The United States is being rocked by mortgage foreclosures, collapsing financial institutions, plummeting stocks, frozen credit, rising unemployment and by fear itself. But defense spending, at least, is going up.
The $542.5 billion "base budget" for 2009 that Congress approved for the Pentagon in September is $35 billion more than the U.S. military received as a base budget for 2008, about a 7 percent increase. Spending on the wars in Iraq and Afghanistan pushed the 2008 total to $696.3 billion, and undoubtedly will cause a similar increase for 2009.
After 2009 the fiscal tide may turn.
A number of defense budget experts say 2009 is likely to be the high-water mark for defense spending. Some predict defense spending will begin to decline as a new administration and a new Congress wind down the war in Iraq and focus attention on neglected domestic needs and deficit reduction.
Others predict that the big annual defense spending increases the military has enjoyed for a decade will end, but that military budgets will hold steady, not decline. They say the war in Afghanistan, residual troops in Iraq and the need to replace war-damaged equipment will require substantial defense spending for years to come.
And in the midst of recession, weapon programs are likely to be preserved by lawmakers intent on protecting jobs in their districts.
But even the most optimistic spending predictions provide little comfort for the U.S. military, which has a new weapon wish list that far exceeds in cost any realistic projection of future funding.
The Air Force, for example, says it needs $20 billion more a year for the next several years to buy all of the planes it wants. Besides additional F-22 stealth fighters and new F-35 fighters, the Air Force wants new refueling tankers, new search-and-rescue helicopters and a new bomber.
The Navy wants $20 billion a year for shipbuilding, but today receives about $14 billion annually.
And the Army wants FCS, its Future Combat Systems program that has ballooned to $200 billion and keeps growing.
"There's a serious mismatch" between the budgets the military services are realistically likely to receive and the weapons they want to buy, said Christopher Hellman, a defense budget analyst for the Center for Arms Control and Non-Proliferation. "And it's getting wider every year because of the spiraling cost of these programs."
The Air Force and Navy face the most severe budget problems because "they are procurement-heavy and every one of their programs has two things in common: They're behind schedule and over budget," Hellman said.
The Army's budget-to-weapon mismatch is less of a problem because the FCS can be more easily chopped into its constituent parts, which can be purchased one or two at a time, he said.
The problem isn't just high-priced weapons.
"Future defense budgets are going to face a lot of internal competition," said P.J. Crowley, a retired Air Force colonel and former national security assistant to President Bill Clinton.
Plans to increase the size of the Army and Marine Corps by 92,000 troops will add $110 billion in costs. Add that to the cost of aircraft, ships and replacing war materiel, and "you can't do all that," said Crowley, who is now a scholar at the Center for American Progress. "Something will have to give."
More likely, everything will have to give some, said James Carafano, a defense and homeland security scholar at the Heritage Foundation.
"FCS won't disappear, it will get whittled down. There will be fewer F-22s. There might not be some new starts." It's possible that a few big programs could be eliminated, but typically they're not, he said.
"I don't think there will be draconian cuts. It will be more like the frog in the boiling water," he said, referring to the oft-recited adage of a frog that's oblivious to gradually heating water and, alas, is cooked.
For a decade, defense budget waters have been benign.
Between 1998 and 2008 the defense budget - not including war costs - increased from $271.3 billion to about $507 billion, an 87 percent increase. And that doesn't include $872.6 billion in additional spending on the wars in Iraq and Afghanistan.
And yet, "resources are scarce," Defense Secretary Robert Gates said in a Sept. 29 address at the National Defense University.
"Yes, it is a sign I've already been at the Pentagon for too long to say that with a straight face when talking about a half-trillion-dollar base budget," Gates said. "Nonetheless, we still must set priorities and consider inescapable tradeoffs and opportunity costs."
Gates criticized the "defense establishment" for focusing too much on well-established, costly weapon programs for notional conflicts of the future, while failing to meet needs - military and nonmilitary - for real wars today.
But Gates knows that change won't be easy.
"Support for conventional modernization programs is deeply embedded in our budget, in our bureaucracy, in the defense industry and in Congress," he said.
Indeed, bad economic times could actually increase support for costly weapon programs, said James Quinlivan, a researcher and defense expert at Rand Corp.
"Defense spending is a stimulus package," Quinlivan said. "Do you want to unemploy people who are highly specialized and are important to defense" in the midst of an economic downturn by cutting or scaling back weapon programs? "There are a lot of reasons not to cut defense."
Put another way, "buying things has constituencies," said Nathan Freier, a defense scholar at the Center for Strategic and International Studies. "Members of Congress, governors and mayors are all pushing for these things."
The jobs on aircraft assembly lines, shipyards and defense plants keep local economies afloat even as they strain the federal budget.
The almost certain budget crunch provides the military with good reason to re-examine the roles and missions of each of the services with an eye toward eliminating overlapping missions, Crowley said.
"Do we really need three services doing close air support? Do we need two services doing long-range strike? Why do we still have a Cold War triad? These kinds of decisions have been deferred."
Quinlivan and fellow Rand researcher Bruce Held contend in a paper written this summer, before the current economic meltdown, that defense spending is due for a significant decrease.
They cite a pattern that has prevailed for seven decades. Defense spending rises and falls every 18 to 20 years, they wrote. If that cycle holds, defense spending has reached its zenith and is about to decline.
Quinlivan said a decrease could be as much as $30 billion a year. That's a big number, but to a $542 billion base budget, it's a little more than 5 percent.
"Voter fatigue with ongoing conflicts will pressure Congress and the White House to reduce military spending, just as a sputtering economy will spread thinning tax revenues over a growing number of claimants," Quinlivan and Held said.
Increasingly, the military will have to vie for federal dollars with such politically powerful competitors as retiring baby boomers who want more from the Social Security and Medicare programs and the nation's neglected infrastructure, they said.
For the near term, deep defense spending cuts are unlikely, said Steven Kosiak, chief of budget studies at the Center for Strategic and Budgetary Assessments. "When you're at war, it's difficult to cut costs."
But continued improvement in the conditions in Iraq could make a big budgetary difference.
If the military is able to begin drawing down forces in Iraq, it could also re-evaluate plans to add 92,000 troops to the Army and Marine Corps, Crowley said. Each cut of 10,000 troops would save about $1.2 billion a year.
"And if you don't add troops, you need less hardware to equip them," Crowley said.
As troops come home, the cost of fighting in Iraq would also decline.
Gates clearly is aware of that possibility.
"In Iraq, the number of U.S. combat units in country will decline over time," he said at the National Defense University. "About the only argument you hear now is about the pacing of the drawdown."
The Army's Future Combat Systems (FCS) program is ready to test a few components that soldiers may have in their hands by 2010.
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