Budget Options for National Defense Section 4 of 6
March 2000

Chapter Three

Modernizing Weapon Systems and Countering Emerging Threats

Among the most important decisions that officials of the Department of Defense make are those that relate to initiating, continuing, or canceling modernization programs. Such decisions will affect the capability and readiness of the military over many decades.

In setting policies and developing programs, DoD leaders must try to balance competing priorities. They must deal with the issues raised by an aging stock of equipment. They must address gaps in military capabilities that require the development and deployment of new systems to perform new missions. And they must manage the defense technology base so that future weapons designers will have a broad menu of new technologies and capabilities on which to draw. This chapter presents options that address those various issues. It also includes several options that would cancel or scale back existing modernization programs to pay for new initiatives.
 

Aging Equipment

DoD's acquisition managers substantially reduced purchases of equipment in the 1990s. They justified those reductions on two main grounds. First, the Soviet threat was gone, and Russia (with a few notable exceptions) was no longer turning out newer and better versions of weapons. Second, U.S. forces were being considerably reduced in numbers, so a surfeit of equipment existed from the buying programs of the 1980s. In fact, in the early 1990s, when forces were being cut most rapidly, so much older equipment was retired that the average age of equipment held steady or even fell for some systems.

Today, by contrast, as a result of that hiatus in procurement, many kinds of military equipment exhibit a higher average age than they ever did in the past. Those aging trends will continue for a number of years for most systems, even those for which replacement systems are in production or development (see Table 2).
 


Table 2.
Average Ages of Selected Equipment (In years)
Type of Equipment Specific System(s) Service Past or Planned
Service Life
of System(s)
Average Age
In 1999 In 2007

Systems Without Replacement Plans
 
Tanks M1 Abrams Army 30 12 20
Shore-Based Maritime Patrol Aircraft P-3C Navy 30-40 23 31
Support Aircraft E-2, EA-6B, S-3B Navy 20-36 18 24
Bombers B-52, B-1, B-2 Air Force 50-70 23 30
Tankers KC-135, KC-10 Air Force 50-66 39 47
 
Systems With Replacement Plans
 
Light Attack and Scout Helicopters OH-58 Kiowa, Comanche Army 20-36 21 28
Surface Combatants DDG-51, DD-21, CG-47, Others Navy 30-40 12 15
Multirole Fighters, Close Air Support F-14, F/A-18, AV-8B, Joint Strike Fighter Navy 20-30 13 16
F-16, A-10, Joint Strike Fighter Air Force 20-30 12 19
Air Superiority Fighters F-15A-D, F-22 Air Force 20-30 18 23

SOURCE: Congressional Budget Office based on data from the Department of Defense.

Service leaders have expressed concern about a number of problems caused by using older equipment--including increased maintenance costs, decreased availability of parts, the need to cannibalize one unit to keep another running, and various other difficulties in supporting and maintaining equipment. All of those problems result in lower mission-capable rates, decreased readiness, and increased workloads for maintenance personnel. In the worst case, a significant part of the equipment that supports DoD's force structure could be rendered inoperable if unanticipated problems arise related to aging.

To halt or slow trends in aging, DoD could reduce the number of its forces, spend more on procurement, or buy cheaper equipment in greater numbers. For missions that have no replacement system in or approaching production, DoD might also need to fund modifications to existing systems, extending their service life and making them easier to maintain. The department may also wish to improve its capability to monitor the stresses that its fleets of older weapons experience. And it may have to pay more to maintain older fleets.

If the services purchased fewer of their newest and most capable systems, they could buy larger numbers of the systems already in the inventory. Some of the options at the end of this chapter--in the section on ways to pay for new initiatives--would slow production and reduce purchases of next-generation systems. One of the options below would buy more of today's weapons.

Another way to deal with aging would be to extend service lives for certain systems and upgrade their capabilities at the same time. Costs for upgrades vary, but a rough rule of thumb is that services can increase a planned service life by about half for two-thirds of the cost of the original system. The Air Force has used that approach to extend the life of its B-52 bombers and KC-135 tankers; the Army and Marine Corps have done the same thing to keep their helicopter fleets in the air.

Another response to problems of aging is to monitor more actively the strains that operations place on a system. The commercial aviation industry has used that approach successfully to target maintenance toward problem areas. An option below would apply that approach to Navy and Marine Corps helicopters.
 

Option 3-01
Buy More Current-Generation Fighter Aircraft for the Air Force
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 582       84      
2002 323 277
2003 297 339
2004 280 316
2005 286 295
 
2001-2005 1,769 1,311
2001-2010 2,666 2,584

The Air Force's fleet of tactical fighter aircraft is older, on average, than it has been for many years. Over the next 12 years that average age will rise to unprecedented levels, despite the planned purchase of two new planes: the F-22 and the Joint Strike Fighter (JSF). The programs to produce those fighters could prove both challenging and difficult to afford, so they might be delayed or extended (see options 3-19-A, 3-19-B, and 3-20 later in this chapter). Such delays would only exacerbate the aging of the fleet.

To counteract that trend somewhat, this option would buy new models of current-generation fighters (F-15s and F-16s) to replace older models. Those purchases would cost a total of $582 million in 2001 and $2.7 billion through 2010.

Buying modest numbers of F-15s and F-16s would allow the Air Force to keep both its production lines and its options open should anything go awry with the two new fighter programs. The Congress added funds to DoD's budget to purchase five F-15s in 2000. This option assumes that the Air Force continues buying F-15Es (since that plane has no new foreign sales to keep it in production) at a rate of six per year through 2003, when the F-22 is scheduled to complete operational testing. Those additional F-15s would cost $322 million in 2001 and $941 million over the 2001-2003 period of the added purchases.

DoD also received funds to purchase about 10 F-16s in 2000, and it plans to buy 10 more in 2002 and 2003. Because of budget constraints, however, the department did not plan any F-16 purchases in 2001. This option would buy 10 F-16s in 2001 and continue purchasing them at that annual rate through 2008, when the Air Force would receive its first large deliveries of JSFs under the current schedule. Those additional F-16 purchases would add $261 million in 2001 and $1.7 billion over the 2001-2010 period, compared with the program set forth in fiscal year 2000. If the JSF program slipped beyond 2008 but its costs remained on schedule--a not uncommon pattern in design efforts, in which increased development costs can offset some or all of the savings from deferred purchases--adding another year's purchase of six F-16s in 2009 would cost $312 million.
 

Option 3-02
Buy Additional Integrated Mechanical Diagnostics Systems for Navy and Marine Corps Helicopters
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 17     6    
2002 7 5
2003 -1 2
2004 -2 -1
2005 -7 -4
 
2001-2005 14 8
2001-2010 -53 -37

As part of a plan to improve its ability to monitor the maintenance status of its rotary-wing fleet, the Navy is developing the Integrated Mechanical Diagnostics (IMD) system for newer Navy and Marine Corps helicopters. If properly used, systems such as IMD can increase flight safety and decrease maintenance turnaround times and spare parts usage; as a result, they can save both lives and money. The systems work by monitoring the vibrations that various helicopter subsystems give off to determine when those vibrations suggest maintenance problems. Maintenance personnel can access data about how reliably the subsystems are operating by using offboard computers--another feature of IMD.

The Navy plans to install IMD on a variety of newer helicopters. But because of budget constraints, it does not plan to install the system on the Marine Corps's fleet of medium assault CH-46 helicopters, which are scheduled to retire as newer aircraft are fielded. The plan for installing IMD on the Marine Corps's heavy lift CH-53 helicopters is also slower than it might be because of budget limitations, according to the Marine Corps. This option would purchase the IMD system for CH-46s, accelerate purchases for CH-53s, and fund miscellaneous shortfalls in the program. To pay for those actions, the Congress would need to add about $17 million to the Navy's budget for 2001.

The Navy's Office of Safety and Survivability evaluated a commercial variant of IMD, which is already used in the helicopter fleets of the United Kingdom and Canada, as well as on helicopters that transport personnel and equipment to offshore mining rigs, and which may be available for off-the-shelf purchases. It adds an expanded flight data recorder (similar to the "black boxes" on airliners) to each helicopter and provides computer systems that let maintenance personnel quickly read the data that are recorded.

According to the Navy office, augmenting and accelerating purchases of such systems would save money in the long run by lowering maintenance costs. In the Congressional Budget Office's estimate, this option would cost a total of $24 million in 2001 and 2002 but would begin saving money as early as 2003. As a result, over five years the option would have a total net cost of $14 million, but over 10 years it would yield total net savings of $53 million.

More important, the integrated diagnostics systems would save lives by alerting maintenance personnel to potential system failures before they happened. The Navy's Office of Safety and Survivability estimated that installing such systems would reduce peacetime crashes by one-fifth. A reduction in crashes would save lives because, since helicopters exhibit erratic flight patterns when they leave controlled flight, crews and passengers cannot eject safely and are less likely to survive a crash. Reducing crashes of the older aircraft considered in the option would not also save investment dollars, according to the Navy, because those planes would not be replaced. But the fleets of older Marine Corps helicopters might be less taxed by flight operations if they lost fewer aircraft to attrition.

If installing IMD proved to save both lives and costs, other services might decide to use some variant of the system in all of their rotary-wing aircraft, even those that were scheduled to remain in service for only a short period. Therefore, the Navy program might serve as a model for other services' modification efforts.
 

Strategic Forces and Missile Defenses

The end of the Cold War has fueled a vigorous debate about the proper role for nuclear weapons and ways to increase nuclear security more broadly. Tensions between Russia and the United States have eased greatly. Both sides have reduced their numbers of short- and long-range nuclear weapons through arms control agreements and unilateral actions. The two countries' conventional forces in Europe have also been cut significantly.

New Threats

Today's security environment is characterized not so much by superpower confrontation as by threats from regional powers and subnational groups. Although such threats were also present during the Cold War, their nature has changed. During the past decade, potentially hostile powers have greatly increased their programs to develop weapons of mass destruction (chemical, biological, and nuclear) and the ballistic missiles to deliver such weapons.

For much of the 1990s, nuclear issues were on the back burner of the national debate on defense. After its conventional forces proved their dominance during the Gulf War, the United States turned its attention to maintaining enough of those forces to fight and win two nearly simultaneous major theater wars. Regional powers, however, took an entirely different lesson away from the Gulf War: U.S. conventional dominance means that a conventional fight is doomed to failure, but U.S. vulnerability to ballistic missiles and aversion to casualties create other opportunities. An opponent could keep U.S. forces at bay by using missiles tipped with nuclear, chemical, or biological weapons to threaten U.S. regional bases and ports, the populations of allied nations, or even the United States itself.

The ability as well as the motivation to acquire nuclear weapons increased during the 1990s. The nuclear ambitions of regional powers were freed from the constraints of their former Cold War protectors. In addition, the collapse of the Soviet Union and loosening of the old Soviet security apparatus boosted the risk that such powers could get hold of the necessary technologies, materials, and know-how to develop their arsenals. The accelerating pace of proliferation was brought home vividly in 1998 when India and Pakistan tested nuclear weapons, and North Korea, India, Pakistan, and Iran tested intermediate-range ballistic missiles.

