For the past 45 years, the United States has had the advantage of a single, unifying threat around which to plan, equip, train, and, most importantly, justify its military forces. It made little difference whether or not the actual threat of direct Soviet attack against Europe or the United States was great or small, defense policy rested on our ability to deter a Soviet nuclear attack on the United States or its allies, and a capability to respond quickly to any Warsaw Pact attack on Western Europe with conventional forces. In this regard, it was felt that if United States forces could handle the European contingency, they could cope with lesser conflicts anywhere around the globe.
In carrying out our defense policy over the past 50 years, we have spent about $8 trillion in FY 1991 dollars. By the end of the 1980s, this had bought us 566 ships, 32 ground divisions (active and reserve), 36 tactical air wings, and a nuclear weapons inventory in excess of 13,000. Our annual defense budget was running at roughly $300 billion, and defense expenditures were consuming about 6% of GNP. Collectively, defense-related manpower, working either directly for the Department of Defense or indirectly in defense industry, numbered 6.5 million. As formidable as these numbers were, however, they represented a downward trend that is likely to continue as the Soviet threat continues to fade from the scene.
The beginning of the end for the Soviet empire came with Gorbachev’s early recognition that until the Jot of the Soviet consumer improved, worker productivity would remain marginal to nonexistent and the Soviet Union would become increasingly irrelevant to the 21st century. Key to his reform effort was the need to outflank the interests of an entrenched bureaucracy, a task which has only recently been completed.
At the same time, the Soviet military has also recognized the need for economic improvement in order to provide an adequate military industrial base for the future. Yet a pressing requirement remains to maintain strategic parity and avoid the possibility of accidental war arising out of instability at the conventional level. Unless Gorbachev can reduce the perceived threat to the Soviet Union through arms control agreements and confidence- and security-building measures, he will have difficulty holding his military to the new doctrinal line. Accordingly, he has been seeking political advantage out of economic necessity, putting pressure on the West through unilateral reductions and bilateral or multilateral proposals- particularly in those areas where the Soviet Union is facing a situation of bloc obsolescence, whether it be in tanks or submarines.
In his five years in office, Gorbachev has removed Soviet troops from Afghanistan, concluded an agreement on intermediate-range nuclear forces, inaugurated the START talks, and just recently struck a deal on reducing conventional forces in Europe. More significantly, he has allowed the Eastern European satellites to break with Moscow and establish their own governments. Of all the steps taken to date, the dissolution of the Warsaw Pact has done the most to tip the military balance in the Wesfs favor.
In Eastern Europe, the two most significant initiatives to date have been the reunification of Germany and Poland,s sweeping approach to economic reform. It is interesting to note that some of the initial euphoria relating to reunification has already died down, especially within West Germany as it looks to the prospective need for enormous investments — some say on the order of $750 billion – to do an effective job. Assuming these formidable difficulties are overcome, it is probably only a matter of time before Germany will rebel at the notion of having foreign troops and nuclear weapons stationed on its soil.
In Poland, there is much at stake as the country works its way toward a market economy. If it succeeds, its northern-tier neighbors, Czechoslovakia and Hungary, will likely follow suit. If not, the process will be slowed considerably. At this point, the probability of their pulling it off successfully is about 50-50. Although the Polish government has the support of its people and inflation has dropped from 75% in January to 6% this summer, unemployment is rising and will probably exceed 10% by year,s end. If one is used to a status quo of zero unemployment as the Poles have been, 10% will feel like a lot.
As if the situation of the Eastern Europeans was not challenging enough, the recent increases in oil prices represent an additional burden of immense proportions. With this being the first year in which the Soviets are requiring their former satellites to pay full-market prices for their oil purchases – after having heavily subsidized such purchases in the past – the runup in prices triggered by the Gulf crisis could not have come at a worse time. It has thus become a one-two punch which all East European countries are being forced to absorb – and at a time when the West will be sorely pressed with respect to its own oil imports. The southern-tier countries of Bulgaria and Rumania are even further behind economically and politically and will require significantly greater effort to reform.
