Defense should remain focused on its primary and core function: deterring, preparing for, and winning America’s wars. Nondefense spending should be removed from the defense budget to make clear what the nation is really spending for its security and to support federal priorities in other agencies that have corresponding missions.
As the debate intensifies on US policy related to the defense of Taiwan, it is useful to examine when and why the US would carry out such a mission, the military resources and capabilities required to do so, and the potential obstacles to a successful outcome. Is the US prioritizing national security in its resourcing and budgeting decisions? Is the US military on a path to success in modernizing its equipment, processes, and capabilities to maintain a competitive edge over China?
We may not have much time to align the answers to these questions.
China regards Taiwan—an island democracy with 23 million citizens—as a renegade province to be folded back under Beijing’s control. The 1979 Taiwan Relations Act does not require the United States to defend Taiwan but ambiguously states Washington will maintain the capacity to do so.1
It is evident that Taiwan matters to the United States.2 China’s control of Taiwan would give the People’s Republic of China (PRC) a forward base 150 miles off the mainland, bringing Chinese aircraft and missiles much closer to important US allies such as Australia and Japan and to vital trade routes. Control over Taiwan, which is China’s fifth-most-important trading partner, would also provide Beijing with an important economic asset linked to a strong technology industry. And it would provide the PRC with semiconductor factories that are essential to microelectronics.
The US-China Economic and Security Review Commission’s 2021 annual report to Congress, released in November 2021, finds that decades of improvements by China’s armed forces “have fundamentally transformed the strategic environment” and weakened military deterrence across the Taiwan Strait, diminishing the position of the US. The commission states,
Today, the [People’s Liberation Army] either has or is close to achieving an initial capability to invade Taiwan—one that remains under development but that China’s leaders may employ at high risk—while deterring, delaying, or defeating U.S. military intervention.
The commission also recommends
Congress take urgent measures to strengthen the credibility of
U.S. military deterrence in the near term and to maintain the ability of the United States to uphold its obligations established in the Taiwan Relations Act to resist any resort to force that would jeopardize the security of Taiwan.3
We must take these recommendations seriously in light of indications that the moment of maximum danger in a conflict with China over Taiwan may be only a few years away.4
If, as noted, Taiwan matters to the US, and China’s capability to take action against Taiwan is improving while the timeline for potential action by China is shrinking, we must ask if the US is resourcing the military to defend Taiwan if called on to do so. Is the US military currently set up for success? The short answer is no.
The US military has four key barriers to success:
1. Defense is not a priority for the current administration, demonstrated by the fiscal year (FY) 2022 budget request and further emphasized with an FY23 budget proposal for defense that does not keep pace with rising inflation.
2. Delays in annual appropriations and authorizations reduce buying power, hinder readiness, and delay the pursuit of a competitive advantage.
3. The definition of defense has been expanded to allow for diversion of defense resources and diffusion of attention to nondefense priorities.
4. Institutional and statutory rules and processes do not promote speed and agility in testing, procuring, and integrating modern capabilities.
These barriers to success are inflicted by the administration, Congress, and the Department of Defense (DOD) itself. So they are also fixable.
Defense Is Not a Priority for the Current Administration. When the Office of Management and Budget released the FY22 discretionary toplines for defense and nondefense departments and agencies in early April 2021, defense was clearly not a priority.5 The Office of Management and Budget press release on the subject did not even mention defense.6 The discretionary totals contained a nearly 16 percent increase for domestic activities, while the proposed defense number would not have kept pace with inflation, which at the time was much lower than it is now.
