Critical Questions for 2013: Defense and Security

In Critical Questions 2013 CSIS's world class experts give their take on what they see as the most pressing challenges facing the world in 2013. Transitions in U.S. defense policy, regional flashpoints, and global-scale issues are likely to dominate what will be another year of international transformation. Read below to find the answers to next year's most critical questions on Defense and Security or follow the links to find additional answers.

Defense and Security

A Defense Strategy We Can Afford
Maren Leed, senior adviser, Harold Brown Chair in Defense Policy Studies and Ground Forces Dialogue

Living within Our Means: Redefining Defense Priorities for an Era of Limited Resources
Clark Murdock, senior adviser and director, Project on Nuclear Issues
Kelley Sayler, research associate, Defense and National Security Group

Maritime Security 2013
Carl Baker, director of programs, Pacific Forum CSIS

Meeting The True Fiscal, Social and Political Challenges to U.S. National Security
Anthony H. Cordesman, Arleigh A. Burke Chair in Strategy

Sustaining an Effective and Affordable Nuclear Deterrent in 2013
Clark Murdock, senior adviser and director, Project on Nuclear Issues
Stephanie Spies, research assistant and program coordinator, Project on Nuclear Issues

Global Challenges

Democratic Governance and Budgets in 2013
Gerald Hyman, senior adviser and president of Hills Program on Governance

The Demographic Picture in 2013
Richard Jackson, director and senior fellow, Global Aging Initiative

Economics in 2013
Matthew P. Goodman, William E. Simon Chair in Political Economy

Energy and the National Interest
Sarah O. Ladislaw, codirector and senior fellow, Energy and National Security Program

How Does America Avoid Becoming Japan or Europe?
James Andrew Lewis, director and senior fellow, Technology and Public Policy Program

Instability and Crisis in 2013
Robert D. Lamb, director and senior fellow, Program on Crisis, Conflict, and Cooperation (C3)

The Prospects for Nonproliferation in 2013
Sharon Squassoni, director and senior fellow, Proliferation Prevention Program

Rewriting the U.S. Narrative
Brad Glosserman, executive director, Pacific Forum CSIS

Support the Doing Business “Revolution” through U.S. Leadership
Daniel Runde, William A. Schreyer Chair and director, Project on Prosperity and Development

Transatlantic Security in 2013
Stephen J. Flanagan, Henry A. Kissinger Chair in Diplomacy and National Security

U.S. Trade Policy and Economic Growth
Scott Miller, senior adviser and Scholl Chair in International Business

What’s Next in Cybersecurity?
James Andrew Lewis, director and senior fellow, Technology and Public Policy Program

Regional Issues

The Arctic in 2013
Heather A. Conley, Senior Fellow and Director, Europe Program

Asia in 2013: Whither the Pivot in 2013?
Michael J. Green, Senior Vice President for Asia and Japan Chair

China in 2013
Christopher K. Johnson, Senior Adviser and Freeman Chair in China Studies
Bonnie S. Glaser, Senior Adviser For Asia, Freeman Chair in China Studies

Europe in 2013
Heather A. Conley, Senior Fellow and Director, Europe Program

India in 2013—and Beyond
Karl F. Inderfurth, Wadhwani Chair in U.S.-India Policy Studies

The Challenge of China and North Korea for Madame Park Geun-hye
Victor Cha, Senior Adviser and Korea Chair

Russia in 2013
Andrew C. Kuchins, Senior Fellow and Director, Russia and Eurasia Program

Southeast Asia in 2013
Ernest Z. Bower, Senior Adviser and Sumitro Chair for Southeast Asian Studies

Western Hemisphere 2013
Stephen Johnson, Senior Fellow and Director, Americas Program

A Defense Strategy We Can Afford

Maren Leed, senior adviser, Harold Brown Chair in Defense Policy Studies and Ground Forces Dialogue

The coming of the new year has left the specter of sequestration still hanging over the Department of Defense (DoD), making it nearly impossible to look beyond the immediate budget challenges.  But 2013 will be a difficult year for the Pentagon for many other, and in some cases even more fundamental, reasons.  Once a new secretary of defense is confirmed, he or she will be faced with an unpleasant reality that may be difficult to acknowledge: DoD’s current strategy can’t be fully executed. Today’s strategy has two principal and related vectors: assuring access to the “global commons,” especially the sea, space and cyber lanes that support trade and commerce, and a greater relative emphasis on the Pacific (followed by the Middle East).  Unfortunately, the current plans to support these strategic ends are unaffordable.  As presently envisioned, DoD is planning major investments in extremely expensive air and maritime platforms that cannot realistically fit within planned resources, let alone when further reductions of still undetermined magnitude are taken.  These challenges are only further exacerbated by a sclerotic acquisition system, and a major knowledge gap between government customers and private sector suppliers.  Compound these problems with the politically vexing but inevitable battles over the balance between active and reserve forces and between the military services competing for missions and resources, and it becomes clearer why the ends, ways, and means for supporting our strategic aims are already misaligned. 

