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This paper has been prepared by the Congressional Budget Office at the request of Senator Lawton Chiles, ranking minority member of the Senate Budget Committee. It presents a summary review of improvements since 1980 in factors contributing to U.S. military capability. In keeping with CBO's mandate to provide objective and nonpartisan analysis, the paper makes no recommendations.

This paper was prepared by R. William Thomas under the general supervision of Robert F. Hale and John D. Mayer, Jr. Eugene Bryton and Jonathan Tyson of CBO's Budget Analysis Division prepared some of the data. Robert Kornfeld was a valued collaborator in compiling and verifying the data presented here. Other members of the National Security Division and Budget Analysis Division also made important contributions to the analysis.
 
 

During the first four years of this Administration (fiscal years 1982-1985), the Congress provided about $1.1 trillion in budget authority for national defense, some 36 percent more in real (inflation-adjusted) terms than was spent in the previous four years. This rate of expansion in defense budget authority was higher than in any other comparable peacetime period since World War II.

What improvements in U.S. military capability have been realized during this period? Claims by the Administration that significant improvements have resulted from the expansion of defense budget authority are challenged by some critics, who focus instead on instances of excessive pricing, inflated contractor overhead, or other wasteful practices. In an effort to provide a reasonable and objective basis for discussion of this issue, CBO has compiled selected measures of factors that contribute to military capability. These factors include the size of U.S. forces (force structure), the quality of equipment (modernization), the extent to which forces are ready for immediate combat (readiness), and the material resources necessary to continue to fight effectively to a successful resolution of a conflict (sustainability).

These measures are subject to important limitations. None provide a direct, comprehensive measure of U.S. military capability or that of its potential adversaries. Most ignore any quality increase in the new generation of weapons. And some--especially the size of U.S. forces--cannot be compared directly with changes in budgets because the measure represents a stock of equipment that changes only gradually over time as budgets increase. Despite these limitations, these measures are a reasonable set of indicators commonly used by the Department of Defense (DoD).

These measures suggest there have been improvements in all aspects of U.S. military capability since 1980, with the degree of improvement often reflecting the priority accorded by the Administration.

• Except for Navy ships, increases in the number of U.S. forces have been relatively modest through 1985. Equipment funded but not yet delivered will permit some further force expansion over the next five years. But expansion will in most cases still be modest, reflecting the lower priority the Administration has placed on force expansion.
  
  
• Purchases of new, modern equipment continued at a high level, but the number of weapons purchased in 1982-1985 was not always significantly greater, despite much higher procurement funding, than the number purchased in 1977-1980. This reflects changes in the mix of weapons--weapons of greater sophistication and higher cost were often purchased instead of cheaper ones--and unanticipated growth in unit costs of weapons since 1980.
  
  
• There has been a marked improvement in the quality of personnel entering the services (especially the Army) and an increase in retention of experienced personnel. Improved personnel readiness--the Administration's highest priority--no doubt means that U.S. forces are more combat ready today than five years ago. Other aggregate measures of readiness, however--such as the extent of training time and the maintenance of equipment--show more modest gains.
  
  
• Resources necessary to sustain combat have increased. War reserve stocks of munitions (including ammunition, bombs, and missiles) have been increased significantly by all the services. Stocks of other items (spare parts, food, fuel, medical supplies) necessary to sustain combat also have increased, though service requirements for the latter have grown even faster than have stocks.

Despite widespread improvements, most of these aggregate indicators have not increased markedly, with a few exceptions like personnel quality. Yet there has been a sizable increase in the defense budget. The lack of marked improvements may reflect the aggregated nature of the measures used here, which may mask some changes, and the gradual change one would expect in stocks of defense equipment. Nor do the measures used here necessarily reflect improvements in weapons quality that have been a high priority in this Administration. Because of these limitations and others stated earlier, it is beyond the scope of this analysis to ascertain whether the defense buildup has been worth its cost.

The analysis does point up the difficulty in quantifying what has been accomplished by the higher level of defense budget authority. This is particularly true for factors such as the quality of weapons, training and equipment readiness, and requirements for sustainability in wartime. Clearly no single measure, or even a group of measures, will fully capture the effects of increased funding. Particularly in the difficult areas like weapons quality, readiness, and sustainability, it would be useful for the DoD to identify new, output-oriented measures of capability, perhaps including some that systematically capture the judgments of experts about factors that resist quantification. These steps might facilitate attempts to assess future improvements in U.S. military capability.

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