National Debt Poses Defense Budget Challenges

It was announced this week that the national debt hit more than $22 trillion for the first time in history, and that debt will likely place tremendous pressure on the U.S. Defense Department budget, suggested Alan Shaffer, deputy undersecretary of defense for acquisition and sustainment, during a morning keynote address at the AFCEA-USNI West Conference in San Diego.

The debt continues to explode at a time when the Defense Department needs more ships and planes while also refurbishing nuclear forces. By 2026, interest on the debt will be the largest expense of the discretionary portion of the budget, Shaffer noted. “We’re going to have enormous pressure on reducing the debt, which means that defense spending, I’d like to tell you it’s going to keep going up, but I’m not terribly optimistic,” he said. “There are going to be some tough choices up ahead. That means we have to be looking now at what systems are the most important to deliver the capability we need.”

Alan Shaffer, deputy USD, acquisition and sustainment: We’re going to have enormous pressure on reducing the debt. I’d like to tell you the defense budget will continue to go up. I’m not optimistic.#AFCEA #WEST2019

— George Seffers (@gseffers) February 14, 2019

The looming potential for constrained budgets comes at a time when the Defense Department hopes to modernize conventional platforms—ships and planes, for example—while also beefing up missile defense capabilities. “We’re looking at the conventional force. At the same time, we’re implementing a missile defense review. The goal from the White House can be summed up as ‘defeat any missile anytime anywhere.’ That’s a pretty daunting task. It’s not going to be done cheaply. Yet, this is one of the primary pillars of our national security strategy,” Shaffer noted.

Alan Shaffer, deputy USD, acquisition and sustainment: The goal from the White House and the administration can be summed up as defeat any missile anytime anywhere. That’s a pretty daunting task.#AFCEA #WEST2019

— George Seffers (@gseffers) February 14, 2019

Additionally, the department last year completed a nuclear posture review. The nuclear triad—bombers, intercontinental ballistic missiles and submarine-launched missile systems—has been 3 percent or less of the overall defense budget for the past 15 years, but the military is investing in major new programs, such as the Air Force’s next-generation bomber and the next generation of surface-based missiles. “We’re projected to go up to somewhere between 6 percent and 7 percent by the end of the next decade,” Shaffer said. “We’re implementing a whole wrath of new systems. We’re growing our force. We’ve got to figure out where we get our best bang for the buck.”

Alan Shaffer, deputy USD acquisition and sustainment: I don’t want to be part of a system that takes 20 years to deliver a capability.#AFCEA #WEST20

— George Seffers (@gseffers) February 14, 2019

Given the potential for constrained budgets, Shaffer recommended achieving a “new normal” for acquisition. He recommends fielding a system now if it provides needed capabilities to the field rather than continuing to spend years developing a system with 100 percent of the required capabilities. “One of the things that really drives up costs in acquisition programs is time. Time is money. If we can start to reduce the cycle time of what we’re delivering, we’ll do a little bit better,” he said. “I’m guardedly optimistic we’re getting there, but that’s a hard problem. Doing a really good risk-based operational analysis is hard work,” he adds.