Dr. Cindy Williams
Visiting Fellow, MIT Security Studies Program

March 31, 1999

Much has been written about the so-called "Revolution in Military Affairs" (RMA), but little has been said about how much it may cost or how it can be funded. Estimating the cost of exploiting the RMA is difficult because there is no consensus on what the RMA consists of, what it is based upon, and where it is going. Specifying where the money may come from is also problematic because the defense budget is appropriated on an annual basis. Despite these difficulties, it is still possible to develop a rough estimate of how much the RMA may cost and to foresee that potential sources of funding will be very tight.

Although the RMA is defined in a variety of ways, there seems to be a degree of confluence in four areas: 1) precision strike; 2) space operations; 3) dominant maneuver; and 4) information warfare. The backbone of the RMA, underlying all of these factors, is information technology, which is embodied in command, control, communications, and intelligence (C³I) systems and the military’s information systems. RMA advocates would have you believe that information technology is inexpensive compared to the cost of major weapons platforms and that technology is getting cheaper as it proliferates in the civilian sector.

Taken together, however, information technology is not as inexpensive as proponents of the RMA suggest. The Department of Defense now spends $54 billion per year on C³I and information systems. As a share of the defense budget, spending on these categories has risen from 15 percent in the mid-1980s to 20 percent today. The amount of resources allocated to C³I and information systems also exceeds the defense budget of any other country except Russia (and its total defense budget is only $10 billion more). Admittedly, not all C³I spending is directly related to the RMA and some of it is devoted to legacy systems that information systems RMA advocates argue are left over from the cold war. Still, the large amount of money that has been spent on C³I and over the past decade raises the question of why an RMA has not already been completed.

How much additional funding might be necessary to exploit the RMA? Proponents of the RMA would have you believe that it will be relatively inexpensive. They emphasize that the RMA involves not only technology but also fundamental changes in training, doctrine, organization, and military culture. The cost of such efforts can be estimated from current military programs designed to promote "cultural" change within the military, such as Advanced Concept Technology Demonstrations (ACTDs) and Advanced Warfighting Experiments (AWEs). Current annual spending on ACTDs, which pull together the work of the services and the Defense Advanced Research Projects Agency (DARPA), totals roughly $700 million. ACTDs have so far been used primarily for the development of unmanned aerial vehicles (UAVs) but will shift toward the exploration of new warfighting concepts once the work on UAVs is completed. Advanced Warfighting Experiments, such as the Army’s Force XXI and Digitization of the Battlefield experiments and the Air Force’s expeditionary force experiments, have been conducted by all of the services. The total cost of AWEs has been less than $400 million per year. These programs are unlikely to expand because of the significant commitment of time and personnel involved. Based on the ACTD and AWE programs, efforts to promote cultural change will therefore probably cost less than $1.5 billion per year.

The problem with focusing on cultural change is that RMA advocates also inevitably call for the development of new technology. What new systems, in their view, must be acquired to exploit the RMA? The Defense Department’s Quadrennial Defense Review (QDR) argues that the weapons systems currently being procured, such as the F-22, F/A-18E/F, the New Attack Submarine, the Comanche helicopter, and the V-22 Osprey, represent leap-ahead technologies that will make the RMA possible. Since these programs are already funded, no additional resources will be necessary to promote the RMA. The strongest advocates of the RMA go much further than the QDR, calling for the development of radically new technologies and weapons systems. These include transatmospheric vehicles carrying precision guided munitions, directed energy weapons, infrasonic weapons, and combat vehicles that require neither fuel nor ammunition. The cost of developing such systems cannot be reliably estimated because nothing like them has been built in the past.

More realistic proposals have been advanced by the National Defense Panel and the Council on Foreign Relations. In its project on alternative defense postures, the Council on Foreign Relations has proposed spending a total of $10 billion annually for technology exploration in the following areas: precision weapons, small computers and communications systems, stealth technology, UAVs and robots, space-based systems, and information warfare. At least some of this research can be expected to lead to advanced development and procurement. For example, developing and procuring one item in each research area will add approximately $15 billion a year to the $10 billion cost of technology exploration. The Council on Foreign Relations proposal could easily require a total of roughly $25 billion annually by 2010.

Finally, where will the resources for exploiting the RMA come from? The defense budget for FY2000 is $263 billion for the Defense Department plus an additional $13 billion for Department of Energy nuclear programs. Given how much is being spent on defense, it seems the US should be able to afford any transformation it wants. However, this may not be the case for several reasons. First, the defense dollar does not go as far as it used to because of the increased cost of weapons systems. Second, there has been significant cost growth in operations and maintenance (O&M) expenditures. O&M spending has increased at an annual rate of roughly 3 per cent per year, rising from 28 percent of the defense budget in the mid-1980s to 37 percent today. Efforts by the Clinton administration to deal with the problem through procurement reform, privatization, and other initiatives do not appear to be working. An annual shortfall of at least $40 billion dollars is therefore likely to emerge over the next five to ten years between current plans and projected budget levels. Adding on a conservative $25 billion for the RMA produces an annual gap of $65 billion during this period.

One approach to funding this shortfall is to seek public support for an increase in defense spending. Given the federal budget surpluses projected over the next decade, the Defense Department believes it can stake a reasonable claim to some additional resources. However, there are competing demands for these projected revenues, such as the tax cuts sought by Republicans and funding for Social Security and Medicare. It therefore seems unlikely that the public will support large increases in the defense budget.

Alternatively, the Defense Department can attempt to find the resources it will need within the defense budget. There are four potential sources of additional funding: 1) existing C³I and information systems; 2) modernization; 3) force structure; and 4) infrastructure. Deep cuts would be needed in each of these areas to generate the level of savings that would be needed to close the budget gap and fund the RMA. For example, the Defense Department has encountered strong resistance to its plans to introduce newer, joint systems that would reduce the cost of C³I. With regard to modernization, cutting tactical aircraft programs (the F-22, F/A-18 E/F, and Joint Strike Fighter) can be expected to save only $4-6 billion per year because these programs will have to be replaced by either a service life extension program or additional production of existing aircraft. Force structure reductions also yield savings that are lower than one might expect. For example, cutting active Army combat units by 30 percent will produce savings of only $4 billion per year. Finally, severe reductions in infrastructure would be needed to generate a large amount of resources. Closing 50 additional military bases will save only $3 billion per year. Other infrastructure reductions, such as closing military hospitals (saving $2 billion per year) or eliminating the $1 billion subsidy for military commissaries, would release more funds. However, such measures are likely to encounter fierce opposition.

All of this suggests the difficulty of finding the resources needed to cover the coming $40 billion shortfall between current plans and projected budget levels, let alone the additional $25 billion needed for RMA programs. Coming up with the funding necessary to exploit the RMA is therefore likely to require either a sea change in public attitudes toward defense spending or a substantial downsizing of the military force structure and its modernization programs.

Rapporteur: Ray Bonoan

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