But new leadership, coupled with the fortuitous mandate to conduct a Quadrennial Defense Review (QDR) this year, offers an opportunity to reexamine this alignment.  It is needed now more than ever.  Even if the strategic ends are preserved, which should be a subject of much more fulsome debate, there must be adjustments in our currently planned ways, and there will certainly be continued pressure on the means.  This means conducting robust analyses of how much of a burden the United States would or should have to bear unilaterally to ensure continued commercial flows, and what tools best enable various alternatives.  It means exploring a range of options that might support maintaining the balance of power in Asia but within the context of a broader balance between those regional objectives, fiscal imperatives, and potential demands for U.S. military capabilities elsewhere in the world.  And it means thinking much more rigorously about the effectiveness of various kinds of partnership activities that our military conducts with other nations.  In many people’s eyes, past QDRs have fallen short of fully tackling these types of strategic issues and charting a clear path forward for defense.  With commitment from senior national security leaders within both the Executive and Legislative branches, this one should. 

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Living within Our Means: Redefining Defense Priorities for an Era of Limited Resources

Clark Murdock, senior adviser and director, Project on Nuclear Issues
Kelley Sayler, research associate, Defense and National Security Group

Although Congress recently acted to delay sequestration, extending the deadline for reaching an alternative deficit reduction agreement to March, the Department of Defense (DoD) will almost certainly be faced with substantial budgetary cuts in 2013 as mandatory spending and interest payments continue to reduce the tradespace for discretionary spending.  By themselves, these cuts will not result in the catastrophe that several administration officials have predicted; even cuts as dramatic as those that would be imposed under sequestration would leave a defense budget topline that is $100 billion higher than in past drawdowns.  Nonetheless, this drawdown will be far more challenging than in years past. 

This is because DoD will be faced not only with declining defense dollars but also weakening defense dollars in terms of purchasing power.  As DoD’s January 2012 white paper, Defense Budget Priorities and Choices, noted, “Within the base budget alone…personnel costs increased by nearly 90 percent or about 30 percent above inflation [since 2001], while the number of military personnel has increased by only about 3 percent.”  Inflation within the operations and maintenance (O&M) account is similarly rampant.  And in the absence of heroic reform efforts, the aggregate inflation within these accounts will place increasingly acute pressure on modernization (procurement and research, development, test, and evaluation [RDT&E]), in turn impacting the nation’s ability to adhere to its current set of defense strategies and priorities.

The 2014 Quadrennial Defense Review, which DoD will begin conducting in 2013, will present a notable opportunity for policymakers to address the challenges posed by this budgetary reality.  In particular, policymakers will need to bring the nation’s means and ends into alignment by limiting defense objectives to the resources available.  This will require a clear eyed assessment of the demands of the future security environment as well as disciplined, strategic choices about mission priorities and the capabilities vital to executing them.   If we are to live within our means in 2013, we must recognize that we cannot do more with less; we must do less with less.

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Maritime Security 2013

Carl Baker, director of programs, Pacific Forum CSIS

Maritime security will be at the top of the list of major concerns in Asia this year. With the ongoing territorial disputes in both the East China Sea and South China, there is a significant risk of miscalculation among disputants. Although these disputes are longstanding, they have taken on increased importance over the past year as a result of additional competition over resources, administrative actions by disputants, and the rise of nationalistic sentiment attached to the territorial claims being made by the governments in the region. While U.S. interests are primarily focused on freedom of navigation, the fact that its allies and partners are among the disputants, the United States also risks being drawn into these disputes. Finessing the balance between promoting regional cooperation and the further development of multilateralism while reassuring allies and partners faced with increasingly assertive territorial claims by China will be major challenge for the United States as it continues to define its “rebalance” towards Asia.

Two critical actions that would show U.S. resolve in dealing fairly and effectively with the issue would be the ratification of the UN Convention on the Law of the Sea (UNCLOS) and the promotion of a legally binding code of conduct for the South China Sea. Taking these steps would reaffirm U.S. commitment to a rules-based regime for resolving maritime disputes and would help reduce the likelihood of miscalculation, promote opportunities for improving cooperation in joint exploitation of resources in the region, and help clarify the provisions for freedom of navigation that have been established in UNCLOS.

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Meeting The True Fiscal, Social and Political Challenges to U.S. National Security

Anthony H. Cordesman, Arleigh A. Burke Chair in Strategy

It is true that we need to reform the ways in which we spend on national security. Few doubt that defense spending grew far too much over more than a decade of wartime increases. Every aspect of defense spending needs to be examined, reshaped, and made more efficient. The United States needs to reexamine the balance between military spending and foreign aid at a time when political upheaval in the Middle East illustrates the need to use such aid as a tool in delivering political and economic stability. The United States needs to ask why the Office of Management and Budget estimates we are now spending nearly $80 billion per year on homeland defense and the war on terrorism. The issue is not simply national security spending as a percent of federal spending; it is national security relative to the total tax burden, the total cost of civil governance, and the impact of each on the overall economy. Seen from this perspective, national security spending becomes something of a historical bargain, as well as a very limited source of solutions to our total fiscal problems.