Upon release of the FY22 president’s budget request to Congress in late May 2021, the lack of attention to defense was further emphasized. The White House budget summary mentioned no actual military capabilities. Some of the investments discussed under “Confronting 21st Century Security Challenges” were COVID-19, foreign assistance, the World Health Organization, the United Nations Population Fund, and a Global Health Security Agenda. When the summary touched briefly on the China threat and the Pacific Deterrence Initiative, it noted the importance of cybersecurity but highlighted none of the myriad investments required to compete militarily with China or defend Taiwan. Rather, the document stated that the budget included significant resources to “strengthen and defend democracies throughout the world; advance human rights; fight corruption; and counter authoritarianism.”7
The FY23 budget proposal continues to de-emphasize defense. “The Budget Message of the President” released with the most recent request does not use the words “defense” or “national security.”8 Any matters relating to national security do not appear until halfway through the letter, and the Russian invasion of Ukraine is mentioned only as a cause of the rising prices affecting Americans. Lastly, while competition with China is mentioned, no context is provided. As of February 2022, US inflation was the highest it had been in 40 years, at 7.9 percent.9 As inflation skyrockets and the defense budget stalls, investments essential to the readiness of our national security apparatus are being cut.10
Instead of investing in military capability, the budget proposes to divest $2.7 billion in systems without buying replacements. Procurement would remain essentially flat, which would be a cut under inflation. The Navy fleet would shrink as ships are retired without sufficient procurement to replace them. In just 2023 alone, the president’s budget request decommissions 24 ships while only procuring eight.11 Similarly, the request would decrease the procurement quantity for the F-35A fighter aircraft to 33 aircraft, down from the 48 requested in FY2022.12
Why is this a problem?
Since 2000, the DOD has spent about twice as much of its expenditures on operations and maintenance (O&M) costs as it did to procure new capabilities.13 As platforms age, their O&M costs skyrocket, and US equipment is rapidly aging. The average aircraft in the Air Force is 31 years old, and some fleets average 60 years old.14 The majority of the Navy’s classes of ships are no longer in production. Additionally, in 2020, maintenance, refueling, and complex overhaul led to less than half the carrier fleet being available for deployments.15
In contrast, the Pentagon recently reported that the People’s Liberation Army and People’s Liberation Army Navy had amassed the largest fleet in the world, cited the acceleration of Chinese nuclear-warfare development in its annual report to Congress on military developments involving China, and called a recent test firing of a Chinese hypersonic missile “a near-Sputnik moment.”16
Solution One. The administration should support the National Defense Strategy Commission’s recommendations by providing 3–5 percent real growth for defense spending—real defense spending that results in readiness and modern military capacity and capability.17
A highly divisive Democrat-led Congress even acknowledges the dangerous lack of attention paid to the national security budget. The FY22 National Defense Authorization Act (NDAA) increased the DOD budget by $25 billion, or 3 percent over the requested amount. The appropriators followed suit in the FY22 Consolidated Appropriations Act by providing $743 billion for DOD, nearly $30 billion above the request.18 The increases provided by Congress are admittedly a bit of a mixed bag since Congress has been guilty for years of diffusing defense resources to nondefense spending, but the signal that increases in defense spending are necessary is clear.
Now, with the FY23 defense budget request also falling well short of the real increases necessary, Congress will need to take the lead again. Defense will require a topline of at least $814 billion just to keep pace with inflation, under which resources should be aligned to readiness of the current force—to include incrementally integrating new capabilities into that force—and procurement of new capabilities that should be emerging from research, development, test, and evaluation investments made over the past five to 10 years.19
Specifically, in its 2021 report to Congress, the US-China Economic and Security Review Commission recommends Congress authorize funding and deployment of “large numbers” of anti-ship cruise and ballistic missiles in the US Indo-Pacific Command (INDOPACOM) area of responsibility.20 In addition, the commission suggests Congress fund INDOPACOM requests for hardening US bases in the region and “robust missile defense.”21
The US should stockpile large numbers of precision munitions in the Indo-Pacific region, the panel recommends, and support programs that enable US forces to continue fighting in the event central command and control is disrupted. Lastly, the panel recommends Congress authorize and fund INDOPACOM requests for “better and more survivable intelligence, surveillance, and reconnaissance in the East and South China Seas.”22
The NDAA also compels a briefing on the advisability and feasibility of increasing United States defense cooperation with Taiwan: It is important we help Taiwan improve its overall readiness and acquire asymmetric capabilities most likely to make the Chinese government question its ability to take the island by force.
Congress will need to prioritize these investments as it considers required increases to the FY23 budget submitted by the administration.
