Footing the Bill for Military Space

Aug. 1, 2003

Of all the uncertainties that currently affect the Air Force’s prospects for realizing the near-term promise of military space, none is more crucial than the basic question of how—and at what opportunity cost—those prospects will be financed.

Under current arrangements, USAF has increasingly come to shoulder the burden of funding what are, in effect, two major military mission areas—air and space—with an annual budget share intended for only one. Although all of the services benefit from the space product ultimately provided, military space funding comes almost entirely out of the Air Force’s budget.

One reason the other services have so readily acquiesced in the Air Force’s long-standing dominance of military space is that USAF’s provision of virtually the entire military space product essentially has allowed them a free ride. It should scarcely be surprising that the other services would have such voracious appetites for space support when they do not have to pay for such costly benefits themselves.

For its part, however, the Air Force has become increasingly hard pressed to uphold both air and space responsibilities with a constant one-third share of overall annual US defense spending. Meanwhile, demands for space support and space force enhancement by all services have grown steadily since military space first came of age during Operation Desert Storm.

Recognizing this growing Air Force predicament, the Congressionally mandated Space Commission concluded in January 2001 that America’s military space capabilities are “not funded at a level commensurate with their relative importance.” The commissioners voiced special concern that the Army and the Navy are the defense community’s largest users of space products and capabilities, but the budget activities of those two services “consistently fail to reflect the importance of space.” This pointed up a “dichotomy between the importance of space to the Army and the Navy [and] the funding commitment these services make” which “needs to be addressed.”

The commissioners appeared to be saying between the lines that the other services are not bearing their fair share of the funding burden for the space-related services provided to them. Specific areas noted by the commissioners as underfunded included space situational awareness, enhanced protection and defensive measures for on-orbit assets, modernized launch, and the science and technology program, featuring space based radar, space based laser, hyperspectral sensors, and reusable launch technology.

Weight and Cost

An aggravating factor is that space applications have become increasingly expensive as the US defense establishment has become increasingly dependent on them. One seemingly intractable cause has been the high cost of space launch, which has imposed a limit on the rate at which the US can expand its military assets on orbit. The constant-dollar price of getting a satellite to low Earth orbit has not changed much over the past two decades. The cost per pound to LEO for most commercial satellites now on orbit ranges between $3,600 and $4,900, depending on the altitude and character of the orbit. The cost per pound for getting a payload all the way out to geostationary Earth orbit is considerably higher—$9,200 to $11,200.

Furthermore, the prospect for any substantial diminution in launch costs over the next 10 to 15 years remains dim because of the unalterable physics of chemically fueled, rocket-based launch. There is little near-term technology offering any promise of circumventing this problem.

One mitigating factor is miniaturization. It has slowly but inexorably increased the functionality of each payload pound on orbit, making possible the development and launching of smaller satellites. A decade ago, military satellites typically weighed between 5,000 and 20,000 pounds. Now those going to LEO usually weigh between 500 and 2,000 pounds. This means that the cost-per-pound issue may turn out to be less pressing in the future.

Further compounding the continued high cost of space launch is another factor. The Air Force is facing an acquisition challenge of the first order due to the block obsolescence of many on-orbit systems now in service and the emergence of a new generation of replacements. Virtually every major US military space system is due for an upgrade or replacement over the coming decade, at an estimated cost of some $60 billion. These include the Global Positioning System satellites, all military communications satellites, and the Defense Support Program constellation of missile-launch sensors.

There also is the looming prospect of space capabilities coming within the grasp of adversaries who would threaten some US satellite functions. That stimulates a need for expenditures on defensive and counteroffensive space control measures.

The potential of new capabilities such as space based radar, laser communications, and hyperspectral sensing, all of which can significantly enhance overall terrestrial force effectiveness, also compound the funding problem.

These technology opportunities have arisen at a time when the Air Force is facing an unprecedentedly costly task of replenishing its deployed air assets, including not only new fighters such as the F/A-22 and F-35 but also new tankers, airlifters, and intelligence-surveillance-reconnaissance platforms. All of these procurement needs are competing for shares of the Air Force budget.

Zero-Sum Game

Clearly, the Air Force can never make good on its obligations to exploit military space unless it begins sinking more money into that effort. Yet the nation’s space priorities must not blot out equally vital air-related mission needs. Not even the service’s most senior space leaders would argue that the Air Force can afford to abandon its existing core air mission responsibilities simply to free up more money for space.

At present, there is a zero-sum competition going on between military space priorities and other USAF spending requirements, including its force-projection needs. Should the Department of Defense continue its current resource apportionment practices with respect to space, the Air Force will, in the words of one former senior space officer, find itself faced with “the untenable option of capitalizing space with its increasingly limited resources.”

As one serving space officer declared, “Today’s zero-sum budget environment does not provide enough money for organizations to support both their core competencies and other essential, though ancillary, functions. … Under today’s configuration, the Air Force is expected to equally prioritize funding opportunities for its own direct warfighting capabilities as well as its own and its customers’ [space] support needs.”

She added, “These space services represent non-core, non-warfighting services that carry some of our nation’s largest must-pay bills.”

A core challenge facing the Air Force entails finding an equitable funding arrangement that will underwrite the nation’s military space needs in the interest of all services without doing so at the expense of the service’s Title 10-mandated air responsibilities. All signs are that space funding needs to be drawn from the US defense budget as a whole, not just from the Air Force’s more limited R&D and procurement allocations. Contributions could come from funding now devoted to Army helicopters, Navy and Marine aviation, submarines, surface ships, tanks, howitzers, and all other military R&D and procurement programs across the board.