Thus, despite the U.S. focus on conventional forces for much of the past decade, concerns about nuclear weapons and other weapons of mass destruction have reemerged as important factors in the debate about the future of U.S. forces. The success that the United States has in reducing those threats will affect how it can shape, size, and use its conventional forces in the future.

Possible U.S. Responses

In the wake of the geopolitical changes discussed above, the United States is reexamining its nuclear policies, including those relating to forces, nuclear weapons, missile defenses, nonproliferation, and U.S.-Russian cooperation to reduce nuclear threats. Some experts advocate cutting U.S. nuclear forces significantly below the 3,500 warheads that the second Strategic Arms Reduction Treaty (START II) allows, arguing that the United States would still have more than enough to deter aggression. Others disagree. Citing the Russian parliament's refusal to ratify START II, they contend that the United States should not reduce its forces below current levels (some 8,000 warheads) until Russia does the same. Still others believe that the United States should trim its forces to START II levels now, both to encourage Russian ratification and to save money.

Experts also disagree about how the United States should conduct its programs to develop and maintain nuclear warheads. Should it follow the Administration's approach of continuing the moratorium on testing nuclear weapons by explosion and instead rely on an active program of laboratory testing, experimentation, and computer modeling to ensure the reliability of the nuclear stockpile? Or should the United States resume explosive testing to ensure that the stockpile remains in working order? Should it reestablish a robust production capability that would allow nuclear weapons to be replaced every 20 years (their nominal design life) or keep weapons for as long as possible by relying on the ability of the nuclear weapons laboratories to predict when they will wear out? If the latter, is the science-based approach being funded appropriately?

Some analysts' response to emerging threats is to push for defenses against ballistic missiles--both theater defenses (designed to protect troops deployed abroad from short- and intermediate-range missiles) and national missile defenses (designed to protect the United States itself from long-range missiles). The Administration has active programs to develop and deploy both types of systems, but some critics do not think those programs are moving quickly enough.

Although the end of the Cold War has increased the appetite for weapons of mass destruction in some quarters, it has also created new opportunities to control their spread. For example, the changed relationship between Russia and the United States has allowed collaborative efforts--unimaginable during the Cold War--to mitigate those threats. Some of those efforts, including ones by the current and previous Administrations, have helped Russia destroy missiles, bombers, and submarines that are being eliminated under arms control treaties; improve the physical security of its nuclear weapons and nuclear materials; keep its weapons scientists from selling their skills abroad; and improve its ability to deter nuclear smuggling.

The options below illustrate a variety of possible approaches for making the United States more secure from weapons of mass destruction.
 

Option 3-03-A
Reduce U.S. Forces to START II Levels by 2007
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0       0     
2002 0 0
2003 0 0
2004 0 0
2005 -20 -10
 
2001-2005 -20 -10
2001-2010 -920 -840

RELATED CBO PUBLICATION:
Letter to the Honorable Thomas A. Daschle regarding the estimated budgetary impacts of alternative levels of strategic forces, March 18, 1998.
 

The second Strategic Arms Reduction Treaty will require the United States to cut its long-range nuclear forces to 3,500 warheads by 2003--roughly one-third of the 1990 level. START II was ratified by the Senate in 1996, but it faces an uncertain future in Russia's parliament, the Duma. Presidents Clinton and Yeltsin agreed to delay full implementation of the treaty until December 31, 2007, in an effort to encourage ratification by the Duma. However, the forces to be dismantled by that date must be made inoperable by the end of 2003.

Today's forces remain largely consistent with the START I treaty--500 Minuteman III intercontinental ballistic missiles (ICBMs) with three warheads each; 50 Peacekeeper ICBMs with 10 warheads each; 18 Trident submarines (each carrying 192 warheads on 24 missiles); and 94 B-52H, 94 B-1B, and 21 B-2 bombers. The Administration would achieve the 3,500-warhead limit in START II by eliminating all 50 Peacekeepers, four Trident submarines, and 23 B-52H bombers by the end of 2007. It would also reduce the number of warheads on Minuteman III missiles from three to one and on Trident D5 missiles from eight to five and redesignate its B-1B bombers as conventional bombers. Although the Administration has decided to eliminate the four Trident submarines over the next five years to save money, it plans to keep all 50 Peacekeeper missiles and 94 B-52Hs in the force until the Duma ratifies START II.

This option would reduce U.S. forces to START II levels even if the Duma does not ratify the treaty. Those cuts would be made by the end of 2007, the treaty's modified implementation date. The primary motivation would be financial; those changes would save $920 million through 2010 relative to the Administration's plans. All of the savings would come from not having to operate Peacekeeper missiles after 2007. (There would be no savings from retiring the 23 B-52Hs because the Administration does not operate them today.) Savings could be $750 million higher through 2010 if the forces were retired by 2003, the original implementation date for START II. If the Duma never ratifies START II and the Air Force is required to keep Peacekeeper in the force beyond 2010--when it will run out of missiles for test flights--there would be significant costs associated with either reestablishing the Peacekeeper production line or developing a replacement missile. Compared with that possibility, this option might save several hundred million dollars through 2010.

Supporters of this approach argue that keeping long-range forces at today's levels is unnecessary. According to several reports, Russia will have trouble maintaining its forces at START I levels. Many of its missiles and submarines are nearing the end of their service life, and production of replacements has slowed to a trickle or stopped altogether. For that reason, several prominent former opponents of START II in the Duma have recently urged ratification. Some advocates of this option also argue that adopting it will encourage the Duma to ratify the treaty.

Critics argue that U.S. forces should remain at START I levels. They oppose any unilateral disarmament. They also worry that Russia might build up its nuclear forces if a hard-line government came to power. In their view, the Duma will only ratify the treaty if it is faced with a robust U.S. START I force.
 

Option 3-03-B
Reduce Nuclear Delivery Systems Within Overall Limits of START II
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -670       -240      
2002 -420 -340
2003 -620 -440
2004 -690 -540
2005 -830 -710
 
2001-2005 -3,230 -2,270
2001-2010 -8,330 -7,880

RELATED CBO PUBLICATION:
Letter to the Honorable Thomas A. Daschle regarding the estimated budgetary impacts of alternative levels of strategic forces, March 18, 1998.
 

This option would go one step farther than the previous alternative (3-03-A). It would reduce the number of missiles and submarines below the levels planned by the Administration for START II but keep the number of warheads at START II levels. Specifically, it would retire four additional Trident submarines and 200 Minuteman III intercontinental ballistic missiles by 2003, retaining 10 Tridents and 300 Minuteman IIIs. To keep the same number of warheads, the smaller Trident force would carry seven warheads on each missile instead of five (see option 3-04). Minuteman III missiles would carry one warhead. This option would keep the same number of nuclear bombers as option 3-03-A, each carrying an average of 16 warheads. In all, those forces would carry nearly 3,500 warheads--the limit set in START II.

Compared with keeping U.S. forces at START I levels, this option would save $670 million in 2001 and $8.3 billion through 2010. One-fifth of those savings--which were outlined in option 3-03-A--would come from reducing forces to the START II levels planned by the Administration and thus do not represent savings from the Administration's budget plan. However, this option would save an additional $670 million in 2001 and $7.4 billion through 2010 compared with the Administration's plan: $3.1 billion from reduced operation and support costs (from retiring 200 Minuteman ICBMs and four additional Trident submarines) and $4.3 billion from lower levels of investment spending (from canceling production of the D5 missile after buying 12 in 2000, extending the service life of fewer Minuteman missiles, and forgoing the Administration's plans to reconfigure four Trident submarines under START II so they can carry new D5 missiles).

During the Cold War, this option might have raised concerns about stability. By putting more nuclear "eggs" in fewer baskets, the United States would have increased its vulnerability to a surprise attack. But today those concerns are less acute. The United States may now decide that it can save money safely by deploying its warheads on fewer weapon systems. Moreover, this option would retain three types of nuclear systems--the so-called nuclear triad--and thus provide a margin of security against an adversary's developing a new technology that would render other legs of the triad more vulnerable to attack.

The disadvantages of this option include those raised in option 3-03-A about cutting forces below START I levels before Russia ratifies START II. In addition, carrying more warheads on D5 missiles would reduce the targeting flexibility of U.S. planners, and deploying fewer submarines might increase their vulnerability to Russian antisubmarine forces. Unilaterally cutting forces would also limit the United States' ability to increase the number of warheads it deployed if Russia decided not to abide by START II. Indeed, some critics argue that unilateral cuts would reduce U.S. leverage to get Russia to ratify START II. Supporters of this option, however, counter that U.S. cuts would encourage ratification because they would reduce the United States' potential to break out of START II--one of Russia's major concerns about the treaty.
 

Option 3-04
Terminate Production of D5 Missiles After 2000
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -670       -240      
2002 -420 -340
2003 -620 -440
2004 -690 -540
2005 -920 -780
 
2001-2005 -3,320 -2,340
2001-2010 -4,870 -4,710

RELATED CBO PUBLICATION:
Rethinking the Trident Force (Study), July 1993.
 

Under both Strategic Arms Reduction Treaties, the Navy plans to deploy a force of 14 Trident submarines. Each one will carry 24 D5 missiles--the most accurate and powerful submarine-launched ballistic missile (SLBM) in the U.S. inventory. Today, the Navy has 10 Trident submarines armed with D5s and eight armed with older C4 missiles. To keep 14 submarines, it must convert four older subs to carry D5s as well. To arm that force, CBO estimates, the Navy will have to purchase a total of 425 D5 missiles, 372 of which it has already bought. If Russia ratifies START II, the Administration will probably cut the number of warheads on each missile from eight to five (for a total of 1,680) to keep the number of U.S. warheads near the ceiling allowed by that treaty.

This option would terminate production of D5 missiles after 2000 and retire all eight C4 submarines by 2005. The Navy would then have 372 D5s--25 more than it says it needs to support a 10-submarine force. Like the Administration's plan for START II, this option would wait to retire the C4 submarines to encourage Russian compliance with START II and to give the United States flexibility to stay at higher START I levels if Russia does not comply. To retain 1,680 warheads, the option would increase the number of warheads on each D5 missile from five to seven.

Compared with the Administration's plan for START I and II, this option would save $670 million in 2001 and $4.9 billion through 2010. The savings would come from canceling missile production ($2.6 billion), retiring all eight C4 submarines rather than upgrading four of them ($1.1 billion), and operating fewer subs ($1.2 billion).

Terminating production of the D5 would have several drawbacks. Loading more warheads on existing missiles would reduce their range by roughly 20 percent, limiting the areas in which submarines could operate. It would also reduce the flexibility of the force, since missiles with fewer warheads can cover more widely dispersed targets. Deploying D5 missiles with seven warheads would also constrain the United States' ability to expand its SLBM force by adding back the extra warheads if Russia violated or never ratified START II. In addition, reducing the fleet to 10 submarines could increase its vulnerability to attack by Russian antisubmarine forces.

Nevertheless, some people may consider the capability retained under this option sufficient to deter nuclear war. Although the missiles' range and the submarines' patrol areas would be smaller, they would still exceed the levels planned during the Cold War--when Russia had more antisubmarine forces and the United States intended to deploy the D5 with eight large warheads (W-88s). Moreover, less targeting flexibility might not reduce the nuclear deterrent: 1,680 warheads deployed on 336 missiles might not deter an adversary any more than if they were on the 240 missiles called for in this option. Also, the smaller likelihood of nuclear war and Russia's atrophying nuclear forces may have weakened the rationale for the United States to be able to increase its forces rapidly by adding warheads to the D5. In fact, since the U.S. ability to do that is one of Russia's biggest concerns about START II, adopting this option could make passage of the treaty more likely.
 

