CHAPTER ONE

Context


Our analysis is based on several assumptions about the context in which U.S. force structure planning will be done. The key assumptions are about the character of the emerging world system, the goals the U.S. will pursue, the resources the U.S. will commit to international affairs and defense, and the state of the U.S. military today.

The Emerging World System

As detailed in the introductory chapters to the 1995 and 1996 editions of Strategic Assessment, the world is changing quickly. It is undergoing three changes so sweeping that they may deserve to be called revolutions. A common characteristic of all three revolutions is that they make the world a more diverse place.

Geostrategic revolution. Most apparent to analysts of international affairs are the geostrategic changes, which are explored in detail in the chapters on flashpoints. With regard to relations among the major powers--which have historically been the main element in world politics--the long superpower confrontation during the Cold War is being replaced by a world of asymmetrical multipolarity in which one power (the U.S.) is much the strongest. The other major powers are, nevertheless, important actors, with considerable influence in their own regions. The world has not become unipolar, as some imagined in the first moments after the Cold War. Now, relations among some major powers are cooler, and differences of perspective are becoming more pronounced. The hopes for a new strategic partnership between the U.S. and Russia have faded. Russia feels isolated and bitter about what it sees as others taking advantage of its temporary difficulties; the West needs to avoid creating a Versailles syndrome in Moscow. China is feeling more powerful because of its spectacular economic growth; sometimes it acts like a normal player in international affairs and sometimes it acts like the stereotype of the Middle Kingdom--not well informed about other states and assuming that it has a natural right to what it wants.

Another aspect of the global geostrategic scene has been the triumph of the idea of market democracy. While not always practiced, it is regarded nearly everywhere outside China as the best way to run society. From this perspective, the world can be
divided into three categories of states:

Some troubled or transitional states may be tempted to assert their interests, or to divert attention from domestic problems, by external aggression aimed at increasing regional influence. The proliferation of weapons of mass destruction, particularly nuclear weapons, could make especially dangerous major regional conflicts with such rogue regimes. At the same time, conflicts within troubled states are likely to be more frequent, and in some cases, those states will fail--their governments will cease to function effectively, and civil society will degenerate into near chaos.

Perhaps the most novel feature of the geostrategic scene has been growing transnational problems, that is, those which do not stem from the action of governments. International crime, terrorism, violent ethnic slaughter, sudden mass migrations, and environmental threats are not susceptible to the traditional tools of statecraft designed for relations among sovereign governments.

Information revolution. Information technology has been improving at the rate of a factor of ten every four to seven years, an unprecedented rate of change. Computers, faxes, fiber optic cables, and satellites speed the flow of information across frontiers, reinforcing the political trend toward increasingly open societies. No one can foretell all the ways in which information technologies will change traditional venues of national power, but certain themes are beginning to emerge. One is that access to information technology has become a prerequisite for economic growth, at least in developed countries. Another is that the ubiquity of global communication is creating new avenues for the interests, cultures, and values of the United States to travel overseas, and vice versa. A third is that the greater availability of information from many alternative channels undermines the ability of totalitarian governments to control what people hear and provides avenues for dissidents to make their voices heard. Yet a fourth is that the extension of rapid communication and computer technological advances to the battlefield may make information-based warfare possible within a decade or two.

Revolution in government. After decades of increasing state involvement in many areas of society in most countries, central governments have been on the retreat recently. Their power is weakening or devolving: whether in Russia, the United States, the European Union or China, central governments are ceding more authority to regional and local governments. Central governments are becoming more susceptible to pressure from a better informed public. They are also shedding functions, partly to reduce expenditures and contain budget deficits. Governments are also privatizing state enterprises, in the expectation that this will boost growth.

The power of international business has increased relative to that of governments. However, this shift may not diminish the ability of governments to mobilize resources to support perceived vital national interests, for instance, during wartime.

A phenomenon related to the decline of central governments has been less concern about domestic issues, especially the economy. In many countries, the argument is heard that only a strong economic base can provide the foundation for an active international role.

We devote much of this report to analyzing the implications of this world situation for the challenges and missions facing the U.S. military. We use as the basis for our analysis the framework set forth in our last two reports. We argue that this international situation dictates that the military should prepare for the following tasks:

We would add that overseas presence can be an important means to shape the strategic environment. The overseas presence of combat-credible forces enhances deterrence, which is as important a function of the military as the capability to fight and win. Presence also facilitates peacetime engagement with other nations' military forces, which can be important for promoting democratic ideals abroad, improving relations with former adversaries, and reducing tensions with potential adversaries.