Military space is not just another Air Force service-specific function—like airlift and close air support—that has long served other categories of military operations and other services. Rather, it constitutes a separate and distinct mission arena in its own right, one which promises, over time, to become as costly as the land, maritime, and air arenas are today.

Needed: New Mechanism

To address this challenge, the Space Commission proposed a new approach—creation of a new DOD major force program (MFP) budget category for space. It would cut across service lines with a view to providing a single budget mechanism for space. It would foster greater transparency in the tracking and management of multiservice space procurement programs.

One advantage of such a budget solution is centralization, which would bring clarity, for the first time, to overall US military space spending. The current method obscures the way the nation’s military space money is reported.

As long as US military space funds are provided as they are now—almost entirely within the Air Force’s R&D and procurement budgets—officials in the Office of Management and Budget and in Congress will be inclined to continue their familiar and historic “service budget balancing” practices, and the other services will be more than content to go along.

As matters stand, space will only get well at the expense of air programs, unless the overall DOD funding topline for military space is increased or alternate funding arrangements across service lines are implemented.

Who Will Pay

This raises a critical question: If push comes to shove, whose program interests should be forced to suffer to finance an accelerated shift of American military capabilities into space? The four services are incapable of reapportioning the defense budget in favor of more equitable support to Air Force air and space interests at the expense of competing accounts. This would require the services to set aside their own high-priority interests in the roles and resources arena. Trade-off decisions of that magnitude should be made by the most senior US civilian defense leaders.

It is worth noting that there is nothing preordained or immutable about the way in which the American defense budget is divided. That is strictly a matter of senior civilian leadership choice and Congressional consent. In the late 1950s and early 1960s, the Air Force’s share of the overall US defense budget ranged from 40 to 44 percent. (See table above.) It happened because national strategy demanded it.

Until the new space MFP is better defined and more fully institutionalized, the Office of the Secretary of Defense may need to exert greater control of the space requirements of the other services. The Joint Requirements Oversight Council may need to closely adjudicate those requirements. Fiscal reality must be taken into account when DOD is identifying and budgeting for new space needs.

The evolving space MFP mechanism will enable the defense comptroller and other supervising entities to view the entire space funding scene for the specific purpose of sizing the space-related budget and scrubbing excess service requirements. They can single out and delete those which represent overlap or redundancy or are merely desirable.

Such oversight should put senior officials in all services on notice that everything they ask for in space will, henceforth, entail a trade-off with everything else they ask for in the other MFPs. That provision alone should help bring greater rigor to the space requirements process.

Secretary of Defense Donald H. Rumsfeld ratified space as a separate and distinct military mission area. Now needed is a funding arrangement in which the other services will have to make contributions for their service-specific space ambitions and requirements. Such an arrangement would help ensure that the air operations portion of the Air Force’s Title 10 responsibilities can compete on more reasonable terms with the programs of the other services, with the Air Force, as the DOD’s designated executive agent for space, setting the direction of the national military space effort.

With respect to the pivotally important issue of DOD space funds management, OSD last year issued a draft directive authorizing the Air Force to “periodically review the space program, budget, and accounting mechanism,” which the directive described as a “virtual” MFP, and to recommend to the DOD comptroller suggested changes to the content of that virtual MFP.

A subsequent DOD report to Congress on the department’s implementation of the Space Commission’s recommendations expressly defined the virtual MFP as consisting of some 180 program elements grouped into space control, space force application, space force enhancement, space support, and “other space.”

More important yet, it identified space program elements not only from the Air Force, but also from the Army, Navy, Defense Information Systems Agency, and Defense Advanced Research Projects Agency. Their aggregation in this new and unprecedented manner should give the Air Force, as the designated space executive agent, an unprecedented ability to identify cross-service program overlap and redundancies.

Title 10 Authority

The Space Commission recommended asking Congress to amend Title 10 of the US Code to give the Air Force statutory authority over the space as well as air mission area. On reflection, OSD chose not to follow up on that recommendation out of concern over the legal Pandora’s box it might open. As a result, the air mission area is now assigned to the Air Force by Title 10, but the space mission is assigned by executive authority.

Nevertheless, the Air Force’s space executive-agent role has a Title 10 context, even if it lacks Title 10 authority. Conversely, the planned MFP for space has a Title 10 flavor though it is set in an executive-agent context.

Although the new arrangement will be insufficient, in and of itself, to relieve the Air Force of its current budget problem, it may offer initial building blocks for constructing a better solution.

Ultimately, if US military space exploitation is to be properly funded without compromising the Air Force’s continuing Title 10 air responsibilities, DOD will need to settle on a more equitable arrangement. “Fee for service,” one option sometimes suggested, is, by most expert opinion, not the right answer for multiple reasons. That said, this issue warrants creative examination by the Air Force and by OSD’s concerned princ399″> ipals, along with determined and energetic action by both, as appropriate, to realize the full promise of the pending space MFP.

On this point, a note of guarded optimism recently was sounded by the designated executive agent for space, Undersecretary of the Air Force Peter B. Teets. He spoke of a new “receptivity to change” among senior Pentagon leaders and the establishment of “an environment where, perhaps, additional resources can be brought to bear to achieve some great objectives.”

Benjamin S. Lambeth is a senior staff member at RAND. He is the author of The Transformation of American Air Power (2000) and NATO’s Air War for Kosovo (2001). This article was extracted from his just-published RAND report “Mastering the Ultimate High Ground” (RAND, 2003), written as a contribution to a larger RAND Project Air Force effort, entitled “Thinking Strategically About Space,” for the US Air Force.