Option 3-05
Reduce the Scope of DOE's Stockpile Stewardship Program
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -50       -40      
2002 -120 -100
2003 -200 -170
2004 -280 -250
2005 -340 -310
 
2001-2005 -990 -870
2001-2010 -2,790 -2,650

RELATED CBO PUBLICATION:
Preserving the Nuclear Weapons Stockpile Under a Comprehensive Test Ban (Paper), May 1997.
 

The Department of Energy (DOE) has developed the Stockpile Stewardship Program to preserve the long-term reliability and safety of U.S. nuclear weapons without testing them by exploding them underground. To carry out the program, DOE plans to continue operating both of its weapons-design laboratories (Los Alamos and Lawrence Livermore) and its engineering lab (Sandia). It will also construct several new facilities to provide data on the reliability and safety of nuclear weapons as they age. In addition, DOE will conduct "zero-yield" subcritical tests at the Nevada Test Site so it can keep enough skilled technicians there to be able to resume testing nuclear weapons by exploding them underground if the United States decides that doing so is in the national interest--a capability that the President has ordered DOE to retain.

DOE plans to spend an average of $2.5 billion a year over the next 10 years on what has historically been known as weapons research, development, and testing. To some observers, a budget of that size today is excessive and unnecessary.

This option would reduce the scope of the stewardship program by consolidating the two design laboratories and halting all testing activities at the Nevada Test Site. However, it would preserve the other elements of the stewardship program, including the Dual-Axis Radiographic Hydrotest (DARHT) facility at Los Alamos and the National Ignition Facility (NIF) at Lawrence Livermore. Taken together, the changes in this option would reduce employment by about 2,000 people. They would also save $50 million in 2001 and $2.8 billion through 2010 compared with the program in the Administration's 2000 budget.

Those savings assume that weapons-design activities would be consolidated over five years at Los Alamos, which developed most of the weapons that are likely to remain in the stockpile. Lawrence Livermore's primary focus would become other scientific research. To ensure that the warheads it developed could be reliably maintained, some designers from Lawrence Livermore would be relocated to Los Alamos. However, a cadre of weapons scientists would remain at Livermore to act as an independent review team for Los Alamos's efforts. To provide them with challenging work, Livermore would keep large computational facilities for modeling the complex processes inside nuclear weapons and would build NIF as currently planned. (Alternatively, stewardship activities could be consolidated at Lawrence Livermore, but the savings would be lower.)

To some people, this option would cut the planned stewardship program too deeply. They believe that the program is the minimum effort necessary to maintain the nuclear stockpile without underground testing. In their view, scientists will need new facilities to obtain data on reliability that were formerly provided directly by such testing. They also contend that consolidation would reduce competition and peer review, result in the loss of some facilities that could not easily be transferred, and eliminate Lawrence Livermore's central unifying mission (and thus its motivation for excellence). For those reasons, the President has directed DOE to retain both labs. Closing the Nevada Test Site would increase the time needed to resume underground testing if Russia started a new arms race or the United States discovered a serious problem with its stockpile that could only be corrected by testing. Closing the test site would also stop scientists from conducting subcritical experiments to learn more about how aging affects the plutonium components in nuclear weapons.

To other people, this option would not cut deeply enough. In their view, keeping part of a second lab and building DARHT and the $1.2 billion NIF are unnecessary to support the nuclear stockpile. Furthermore, they claim, those facilities might allow DOE scientists to continue designing and testing weapons and circumvent the restrictions imposed by the Comprehensive Test Ban Treaty. Even if DOE has no such intentions, the perception of such a capability could make it difficult to convince countries such as India, which are critical of the United States' plans to preserve its nuclear weapons under a test ban, that the United States has really given up designing new weapons. Critics also argue that NIF should be funded outside the nuclear weapons program if it can help scientists understand how to harness fusion for civilian energy, as supporters claim.

Finally, some analysts are fundamentally opposed to a U.S. moratorium on testing (which will become permanent if the United States ratifies the test ban treaty). They contend that the only way to ensure the reliability of U.S. nuclear weapons is to explode those weapons underground. They also worry that by halting the development and testing of new types of weapons, the United States will lose the skilled people necessary to preserve the stockpile. This option does not address the test ban directly, but the cuts it would make to the laboratories would probably be resisted by test-ban opponents.
 

Option 3-06
Fully Fund the Administration's Proposed Plan for National Missile Defense
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 200       210      
2002 700 320
2003 430 350
2004 270 360
2005 670 410
 
2001-2005 2,270 1,650
2001-2010 5,370 4,910

The Clinton Administration is developing a limited system for national missile defense but has yet to commit to deploying it. The Administration's approach assumes that development will continue through this year, at which time the President will review both the progress of the program and the potential threats and decide whether to continue development or to deploy the system within five years. In its 2000 budget request, the Administration included enough money between 2000 and 2005 to develop an initial system with 20 interceptor missiles. But that budget did not include enough development or procurement funding for the 100-interceptor system that the Administration now favors.

This option would fully fund deployment of the 100-interceptor defense that the Administration has included in its 2001 budget plan. (The option assumes that the decision to deploy that defense is made in the summer of 2000.) The interceptor missiles would be located at a single site in Alaska; a battle-management center and a new X-band radar would also be constructed there. In addition, five existing early-warning radars would be upgraded to provide early tracking data. The resulting system, called Expanded Capability 1, would defend against many warheads that perhaps were accompanied by rudimentary countermeasures, according to DoD. (The department is also considering a Capability 2 system that it says would be able to handle a few warheads that were more challenging in the sophistication of their countermeasures.) The system would be functional--with 20 interceptors--by the end of 2005, according to Administration documents, and would be completely deployed by 2007.

Deploying the Expanded Capability 1 system in Alaska would cost a total of $17 billion over the next 10 years, CBO estimates, or about $5 billion more than the Administration included in its 2000 budget plan. About $2 billion of that increase would come from buying additional interceptors and upgrading the radars; another $2 billion from increased system integration; and the remaining $1 billion from increased operations.

Supporters of quickly deploying a national missile defense argue that the threat of an attack on the United States by intercontinental ballistic missiles from developing countries is imminent, if it does not exist already. They cite North Korea's recent test of a Taepo Dong missile as evidence that hostile nations in the developing world will soon be able to target the United States. A commission established by the Congress to evaluate that threat (known as the Rumsfeld Commission after its chairman) also reported that the threat could emerge quickly and perhaps without warning. In the view of supporters, a national missile defense could also prevent such hostile countries from limiting the United States' freedom of action overseas simply by deploying a few long-range missiles. In that view, U.S. leaders might be reluctant to aid their allies if the U.S. population was vulnerable to a ballistic missile attack.

Other advocates of deploying a national missile defense would not support this option, however. Some believe that the United States should deploy more extensive defenses, either on the ground or in space. They worry about accidental launches of Russian missiles--particularly given the effect of economic collapse on that country's command-and-control system--and argue that the United States must do everything it can to protect itself from such attacks. Still other supporters of a national missile defense believe the system should be based on ships.

Opponents of an immediate decision to build a national missile defense argue that the United States should wait until the threat warrants such an expensive investment. The longer the United States waits, they say, the better the technology will be. Some critics maintain that the hit-to-kill technology that DoD is pursuing is not technically feasible now because it is too vulnerable to simple countermeasures. They point out that none of the flight tests conducted so far have demonstrated the system's ability to counter realistic countermeasures. Nor would the system protect against shorter-range ballistic or cruise missiles that could be launched from ships off U.S. coasts. Other opponents believe that the United States' nuclear deterrent has been and will continue to be more effective at protecting the United States than any missile defense.

Some critics also contend that deploying a national missile defense would seriously harm other aspects of U.S. security. They worry most about Russia's reaction: such a defense would violate the Anti-Ballistic Missile (ABM) Treaty as it now stands, which many people in the United States and Russia consider the cornerstone of nuclear arms control. If the United States abandoned that treaty, Russia might refuse to reduce the size of its nuclear force. It might even increase that force to ensure that it could overcome the U.S. defense system. Moreover, the hard feelings that a missile defense might create in Russia could jeopardize ongoing cooperative efforts to address U.S. concerns about nuclear proliferation. Opponents of a national missile defense also fear that China would respond by sharply increasing the number of weapons it could use to strike the United States and increasing the day-to-day readiness of its forces to launch quickly. If the North Korean threat is driving the United States to deploy a national missile defense, one approach to that threat that might address Russian concerns and be more effective against countermeasures would be to deploy a boost-phase defense near Vladivostock, Russia (as Richard Garwin from the T.J. Watson Research Center and Ted Postol of the Massachusetts Institute of Technology have proposed).

The ABM treaty and Russia's possible reaction to a U.S. national missile defense are hotly debated even among supporters of quick deployment. Some argue that the treaty is a product of a bygone era and should be abandoned altogether. In their view, it is no longer in effect because one of the original signatories, the Soviet Union, no longer exists. Other supporters of a national missile defense, including the Administration, believe that the treaty is still in force but can be modified through negotiations to allow the planned system to be deployed without jeopardizing arms control efforts and nuclear stability.
 

Option 3-07
Fully Fund the THAAD and Navy Theater Wide Missile Defenses
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0       0      
2002 0 0
2003 0 0
2004 0 0
2005 300 80
 
2001-2005 300 80
2001-2010 5,970 4,360

The United States is developing two defenses against longer-range theater ballistic missiles: the Army's land-based Theater High Altitude Area Defense (THAAD) and the Navy's ship-based Theater Wide system. The Administration's budget plan for fiscal year 2000 did not include enough money to deploy both of those as soon as possible. Instead, the Administration plans to have a competition between them over the next two years. The winner will be deployed in 2007 or 2008; the loser will continue development at a slower pace and be deployed sometime after 2010.

This option, by contrast, would fully fund both THAAD and the Navy Theater Wide system so they could be deployed beginning in 2008. Doing so would cost about $6 billion over 10 years.

Those systems, known as upper-tier defenses, are designed to provide an upper layer of protection for broad areas within a theater of combat. They complement lower-tier defenses, such as the Patriot and Navy Area systems, which protect relatively small areas. (Theater defenses are distinct from national missile defenses in that only the latter can protect against missiles with intercontinental ranges.) The THAAD program is well established: the Army and the Ballistic Missile Defense Organization (BMDO) have been developing it for nine years. The Navy Theater Wide program is a relative newcomer. It would be deployed on Aegis cruisers and would consist of an upgraded Aegis radar and a number of Standard missiles carrying the lightweight exoatmospheric projectile (or LEAP) kill vehicle. To be fully effective, the system would also require that the United States deploy the 24 satellites that make up the low-orbit segment of the Space Based Infrared System.

Because the funding in the Administration's 2000 budget reflects the projected requirements for deploying THAAD, not the Navy program, this option would effectively accelerate the Navy upper-tier system. An initial version of that system--called Block 1--would be deployed by 2007, speeding up the program by at least three years. A more capable, Block 2 system would be deployed in 2010. Like the Administration's 2000 plan, this option would also fully fund THAAD for deployment in 2008.

