President Joe Biden’s new administration and the 117th Congress must respond to a uniquely difficult political and fiscal environment; as part of this mandate, they will be charged with addressing the enduring mismatch of US defense strategy and resources, which contributes to ongoing supply and demand imbalances regarding requests for forces by combatant commanders. Since these challenges have been growing unchecked for years, the coming decade looms large as the US military is facing a massive spending spike to pay for modernization bills across the Navy, Marine Corps, Air Force, and Army that have been ignored, deferred, or inadequately considered. Although this was foreseen and forewarned, insufficient action has been taken. Resolution requires political courage, persistence, innovation, risk, and resources.
Fleets of ships, aircraft, vehicles, and other equipment are reaching the end of their service lives, hitting the edge of their upgrade limits, and losing combat relevance. As great-power competition accelerates, the United States is offering a free and open window of opportunity and advantage to its adversaries. Unless policymakers take concrete steps now, defense leaders will continue America’s sleepwalk into strategic insolvency and its consequences. The aptly named “Terrible 20s” have arrived.
The intention of this report is not to propose ideal or preferred defense investments. Rather, it aims to deliver an unvarnished overview of the existing modernization bill before the Pentagon today, forcing an overdue confrontation with reality.
The 2020s Tri-Service Modernization Crunch undertakes three paths of analysis. The report initially reviews decades of defense investment decisions that resulted in the current composition of the US military. This history considers the ramifications of delayed equipment recapitalizations from the end of the Cold War, the dominance of short-term spending priorities during the wars in Iraq and Afghanistan, the legacy of the 2011 Budget Control Act, and competing federal spending priorities and objectives. The results include climbing operations and maintenance costs for aging military platforms—which put still more pressure on modernization programs—and the entrenchment of inefficient modernization decision-making patterns.
This report also provides a comprehensive examination of the bills facing each service to modernize over the next decade. While the Department of Defense provides most modernization cost data for the next five years — or over the Future Years Defense Program — in its annual budget requests, this report projects costs for a 10-year time frame to demonstrate the scale of the challenges facing the armed forces. Although such cost data are inherently subject to change and variation, this analysis identifies the overarching trends shaping the modernization cost profiles of each service. Accordingly, while the total costs of specific modernization programs may evolve, many of the patterns discussed in this report will not. For example, the Navy has no choice but to continue replacing its old attack submarines, even though analysts may debate how many new ones should be built and how quickly.
Finally, the report lays out policy recommendations for how Congress, the White House, and the armed forces can begin developing and implementing a serious plan to meet the modernization crunch. Such options include taking immediate action to relieve pressure on procurement and accelerating the fielding of advanced technologies — in some cases using legacy platforms as playgrounds for innovation.
Unfortunately, as this report demonstrates, there is no easy way out of this fiscal bind for the US military. Rather, now is the time for effective mitigation strategies, urgent worst-case scenario planning, hard choices, and political leadership.