Delays in Annual Appropriations and Authorizations Reduce Buying Power. Once again, the DOD operated under a continuing resolution (CR) for a large portion of the fiscal year.23 Before enactment of the FY22 Consolidated Appropriations Act on March 15, 2022, the government operated under three successive CRs.24 CRs essentially extend last year’s funding and priorities into the new year to avoid a lapse in appropriations and government shutdown when Congress can’t agree on regular annual spending. When the CRs for 2022 ended, DOD had operated under temporary funding extensions like this one for over 1,400 days during the past 12 years.25
CRs are expensive and damaging to national security.26 The longer the CR, the more the damage.27 For example, as the National Defense Industrial Association (NDIA) points out, a yearlong CR for FY22 would have meant “a $36 billion reduction from Congressional intent.”28 In this way, CRs compound the harm already done by insufficient toplines.
Secretary of Defense Lloyd Austin explained in a statement that a full-year CR for FY22 “would cause enormous, if not irreparable, damage for a wide range of bipartisan priorities.” He said,
The Department’s efforts to address innovation priorities such as cyber, artificial intelligence and hypersonics programs would be slowed. . . .
. . . It would misalign billions of dollars in resources in a manner inconsistent with evolving threats and the national security landscape, which would erode the U.S. military advantage relative to China, impede our ability to innovate and modernize, degrade readiness, and hurt our people and their families. And it would offer comfort to our enemies, disquiet to our allies, and unnecessary stress to our workforce.29
Comptroller Michael J. McCord reiterated during the briefing on President Biden’s FY23 defense budget, “We were unable to move out as quickly as we would have liked to in F.Y.’23 because we were under a continuing resolution for months and months and months, unable to undertake new activities.”30
The under secretary for research and engineering likened the CR to a self-inflicted wound, saying it would put the US further behind its adversaries.31
During the December 2, 2021, floor debate on the CR, members of Congress repeatedly conveyed the importance of full-year funding and stated that passing annual appropriations is their “most basic constitutional responsibility.”32 Rep. Rosa DeLauro (D-CT) said, “Continuing resolutions are not the way to govern. They are a short-term patch that leaves the American people behind.” Rep. Ken Calvert (R-CA) said,
The most basic responsibility of this Congress is to fund the government, to ensure seniors and veterans receive their earned benefits on time. . . .
We cannot continue to cripple our national security apparatus with CRs year after year. It is not only wasteful—this CR is going to cost the Department of Defense about $1.7 billion per month for nothing—but it allows our adversaries to continue gaining while we remain stagnant.
Rep. David Price (D-NC) said, “I also urge my Republican colleagues to meet Congress’ most basic constitutional responsibility of funding our government and directing investments for the future by coming to the table.” Rep. Lucille Roybal-Allard (D-CA) suggested “enacting a year-long CR would effectively wash our hands of our constitutional duty.” Sen. Patrick Leahy (D-VT) said,
In fact, the only thing worse than running the government under a continuing resolution, a CR, is a government shutdown. . . .
. . . A full-year CR would not only reduce defense spending instead of increasing it, it would reduce it by $37 billion compared to the levels set forth in the NDAA that they voted for unanimously.
Industry has also conveyed the destructive nature of CRs through letters that members included in the congressional record. The Aerospace Industries Association said,
Both “new starts” and rate increases [which are prohibited under the CR] are critical for our national defense because our defense posture and threats are always evolving. . . .
. . . We count on stable, reliable and adequate funding to support the critical capabilities that we provide for all Americans.
The NDIA said,
We cannot stress enough the importance of the defense appropriations bill to our national security and to a healthy defense industrial base. The limbo caused under CRs wastes precious time and money our nation cannot recover Our nation’s competitors face no similar challenges putting us at a competitive disadvantage, particularly with emerging technologies, and place our supply chains at increasing risk, something we cannot afford after the nearly two years of pandemic impacts. . . .
. . . The ultimate price of this is paid by our warfighters who will lose out on innovations and new capabilities not delivered.
Despite clear comments on the cumulative, damaging nature of CRs to national security, the industrial base, uniform personnel, military competitiveness, and local communities across the country and the unambiguous acknowledgment of enacting annual appropriations as the primary constitutional responsibility of Congress, most of the recent debate in Congress was spent by its members blaming each other for not getting the job done. Meanwhile, time ticks by, and the lack of sufficient and appropriately placed resources further inhibits military capability necessary to carry out the nation’s strategy or defend Taiwan.33
Solution Two. Congress must start taking its responsibility to pass annual appropriations on time seriously instead of relying on CRs almost every fiscal year.34 The administration and Congress should get together early and often until a budget agreement is reached that allows appropriators to act on the president’s budget submission with established allocations before the end of the fiscal year.
