Add to all this the continued salience of the jihadist threat, increased conventional activity among the world’s great powers and the playing fields of outer space, cyber space and biological warfare and you’ve got yourself a really, really scary world.
For the safety of the American people, it is imperative that the United States repeals the Budget Control Act and the sequestration it mandated and begins spending on defense at levels recommended by the National Defense Panel (hint: that’s a lot more than current spending). Moreover, billions of federal dollars are wasted every year in inefficient acquisitions systems and bureaucracies. To make sure that every dollar we spend on our safety is used as effectively as possible, we would do well to undertake fiscal reforms across the federal government, but especially in the Department of Defense, to boost the value of federal defense spending.
The sheer number of moving parts testifies to the enduring need for a broad reform in the interests of national strategy. Rising threat levels around the world demand a stronger American military; a stronger American military requires more defense spending; more defense spending requires more funds, which can come from one of two sources: greater revenue or decreased spending in other areas. Greater revenues require greater economic productivity, which requires regulatory reform and productive investments. Decreased spending in other areas requires entitlement reform and administrative reform, as well as a reallocation of spending. In this complex ecosystem, national strategy involves everything from R&D investments to entitlement reform to administrative reorganization to tax policy. And those are just areas directly relating to defense spending; it does not begin to consider other strategic areas, like energy policy, strategic manufacturing productivity, education policy, physical infrastructure or national financial planning.
True grand strategists are not only concerned with the guns-and-ships maneuvers and interpersonal diplomacy of RISK. As Napoleon Bonaparte is purported to have said, “Amateurs think about strategy. Professionals think about logistics.” That demands an understanding of domestic political economy and the economic and political structure of the entity with which one is conducting strategy, and it adds a whole new dimension to the strategic planning process.
Unfortunately, there seem to be few such domestic grand strategists in America today, outlining the country’s needs for the period of protracted strategic competition we’ve entered. In future pieces, I will do what I can to outline what this kind of national economic strategy would look like.
The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff, editors or governors.