The military brass has been sounding the alarm about the imminence of a potential Chinese attack on Taiwan. But this urgency is not reflected in the Pentagon’s budget. Last month, the Chief of Naval Operations, Adm. Mike Gilday, said he needs to prepare his service for potential aggression against Taiwan this year. But by prioritizing capability over capacity in its spending, Washington risks inviting the aggression it seeks to deter.
Over the past nine fiscal years, budget after budget has traded away combat power, truncated needed weapons early, and permanently closed production lines. As a result, margins in the force are dangerously low, readiness is still recovering, and America’s conventional and nuclear deterrents are at their nadir. Yet Pentagon leaders continue to sacrifice capacity, as measured by fleets, inventories, and their associated force structure, in the fervent belief that Beijing will not attempt to forcibly reunify Taiwan in the next five years.
This rosy assumption flies in the face of China’s recent actions and ignores the reality that robust capacity is what the United States needs to bolster deterrence and avoid the war that the United States seeks to win later. Pentagon leaders would be wise to better balance investments for deterrence and the warfight before both are weakened. If military leaders truly believe Beijing is prepared to act sooner than anticipated, they should focus on what can be built and fielded in this decade.
2027 Is Here and Now for Pentagon Bureaucracy
The Pentagon’s 2023 budget request seeks to build just eight new Navy ships while cutting 24. The five-year plans would have the Navy continue to shrink down to 280 ships by fiscal year 2027 — the same year defense civilians say the force must be ready to defend Taiwan. Worse, 16 of the ships proposed to be scrapped still have service life left. Meanwhile, the replacements for these platforms won’t reach operational status until 2030.
Cutting vast amounts of legacy weapons to pay for bets on developmental technologies suffers from several flaws. First, it discounts developmental risk and focuses on technology before operational concepts. Second, it ignores massive deferred modernization bills coming due now. And third, it underinvests in sustainable equipment choices.
This is more than a strategy of “divest to invest.” The U.S. Navy, in the case of at least one of its modernized Aegis cruisers and some of its more recently procured littoral combat ships, is in effect proposing a strategy of “invest-to-divest.” In terms of the littoral combat ships, that means the Navy has poured billions of dollars into ships that it is now seeking to decommission, even as some of them were put into service as recently as 2019 and 2020.
The Air Force is following the same playbook, seeking to cut needed platforms almost as soon as they reach initial operational capability. Sometimes doctrine changes allow for this shift, but other times it is done simply to meet reduced budget bogies. That is not only a waste of effort but a waste of taxpayer funds. It also launches a knowable acquisition death spiral. Buying fewer units means costs increase, which triggers a Nunn-McCurdy breach, which often leads to schedule slips and more program cuts.
Besides, for a bureaucracy as large as the U.S. military, 2027 is basically the same as today. The process that stretches from desire to planning to requirements to approval to bid to contract award to research to fielding at scale takes three to five years at best. This why it is so problematic that the current wave of early retirements and mass divestments all come when follow-on or replacement capability is frequently stalled or delayed. This creates a gap in combat power at a time when there are no gaps in global threats.
Take the always-busy airborne early warning and control airplane (AWACS). The Air Force wants to retire half the fleet of 31 aircraft this year, but leaders say there will be “a capability gap as new capabilities … are being developed.” The Air Force is cutting its planned purchase of Joint Strike Fighters while doubling its purchase of F-15EXs in this request. But these are two different fighter capabilities that meet separate requirements. Buying more of one tactical fighter doesn’t free up the other one to conduct more missions.
The near-term shrinking and aging is playing out across all the services in the current budget request. The Vice Chairman of the Joint Chiefs of Staff recently confirmed this, stating the forthcoming third iteration of the Joint Warfighting Concept “recognizes gaps in the current force’s capability.” Another official in the Air Force characterized the situation aptly, noting that, “By any measure, we have departed the era of conventional overmatch” vis-à-vis China. Beijing has “advanced so far and so fast in its air and space power that the Air Force’s ability to deter through conventional forces is at risk.”
The Link Between Capacity and Readiness
Volume is crucial to maintain healthier readiness levels across the armed forces. The Congressional Budget Office has shown that both the Navy and the Air Force saw fleet-wide declines in aircraft availability rates between 2001 and 2019. Fewer airframes to employ means pilots fly less, which leads to reduced readiness. In Fiscal Year 2021, active-duty pilots averaged 10.1 flying hours per month, putting them at 121.2 hours per year. That is about 80 fewer hours than the number that the Air Force believes necessary for peak readiness.
Fewer planes available to fly also means fewer planes that can be put into a fight. And in a high-end conflict with a peer adversary like China, the United States would need to deploy as many planes as possible, given the likelihood that nearly half of the Air Force and Navy inventory could be destroyed. Sufficient capacity also depends on sufficient personnel and maintenance periods. In these, too, the services are struggling. The Army came up 25 percent short of its target recruiting goal for FY22. The entire Air Force was down 1,650 pilots in FY2021, while the Navy was short 587 officers in FY22 across both the active force and reserves.
As the military struggles to bring in new talent, units will become overworked and undermanned as they’ll be forced to pick up the tasks that would otherwise have been assigned to new recruits. That will put the military into a retention crisis, further shrinking the force and reducing readiness. To take just one example of how this is playing out, the Pacific Air Forces’ crisis response forces are currently five squadrons short of requirements.