Should these countries not succeed in their transformation, there is a strong likelihood that extreme nationalism will rise to the fore. There are any number of unresolved ethnic disputes that involve unbalanced distributions of wealth, political power, and cultural freedom. Czechoslovakia, for example, was created from two culturally separate provinces of the Austro-Hungarian empire. Despite far-sighted and largely successful attempts by the Czechs to improve the living standards of their Slovak brethren, the ties between the two have not improved during the past four decades of communist rule — as differences have been kept at bay through suppression of political discourse and expression.
The United States, because of its own economic situation and because of the actions taken by the Soviet Union, has also been reducing its military expenditures. Between 1980 and 1985, defense spending in the United States grew by more than 50% in real terms. However, in 1986 it began to drop — a trend that will continue, at least over the course of the next SixYear Defense Plan. Whatever else the political changes in Eastern Europe may imply, they relieve the United States of the need to be able to wage war in Europe with little or no warning. Rather than having to transport ten army divisions, one hundred tactical air squadrons, and a Marine Corps expeditionary brigade to Europe within ten days, the United States will now have between six months and a year to respond to any Soviet military designs on Western Europe. This will permit the United States to maintain a much smaller active force at much lower levels of preparedness.
Pentagon planning presently calls for defense spending to fall 2% a year between now and 1995. The Congress could even take it deeper, perhaps on the order of 5% a year. If so, United States defense expenditures in real dollars could end up at half of their present level within a decade. In any event, by 1995 defense spending will be at its lowest level since before World War n, measured either as a share of GNP or as a portion of total federal spending.
The advocates for deeper reductions maintain that even at a level of $150 billion -or 3% of GNP a year– the United States would be able to buy 22 divisions (11 active and 11 reserve), 24 air wings (12 active and 12 reserve), and at least 400 ships backed by 3000 nuclear warheads. The Iraqs of the world notwithstanding, this would probably be adequate to maintain a global presence and ensure nuclear deterrence, while keeping sufficient forces in reserve as a hedge against any resurgence of the Soviet threat. However, even if the Soviets were to reverse their present policies, it is likely they would emerge as more of a regional factor than a global power in the future. Whether an active force posture of the above size would be enough to handle all conceivable contingencies on a unilateral basis remains open to question.
These, then, are the present trends. They are by no means inevitable, and it will be necessary for some additional pieces to fall in place for them to play out as predicted. First, the United States and the Soviet Union will need to conclude a strategic arms agreement, as they have just done with their conventional forces. It will also require providing political and possibly additional economic assistance to Eastern Europe and the Soviet Union to facilitate their respective transitions to market economies and democratic political systems. Not providing this assistance could ultimately mean a failure to achieve closure on the trillions of dollars we have invested over the past four decades to win the Cold War.
One thing that will not be required, however, is an agreement on naval arms control. It simply makes no sense for the United States to tie itself to a diminishing Soviet threat in the one area that is most likely to require future growth. In a time of great uncertainty, maritime forces provide a unique capability and flexibility for coping with the unknown. Any number of unforeseen developments could require us to rebuild our naval forces in the years ahead Moreover, the assumption that continued improvements in U.S./Soviet relations will require the United States to agree to constraints or limitations on its naval activities (beyond those that already exist) as a quid pro quo for the disproportionate concessions the Soviets have been making in land forces is becoming increasingly suspecL Changes in the political and strategic environment are now overtaking and rendering moot the naval arms control debate. There can be no greater confidence-building measure for would-be adversaries than to start cooperating in areas of mutual concern, much as the United States and Soviet Union are presently doing with respect to Iraq.
Beyond the above, it is difficult to see how Gorbachev will be able to keep things together. Not only have the various Soviet republics declared their autonomy, but even some cities and individual districts within cities are doing so as well. When you couple these moves toward independence with a situation in which there are so many displaced nationalities — a legacy from Stalin’s time in which he purposely transplanted ethnic groups to remote regions in order to suppress them more effectively – it is difficult to see how they will avoid anarchy, let alone preserve the empire.
Even if one assumes a benign Soviet Union, however, significant security challenges to the United States will remain. Saddam Hussein serves as a useful reminder of the untidy world in which we live. Unless the standoff in the Arabian peninsula leads to outright war, though, it is doubtful that the planned defense build-down will be reversed. While it is clearly mitigating the magnitude of the reductions, it will not reverse them. The crisis may ultimately influence our mix of forces as well. An attempt to decommission our last two battleships has already been reversed and other weapons systems such as the B-2 bomber, the C-17, and the V-22 OSPREY may also acquire a new lease on life.