Limited Resources for Foreign Affairs and Defense

In FY 1987­96, there was a sharp decline in national defense funding, that is, in the 050 account in the federal budget, which includes nearly all the DOD budget as well as defense-related expenditures by other agencies, mostly the Department of Energy. In FY 1997 dollars, the 050 account budget authority declined from $386 billion in 1987 to $254 billion in 1996, a 34 percent reduction. The largest reduction ($65 billion out of the total reduction of $145 billion) was in procurement, which fell by 60 percent. At present, the services are operating with the large equipment stock bought during the 1980s buildup. In FY 1996, the Army bought no new tanks and the Navy bought only four ships. Obviously, this is not a sustainable long-term procurement level, if current forces levels are to be sustained. As discussed in the chapter below on force structure, the five-year plans include an eventual upturn in procurement, which will place further pressure on the budget.

The FY 1996 national defense budget shrank in real terms by 3 percent, contrary to the widespread impression that it grew because of the $7 billion added by Congress to the Clinton administration request. For FY 1997, the Clinton administration proposed a further four percent cut. However, Congress added $11 billion, which made the FY 1997 national defense budget essentially the same in real terms as in FY 1996.

The international affairs budget also dropped sharply in FY 1987­96. In real terms, the international affairs budget (the 150 account) fell 34 percent, the same percentage as the reduction in the national defense budget. In constant FY 1997 dollars, the reduction was from $25 billion to $16 billion over that time. However, the reduction was heavily concentrated in aid and foreign information, especially in military aid. In FY 1997 dollars, the budget for the conduct of foreign affairs (account 153, which is a component of account 150), which is essentially the State Department operating expenses, went from $3.5 billion in FY 1987 to $4.2 billion in FY 1996. But the burden of work grew as the number of countries rose and as the world became a more complex place. For FY 1997, the Clinton administration proposed a slight increase in international affairs spending, but the funding Congress approved meant a slight decrease.

The congressional concurrent resolution on the FY 1997 budget and the FY 1997 Clinton administration budget both forecast spending through FY 2002.

Both plans call for national defense budget authority to be marginally reduced in real terms by FY 2001 from the FY 1997 level. The Clinton administration budget provides detailed breakdown of its spending plans by category. Under those plans, further reductions in research and development ($7 billion), personnel ($5 billion) and operations and maintenance ($4 billion) are programmed in order to pay for increased procurement ($14 billion). Despite the increase, procurement will remain significantly below the steady-state replacement rate, that is, the average age of major systems will continue to increase. In other words, it may be difficult to sustain the planned force levels with the resources programmed for defense.

For international affairs, the FY 1997 Clinton administration budget programs a five-year reduction of 6 percent in real terms. The congressional concurrent resolution on the FY 1997 budget calls for a much more substantial cut, primarily because of a greater reduction in aid accounts. However, neither Congress nor the administration are proposing cuts as steep as they had envisioned in 1996, when the five year program called for cuts of at least 40 percent. Nevertheless, any of these plans for reduction will be a challenge to absorb. The risk is that funding will cover only the most pressing needs, while shortchanging preventive diplomacy that can have high returns in the mid- and long-run. It will be difficult to maintain much of a foreign aid program, especially if contributions to multilateral institutions and aid to Israel and Egypt are sustained at anything like current levels. It is likely that the U.S. will remain in arrears to the UN throughout the rest of this decade. At the same time, the reduced international affairs spending will not have much effect on the overall deficit. Spending on international affairs is one percent of the overall government budget.

The five-year spending programs would continue the reduction in the share of national income spent on national defense and international affairs. From FY 1987 to FY 1996, defense and foreign affairs spending fell from 6.9 percent of GDP to 3.7 percent. The administration proposal would reduce that to 3.0 percent in FY 2002. Of that, defense spending would be 2.8 percent of GDP--its lowest level since the 1930s.

Both the Clinton and congressional plans would mean tight resource constraints for national security. And the situation could get worse, because of the pressure for balancing the budget. Both political parties want the budget balanced. The Republicans want a large tax cut. The Democrats want to protect spending on programs like health, education and the environment. In 1996, the economic climate looked good for achieving that combination of goals, with low interest rates holding down the cost of servicing the national debts, while rapid economic growth raised revenue and kept low the cost of programs like unemployment insurance and welfare. As a result, the FY 1996 budget deficit was only 1.5 percent of GDP, or $109 billion.

However, it will be difficult to shrink the deficit further for several reasons. Economists anticipate that the U.S. economy will grow more slowly over the long run than it did in 1993­9, which will limit revenue growth and create pressures for more spending. Pressures could build for more tax reduction or for higher spending on social programs. And the cost of entitlement programs such as Medicare and Social Security will increase as the baby boom generation begins to retire. Perhaps savings will be made, e.g., through changes in the way benefits are increased as the consumer price index rises. Besides the entitlement programs, defense spending is one of the few large items available to cut. Therefore, it could well be reduced below the current agreed level. A prudent national security planner would include among his scenarios one in which budgets are reduced appreciably more than presently planned small cuts. The fact that, during the FY 1997 budget debate, the president and Congress agreed relatively easily on a forecast level of defense spending for 2002 does not by any means assure that those resources will actually be made available when 2002 arrives.