The primary motivation for fully funding both programs is that a number of countries--including North Korea, Pakistan, Iran, and India--are developing and deploying ballistic missiles with ranges of more than 1,000 kilometers, which will begin to exceed the capability of lower-tier defenses. Both upper-tier systems have unique capabilities that would help protect U.S. forces and allies from such longer-range missiles. THAAD could protect forces on land, particularly those away from coastal regions. The Navy upper-tier system could protect areas near coasts and might provide the only upper-tier defense in a theater of combat until THAAD could be set up. The Navy system is also uniquely suited to defend Japan from North Korea. A few Aegis ships off the coast of North Korea could protect all of Japan by intercepting missiles as they left the atmosphere during their ascent phase. For an extra layer of protection, ships off the Japanese coast could intercept any surviving warheads as they reentered the atmosphere near that country. In some cases, the Navy upper-tier system could also intercept missiles launched by Iran against Israel or Saudi Arabia, although the locations of the ships would not be ideal.

Accelerating the Navy upper-tier system has other potential advantages. In some situations the system could be very effective against missiles that carry many small warheads. Those so-called submunitions can easily overwhelm ground- and sea-based defenses located near the targeted areas because instead of having to intercept one warhead, the defenses must contend with dozens or even hundreds. If the Navy upper-tier system could intercept such missiles during their ascent phase, it could destroy them before they had a chance to deploy their submunitions. In addition, speeding up the Navy upper-tier system would provide a backup in case the THAAD system was unable to overcome its development problems quickly. Finally, according to BMDO, the Navy system has the potential in some scenarios (if it is upgraded to the Block 2 configuration by improving its kill vehicle) to defend far western parts of the United States, such as Alaska and Hawaii, from the Taepo Dong II missile that North Korea is developing. Accelerating the system would make it possible to deploy that advanced capability sooner.

Those advantages must be balanced against several disadvantages. First, although the Navy upper-tier system can protect large areas, it is more susceptible to countermeasures than THAAD, which can operate in the upper portions of the atmosphere as well as in space. Discriminating between actual warheads and objects designed to look like warheads (such as lightweight balloons) is more difficult outside the atmosphere. In addition, the kill vehicle on the Navy interceptor missiles will be relatively simple and less able to distinguish warheads than the larger exoatmospheric kill vehicle that is being developed for a national missile defense.

Second, some analysts are concerned that the Navy upper-tier system could violate the Anti-Ballistic Missile Treaty. Although the United States and Russia negotiated an agreement that would allow the United States to designate that system as a theater missile defense, neither side has ratified the agreement, and it is not clear that Russia's legislature will accept it. Other analysts contend that such concern is moot: the ABM treaty is no longer in force, they argue, because the Soviet Union no longer exists.

Third, using the Navy upper-tier system (in its Block 2 configuration) would not be the only option for intercepting North Korean missiles aimed at the United States. One alternative would be to use the Air Force's Airborne Laser--which could be available a few years earlier than the Block 2 system. Another alternative would be to deploy a ground-based defense near Vladivostock, Russia, that could intercept those missiles during their boost phase, when they would be easier to detect and kill and when countermeasures would be more difficult to overcome.
 

Option 3-08
Establish a Space-Based Capability to Search For and Track Adversaries' Spacecraft
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 5     2    
2002 10 7
2003 59 35
2004 60 55
2005 69 63
 
2001-2005 203 162
2001-2010 590 552

The United States is the leading "spacefaring" nation of the world. The U.S. military has incorporated satellites into almost all levels of its operations: from providing early warning of long-range missile attacks to guiding bombs as they fall toward their targets. Although space has given the United States extraordinary capabilities, it has also made the country vulnerable if its satellites are attacked. Potential adversaries have noted the advantage that satellites gave the United States in the Gulf War, and they are proceeding with their own plans to utilize space. The United States cannot fully respond to such threats without accurate and timely knowledge of where other countries' spacecraft are located.

This option would build and operate a fleet of three satellites dedicated to searching for and tracking the satellites of potential adversaries in low-Earth orbit or higher. Doing that would cost DoD a total of $590 million over 10 years. The sensors on the three new satellites would be based on the same technologies being used on the United States' only current space-surveillance satellite. Furthermore, the satellites would be relatively small, since they would be dedicated to one task. Thus, their launches could be conducted with only two space-launch vehicles; after the first satellite had been put into orbit for a brief testing period, the second and third could be launched on a single Delta II rocket. Once the fleet was in orbit, operating it would cost $6 million a year. Each satellite would have a lifetime of seven years; funding for long-lead items for replacement satellites is included in the estimated costs of this option.

Although space may appear to be a borderless void, there are distinct regions above the Earth that accommodate some purposes better than others. Thus, simply knowing a satellite's altitude can give a good indication of its intended mission. Photoreconnaissance satellites are placed in low-Earth orbits to optimize their views; navigational satellites, such as the Global Positioning System, are in medium-Earth orbits a little farther out; and communication satellites are often even farther out in geostationary orbits, in a part of the region known as deep space. Other details of a satellite's orbit--such as the longitude over which it spends most of its time--might indicate the intentions and interests of its owner. For example, shortly before the end of the Persian Gulf War, Russia put an early-warning satellite into geostationary orbit roughly over the combat zone. That is not the nation's highest-priority position, which can be determined by looking at how often it places a satellite there. (Russia eventually moved this satellite to its highest-priority position--over the Atlantic where it can watch U.S. missile fields.) Positioning the satellite near the Gulf War combat zone at that time possibly signaled Russia's interest in the region.

The United States uses a network of surveillance facilities to search for and track spacecraft orbiting the Earth. Those facilities include radars and optical telescopes based on the ground as well as the existing space-based telescope, which joined the surveillance network in 1998. The ground-based assets, however, face a number of limitations in when they can operate, the size of the objects they can see, and how far into space they can search. Radars can view low-altitude satellites (including most photoreconnaissance satellites), but they can detect only the largest satellites in geostationary orbits, because of the long distances--nearly 50,000 miles--that the radar beams must travel. Thus, the United States uses optical telescopes to search for and track such high-altitude satellites. But optical telescopes based on the ground are effective only at night and in clear weather.

The U.S. space-surveillance network tracks nearly 10,000 objects--orbital debris as well as satellites. The parameters that describe the orbits of those objects allow the Air Force to predict their future positions. But those parameters must be updated periodically with new observations because a host of factors--from atmospheric variations to human actions--can cause a satellite's orbit to change substantially. The Air Force updates the orbits of Russia's photoreconnaissance satellites every seven hours, on average. Satellites in higher orbits are tracked less often: every 24 hours, on average, in the case of Russia's early-warning satellite in geostationary orbit.

On some occasions, however, several days have gone by without the U.S. network tracking that satellite. Such gaps might pose a danger not only for U.S. space assets--if the Russian satellite had been a space mine, it could have maneuvered close to a U.S. satellite and exploded--but also for U.S. ground forces. In 1998, a Russian early-warning satellite in geostationary orbit reportedly observed the flashes from attacks on Baghdad by U.S. Tomahawk missiles. Observations of such flashes from munitions can be used to increase battlefield awareness and directly assist combat troops.

Further, a global trend is taking place toward satellites that are smaller but still capable of making sophisticated observations. That trend poses at least two distinct dangers to the U.S. military. First, it "lowers the bar" for developing countries to orbit satellites, because less powerful rockets can be used. Second, small satellites--which some analysts worry could be smaller than a bowling ball--are much more difficult to detect in the vastness of space or to track once they have been found.

The fleet of three satellites that this option envisions would significantly improve the U.S. space-surveillance network by allowing virtually all potential enemy spacecraft to be tracked and their location updated at least every six hours--and all satellites in geostationary orbits at least every 15 hours. Moreover, that fleet is expected to be capable of detecting and tracking near-Earth satellites smaller than a bowling ball.

Critics of this option could point out that many potential U.S. adversaries are no match for the United States in terms of being able to orbit sophisticated military satellites. For example, North Korea has tried to develop a space-launch capability along with an intercontinental ballistic missile, but it failed in its first attempt to orbit a satellite. Thus, critics might argue, the United States can afford to wait until the threat is more pressing before adding to its space-surveillance network.

Other opponents might argue that this fleet of spacecraft would be too limited in its ability to track photoreconnaissance satellites. (Because of interference from sunlight reflected off the Earth's surface, the window for tracking such spy satellites might be limited to a half-dozen or so brief intervals each day, CBO estimates.) Those critics might feel that photoreconnaissance satellites are the only near-term space threat that the United States should be concerned about. In their view, a preferable option might be to add satellite-tracking sensors to the planned fleet of low-orbit satellites in the Space Based Infrared System (SBIRS), which is intended to detect and track warheads that are coasting through space. Giving that system the ability to track photoreconnaissance satellites in low-Earth orbit could be less expensive than launching a new fleet.

Still other critics of this option would argue that the U.S. military should have a fleet of satellites dedicated to tracking spacecraft but that the positioning of the satellites in this option would not be optimal for detecting and tracking satellites in low-Earth orbit. They would call for adding a fourth new satellite that would be placed in an orbit varying from very close to the Earth to very far away. That satellite would spend most of its time far from the Earth and could search for reconnaissance satellites as they came around the Earth's edge.

Proponents of this option, by contrast, might argue that the spacecraft of potential adversaries already pose a significant threat: they could gather information on U.S. ground forces and even destroy U.S. satellites. In that view, the United States should not only prepare for emerging space powers like North Korea but also carefully watch Chinese and Russian satellites at all altitudes.

Proponents could also argue that launching three satellites dedicated to space surveillance would be better than trying to add another requirement to the low-orbit SBIRS satellites, which already have a difficult and complex task just finding and tracking missile warheads. An extra telescope, sensor, and associated computers would add a new level of complexity to the communications and control of SBIRS and might require redesigning the architecture of the whole system. Moreover, proponents would say, the improvements that a new space-surveillance fleet would make in searching out and tracking potential adversaries' higher-orbit satellites are important enough to justify a dedicated system. Further, they might argue, the system could adequately track known low-orbit satellites if its resources were allocated carefully.
 

Option 3-09
Increase Funding for Nuclear Nonproliferation Efforts in Russia
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 110       70      
2002 110 100
2003 110 110
2004 120 110
2005 120 120
 
2001-2005 570 510
2001-2010 1,120 1,060

RELATED CBO PUBLICATION:
Cooperative Approaches to Halt Russian Nuclear Proliferation and Improve the Openness of Nuclear Disarmament (Memorandum), May 1999.
 

Since the collapse of the Soviet Union in 1991, the United States has been concerned about the security of the nuclear materials and weapons in the former empire. Social upheaval in the former Soviet republics and the loosening of the Soviet-style security apparatus have left nuclear weapons, nuclear materials, and weapons-design expertise vulnerable to proliferation. This option would increase funding for programs aimed at reducing those threats.