Nondefense Spending in the Defense Budget Continues to Grow. At the same time defense budget requests are stagnant, definitions are expanded, and resources and management attention are diverted to nondefense priorities.
Public perception is that the DOD budget is growing exponentially and that it only pays for military capabilities and operations spending. This is misleading. The defense budget has included funding for programs and activities that do nothing to advance military capability or increase national security for years.
The Biden administration is redefining what is included in “national security,” further increasing the amount of nondefense spending in the defense budget, compounding the problems associated with the declining defense topline and unreliable funding, and diffusing the US ability to successfully defend Taiwan.
Budget documents note that “at home, the Department will invest in American manufacturing, military families, and national disaster and pandemic response infrastructure, ensuring the Department’s positive impacts are felt across America as we work together to build back better.”35 This ignores that defense spending has long been recognized as an economic engine, an engine that should focus on building warfighting capability and not be an easy button for any and all challenges the nation faces.
The secretary of defense’s concept of “integrated deterrence,” as foundational to the revised National Defense Strategy, furthers the subservience of hard power and military capability, which should be his primary function in backing foreign policy.36 While the military can and should support diplomacy, and vice versa, there is no replacement for the United States retaining superior military systems, as hard power gives credibility to diplomatic efforts. The recent US diplomatic approach of “surrender first, then negotiate” will result in severe consequences if our military power continues to fall in resourcing priority.
Every time a new mission is assigned to the DOD, it must manage, plan, execute, assess, and report on the activity. This draws personnel, management focus, and resources—beyond those appropriated for the function— away from what should be its core mission: preparing for, fighting, and winning America’s wars.
For example, the House Appropriations Committee expressed concern that the “nation lacks medical surge capacity beyond what is currently available” and added $14 million to the budget for the DOD to “initiate investment in a joint civilian-military modular surge facility.”37 While this may be a federal priority, is it really something that the DOD should lead?
Congress annually adds well over $1 billion to the defense budget for Congressionally Directed Medical Research Programs, many of which duplicate programs managed by the National Institutes of Health. In fact, the National Institutes of Health budget in 2021 was more than $275 billion, within which $21.5 billion was reserved for conditions and diseases the DOD also funded.38
The DOD spends more on the Defense Health Program than it does on new ships.39 It spends almost $10 billion more on Medicare than on new tactical vehicles.40 It spends more on environmental restoration and running schools than on microelectronics and space launch combined.41
Congress added more than $480 million to the environmental restoration accounts in FY22 plus funding to address drinking-water contamination while acknowledging there is currently no plan for the use of such funds.42
Solution Three. We must redefine national security, and therefore what belongs in the DOD budget, to focus on military capability. Removing lower-priority expenses or transitioning their funding to another more appropriate department or agency will make room in the budget for military readiness, modernization, and operations, including those essential to Taiwan efforts.
The DOD is used as an easy button to solve problems that are not part of its core mission and function. Some of these activities may seem small in the scheme of the overall budget, and many are worthy efforts; however, they artificially inflate the defense budget and distract from true defense priorities. For example, the DOD runs excellent schools, but should funding for this be considered “defense” in budget discussions? And should the DOD maintain an infrastructure for management and oversight of this activity, thereby pulling attention from its primary purpose and from the mission only the DOD can carry out?
This same strain occurs with energy, environmental, and medical priorities. The other federal agencies with much more expertise in these respective areas should be taking the lead on these efforts. Pushing these responsibilities on the DOD results in a misleading sense of what the nation is spending for its security and diffuses attention from military capabilities necessary to compete with China and defend Taiwan if called on to do so.
Institutional and Statutory Rules and Processes Hinder Modern Capabilities. The United States must compete with China and any other adversary that threatens US national security. With the small wiggle room the DOD has left after the obstacles discussed earlier have wreaked havoc on its budget, the department must spend its funding as economically as possible. Barriers to doing so come in many forms, including incentive structures that support bureaucracy and risk aversion over innovation, agility, and speed; legacy and diverse business systems that don’t communicate; and general stagnation and opposition to creative change.