Ambitious Goals Require Creative Use of U.S. Power

At the most general level, there is little disagreement about the aims for U.S. government policy. The Constitution describes its purpose as being to provide for the common defense, promote the general welfare, and secure the blessings of liberty and establish justice, as well as to form a more perfect union and ensure domestic tranquility. In more modern language, those first objectives might be phrased as:

A broad political consensus exists in the U.S. that such aims can be accomplished only if the U.S. maintains a leadership role in world affairs. A small group would sharply reduce U.S. international engagement in order to focus on domestic issues. But the vast majority of the electorate, and nearly all elected leaders and opinion makers, reject that approach as dangerously short-sighted.

The consensus in favor of an active leadership role in world affairs for goals as broad as promoting market democracy worldwide seems hard to reconcile with the trend toward strict limits on resources for foreign affairs and defense. The ambitious goals of U.S. foreign policy seem to fit poorly with spending capped at levels far below those that have prevailed at any time since the U.S. became a world leader during World War II.

One way to reconcile the limited resources and the ambitious goals would be to concentrate on only a few areas of the world. For instance, the U.S. could adopt a policy of concentrating on the Western Hemisphere, a direction which some believed inherent in the North American Free Trade Agreement (NAFTA). Or the U.S. could emphasize its historic alliance in the North Atlantic region, to which the U.S. is tied through a myriad of institutions such as NATO, the OECD, and the G7. Or an argument could be made that the U.S. should concentrate on the fast-growing economies of East Asia. These proposals may sound attractive to a geostrategist, but none is acceptable to the American people. As part of the desire to be number one on a global scale, Americans insist that their government remain active nearly everywhere in the globe--certainly in the Western Hemisphere, in the North Atlantic, in East Asia, and in the Middle East.

Another way to reconcile the limited resources with these ambitious goals would be to work through multilateral institutions more than at present. Again, this is not acceptable to the American people. To be sure, the immediate aftermath of the Cold War saw a burst of enthusiasm for the United Nations and other international institutions. But these hopes were soon tempered by the realization that international organizations are often poorly run, and that many states, including the U.S., are reluctant to provide them the clout and the resources to implement the lofty goals they proclaimed. Based on the experiences in Somalia and the former Yugoslavia, the perception in the U.S. is that the UN is often not an effective security organization. Indeed, the perception is that the NATO alliance works well only when there is a strong U.S. leadership role.

In short, the American people remain committed to a global presence and to U.S. leadership, while insisting that the ambitious U.S. goals be accomplished with only limited resources. Implicitly, the U.S. public believes the world situation is benign. In other words, because there is no enemy, the U.S. need not spend much on defense and even less on civilian activities abroad. It is true that the U.S. no longer faces a peer competitor who challenges its very existence (Russia and China nuclear weapons that could inflict unacceptable damage on the U.S., but neither has sufficient national power to be a peer to the U.S. nor to challenge the U.S. in every theater around the globe). Nearly all major nations have cut back on their militaries; despite the defense drawdown, the U.S. spends as much on its military as the next ten highest spending countries combined.

Nevertheless, we disagree with the contention that the world situation is benign. We argue instead that, compared to the Cold War, the threats are not as high but they are broader. Moreover, they require a greater degree of understanding and more creative diplomacy than when the threat was simpler. To paraphrase ex-CIA director James Woolsey, the Cold War dragon has been slain, but now we are in a forest teeming with poisonous snakes. Furthermore, we are concerned that major threats far surpassing those from an Iraq or North Korea could develop in ten or twenty years, especially if other major powers conclude that reduced resources will make the U.S. unable to defend its interests against the challenge they could mount in their region.

If our view of the world situation is correct, there will be tensions between the ambitious U.S. goals and the limited resources devoted to defense and foreign affairs. That tension creates the risk that by trying to do too much, the U.S. may accomplished less than if its efforts were more focused. We find that a higher degree of risk exists than we are comfortable with, but that is what we will have to live with unless the U.S. political climate changes in a way that we do not expect.

The best response to the tension between goals and resources is to focus on ways to improve efficiency, that is, to do more with the same resources. It is incumbent on the defense and foreign policy community to reinvent how to do business to take advantage of new opportunities and to phase down or out that which has become less important or less effective. A variety of means to diversify and leverage the instruments of U.S. power were analyzed in the 1996 Strategic Assessment, including:

In sum, the U.S. government has so far been successful in adapting the ways it does business so as to protect vital national security interests, despite tight resource constraints. At the same time, it has been a challenge to stretch resources to cover important, though not vital, interests, as well as to promote humanitarian values.