Over the past seven years, the United States has instituted several programs to help Russia and the former Soviet republics prevent such proliferation. Those programs include the Department of Defense's Cooperative Threat Reduction program (also known as Nunn-Lugar), which is helping Russia secure its existing nuclear weapons as well as the fissile materials (including highly enriched uranium and plutonium) from weapons it is dismantling under the Strategic Arms Reduction Treaties; the Materials Protection, Control, and Accounting (MPC&A) program of the Department of Energy, which has helped the former Soviet states protect their far-flung stocks of weapons-usable nuclear materials; and other programs aimed at keeping weapons scientists in Russia and helping the former Soviet states halt nuclear smuggling. In all, the United States spends about $700 million a year on those efforts.

This option would increase funding for nuclear nonproliferation programs by nearly 15 percent, or a total of $1.1 billion over the next 10 years, compared with the Administration's 2000 budget request. Specifically, to reduce the chances that fissile materials could be stolen, this option would improve the security of those materials at 80 additional sites (at an average cost of $10 million per site), install nuclear detection equipment at 15 high-priority border crossings, and help Russia establish an export-control system. (For more details of those initiatives, see Congressional Budget Office, Cooperative Approaches to Halt Russian Nuclear Proliferation and Improve the Openness of Nuclear Disarmament, CBO Memorandum, May 1999.)

In addition, this option would fund two new programs to give nuclear weapons scientists and other key nuclear workers less incentive to sell their skills abroad out of financial desperation. First, it would establish nonproliferation, arms control, and environmental research facilities at both of Russia's weapons-design laboratories and pay for 200 weapons scientists to do work there of interest to the United States and Russia. Those centers would be similar to the ones that the United States has set up at all three of its weapons labs. Second, this option would spend $15 million a year to improve economic opportunities in Russia's "nuclear cities" (the formerly closed, isolated towns devoted to weapons research and production). That money could be used in a variety of ways, such as to establish business "incubators" in those cities to provide equipment and support to new businesses, offer business education to weapons scientists, and help identify and find capital for good business ideas.

Of the $1.1 billion that this option would cost over the next decade, $920 million would help Russia secure fissile materials, $80 million would equip border crossings and establish export controls, $30 million would fund research centers, and $90 million would improve economic opportunities in the nuclear cities.

Several analysts have argued that the United States should step up its efforts to address the proliferation threat from Russia. Those efforts are critical, they say, because of continued economic troubles in Russia, which mean that nuclear workers often go unpaid for months at a time; the rise in organized crime in that country; and the persistent efforts of some rogue nations and terrorist groups to develop weapons of mass destruction and the means to deliver them.

Critics of expanding U.S. efforts would argue that the United States is already doing enough to reduce the proliferation threat from Russia and that additional money would be better spent on other defense needs. Other critics might take issue with specific aspects of this option. For example, some argue that securing fissile materials through the MPC&A program should continue to be the United States' first priority. After all, they say, access to fissile materials, not weapons expertise, is the primary obstacle for a country bent on developing nuclear weapons--and the most effective way to stop fissile materials from leaving the former Soviet Union is to keep them securely locked up.

Other critics worry that trying to secure Russia's borders against nuclear smuggling may be too big a problem to solve. Under this option, 15 high-priority locations would have the ability to detect smuggling of nuclear materials and items that could be used to make nuclear weapons. But another 500 locations would not. Supporters acknowledge that borders cannot be made impervious, but they counter that effective export-control laws and increased surveillance at border posts would at least make nuclear smuggling more difficult.

Efforts to reemploy workers in the nuclear cities also face potential problems. Trying to create vibrant civilian economies in those cities could prove difficult, particularly during Russia's current economic crisis. Nonproliferation research centers, by contrast, would not depend on the health of the Russian economy for success, but employing 200 scientists at such centers would not address the estimated 20,000 other workers in Russia's nuclear weapons facilities who have important skills or access to fissile materials. Paying all of those workers to stay in the nuclear cities would cost significantly more--perhaps as much as $240 million a year.
 

Other Emerging Threats and the Revolution in Military Affairs

As it formulates plans for research and development and sets priorities for modernization, DoD must be keenly aware of emerging threats and devise new ways to cope with them. DoD officials and other analysts have identified a number of those threats in analyses such as the Quadrennial Defense Review, the National Security Strategy, the Strategic Assessment, and the Report of the National Defense Panel. In addition to the one just discussed--the proliferation of nuclear, biological, and chemical weapons and the means to deliver them--two other major emerging threats are often cited:

To counter those threats, some of the options below would improve the military's reconnaissance systems. Another would add to the number of surface-launched cruise missiles that the United States could deploy in a theater.

In addition to those approaches, improving precision-guided munitions would add to the United States' ability to quickly identify, target, and destroy conventional weapons used to threaten deploying U.S. forces. Moreover, research and development programs could be directed toward establishing improved capabilities in such areas as detecting and disabling sea mines, repairing runways, and quickly reestablishing the ability (if it was lost) to deliver equipment and supplies from ship to shore. An important related NATO initiative is to improve the alliance's ability to deploy forces out of its area and to support them once deployed. One of the options below examines the idea of creating a common NATO airlift fleet of C-17 aircraft.

Such initiatives are part of a broader effort by DoD to pursue technological advances that can fundamentally transform the way military operations are conducted--what many experts call the revolution in military affairs. Technological advances (such as cannons and gunpowder, steam-powered ships, and aircraft) have clearly played a key role in past military revolutions. And certainly, the past 20 or so years have seen advances in sensor and information technologies that also appear to have major implications for warfare.

Technological trends affecting the military are part of larger forces shaping society as a whole. Those trends include high-speed, distributed computational power; dramatic increases in communication capabilities; networked communications (ranging all the way from local office networks to the Internet); microminiaturization of machines; and advances in biological sciences, such as genetic engineering. All of those trends have potential military applications, and DoD's lead innovator, the Defense Advanced Research Project Agency, and its service counterparts are actively pursuing them.

Technological advancements also carry with them additional risks and complexities. Any new advance--such as a battlefield network linking all active forces with surveillance assets and commanders--becomes a target of attack for a sophisticated enemy. The increased complexity and interconnectedness of modern industrial society also present opportunities for attack, and if the enemy is less advanced, it is at less risk from a similar counterattack. Furthermore, change requires more than technological advances to be effective. It can require changes in organization, tactics, doctrine, and training.

Several of the options presented below relate to DoD's efforts to incorporate new technologies into its operations and equipment, including options that would purchase more unmanned air vehicles as reconnaissance assets or launch dedicated satellites for space surveillance.
 

Option 3-10
Buy an Additional MILSTAR Communications Satellite
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 200     50    
2002 490 190
2003 210 260
2004 50 220
2005 0 130
 
2001-2005 950 850
2001-2010 950 950

The Air Force's Military Strategic and Tactical Relay (MILSTAR) satellites provide protected communications during both strategic (intercontinental) and tactical (theater) conflicts. Two older satellites are already in orbit, though nearing the end of their service life. The Air Force had planned to put four redesigned MILSTAR satellites into orbit over the next several years; it says that number is necessary to maintain full global communications coverage. Those four satellites--referred to as flights 3 through 6--are collectively known as the MILSTAR II program. But when the flight 3 satellite was launched in April 1999, it failed to reach its intended orbit. The Air Force considers that satellite a loss. Flight 4 is awaiting launch later this year, and flights 5 and 6 are expected to be launched in 2001 and 2002.

This option would aim to get four MILSTAR II satellites into orbit at the earliest feasible date. Thus, it would begin production of a flight 7 satellite immediately and launch it by 2004 using an expendable launch vehicle. Purchasing an additional MILSTAR satellite could cost about $200 million in advance funding in 2001 and almost $1 billion over the next 10 years. That estimate assumes that the launch vehicle would cost about $200 million.

The focus of the MILSTAR program has changed over the years. The first two satellites--flights 1 and 2--were designed to meet the national command authority's requirements for low-data-rate (LDR) communications. Such communications use lower bandwidths that are less likely to be disrupted by nuclear explosions. Those two satellites were launched into orbit in 1994 and 1996. Since then, because the threat of nuclear war has declined greatly in the post-Cold War era, MILSTAR satellites have been redesigned to emphasize their usefulness for tactical forces. For example, later satellites are designed to provide not only LDR capability but also medium-data-rate (MDR) communications, which use higher bandwidths that allow faster processing of information. (MILSTAR can also overcome jamming that would overwhelm other, less robust communication systems.) The average service life of those satellites is about seven years. To replace them, the Air Force is developing advanced extremely high frequency (EHF) satellites, which it plans to begin launching around 2006.

Proponents would argue that buying an additional MILSTAR II satellite now is essential, for three reasons. First, the Air Force says four of those satellites are necessary to ensure 24-hour MDR communications capability over trouble spots around the globe. Consequently, the loss of the flight 3 satellite means at least a 25 percent degradation in that capability by 2006. According to the Air Force, current satellites lack excess capacity, and the enhanced EHF program cannot be accelerated enough to close the gap in coverage significantly, so that gap would persist for at least five years. Second, the Army has already made substantial investments in ground terminals for MILSTAR MDR communications and has eliminated many of its older LDR terminals in anticipation of the switch. Third, the last two MILSTAR satellites are expected to finish production by the end of this year. By purchasing another satellite now, the Air Force could avoid the significant cost increases that would result from shutting down production temporarily.

Opponents of this option would argue that closing the anticipated gap in coverage is not critical enough to warrant spending $1 billion on another MILSTAR satellite. Rather, they would argue, devoting that money to the next-generation EHF satellite would make more sense given the limited resources that the Department of Defense is likely to face in the next decade. In the meantime, opponents might say, the Air Force could fill the gap in strategic communications for several years with its two earlier LDR satellites and could rely on the Navy's existing UFO satellites to fill some of the gap in tactical communications.
 

Option 3-11
Increase Funding for Tactical UAVs
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 121     30    
2002 83 74
2003 74 88
2004 52 76
2005 52 62
 
2001-2005 381 330
2001-2010 808 745

RELATED CBO PUBLICATION:
Options for Enhancing the Department of Defense's Unmanned Aerial Vehicle Programs (Paper), September 1998.
 

The Department of Defense maintains that one of its top priorities in the area of reconnaissance and surveillance is to give brigade commanders access to unmanned aerial vehicles. The Army, in particular, could use UAVs to support its brigade commanders as well as the commanders of its corps and divisions. After several, generally unsuccessful, programs to develop UAVs, the Army has selected the Shadow system to meet the requirements of brigade commanders. The Hunter, a more capable and highly reliable UAV, could do so for division and corps commanders. The Navy, too, is examining several alternatives to replace its UAV systems. Its current systems are old, expensive to maintain, and hazardous to shipboard operations since they are powered by gasoline rather than less dangerous diesel fuel.

This option would provide 40 Shadow tactical UAV systems for the Army's brigades, 14 Hunter systems for the Army's divisions and corps, and 32 diesel-powered UAV systems with vertical take-off and landing (VTOL) capability for the Navy's aircraft carrier battle groups, amphibious ready groups, and surface combat ships. Both the Army and the Navy are planning to spend about $670 million on UAV systems over the next five years, but this option would purchase more systems than they envision. Consequently, it would cost about $120 million in 2001 and a total of about $800 million over 10 years. (For an option relating to Air Force UAVs, see option 2-04 in Chapter 2.)

