The Cult of the Topline

March 1, 2000

The Pentagon acknowledged in July 1994 that the defense program could not support enough forces to execute the national defense strategy.

The defense budget has declined every year since then. All of the services are showing the effects of underfunding, but worse problems lie ahead.

Daniel Gouré and Jeffrey M. Ranney of the Center for Strategic and International Studies warn that we are heading for a defense “train wreck,” perhaps within the next 10 years.

The United States today owes its military superiority to systems and weapons developed before the budget cuts began. Much of this equipment is old. It is wearing out, and it is not being replaced.

The Congressional Budget Office says it would take “steady state procurement” of $90 billion a year just to maintain the current age of equipment in the fleet. The Pentagon has struggled to find $60 billion a year for procurement. Operations and support already consume almost two-thirds of the defense budget, and maintenance costs will rise as the fleet gets older.

The Department of Defense does not know how it might pay for its prescribed “transformation” to the next generation of force capabilities.

Gouré and Ranney estimate the budget shortfall at $100 billion a year. They predict that unless it is resolved, the nation will lose much of its relative military advantage between 2005 and 2015.

The armed forces are not likely to ask for–much less get–a big increase. Budgets are supposed to be built around requirements, but in reality, the opposite is true.

In the jargon of the budgeteers, the defense budget total is the “topline.” It is said to be “stable,” or “fixed.” That means it cannot be increased. It does not mean it cannot be cut, which it has been, regularly.

Under the prevailing culture, the topline is not to be challenged. If a reminder was needed, The New York Times reported in December that the services had been “quietly told” that “in drawing up this coming year’s spending plan, they must live within the limits imposed in the current budget.”

The military has always kept an eye on the funding situation when drawing up requirements, but in the 1990s, the bean counters took over.

The first real step in establishing the cult of the topline was the “Bottom-Up Review” in 1993. Two months after coming to office, the Clinton Administration cut the five-year defense plan by $131.7 billion, based on nothing more than wishful thinking by the new Secretary of Defense, Les Aspin. Aspin launched the Bottom-Up Review in search of a defense program to match his budget cuts.

It didn’t work, but the reductions stuck anyway. The services gradually got into the habit of framing their requirements to fit within the “fixed” (although steadily diminishing) topline.

In 1997, the Quadrennial Defense Review said, “The nation is unlikely to support significantly greater resources dedicated to national defense than it does now.” It projected “stable” budget toplines on into the future.

In each of the past five years, Congress has added money–more than $44 billion in all–to the Administration’s proposal for defense.

Last year, the White House announced a proposal to raise defense by $12.6 billion in 2000. Sadly, though, the “increase” depended on such things as how and from what point it was measured. After inflation, the Administration’s proposal was lower than the 1999 budget had been.

The 2001 proposal proclaims real increases coming up, but they are not enough to close the shortfall.

Defense is the only major category of federal spending to decline between 1994 and 2004. Mandatory outlays, paced by Medicare and Medicaid, are up by 32 percent. Domestic discretionary outlays are up by 7 percent. Defense is down by 9 percent.

Commenting last year on the reluctance of military leaders to state requirements that exceed the topline, Rep. Floyd Spence (R-S.C.), chairman of the House Armed Services Committee, said that “if we can’t get our own military leaders and the Department of Defense to tell us that we need more, it makes our job very difficult, if not impossible.”

In the Pentagon, however, the presumption of the fixed topline holds strong.

The superb performance of the B-2 in the Kosovo air campaign, for example, brought back questions of why the Air Force had not sought to obtain more than 21 of the bat-winged bombers.

As Air Force leaders explained it at the time, it was not that they did not want more B-2s or did not recognize their value. They did not push for more because they were not “affordable” within the topline. It is presumed that a similar logic helps explain why the Air Force has deferred the replacement of its current bombers until 2037.

Obviously, there is a limit to what budgets can cover, and it is necessary to set priorities. The problem is that topline culture gets the order of things backward. It leads us to think first about affordability, then priorities, and then essentially back into the requirements.

The Congressional Budget Office projects a federal surplus of $176 billion this year. Proposals abound on what to do with it.

This presents an opportunity for the nation to look again at where the underfunded defense budget is taking us-and also a chance to deprogram ourselves from the ruinous cult of the topline.