But even the best set of reforms to current national security spending are unlikely to cut the total burden on the economy by two percent of the U.S. gross domestic product (GDP); the savings will probably be closer to one percent or less. It is doubtful that the United States can get the baseline cost of defense below 4 percent of the GDP. Even with the nation at war in 2011, the United States spent only 4.7 percent of GDP on defense and this was scarcely a critical burden on our economy. It was far less than 5.4 percent spent as the Cold War was ending in 1991, or the average of 7-9 percent of the GDP spent on the Cold War for nearly half a century.

All of the budget planning in the world and all the ten years plans will amount to nothing if we need more money to deal with the world. There are some aspects of future spending that cannot be controlled. Even through the Iraq War is over, the cost of spending on a relatively limited conflict still requires $85 billion in Overseas Contingency Operations (OCO) spending out of some $633 billion for the FY2013 defense budget. If the United States has new contingencies needs to deal with Iran, North Korea, the Pacific, or any other major crisis, it will have to spend the money.

The crisis in federal and other government spending has very different causes. It comes from the failure to control entitlement spending but also from demographic and social changes. The first such challenge is an aging United States. The United States cannot base a national economy on early retirement at a time when life expectancy today is nearly 20 years over the retirement age of 65 which was once the average age of death and the reason for setting Social Security eligibility at that age in an effort to protect the surviving elderly from destitution. The number of Social Security beneficiaries will rise from 56 to 91 million between now and 2035. Most defined pension plans are being phased out while more and more employers chose to not contribute to 401Ks, and a majority of Americans reach retirement age without adequate savings or a pension. All these trends are pushing the country towards a time when Americans have to work longer, probably to 70 and beyond, and save more on their own. Democracies cannot function if the combination of private savings and government spending for aging Americans do not meet their basic needs.

The United States has an even more urgent need to look beyond the cost of Medicare and Medicaid and to reduce the overall economic burden of medical care. The country cannot divorce the debate over national security spending given the fact that since 1960, national spending on medical care has gone from some 5.7 percent of our GDP to over 17 percent, and is now projected to rise above 20 percent. It means private spending and employer benefits will have still to increase in cost along with taxes. As important as medical care may be, the U.S. economy has to pay for the cost of living and not simply the cost of being sick and dying.

The current narrow and partisan debate over measures like sequestration, raising or lowering taxes, altering the deficit and lending cap, and cutting federal spending cannot solve the real social, economic, and fiscal problems. However, public policy experts, academics and think tanks, the private sector, and the media need to change and broaden their focus. Until Americans can be broadly educated to accept these needs, no sane politician will talk about the true cost of dealing with an aging population and medical spending. Today, the result of such a debate in Congress would be political suicide for the party or members that tell unpleasant truths. This will be particularly true because of today’s environment of domestic political extremism, bitter partisanship, and methods of campaigning that range from the negative to character assassination. Neither the administration nor the Congress will take the lead under such conditions, and profiles in cowardice and ideological posturing will remain the political norm.

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Sustaining an Effective and Affordable Nuclear Deterrent in 2013

Clark Murdock, senior adviser and director, Project on Nuclear Issues
Stephanie Spies, research assistant and program coordinator, Project on Nuclear Issues

In 2010, the Nuclear Posture Review (NPR) endorsed sustaining the Cold War-era nuclear triad, albeit at reduced force levels, as the best way to maintain a "safe, secure, and effective" nuclear arsenal.  To win ratification of the New START treaty, the Obama administration agreed to modernize both the nuclear force and the nuclear complex at a projected price tag of about $215 billion dollars over 10 years.  Two years later, it is clear that this estimate both understates the cost of nuclear modernization and is not affordable in an era of tight defense budgets.  Defining an affordable, but effective, U.S. nuclear posture and forging a sustainable consensus in support of it will be a significant political challenge in 2013 and the years to come, both domestically and internationally.

Although nuclear weapons can make only limited contributions to achieving specific, tactical objectives, they remain an important hedge against unpredictable changes in the security environment, including deterring nuclear attack on the United States or its allies. As long as other states retain nuclear weapons, maintaining a credible and effective deterrent will be critical to U.S. leadership, both for maintaining the U.S. global network of security assurances and commitments and for sustaining a robust international non-proliferation regime. However, such a sustainable nuclear posture relies upon the United States first domestically establishing an agreement on how best to support it.  During 2013, analysts and policymakers alike must grapple with the important issues involved in maintaining a safe, secure, and effective nuclear arsenal, including but not limited to: whether to maintain a strategic triad of delivery systems and dual-capable fighters, when and how to modernize the nuclear force as well as the nuclear complex, and which arms control and nonproliferation initiatives to pursue in the near-term, if any.  Addressing these questions in a timely and cost-efficient manner will require political pragmatism, presidential leadership, and willingness to compromise by all parties given new budgetary realities.

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