U.S. Forces Strong Today, Despite Drawdown

U.S. forces have been reduced by one-third or more since the Cold War, but they remain stronger by far than any other country's. The drawdown has been largely a reorientation away from those capabilities needed to meet the Soviet threat.

Land forces. Throughout the Cold War era, the large ground forces provided by the United States and its allies were at the heart of the strategy to contain the expansion of the Soviet Union in Europe. The big land forces procurement programs of the 1970s and 1980s strengthened the capabilities to fight a high-intensity war against large, heavily armored units.

With the dissolution of the Soviet Union, the requirement to fight two nearly simultaneous major regional contingencies has become the planning standard that determines the requirements for ground forces. The result has been a shift to mobility and rapid response capabilities.

Overall, the Army's active component is 40 percent smaller in 1997 than it was a decade earlier, as the result of budget pressures and the changing strategic environment. The reserve component has been reduced by a smaller amount. Although the absolute size of the Marine Corps has not declined as much as that of the Army, the Marines were a relatively small force to begin with, and they never focused primarily on the defense of the central region of Europe against Soviet aggression. They have maintained their traditional role as an expeditionary force, and the active structure of three divisions and three Marine aircraft air wings is being maintained with this point in mind.

Aerospace Forces. During the Cold War, U.S. aviation force planning was largely focused on the Soviet Union, which possessed a large, capable tactical- and nuclear-strike air force. The Air Force and Navy responded by assigning priority to air superiority, which was essential for defense or counterattack on the ground. Without air superiority, damage suffered from Soviet air strikes on NATO's rear area could have been crippling. In the 1970s and 1980s, considerable investment went into ensuring U.S. air superiority, with the procurement of large numbers of F­14, F­15 and F­16 aircraft, among others.

In the post-Cold War world, no opposing air force currently possesses a capability in terms of absolute numbers or technological sophistication in any way comparable to U.S. air power. As a result, U.S. aviation forces are able to focus more of their effort on bringing firepower to bear on the ground quickly and accurately. At the same time, the largest modernization program pursued by the Air Force is the F­22 stealth fighter, which will replace the F­15 air-superiority fighter.

In 1997, the Air Force is about half the size it was in 1987. Naval air forces have been reduced less and the Marine Corps air hardly at all.

Maritime Forces. During the Cold War, the Navy focused on control of the high seas to safeguard the U.S.'s ability to reinforce NATO and Pacific allies by sea. By the late 1970s, the Navy concluded that dealing with the Soviet threat required a strong offensive strategy, rather than waiting for the Soviets to attack. It developed the Maritime Strategy, which emphasized carrying the battle to the source of the Soviets' combat power, including attacking heavily defended targets.

In the late-1990s, no nation can mount a sizable naval threat to U.S. forces far from its own shores, thereby easing the task of self-protection and defending merchant shipping on the high seas. This has allowed U.S. maritime forces to work on bringing a more massive and more precise firepower to bear on the battle ashore. The Navy and Marine Corps have developed a strategic concept in which the focus is on the littoral, or coastal areas, of the globe. Littoral operations, which were only a secondary concern during the Cold War, involve different challenges than operations on the open ocean. As maritime forces approach the shore, they come into range of attack from land (for instance, from land-based cruise missiles). Mines are more of a threat in shallow, geographically restricted waters.

The Navy faces the challenge of transforming a force optimized to defeat a peer superpower on the open ocean into one that aims primarily at supporting regional littoral operations typical of the post-Cold War environment. The inventory of ships will change slowly: aircraft carriers have a useful life of up to fifty years; major surface combatants and submarines, some thirty-plus years. Many of the ships are flexible and adaptable. As a result, much of the adjustment of maritime forces to the demands of the post-Cold War world will be a matter of doctrine and training.

U.S. maritime forces are much smaller in 1997 than in 1987. The biggest reduction has come in the number of attack submarines and convoy-escort surface combatants. This reduction reflects the diminished threat to battle groups and merchant shipping in the open ocean. The number of carriers and large-deck amphibious ships that can bring aircraft and forces to a conflict theater has decreased only marginally. Mine-warfare capabilities also are being improved.

In 1996, almost one-third of all U.S. maritime forces were continuously deployed overseas, even though the U.S. was at peace. A carrier battle group with supporting ships and a Marine expeditionary unit, the core of the Seventh Fleet, are permanently stationed in Japan. The Fifth Fleet, established in 1995, patrols the Persian Gulf region. The Sixth Fleet, with its home port in Italy, provides a continuous presence in the Mediterranean Sea.


Flashpoints

The flashpoints considered here illustrate the diverse circumstances that could lead to conflict. More important than the particular flashpoints is the analytical framework we propose for thinking about the problems with which the U.S. military will be tasked to respond in the next three to ten years. The analysis demonstrates that the world's flashpoints can be divided into four types of problems, which are, in order of the military challenge presented:

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