After years of stagnant Pentagon budgets, the next presidential administration will face a defense acquisition bow wave in the early 2020s and will need an influx of funding to pay for the various weapon systems in development or production, a new report by the Center for Strategic and International Studies said.
Funding needed for major defense acquisition programs is slated to peak in fiscal year 2022—just a year beyond the upcoming 2017 future years defense plan that will project spending over the next five years, and within the first term of the next president, according to “Defense Modernization Plans Through the 2020s: Addressing the Bow Wave.” The report, written by CSIS director of budget analysis Todd Harrison and released on Jan. 27, uses the president’s fiscal 2016 defense budget and other documents to estimate the cost of major acquisition programs through 2030.
The modernization bow wave presents an interesting opportunity to the next president, but also some risks, Harrison said during a rollout of the report. To fund all major weapons programs as currently planned, the Pentagon will need to grow its acquisition spending from 23 percent between fiscal years 2015 and 2022. Harrison estimates that the majority of that increase will occur in two years: 2016 and 2022, with flat spending in the years between.
That leaves the next administration with three options: Find a way to increase the Defense Department’s budget as a whole, cut other areas of the defense budget—such as force structure or research and development—or look inside the defense acquisition portfolio and rebalance it to reflect the new president’s national security strategy.
“They’re going to have some challenges to deal with, but really the opportunity here is that in trying to reshuffle programs to smooth out the acquisition bow wave and make it more executable, they also have a chance to make sure those programs are in alignment with their defense strategy,” Harrison said. “That’s what really important here, is to make sure that our major acquisition program funding accurately reflects our strategic priorities.”
More than half of the funding going to major weapon systems from 2015 to 2030 will be spent on 10 Air Force, Marine Corps and Navy programs: the F-35 Joint Strike Fighter (JSF), ballistic missile defense systems, Ohio replacement and Virginia-class submarines, Long Range Strike Bomber (LRSB), DDG-51 destroyer, KC-46A tanker, Ford-class aircraft carrier, Evolved Expendable Launch Vehicle and Ground Based Strategic Deterrent (GBSD).
Rebalancing those programs, either by cuts or delays, would have strategic consequences, but could give the services some relief, Harrison said. For instance, the Pentagon would save up to $4.5 billion per year during the peak years of the bow wave by delaying the Ohio replacement submarine by five years. Another option, cutting F-35 procurement from 120 to 80 aircraft a year, would save about $40 billion annually.
Of all the services, the Air Force will be the major driver of the bow wave as a handful of major aircraft programs will need to be funded simultaneously, including the service’s top three acquisition priorities: the F-35, LRBS and KC-46A tanker. Aircraft programs will almost double in cost from $12 billion in 2015 to $22 billion in 2023, Harrison said.
Space and communications systems could be a wildcard, as the Air Force has not announced plans for follow-on systems for many of its satellite constellations. At the very least, it will have to buy new satellites, Harrison said, but if the service decides to develop entirely new systems, it would further drive up planned acquisition costs.
The GBSD, which will replace the Minuteman III, is planned to start in the 2020s and represents another big addition to the Air Force acquisition portfolio. If the next administration is looking for “low hanging fruit,” the GBSD is an “early-top-need” capability that could be pushed back by five or so years to lower the Air Force acquisition budget, he said.
The Navy and Marine Corps, on the other hand, are coming down from a bow wave as many aircraft and shipbuilding programs begin declining in 2022. The Navy’s biggest acquisition priority, the Ohio-class replacement submarine, will be partially offset as production of the Virginia-class submarine and other ships slows down.
Aviation purchases are also set to decline “precipitously” in the next decade, in part because the services have already modernized its fleet, Harrison said. Only acquisitions of the F-35B and C and the Marine Corps’ CH-53K helicopter are planned to ramp up production throughout the decade.
“For several years now, the Navy has been buying more aircraft than the Air Force. That is going to come to an end in the near future,” he said. By the end of the 2020s, the services’ will have procured for the P-8A Poseidon, V-22 Osprey and E2-D Advanced Hawkeye.
The Army will have a small bow wave in the area of ground vehicles, as it plans to ramp up buys of the Joint Light Tactical Vehicle and Armored Multi Purpose Vehicle, M1 Abrams tank upgrades, modernization of the Paladin and Bradley fighting vehicle. However, the scale of the bowwave – from about about $1 billion to $3.5– is small compared with the more massive costs of Air Force aircraft and Navy ships.
“That is pocket change” in D.C. speak, Harrison said.