The National Security Commission on Artificial Intelligence said it well: “Unless the requirements, budgeting, and acquisition processes are aligned to permit faster and more targeted execution, the U.S. will fail to stay ahead of potential adversaries.”43
The ability to integrate and operationalize new technologies will likely determine success on the future battlefield. While the DOD and the US government remain significant investors in research and development (R&D), defense spending made up about 75 percent of the R&D funding spent by the government in 1960.44 In FY21, the DOD retained only 41.4 percent of federal R&D, forcing the DOD to use commercial technologies to retain its military edge.45
Unfortunately, technology companies find it difficult to work with the DOD. A recent NDIA letter noted that
the tomes of regulations, burdensome business requirements, sometimes Kafkaesque contracting and oversight procedures, and compressed margins have combined to drive businesses out of the defense sector with a net outflow of well over 10,000 companies since 2011 and . . . a halving of new entrants to the sector between fiscal 2019 and fiscal 2020 alone.46
Many startup firms, with technology solutions ideal for defense adoption, either decline to enter or quickly exit the federal market. This is driven by different reasons, but long lead times for resourcing new requirements play a key role. The DOD needs to maintain access to these cutting-edge businesses to ensure that the warfighting capabilities it delivers are and remain relevant.
Transforming future concepts of operations into actionable programming guidance will require a new construct that abandons the legacy life-cycle funding model in which a technology slowly moves from research, development, test, and evaluation to procurement and concludes with O&M. Instead, the budgeting process needs to support timely movements of funding to capture technology solutions and move them quickly from concept to a fielded capability. This approach also forces a reevaluation of how the DOD conducts oversight and management.47
Solution Four. At a time when political consensus on anything can be hard to reach, there is general agreement that the United States military must modernize to fend off a rising China and an aggressive Russia and meet other national security needs. The seemingly immense changes necessary to modernize how the DOD operates can be made more manageable by adopting an acquisition approach built around evolutionary innovation. This will require leadership, cultural change, and funding lines that are flexible and responsive to rapid iterative development, testing, and fielding. Evolutionary innovation follows a simple formula: Experiment with diverse options, select the most promising candidates, and scale the results. Currently, budget and acquisition processes estimate the life-cycle cost of a system upfront. This model was intended to foster careful consideration of important decisions and stabilize planning.
It is not as effective today. To seize the opportunities of an evolutionary approach to modernization, the Pentagon needs three things.
First, it needs stable lines of funding that can accommodate the open-ended nature of an evolutionary development. The department’s newly proposed Rapid Defense Experimentation Reserve is a step in the right direction.48 To do better than previous attempts, it would need to be structured to provide current-year funding for any type of appropriation aligned with joint and combatant command needs.
Second, it needs business systems that can track metrics for information-age military capability to keep up with the speed of continuous development and enable effective oversight. The Advancing Analytics capability, initially developed to support the department’s full financial statement audit, could meet this need when fully implemented.49
Third, it needs congressional support to modernize the Planning, Programming, Budgeting, and Execution process to match acquisition reforms made over the past decade with agile, responsive, and transparent funding not tied to a specific stage in development or fiscal year. The recently enacted NDAA provision that requires a commission to look at this issue, if structured correctly, should help shed light on what works, what does not work, and specifically what changes will have the most positive impact.
Any planning for the defense of Taiwan must fix the four above barriers to succeed. Proper budgeting is essential in the success of all US military priorities. The defense budget must account for inflation, which increases the cost of must-pay bills, and it must support the modernization necessary to remain competitive.
Congress should prioritize and hold itself accountable for executing its fundamental constitutional responsibility of passing annual appropriations bills. We can’t spend good intentions or political blame on defense priorities.
Defense should remain focused on its primary and core function: deterring, preparing for, and winning America’s wars. Nondefense spending should be removed from the defense budget to make clear what the nation is really spending for its security and to support federal priorities in other agencies that have corresponding missions.
And finally, the department and Congress should shake off the chains of the past in the way they plan, program, budget, and execute the sustainment and advancement of the world’s best fighting force.
With these four barriers solved, the United States exponentially increases its ability to succeed in all future endeavors, including defending Taiwan.
