AMERICAN DEFENSE – LIKE IT OR NOT WHAT THEY SPEND MATTERS

The new administration has a policy plan called ‘Peace through strength’. Congress, and there is actually bipartisan support for this, is looking to spend $200 billion more on defense spread over two years – including the current 2025FY.

There is the Fiscal Responsibility Act which republicans use to enforce Democratic spending plans when they’re in office and then ignore when they are.

As a result the Biden Administration and Congress passed a NDAA (national defense authorization act) that was just $3 billion more than the 2024 one. That in real terms is a cut in funding.

Defense inflation is around 3% so just to keep up with that, the budget should have risen by $25.41 billion. Immediately you have to cut that amount from the extra $100b per year.

The US system is based on the Pentagon as the ‘appropriator’ requesting money to fund what it wants. Congress then decides, it may at the time of the bill add or reduce funding for different programs the appropriations team in the Pentagon have asked for, it’s often canceled them by starving it of money.

Congress is also able to add specific funding during the NDAA process, for example forcing the navy to build two SSN’s when it only wanted to build one to help reduce the backlog.

Once the NDAA is passed and signed a supplementary bill can be passed at any time, without appropriators asking for it. Congress, lead by Senator Wicker, seems willing to do this because it feels the United States is falling behind not just in its future priorities but its present ones.

The Pentagon might be asked for what it would like to see – but in the eyes of Congress right now it’s the Navy and the Air Force getting the lions share of the money under discussion. There’s nothing planned for the Marines or the Army. They may argue for some of it.

Congress gets to decide what the money is spent on in this process. If they want more money spent on submarine yard expansion and so on, that’s where it goes.

However one of the key areas Congress is looking at is well away from the traditional. There has already been a move to slow Ford Class carrier production by delaying by a year the next ship in the pipeline.

USS Gerald R Ford is already in service with the USS John F Kennedy close to completion. The next one is the USS Enterprise, then the USS Doris Miller (the first carrier named after a black naval hero), which is well under way. The USS William J Clinton and the George W Bush (one of the Nimitz class is George H Bush and they bizarrely, would both be in service simultaneously at some point), are the next pair. However by delaying one (the Clinton) a year it actually diminishes the overall carrier fleet from 11 to 9 by 2040, as the oldest Nimitz (The USS Nimitz itself retires in May 2026) class operating retire, which is technically illegal as 11 is the minimum required.

The shipyard, is of course worried. The delay from FY2028 to 2030 is dire. In addition the long lead procurement for the next carriers has been delayed from 2025 to 2027. A year with no carrier under construction has huge ramifications for continuity of employment and the vast component supply line (almost 2,000 separate component suppliers) – the very core of the issue at the heart of the defense industrial base. Yet that’s how it stands.

The latest ideas from Congress don’t even go there. They’re looking at moving away from what are termed ‘exquisite’ massive platforms. They think if Ukraine can build 4 million drones a year on a micro budget, then the US needs to be looking at that type of infrastructure for its air and naval forces. It thinks that new and more competitive manufacturers could provide, in that age old phrase, ‘a bigger bang for the buck’.

There are many in Congress now who think the age of the super carrier is over (but nowhere near the majority). Just as the big gun battleship was seen off by changing technology. It has its place in my opinion, but it is no longer valid in times of peer to peer warfare. As power projection against inferior players there’s nothing like it, against China its days are already over in my personal opinion, but I could be wrong.

The Chinese now have networks of radar satellites tracking everything in the Pacific- the carrier has nowhere to hide and is easily tracked down. They are expensive, resource intensive and fully loaded operationally, cost around $28 billion each with aircraft and ammunition and a full crew, plus the escorting battle group. They are a lot of valuable eggs in one vulnerable basket in peer to peer combat.

Arguments for more but smaller have merit. Yet just as the US considers parting ways with its big carrier plans – why is China building more? The answer is for the very same reason America has them. Peer to peer is not their purpose – it’s about projecting power over the rest of its potential enemies who cannot match it.

The entire policy of the US in terms of naval construction needs overhaul. It is not right now competing with China at all. It simply isn’t.

The administration sees the Atlantic as largely a NATO problem. Why can’t the western navies between them handle the Russian fleet? Only two of those navies are full-on ocean going powers – Britain and France, and they need backing up from the others to be viable. Yet even so without an American contingent in the Atlantic they would struggle against the Russian submarine forces, which are designed to be aggressive and predatory.

The extra money Congress is looking for will not provide a panacea to solve all of the problems faced by the Pentagon, but it will help shape the future – long after 47 is dead and gone.

Defense is the one area most agree needs the biggest shake up and there is wide support for this to happen. Its procurement policies are a joke. Yet we stand at a point of radical technological, domestic political and geopolitical change. What gets decided now will be with us in a decade and beyond.

They will shape US power and influence capabilities and with it ours here in Europe. There’s much to be said for Europe developing its own military and economic infrastructure capabilities to stand alone.

Discussions on that are happening this week at key meetings in Brussels – and the British are also attending. Europe understands the potential of America decoupling from Europe – a Russian dream it has to be admitted. However if the US is to take on China or be ready to do so it needs everything it has to do it, because it has not taken seriously enough its defense needs, its farcical procurement process, and the scale of the threat China poses.

Europe combined is more than capable of matching Russia if everyone coordinates their efforts properly. They finally seem to be reaching that conclusion. The Munich Security Conference is 12-14 February and this subject is high on the agenda.

Meanwhile, the United States has embarked on a trade & tariff war that could have implications for the defense sector too. It will cause pain for Americans and American business, just as it will everyone else. It is a no win scenario. If GDP falls because of it or at the least growth is stymied, then defense budgets don’t rise in real terms, they struggle to even rise with inflation caused by increased prices being passed on to consumers. This is bad for everyone.

There is much that needs reform in the US system, especially the order and delivery cycle to Ukraine. New figures show that the Biden Administration was next to useless in keeping its promises of aid deliveries to Ukraine from the $60 billion May 2024 appropriations.

Some equipment like cluster munitions and other ammunition was delivered quite fast as it was ready to go. Armored vehicles, additional Bradley’s and M-1 Abrams have been very slow to arrive. In some cases less than 30% of what was promised has turned up. A lot of this is lack of skilled labor in the US to get things ready, parts supply issues because of reduced or even non-existent manufacturers who have gone out of business. Yet again, it’s the entire defense industrial base that’s the problem. Rebuilding it is a vast undertaking, requires a long term commitment and ongoing orders. Europe has the same problem – so indeed does Russia, despite what its spent on the war. The only country that stands hand over fist at the top of this tree is China.

Yet despite all that this new administration seems almost as chaotically incapable of fixing the problems, if it even understands them. Congress isn’t looking at doing it, so who will? Talk about making America militarily great again, is one thing. Yet those so far appointed, or look to be so, are political grudge holders and obsessed with who uses which bathroom, more than they are making good defense policy.

The Analyst

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