US-nuclear-missileby Peter Huessy

Steve Pifer of the Brookings Institute recently published an analysis of how one might save significant costs by down-sizing our strategic nuclear deterrent. He explained “Two recent studies make clear that maintaining and recapitalizing U.S. strategic nuclear forces will be expensive, at a time when fiscal realities will undoubtedly continue to constrain the defense budget.” [Opinion: Nukes, Dollars and Sense
Brookings Institute, 10 Mar 14].

Pifer suggests we reduce our strategic submarines from the planned force of Ohio Replacement submarines from 12 to 9; cut our Minuteman force from 420 to 200-300 missiles and put off giving our new strategic bomber any nuclear capability. The total budget savings are not estimated exactly by Brookings but they probably are actually considerably less than implied by the analysis for a variety of reasons.

Reducing Minuteman to 200-300 missiles saves almost nothing in the first decade. You would incur base closing costs which have traditionally eaten up 40% off the “savings” estimated by previous base closing studies. In this case Minuteman, as the recent well done Rand study notes, would cost in the range of $1.8-2.3 a year to modernize. However, cutting missile procurement only saves you funding at the end of the procurement cycle as the RDT&E costs are the same whether you have 200 or 420 missiles. As a result of these factors, savings thus might get to $200-300 million a year. But for what? 

Pifer proposes the cuts not just to our warheads but the platforms upon which the warheads will be deployed—in this case, missiles in silos, missiles aboard submarines and warheads or cruise missiles on our bombers. The platform cuts would be at least 40%, from 700 strategic nuclear delivery vehicles (SNDVs) to 500. But reducing SNDVs goes the wrong way re: stability. Increasing the ratio of Russia and Chinese warheads to US nuclear targets gets you nothing but added instability. As President Reagan famously said 33 years ago, the US nuclear deterrent and its extension over more than 30 allied nations requires an “effective margin of safety”. In each arms control treaty from START to the Moscow nuclear arms agreement, the US has decreased the ratio of the “bad guy” warheads to the “good guy” targets. That goal should be continued and emphasized.

But more importantly, there is no strategic requirement to reduce our delivery platforms. Even if you wish to cut our arsenal down to 1000 deployed warheads, (which I do not support), you can do so and keep 700 SNDVs. Admiral Richard Mies, the former Commander of the US Strategic Command, makes this point repeatedly in his masterful Spring 2012 essay in the Journal “Undersea Warfare”, (“Strategic Deterrence in the 21st Century”), explaining:  “A smaller arsenal may appear to be a more tempting and easier target for preemption, breakout or a race to parity”.

The Admiral further warns that the US “Must preserve sufficient deterrent capabilities to respond to future challenges, to provide a cushion against imperfect intelligence and technological surprises, and to provide a reconstitution capability as a hedge against unwelcome geopolitical developments”.

Thus arms control futures should be about maintaining the highest amount of stability. While the marginal cost to maintain 700 SNDVs is not insignificant, the risk being taken for at best marginal savings calls for maintaining the currently planned nuclear platforms.

Another problem with recent budget analyses of the cost of our nuclear deterrent is confusion over the proposed new strategic bomber. The nuclear cost of the new bomber is 3% of total costs according to the former Under Secretary of Defense for Policy James Miller’s testimony before the HASC in 2013 and in remarks he made at my breakfast seminar series in July 2013. That comes to $16.5 million per plane at $550 million per plane that can be attributed to “nuclear requirements”.  Hardly the tens of billions claimed by CBO.

A further confusing aspect of nuclear budget assessment is that one key study– by the Congressional Budget office (CBO) — asserts that $35B a year on average is needed to modernize the nuclear enterprise.

But we are starting at the current level of $21B a year. To average $35 billion means at some number of years we would have to go considerably higher than $35 billion a year. The implication is thus that somewhere around $49 billion a year would be the future peak costs of nuclear modernization. However, the most authoritative assessment to date—by the Cost and Program Evaluation Office (CAPE) — says that if you did all nuclear modernization required the peak would be $35 billion a year not the ten year average.

