A think tank is proposing that Pentagon choose up to seven parts of the U.S. defense-industrial base to sustain and then to “ruthlessly” slough off the remaining aspects.
The non-partisan Center for Strategic and Budgetary Assessments (CSBA), in a report its authors acknowledged will face resistance in the executive and legislative branches, argues the Pentagon needs an industrial-base policy that would result in the “adaptive sustainment” of only a select few yet vital elements of the defense-industrial base.
The 81-page report suggests a strategy that would “ensure the preservation of those few sectors that are currently critical to American national security, adding over time any emerging sectors that become critical, and ruthlessly underfunding or jettisoning any sectors that cease to be critical.”
Barry Watts and Todd Harrison, authors of the “Sustaining Critical Sectors of the U.S. Defense Industrial Base” tome, argue that of the two to three dozen sectors of the industrial base, only five to seven “strategically critical” ones can remain.
The tough question is identifying those chosen few sectors to be prioritized.
“An industrial-base ‘strategy’ that seeks to preserve every sector deemed desirable by any of the war-fighting communities across the four military services, the prime defense contractors, or their congressional allies is not in fact a strategy and will not succeed,” they write. “Indeed, even within the truly critical sectors, not every design or production capability will merit preservation. The sine qua non of the proposed guiding policy, then, is the imperative to make hard choices.”
Harrison told reporters yesterday that the Pentagon should not have a one-size-fits-all policy for the industrial base.
“You should prioritize your critical sectors, and the way that you manage them–the specific policies that you implement for those sectors of the industrial base–should be different,” he said during a briefing at CSBA’s Washington office. “It depends on that sector of the industrial base.”
Before such an approach is crafted, the government must assess which military capabilities are needed in the future, and such an analysis would need to be tied to a “realistic” assessment of future threats and competition, he said.
Watts said to craft such a strategy as proposed in the report, support is needed from “an exceptional secretary of defense who’d really be willing to take this on and push very hard on this as a long-term priority.” He said backing from Capitol Hill also is vital, adding House Armed Services Committee Chairman Howard “Buck” McKeon (R-Calif.) has been supportive.
Harrison said that realistically the main thing he’d want from Congress, to bring about such a strategy, is stability and predictability in the defense budget “over a reasonable period of time.”
With “the kind of budget environment that we’re in now–where at the last minute the appropriation committees have to come up and take the president’s budget request and find a whole bunch of savings to fit within a budget cap, that kind of last-minute reshuffling of the budget–a strategy like that can’t work in that kind of budget environment,” he said. “So you would need to have some sort of consensus that would hold for a number of years on what the defense budget will be.”
Even if the defense budget is declining, knowing that funding drop is coming would help when trying to execute such a strategy as CSBA is proposing, he added. “But when it’s changing year to year there’s so much uncertainty, there’s not much long-term planning you can do.”
The CSBA report states that looking to the future, “there is every reason to think that the United States’ defense industrial base will continue to be a source of strategic advantage in the decades ahead–if it is adequately maintained.”
The document makes a point to note the defense industry–which it dubs the military-industrial-congressional complex–does not operate like a normal free market. It says the highly regulated industry has the government as both the sole customer and regulator, and fundamental decisions about weapons purchases result from “complex, often politicized” interactions within and between the Pentagon, White House, and Congress.
“A classic free market involves many small buyers and many small suppliers, and competition among buyers and suppliers drives prices toward stable, economically efficient equilibrium levels,” the report states. “None of these features resemble the way in which the U.S. defense industrial base functions. Consequently, incremental regulatory and statutory adjustments to defense acquisition based on the presumption that the defense industry operates like a normal free market are not only unlikely to improve efficiency, but have often made things worse.”
Harrison and Watts, thus, argue their proposed type of focused and long-term strategy is needed to preserve vital sectors of the industry.