It’s clear that the services need both size and strength as they seek to deter Beijing. All these factors — steep weapons retirements, high operating tempo, and degraded readiness — create reinforcing feedback loops. As fewer aircraft and pilots are available for the same number of missions, for example, existing fleets are driven into the ground as man and machine are worn out faster.
Even though the force is too small to meet global demand and modernize at the same time, the White House is opposed to many provisions in the Senate’s defense policy bill that seek to prop up the capacity of the armed forces until replacements can be fielded later this decade. That opposition is largely due to the Pentagon attempting to resource its defense strategy through a three-Future Years Defense Program approach, which over-weights developing the capabilities of the early 2030s rather than on maintaining and procuring the capabilities of today.
Cull Research and Development, Build New Old Equipment
One cause of this temporary disarmament is an overemphasis on the warfight at the expense of competition and deterrence. If a system doesn’t “survive the threat ring” in Asia, it is on the chopping block for budget cuts. But the U.S. military also prevents wars, and capacity can act as a deterrent in its own right.
Buying less capability now makes little sense when the potential for hostility is increasingly near. What’s more, size matters, not just technology. Relying on capability alone to win the day will only allow America’s armed forces to get smaller, older, and less ready. Instead, mass and attrition should return as foundational force-planning principles for the U.S. military. Putting more mass in theater doesn’t mean that it’s all just cannon fodder. In fact, the aim of purchasing and fielding more platforms is to increase U.S. military capacity precisely in order to deter war.
In other words, the military needs more stuff and it needs it fast. What it doesn’t need are platforms irrelevant for a fight in the Pacific or those that could be fielded, at the earliest, a decade from now. It needs existing capabilities that can not only act as a bridge for next-generation platforms but are useful for winning and deterring war in the Indo-Pacific and maintaining presence forward to prevent conflict.
However, the Defense Department can’t purchase more unless it has enough funds in the right appropriations account. That’s why resetting the procurement to research and development ratio is important. In the administration’s budget request for FY23, that ratio is 1.11 to 1. This is a far cry from the days of the Reagan administration’s buildup, when a ratio of 2.74 to 1.00 produced much of the equipment that our military uses today.
A healthy and feasible ratio is closer to 2.25 to 1. To meet the threat from China, policymakers should shift $45 billion per annum from research and development into procurement over the next five years. Given that ongoing support for Ukraine is straining some key U.S. military supplies, Washington should be concerned that the China fight would demand even more and faster.
Trading away capacity — especially before the promised next-generation technology arrives — results in a force with tiered modernization incapable of carrying out the full ambitions of the defense strategy. Even if the ongoing efforts at transformation succeed, without creating more capacity in the meantime it will lead to an unbalanced military, reduce the efficiency and cost savings of the acquisition system, and leave future policymakers with fewer and worse choices. By narrowly focusing on one future scenario, policymakers are too quick to retire and divest from the so-called legacy systems that maintain deterrence through daily global presence missions.
The Path Forward
Crucially, not all legacy systems are created — or recreated — equal. New technologies often need a platform with which to partner and demo. As the future is fielded, all the military services will be a blended mix of old and new. The Army of 2030 will only modernize about half the total Army when complete. Given the constant mix of new and old — or enduring and legacy — equipment, leaders must carefully consider what legacy systems are worth keeping and updating.
Legacy systems can keep capacity from sliding even further and possibly be useful in war, whether as tech playgrounds or by being updated and given entirely new missions. The Pentagon should avoid throwing aside older weapons systems in favor of wholesale investments in new technologies and platforms. While modernization is necessary, the Department of Defense does not have the time, track record, or funding to rapidly field replacements to legacy systems. Besides, in many cases the Pentagon doesn’t need entirely new systems: It only needs new tech on old stuff. Invention and innovation are not the same thing. The Pentagon was the inventor from the 1940s through the 80s but now must be the innovator — using existing platforms to put things together that already exist to create a different and better outcome.
For instance, the 70-year-old B-52 bomber can carry high-tech standoff munitions, while the 36-year-old B-1 bomber is now being considered to carry hypersonic weapons. Rather than retiring legacy systems before they have a suitable replacement, the services should start thinking creatively about how to employ them now.
With more procurement dollars, the Pentagon should focus on maxing out production lines in a few key areas. First, it should expand yard capacity and then place orders for more destroyers, oilers, and attack submarines. It should also place orders for large amphibious and amphibious assault ships, and eventually, the light amphibious warship that can rapidly deliver marines in the event of a contingency.
As Ukraine has demonstrated, wars require a massive amount of things that blow up. Munitions production should rise across the board, not only to replenish stocks drawn down to aid Ukraine but to grow reserves. Special attention should be paid to increasing anti-ship weapons, like the Long-Range Anti-Ship Missile, currently produced at such a slow rate that the Navy and Air Force will have a paltry 629 combined by 2027.
The military also needs more F-35s and expendable drones, as well as expanded logistics support and long-haul capacity in the form of C-130s. The Army will need more manned cargo and attack helicopters for bridge capacity while it awaits Future Vertical Lift. This isn’t an exhaustive list of investments and reforms that should be made but are first steps to increasing capacity in the Indo-Pacific.
The armed forces need more equipment, higher readiness, and greater urgency to deter Beijing. The imbalance in the three-legged stool of capability, readiness, and capacity is sure to invite the very aggression that trading capacity for capability is intended to avoid.
Mackenzie Eaglen is a senior fellow at the American Enterprise Institute. She has previously worked in Congress and at the Defense Department as well as staff to three previous national defense strategy commissions.
Image: U.S. Force Photo by Staff Sgt. Perry Aston
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