Unmanned aerial vehicles are a valuable asset to a commander because they can conduct reconnaissance and surveillance missions without risking the lives of an aircrew. UAVs could let brigade commanders view nearly instantaneous video footage of what lay just over the next hill. Higher-echelon commanders could use UAVs to send back imagery of enemy troop movements farther away. UAVs could perform other useful missions, such as locating and identifying particular targets, designating targets for attack by precision munitions, assessing the damage that targets have suffered after an attack, serving as communications relays, jamming an enemy's electronics and communications systems, and operating in environments too dangerous for humans, including areas contaminated by nuclear, chemical, or biological agents.

Although the Army and Navy have said they want to give their forces UAV capability, unmanned aerial vehicles do not appear to have had a high priority. After the Army terminated the Hunter program in 1996, it placed seven Hunter systems (with eight air vehicles apiece) in storage. It has since used most of two of those systems for training, and their performance has been considered outstanding. Nevertheless, the Army appears unwilling to use those systems to give its corps and division commanders UAV capability (although it did use Hunter systems during operations in Kosovo). By reorganizing its existing Hunter assets and buying a little more equipment, the Army could equip 10 divisions with Hunter systems of four air vehicles each and four corps with systems of six air vehicles each.

For their part, the Navy and Marine Corps have been operating Pioneer UAVs since the 1980s and are looking for a replacement. They are testing several UAVs with VTOL capability to fulfill their requirements, but the Navy does not plan to commit funds to buy a new system until at least 2003. This option would acquire greater UAV capability than the Navy now plans.

The option would have several disadvantages, however. The first is the uncertain state of some UAV technology. The Army recently revised its requirements for tactical UAVs. During the fall of 1999, it held a flight competition of several UAV systems to determine which one could meet its revised requirements. The Shadow 200, built by the AAI Corporation, won that competition. But whether the Army will require more development of that system is not yet clear.

A second disadvantage is that using Hunter UAVs to provide reconnaissance for Army divisions and corps could impose a burden on those units. Hunters typically require a large amount of equipment and personnel to operate them. The Army expects that new UAV systems will be easier to support. However, reducing the size of Hunter systems may be possible with some modest changes and upgrades.

Third, the Army ultimately wants to use the same type of UAV to provide reconnaissance and surveillance at the brigade, division, and corps levels. Using Hunter and Shadow would mean having two different types of UAVs for those missions. But fielding a system to provide reconnaissance to divisions and corps might take the Army at least five years. The service could deploy Hunters within several months at a relatively low cost as an interim measure.
 

Option 3-12
Convert the Four Oldest Trident Submarines to Carry Conventional Land-Attack Missiles
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0       0      
2002 0 0
2003 850 380
2004 860 620
2005 110 410
 
2001-2005 1,820 1,410
2001-2010 3,290 3,090

RELATED CBO PUBLICATION:
Rethinking the Trident Force (Study), July 1993.
 

The Navy currently deploys 18 Trident strategic submarines, which carry nuclear-armed ballistic missiles. Ten of those submarines have D5 missiles, and the other eight are fitted with older C4 missiles, which are less accurate and have a shorter range than D5s. The Navy plans to upgrade four of the C4 submarines over the next seven years so they can carry D5 missiles. It plans to retire the other four submarines (the Ohio, Michigan, Florida, and Georgia), which are the oldest Tridents. However, once they were refueled, those submarines would still have 22 to 25 years of useful life. Consequently, some defense analysts, Members of Congress, and Navy officials have proposed converting those submarines from carrying nuclear-armed ballistic missiles to carrying conventional land-attack missiles and special-operations forces.

This option would convert the four oldest Trident submarines to a conventional land-attack configuration rather than retire them. It would alter 22 of the 24 missile tubes on a Trident to carry seven conventional missiles each, for a total of 154 missiles per submarine. That would give each Trident about the same land-attack capability as all of the escort ships in an aircraft carrier battle group. The conventional missiles loaded on Tridents could be Tomahawk cruise missiles or a naval version of the Army Tactical Missile System (a short-range ballistic missile that can attack enemy infrastructure, armor, communication facilities, and command centers). Or, because the Navy will begin producing its advanced land-attack missile, the Tactical Tomahawk, in 2001 and the first two submarines would not be finished with their conversion until 2005, the submarines could be armed with those missiles. The Navy plans to buy 1,350 Tactical Tomahawks for various purposes. This option would purchase another 850 to arm the submarines and to provide extra missiles for use in maintenance.

In addition to those changes, the four Tridents would receive a full suite of communications equipment as well as tactical-surveillance and intelligence-collection equipment to conduct reconnaissance missions before and during hostilities. Further, the space freed up by the two unused missile tubes would be converted to carry and house special-operations forces.

Taken together, those changes would cost a total of about $3.3 billion over 10 years compared with the Administration's 2000 budget request (which assumes that the Navy will retire the four oldest Trident submarines). Of that total, $2.5 billion would go to refueling the submarines' nuclear reactors, converting them to carry Tomahawk missiles, and purchasing the missiles. The remaining $0.8 billion would represent increased operating costs for the submarines.

By changing four submarines into conventional missile carriers, the Navy could make effective use of a valuable asset that would be well suited to support its doctrine of littoral warfare, as expressed in the white paper Forward . . . From the Sea. Some analysts fear that surface combat ships are becoming increasingly vulnerable to attack by antiship missiles in coastal waters. Trident submarines, by contrast, are very difficult to detect and therefore harder to attack. They could provide a powerful capability in areas of potential conflict without revealing their presence. Potential adversaries would know that retaliation for aggression could occur at any time and would be very difficult to prevent or preempt. That knowledge alone could prove an effective deterrent.

In addition, by deploying more Tomahawk missiles on converted Tridents, the Navy would free other ships to perform missions other than land attack. For example, in the future the Navy may need to dedicate a force of Aegis ships for missile defense (see option 3-07). Consequently, those ships may not be available to launch Tomahawks. The Navy is planning to buy 28 surface ships over the next decade, each carrying dozens, if not hundreds, of land-attack missiles. Rather than buy all of those additional surface ships, the Navy could use the converted Tridents to perform land-attack missions that might otherwise have been done by some of those ships.

This option could have several drawbacks, however. For example, according to naval authority Norman Polmar, Trident submarines could be highly vulnerable to detection when preparing for and executing a land-attack mission. Land attack usually requires a great deal of communication and data transmission between ships and authorities on shore. That would be especially true if Tridents were carrying Tactical Tomahawk missiles, which were designed for quick reaction and in-flight retargeting. The high volume of communications traffic might enable an opponent to detect the submarine. The Trident could also be vulnerable to detection when it was launching its missiles.

Polmar also questions whether the Navy really needs additional capability to make stealthy strikes. He argues that such strikes were not particularly important during the Gulf War and in subsequent Tomahawk missile operations, and they may be no more valuable in the future. If that proves to be the case, the value of converting Trident submarines is less clear.

In addition, altering the Tridents would have implications for the size of the strategic weapons force. Under the terms of the Strategic Arms Reduction Treaties, ballistic missile submarines can only be converted to perform other missions using a specific method that eliminates their missile tubes. According to information provided by the Navy, converting the submarines to eliminate the missile tubes would add costs that could approach twice those estimated for this option. If the Navy converted the Tridents using a less expensive method that essentially left the missile tubes intact--as this option assumes--the United States would have to count those tubes under the terms of START and allocate "phantom" warheads to them. (Russia might agree to allow a less expensive conversion procedure, but that appears unlikely.) With respect to the force level under START I, the additional phantom warheads would make no difference. But if Russia ratified START II--which the President has signed and the Senate approved--the United States would be allowed to deploy only about 1,350 warheads on the Trident force, about 330 less than the Navy is planning.
 

Option 3-13
Cut U.S. C-17 Costs and Create Common NATO Airlift
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0       0      
2002 -1,893 -274
2003 -943 -890
2004 -80 -981
2005 -179 -637
 
2001-2005 -3,094 -2,783
2001-2010 -4,037 -3,983

RELATED CBO PUBLICATIONS:
Moving U.S. Forces: Options for Strategic Mobility (Study), February 1997.
Assessing Future Trends in the Defense Burdens of Western Nations (Paper), April 1993.
 

The C-17 Globemaster III is a four-engine transport aircraft that can carry at least 110,000 pounds of cargo for 3,200 nautical miles without aerial refueling. Because it is designed to land at small airfields with short runways, the C-17 could help meet transport needs within a theater of combat as well as over long distances. The current plan for transporting U.S. forces to regional conflicts calls for a fleet of 120 C-17s. At the same time, seven of the United States' European allies in the North Atlantic Treaty Organization are planning to buy a total of 289 transport aircraft to carry reaction forces to crisis spots outside the territory of NATO members, in accordance with NATO's Strategic Concept.

This option would create a common NATO airlift fleet of 20 C-17s (similar to the common NATO AWACS fleet based in Germany, for which the United States pays 41.5 percent of operating and modernization costs). Twenty C-17s that the Air Force plans to buy in 2002 and 2003 would be transferred to NATO, which would reimburse the Air Force for them by the beginning of each year in order to comply with full-funding requirements. The average cost of those planes is about $200 million apiece.

A common NATO airlift fleet would enable the allies to deploy forces to a crisis zone, while allowing the United States to draw on those assets for non-NATO missions under the Combined Joint Task Force (CJTF) concept approved in 1996. That concept allows NATO members--with consensus from the alliance--to use NATO assets for missions other than defense of a member state.

Assuming that the United States paid 41.5 percent of the cost of the NATO airlift fleet, this option would achieve net savings for the United States of $3.1 billion over five years and $4.0 billion over 10 years, including net savings of about $200 million per year in operation and support costs once all 20 aircraft were delivered. It also would give the European allies faster access to strategic airlift than would otherwise be the case.

This option would face two main obstacles, however. The first is the European countries' desire to protect their defense industries by building their own strategic transport plane. The seven countries involved have committed to a joint program to develop the Future Large Aircraft (FLA), to be produced by the Airbus consortium. That plane would carry less cargo than the C-17 and be cheaper (at $75 million apiece). Alternatively, the Europeans could consider buying Airbus commercial aircraft, although such planes are more difficult to load and unload, cannot carry very large cargo, and cannot land on some shorter or unpaved runways. Enthusiasm for developing the FLA is waning, however. In an indication that they will consider alternatives, Britain, France, Spain, and Belgium have all solicited bids from U.S. firms for a total of 143 aircraft, and Britain intends to lease four C-17s or their equivalent.

The second obstacle involves the political ramifications of relying on NATO to provide part of the U.S. Air Force's lift capability. The CJTF concept, designed to let European coalitions act without U.S. involvement, is new and evolving. Conceivably, if a NATO member opposed a mission (such as France opposing military action against Iraq), it might be able to veto U.S. use of NATO assets. Some Members of Congress might find that saving money would not outweigh the risk of diminishing the U.S. ability to act unilaterally if necessary.
 

Ending or Slowing Some Acquisition Programs to Pay for New Initiatives

Finding the funds to support all of DoD's desired initiatives could be a problem. Part of the task of acquisition managers is to identify systems in development or production that no longer fit well with DoD's new strategic or operational concepts and to cancel those systems. A few options that would do so are included below.