Other problems with the CBO study are that it adds in an arbitrary $59 billion in increased “anticipated” costs over the next decade. Its estimated Minuteman costs are at a minimum some $35-40 billion too high per decade. And as we have noted, while the nuclear aspects of the bomber costs are 3% of the total, CBO includes a far higher total.

One important area of confusion involves how many remaining missile test assets Minuteman has. The removed 50 missiles from what was known as the “odd squad” at Malstrom USAF base where 200 Minuteman missiles were once deployed were in fact removed to provide for extra test assets. And we built 605 Minuteman rocket motors/missiles under the Service Life Extension Program we started in 1993, which is now just being completed, which are 150 more missiles than were scheduled for deployment.

We also know these rockets motors have at least a 30 year life. At 3-4 tests a year, the test assets we have are adequate for testing certainly to 2030. Testing 3-4 a year might require that we build new rocket motors, which we would be building anyway as part of such a steady modernization plan.

CBO also confuses people by adding into what it considers the nuclear enterprise the costs for the threat reduction work done by DTRA (the DOD Defense Threat Reduction Agency) and under the Nunn-Lugar program which gets rid of primarily Russian and former Soviet nuclear stuff, hardly something one can lump in with the costs of American nuclear modernization.

CBO also adds—in another analysis–a $9 billion annual cost for missile defense—the vast majority of which is for the interception of conventional medium and short range missiles armed with conventional munitions.  This is an absurd assumption but someone apparently wanted to pad the nuclear numbers to make nuclear expenditures look big so we can scare people. It’s simply bad budgeting.

A more reasonable assessment would be that following the requirements of the section 215 of the National Defense Authorization Act roadmap, adopted in 2010 as part of the Senate agreement to ratify the New Start treaty, nuclear enterprise costs could reasonably peak at $27-33 billion a year, a procurement program and modernization effort that is in my mind affordable.

Here Steve Pifer correctly notes $30 billion a year is a lot of money. I agree. But will it “break the bank” as some have suggested?

The federal government will be spending $5.5 trillion in 2025; $30 billion on the nuclear enterprise at that time amounts to 0.0054% of all projected Federal government spending and 0.0032 of all nationwide government spending. And this is at the peak level of spending for nuclear modernization. So we do not have a spending problem. We have a priorities problem as retired SAC Commander and former USAF Chief of Staff General Larry Welch explained in remarks on the nuclear Triad at a Kings Bay, Georgia November 6, 2013.

If we wanted to, however, where might we find cuts in government programs to offset such needed investments?

Well, according to GAO—the Government Accountability Office–we spend every decade $189 billion on job training programs for which it cannot find any value. We also spend $46 billion a decade in fraudulent child tax credits to illegal aliens. Combine the two and you have paid for 78% of your modernization effort.

According to the Joint Committee on Taxation, the Congressman David Camp, (Chairman of the Ways and Means Committee),  tax reform program would generate $70 billion a year in additional Federal revenue due to economic efficiencies and pro-growth elements contained in  the bill even though nominally the bill is revenue neutral.

Opening up hydraulic fracking on Federal lands for oil and gas production would generate an additional $1.6 trillion in revenue to Uncle Sam in the form of royalties and taxes over the next 20 years or a little more than $70 billion a year based on prices somewhat lower than today’s oil and gas numbers according to a recent study by the Marshall Institute.

Taken together —fracking, GAO waste estimates for just two programs and tax reform– would generate revenue of roughly $160 billion a year. We need $7-10 billion of that for nuclear modernization from the current level of effort for the #1 defense priority in the country. That comes to 6/10ths of 1% of what simple three reforms would generate in new revenue to the US Treasury. That would easily provide the resources necessary to strengthen and modernize the US strategic nuclear deterrent and “provide for the common defense” which is after all our constitutional duty.

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Peter Huessy is the President of Geostrategic Analysis. 

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