Beyond any impact on future budgets, the confrontation is already costing the United States an additional $15 billion a year in operational terms, costs that we have been asking other countries to help us bear. At this time, it looks as though we will end up absorbing about half of the total.
The ultimate impact of all this on Navy shipbuilding is yet uncertain. If the President’s FY 1991 budget request and subsequent modifications thereto hold up, the Navy’s shipbuilding and conversion budget will approximate $9 billion. This includes funding for thirteen ships — down from nineteen requested a year earlier. These would include: one TRIDENT SSBN, one SSN-21, four DDG-51s, one amphibious assault ship, one landing ship dock, three coastal mine hunters, one fast combat support ship, and one oceanographic research vessel.
As the Navy’s older classes of ships are retired- the DDG-2 ADAMS class destroyer, the DDG-37 COONTZ class destroyer, and soon the FF-1052 KNOX class frigate – in greater numbers than newer ships are added to the fleet, the Navfs inventory of battle-force ships will steadily decline. At the end of FY 1989 the number was 566, and that is projected to decline to 546 by the end of FY 1991.
Such reductions also shrink the opportunities for overhaul and repair work. These trends are already at work as demonstrated by the differences in the FY 1990 and FY 1991 budgets for Navy ship repair, dropping from $4.15 billion to $3.53 billion, a reduction of 15%. H one carries out the harsh arithmetic of whatever “budget compromise” ultimately emerges, one faces the prospect of even further reductions in ship procurement, overhauls, and repair work.
In spite of the negative trends in the defense budget that inevitably affect our maritime forces, there is strong support within the Administration for a robust Navy that can meet peacetime requirements and respond effectively to unanticipated crises. That perspective, to the degree it is shared by Congressional leaders, will hopefully mean that future reductions are managed wisely and in a manner that will minimize economic dislocation.
Yet another ingredient in this equation are the lessons that are flowing from our military buildup in the Gulf, especially with respect to our needs relating to sealift. While the buildup has been impressive by any standard, with more than six billion pounds of supplies shipped, in some cases 8,000 miles by sea and air, to Saudi Arabia during the first 30 days of the operation, there have been a number of problems in using our 96ship Ready Reserve Force. Only 14 of the first 41 ready reserve ships reached their loading ports on time. A few didn’t make it at aU. Because of some breakdowns in these ships which are generally in a poor state of readiness due to congressional under-funding, more foreign vessels have been recruited into service than originally planned – and at considerable cosL Of the 44 private cargo ships chartered to support Desert Shield, 35 are foreign-owned, underlining the dramatic decline in the U.S.-flagged merchant marine- down from 893 vessels in 1970 to only 367 today.
A Presidential commission warned in February of last year that the United States was dangerously short of the transport ships it would need in a major war. Accordingly, the panel recommended a 10-year, $13 billion construction program to meet the shortfall. Although Navy planners expect renewed shipbuilding on the commercial side to revive in the late ’90s, there is presently only one such vessel now being built in a U.S. shipyard.
With the removal of U.S. shipbuilding subsidies a decade ago, U.S. yards are no longer competitive with their Japanese, Korean, and European counterparts, despite lower U.S. wage rates in most instances. Consequently, a number of U.S. yards have gone out of business and the industry has shrunk considerably. With fewer Navy contracts, this situation will be further exacerbated. Because the present attempt to persuade foreign countries to eliminate their subsidies is unlikely to succeed, other more creative approaches will be required.
It is imperative that the United States reposition itself with respect to commercial shipbuilding, both to maintain a viable base for the future and in order to compete effectively in what will become an increasingly lucrative market as older ships are replaced and the requirements of worldwide shipborne commerce increase. Moreover, the need to accommodate environmental concerns relating to oil spills and the like will dictate the replacement of single-hull ships with newer double-hulled alternatives.
There is simply too much at stake in terms of our future economic competitiveness to permit this country’s once-proud shipbuilding industry to collapse as it most certainly will if present trends are not reversed.
[Ed Note: Dr. Johnston is a qualified sub17Ulriner who served in SKIPJACK, ULYSSES S. GRANT and JAMES K POLK. He is currently Executive Vice President and Chief Operating Officer of the Center for Strategic & lntemational Studies in Washington, DC]