Army systems are particularly subject to reexamination because the new Chief of Staff, General Eric Shinseki, has enunciated a concept of a new Army built around units with lighter equipment that would be more deployable to small-scale operations as well as to major theater wars. The heavy armored forces of the current Army are well suited to conventional land wars. But Army leaders now feel that those forces are simply too heavy and require too much support to be dispatched quickly around the world.
 

Option 3-14
Cancel the Army's Comanche Helicopter Program
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -42       -71      
2002 -165 -183
2003 -178 -232
2004 -277 -296
2005 -247 -278
 
2001-2005 -909 -1,060
2001-2010 -6,270 -4,531

RELATED CBO PUBLICATION:
An Analysis of U.S. Army Helicopter Programs (Study), December 1995.
 

Many of the Army's helicopters are beyond the end of their useful service life. Initially, the Army had planned to replace some of those older scout, attack, and utility helicopters with more than 5,000 new Comanche (RAH-66) helicopters. Comanche has had a troubled development program, however. The utility version of the helicopter was dropped in 1988 because the program had become too costly. In 1990, the size of the planned purchase was reduced from more than 2,000 aircraft to just under 1,300. Later, the Army delayed the projected start of Comanche production from 1996 to 2005.

Those changes have caused the procurement cost per helicopter to nearly double since the program began--from $11.7 million (in 2000 dollars) in 1985 to $21.5 million, based on current Army estimates. With that cost growth, Comanche is now more expensive than the Army's Apache (AH-64) attack helicopter, even though it was developed to be less costly to buy, operate, and maintain than other attack helicopters. Moreover, the General Accounting Office (GAO) and the Department of Defense's Inspector General (IG) have stated that costs could grow by as much as another 30 percent. In addition, GAO recently reported that there are significant risks that Comanche will enter service later than expected and will not work as well as planned.

The primary advantage of Comanche over existing aircraft is its sophisticated stealth, avionics, and aeronautics technologies. However, some analysts would argue that the helicopter, which was conceived at the height of the Cold War, will no longer face threats of the same scale or sophistication as those for which it was designed. According to the DoD IG, the Army has not reexamined the mission requirements for Comanche in any depth since the end of the Cold War (although it will need to do so in the context of the Army Chief of Staff's new restructuring plan). Comanche is intended both to serve as a scout for Apache and to fill the scout and light attack role independently. But whether Comanche really does have a unique role to play in Army aviation is unclear. The Army is planning to use Apaches in both scout and attack roles for the next 15 to 20 years, as it did successfully during the Persian Gulf War. The Army also used armed scout helicopters, known as Kiowa Warriors, in the Persian Gulf both as scouts for Apache and as light attack aircraft. Moreover, the Army could use unmanned aerial vehicles for some scout functions. Secretary of Defense William Cohen testified that U.S. forces used UAVs as scouts in Kosovo effectively and without the risk of losing aircrews.

This option would cancel the Comanche program. The Army has already purchased enough Apaches to fill the attack role assigned to 13 of its 18 divisions, but it does need to replace the aging Cobras assigned to the attack aviation units of the remaining divisions. This alternative would buy 519 Kiowa Warriors by the end of 2010 to replace the Cobras still in service. Net savings would total about $6.3 billion over the 2001-2010 period. Some of the savings could be used to fund a program to continue development of advanced helicopter technologies. Abandoning the Comanche program, however, would mean that the Army would have to rely on helicopters designed in the 1960s and 1970s for years to come.
 

Option 3-15
Cancel the Army's Crusader Artillery Program
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -201       -117      
2002 -365 -245
2003 -280 -225
2004 -602 -352
2005 -569 -419
 
2001-2005 -2,016 -1,358
2001-2010 -6,687 -5,444

The Army plans to invest $13.7 billion (in 2000 dollars) to develop and procure more than 1,100 Crusader artillery systems. It considers the Crusader--which includes a self-propelled howitzer and a resupply vehicle--to be technologically advanced and significantly more effective than the service's current artillery systems.

Supporters cite several reasons why Crusader is needed. The Paladin, the Army's most modern artillery system, is too slow to keep up with other combat vehicles when armored forces advance. Its range is shorter than that of several foreign systems available to potential adversaries. And Paladin's peak firing rate of four rounds per minute is significantly slower than the 10 to 12 rounds per minute that the Army says it needs. Crusader's current design includes an automated resupply system, which makes a higher firing rate possible and reduces the crew size to six from Paladin's nine. Crusader is also designed with more sophisticated automation and better crew protection.

Opponents, however, question whether a heavy system such as Crusader has a role in the lighter, more mobile force envisioned for the future Army. Some also question how much improvement Crusader will actually deliver. It may be only 9 kilometers per hour faster than Paladin, and it has encountered technical difficulties. The original concept called for a gun using liquid propellant. The Army had to abandon that technology in 1996 because of technical and schedule problems. In addition, some Crusader subsystems embody technological innovations that have not yet been proved, and some have no backups in case of failure. For example, if the automatic munition reloader fails, Crusader will not be able to fire since it cannot be loaded manually. Those technical risks could prevent Crusader from meeting some of the Army's key requirements, in which case it might be no more effective than current systems. As part of the restructuring plan proposed by the Army Chief of Staff, the Army is now scaling back its requirements for Crusader to reduce the system's weight and is cutting the number of systems it will buy by more than 50 percent.

This option would cancel the Crusader program and provide funds to procure 550 German PzH 2000 self-propelled howitzers (with resupply vehicles), which the General Accounting Office has identified as a viable alternative to Crusader. The PzH 2000 fires eight to 10 rounds per minute, and its cross-country speed of 45 kilometers per hour is within the range required for Crusader. Purchasing that system could hedge against potential threats while freeing $6.7 billion over 10 years for the Army to pursue other promising technologies. For fire support in fast-moving advances, the Army could rely on the PzH 2000 systems or on the multiple-launch rocket system, which it used successfully in that role during the Persian Gulf War.
 

Option 3-16
Cancel the Army's Tank Upgrade Program
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -525       -85      
2002 -366 -295
2003 -377 -379
2004 -323 -357
2005 -123 -307
 
2001-2005 -1,712 -1,422
2001-2010 -2,107 -2,064

RELATED CBO PUBLICATIONS:
Alternatives for the U.S. Tank Industrial Base (Paper), February 1993.
 

The downsizing of the U.S. military and the unprecedented peacetime investment in modern weapons that occurred in the 1980s have sharply reduced the need for new weapons. In particular, the Army now has enough of the latest type of tank, the Abrams, to equip the forces it plans to field for the foreseeable future. As a result, the Army does not intend to buy new tanks for at least the next 15 years.

Instead, the Army has proposed upgrading about 1,000 M1s (the first model of the Abrams) to a later configuration, designated the M1A2. The upgrade program, which began in 1991 and ends in 2003, has two major goals: to increase the capability of Army tanks and to keep the facilities that produce tanks in business pending the need for a new tank to replace the Abrams. (Most of those facilities are owned by the government and operated by private contractors.)

In late 1999, the Army Chief of Staff presented a new vision for a much lighter and more rapidly deployable Army. One of its goals is a force that can deploy a brigade in four days, a division in five days, and five divisions in 30 days. Another goal is a force that can deploy aboard C-130 transport aircraft. What role heavy, current-generation tanks have in such a force is unclear. Upgrading those tanks might not be the best use of scarce funds. Also, although the M1A2 is 20 percent more capable than the M1 (as measured by one scoring system developed for the Department of Defense), converting 1,000 M1s to M1A2s would increase the total capability of the Army's 7,880 Abrams tanks by only 3 percent. That slight increase in capability would come at a high price--a total of about $3 billion over the next 10 years.

This option would cancel the Army's upgrade program but would keep some of the major components of the tank industrial base in a mothballed status. By preserving production facilities, the United States would retain the capability to make new or existing types of tanks in the future. Mothballing the government-owned facilities would require an initial investment. But after taking those costs into account, this option would save $525 million in 2001 and a total of $2.1 billion through 2010. Those funds could be used to develop new, lighter vehicles for the future Army.

Closing the tank production line would have some disadvantages, however. Without an upgrade program, the U.S. inventory would include fewer of the most capable M1A2 tanks. As regional powers acquired better tanks, the absence of M1A2s might erode the United States' advantage in a war, even though the M1A1 remains a highly capable tank. Perhaps the most important drawback of this option is that some companies that manufacture tank components might close and thus be unavailable to produce tanks in the event of a crisis. A related concern is the potential loss of workers whose skills are unique to tank manufacturing.
 

Option 3-17
Reduce Procurement of the Virginia Class New Attack Submarine
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0        0       
2002 0 0
2003 0 0
2004 -400 -30
2005 -440 60
 
2001-2005 -840 30
2001-2010 -12,970 -5,270

As a result of the Quadrennial Defense Review, the Navy is reducing its force of attack submarines from 80 in 1996 to 50 by 2003. To meet that ambitious schedule, the Navy is decommissioning some of its Los Angeles class (SSN-688) submarines before they reach the end of their 30-year service life. (A recently released study prepared for the Chairman of the Joint Chiefs of Staff, however, calls for a force of 55 to 68 submarines. For a discussion of increasing the attack submarine force to 68, see option 2-01 in Chapter 2.) Even as it is discarding older subs, though, the Navy is building newer ones. It ordered three Seawolf class submarines in the late 1980s and 1990s and is procuring the Virginia class New Attack Submarine (NSSN) to be their lower-cost successor. The reason for the additions is that the Joint Chiefs of Staff believe that the Navy will need 10 to 12 very quiet submarines by 2012 to compete with Russia's newest subs, which have become quieter, making them harder to locate and track.

The Virginia class submarine is designed to be as quiet as the Seawolf but will be smaller and slower, carry fewer weapons, and not be able to dive as deep. Although the Seawolf was designed primarily to counter the more severe threat posed by Russian submarines in the open ocean, the Virginia is being developed to operate in coastal waters close to potential regional foes.

The Navy ordered the first Virginia class submarine in 1998. It plans to buy one Virginia per year from 2001 to 2005 and two or three subs per year thereafter. Under that plan, 15 Virginia class submarines would be authorized between 2001 and 2010.

This option would save money by keeping the Los Angeles class submarines in service until the end of their normal 30-year life and slowing procurement of the Virginia class. To help maintain the industrial base for building subs and to modernize the fleet, the option would produce one Virginia per year from 2001 to 2010. At that pace, 10 Virginia class subs would be authorized between 2001 and 2010.

Producing the Virginia at low annual rates would save a total of almost $13 billion over the next 10 years. Most of those savings would occur after 2005, when the submarines would be produced at a lower rate. (Had CBO reflected a higher force goal in this option, savings would be lower.)

During the Congressional debate on producing the third Seawolf, the Navy emphasized that although Russia's economic troubles mean it cannot operate its nuclear submarine fleet up to potential, it is still buying new, very quiet attack submarines at low rates. The Seawolf and the Virginia would both be quiet enough to meet the Joint Chiefs' goal of competing with those new Russian subs. Procuring a total of 10 Virginias in addition to the three Seawolfs would enable the Navy to field a force of 13 very quiet submarines by 2012, meeting the Joint Chiefs' requirement.
 

Option 3-18
Defer Purchases of the Marine Corps's V-22 Aircraft
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0       0      
2002 0 0
2003 0 0
2004 -22 -3
2005 -637 -110
 
2001-2005 -658 -113
2001-2010 -3,270 -2,285

RELATED CBO PUBLICATION:
Moving the Marine Corps by Sea in the 1990s (Study), October 1989.
 

The V-22 aircraft, which entered production in 1997, is designed to help the Marine Corps perform its amphibious assault mission (seizing a beachhead in hostile territory) and its subsequent operations ashore. The plane's tilt-rotor technology enables it to take off and land vertically like a helicopter and, by tilting its rotor assemblies into a horizontal position, to become a propeller-driven airplane when in forward flight. As a result, the V-22 will be able to fly faster than conventional helicopters. The Marine Corps argues that the plane's increased speed and other design features will make it less vulnerable when flying over enemy terrain and will provide over-the-horizon amphibious assault capability.

Despite all of those advantages, the Bush Administration tried to cancel the V-22, largely because of its price tag. Each aircraft bought for the Marine Corps is expected to have a unit procurement cost of $61 million, on average--considerably more than most conventional helicopters. Nevertheless, the Congress has continued to fund the V-22, and the Marine Corps plans to buy a total of 360 planes. (The Air Force may eventually buy 50 V-22s for its special-operations forces, and the Navy plans to buy 48 for combat search-and-rescue missions and for logistics support of its fleet.)

The Marine Corps expects to acquire several other planes at the same time. During many of the years that it is purchasing V-22s, it also plans to buy large numbers of Joint Strike Fighters to replace its short-range bomber, the AV-8B, and its F/A-18 fighter attack aircraft. JSFs are expected to be relatively inexpensive as tactical fighters go--perhaps 60 percent of the price of the Air Force's sophisticated F-22. But when bought in quantity and combined with the cost of the V-22, their purchase would bring peak annual spending on the V-22 and JSF to about $5.5 billion--roughly five times the amount requested for Marine Corps combat aircraft in this year's budget. (Technically, the V-22 and JSF are bought with Navy procurement funds.) If the Marine Corps cannot increase funding for those aircraft, it may have to modernize either its fighter fleet, its airborne amphibious assault fleet, or both more slowly.

This option would halve the Marine Corps's annual procurement of V-22s during the 2005-2010 period, when both V-22s and JSFs would be bought. As a result, the service's average funding requirements during those years would decrease to about $5 billion. That sum may be more manageable than the Marine Corps's current plan and would save almost $3.3 billion over 10 years.

Deferring purchases of V-22s would have drawbacks, however. The current amphibious assault fleet is made up of CH-46 and CH-53 helicopters that are more than 30 years old, on average. The CH-46s would remain in the fleet until their average age approached 50 if the V-22s deferred under this option were bought beginning in 2013, when planned V-22 purchases decrease sharply. (If the Marines had to engage in an extensive modification effort to retain those helicopters longer, the savings from this option would be lower.) Also, the amphibious assault fleet provides more unique services than the Corps's fighter attack fleet. The Marines can probably count on the Navy's carrier-based F/A-18 aircraft to provide them with additional firepower, but they cannot get aerial amphibious assault assets anywhere else. Also, cutting V-22 purchases might decrease the Corps's ability to perform humanitarian missions and other peacekeeping activities, which have grown more common in recent years.
 

Option 3-19-A
Reduce Purchases of the Air Force's F-22 Fighter
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 0        0       
2002 -320 -46
2003 -1,735 -378
2004 -1,842 -1,045
2005 -1,906 -1,541
 
2001-2005 -5,803 -3,010
2001-2010 -22,223 -16,242

RELATED CBO PUBLICATIONS:
A Look at Tomorrow's Tactical Air Forces (Study), January 1997.
 

The F-22 is being developed as the Air Force's next premier fighter aircraft and is scheduled to begin replacing the F-15 soon. But the plane has experienced repeated delays, reductions in quantity, and increases in price during its almost 20-year development. This option would decrease the planned purchase of F-22s by 219 planes. Assuming that the reduction was evenly distributed over the F-22's purchase period, it would save a total of $22.2 billion through 2010, although the savings would not begin until 2002. (A related option, 3-19-B, would cancel production of the F-22 altogether.)

The Air Force originally planned to buy more than 800 F-22s. After a series of cuts, the latest plan will buy only 339 aircraft--enough for about three air wings. Even if the Air Force makes no further cuts to planned purchases, it will have to pay $120 million apiece for the F-22. That price will purchase a number of improvements in capability over other fighters. Even so, the F-22's cost makes it the most expensive fighter ever built.

The F-22 is the only tactical fighter program to survive from the Cold War period. (The other two fighters that the Department of Defense is planning--the Joint Strike Fighter and the Navy's F/A-18E/F--entered development after 1990. They are likely to be both less capable and less expensive than the F-22, although they may face many of the same threats.) The F-22's sophistication and cost, plus concerns about whether the plane will actually realize promised improvements in capability, have led some people to suggest that the F-22 is a legacy of the Cold War--a plane designed to fight many sophisticated Soviet fighters rather than the modest regional fighter forces it is more likely to encounter today. Such critics recommend canceling the program, or at least cutting planned procurement further. In its report on its fiscal year 2000 defense appropriation bill, the defense subcommittee of the House Committee on Appropriations expressed concerns about the plane's cost and capability. The Senate concurred and the Congress directed DoD to complete testing of the F-22 before spending procurement funds on production.

The Air Force could reduce production quantities to a total of 120 F-22s, enough to let the service field one air wing of the sophisticated fighters. Such a "silver-bullet" purchase would allow the Air Force to learn lessons about producing aircraft of the F-22's technological complexity but might still leave more than enough planes to perform the missions for which the service needs the F-22's degree of stealth and other performance advantages.

One possible disadvantage of this option is that it would make the Air Force's fighter fleets, which are already aging under current plans, even older. However, buying 219 F-15s to replace the cut in F-22s would remedy that problem. Although the F-15 is much less capable than the F-22, it is far more capable than the fighters of almost any of the United States' regional adversaries. A one-for-one offset of F-15s for F-22s would lower the 10-year savings from this option to $10 billion.
 

Option 3-19-B
Cancel Production of the Air Force's F-22 Fighter
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -3,069        -655       
2002 -3,952 -2,080
2003 -5,037 -3,174
2004 -4,799 -3,969
2005 -4,799 -4,467
 
2001-2005 -21,657 -14,344
2001-2010 -43,091 -36,842

RELATED CBO PUBLICATION:
A Look at Tomorrow's Tactical Air Forces (Study), January 1997.
 

As the previous option discussed, although the Air Force has great hopes for its new F-22 fighter, the aircraft's development program has experienced numerous delays, reductions in quantity, and increases in price over almost 20 years. If the program does not deliver as promised--or if leaders in the Congress and the Department of Defense decide that the plane's capabilities are too expensive to afford in today's budget environment--the F-22 could be canceled. Doing that without making any provisions for replacing the plane would save $3.1 billion in 2001 and a total of $43 billion over 10 years. If F-22 purchases were offset with F-15s, savings would drop to $2.4 billion in 2001 and $25 billion over 10 years.

Outright cancellation would save more money than a "silver-bullet" purchase of F-22s (as described in option 3-19-A). But it would have several disadvantages. Cancellation of the F-22 could affect development of the Joint Strike Fighter, since DoD expects the two planes to have common design elements. In addition, the U.S. military might need the F-22's stealthy design and other characteristics if other countries improved their fighter capabilities. Finally, if beginning another top-of-the-line fighter program to replace the F-22 proves necessary, some of the costs already incurred in developing the F-22 could be paid again in a new development program, adding to the government's overall costs.
 

Option 3-20
Slow the Schedule of the Joint Strike Fighter Program
 


Costs or Savings (-)
(Millions of dollars)

Budget
Authority
Outlays

2001 -687        -407       
2002 73 -183
2003 -284 -178
2004 -557 -398
2005 -1,604 -675
 
2001-2005 -3,058 -1,841
2001-2010 -22,320 -16,051

RELATED CBO PUBLICATION:
A Look at Tomorrow's Tactical Air Forces (Study), January 1997.
 

One of the military's most ambitious aircraft development programs is the Joint Strike Fighter program. Variants of the JSF are intended to replace planes in the Air Force, Navy, and Marine Corps; they account for two-thirds of the fighter aircraft the military expects to buy through 2020. The Department of Defense intends to develop and begin purchasing the JSF by 2005--only nine years after the plane's first acquisition milestone. That interval is about 40 percent less than the time DoD has spent developing the F-22, the other new jet fighter it is developing from scratch. Many experts question whether DoD will actually be able to keep to such a tight schedule in a program that is supposed to produce three versions of the aircraft for three services.

This option would postpone fielding the JSF by two years to make the program's schedule more closely reflect recent experience with fighter development. That slowdown in development and production would decrease requirements for funding by $3 billion over the next five years and $22.3 billion through 2010.

The program office expects to need a total of about $23.4 billion to develop the three variants of the Joint Strike Fighter: an inexpensive multirole fighter for the Air Force; a longer-range, stealthy, ground-attack plane for the Navy; and a short-takeoff/vertical-landing fighter for the Marine Corps. (That sum includes about $1.3 billion invested by several foreign governments, including the United Kingdom's, that expect to purchase one or more of the variants.) The JSF program amalgamated three fighter programs that had been under way: the Air Force's multirole fighter, the Navy's A/FX, and the Marine Corps's ASTOVL program. Although the JSF variants will perform significantly different missions, they are expected to have much in common. DoD wants them to be more capable than current-generation aircraft but only slightly more expensive, if at all.

Satisfying the diverse needs of prospective users of the JSF could be challenging. Nevertheless, DoD plans to begin buying the planes just six years from now. The Joint Strike Fighter became a major defense acquisition program in May 1996; under the current schedule, the first formal review will take place in 2001, when the program is scheduled to enter the engineering and manufacturing stage of development (EMD). The JSF would then be produced in 2005, just four years after EMD began and nine years after it became a major acquisition program. The F-22 program, by contrast, has already been running for 14 years and may take a year or more to enter low-rate production (see options 3-19-A and 3-19-B). Some analysts might argue that the F-22's experience is not a good indicator for the JSF, since the F-22 was expected to represent a greater technological leap over its predecessor. But with the JSF's multiple missions and sponsors and the services' ambitious cost goals for the fighter, others might argue that the JSF program will be even more complex.

If the original JSF schedule is actually attainable, delaying it by two years would have several major drawbacks. Despite saving money in the near term, the delay could add to development costs. In addition, delay would exacerbate the aging problem of DoD's fighter fleets. Even under current plans for the JSF, when large-scale deliveries begin toward the end of the decade, fighters in the Navy and Marine Corps fleets will be an average of almost 15 years old. The Air Force fighter fleet will average almost 20 years of age when that service receives bulk deliveries of JSFs. Both averages exceed the ages at which each of those services has retired fighter planes in the past.

If, however, delays in developing the JSF are inevitable, a less ambitious, more realistic schedule would add to neither costs nor fleet ages. Revising the JSF schedule would permit DoD to plan its future courses of action better. For example, actions to deal with fleet aging might include buying more current-generation aircraft or modifying the planes in existing fleets.


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