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“Modest reforms to pay and compensation will improve readiness and modernization. It will help keep our all-volunteer force sustainable and strong. Keeping faith also means investing sufficient resources so that we can uphold our sacred obligations to defend the nation and to send our sons and daughters to war with only the best training, leadership and equipment. We can’t shrink from our obligations to one another. The stakes are too high.”

Gen. Martin E. Dempsey

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Rebalance the Pentagon’s Golden Ratio

By Travis Sharp

Americans this week are enthralled by the details of Osama bin Laden’s death, which comes at a critical time for U.S. national security policy as the Pentagon prepares to undertake a “fundamental review” of its missions and capabilities. Al Qaeda exploited American failures of imagination when launching its heinous attacks almost ten years ago, and DOD must strive to avoid uncreative thinking during this important review.

The Pentagon’s most stifling status quo policy is its Golden Ratio, the near equal division of its budget among the military services. Since fiscal year 1948, the Army, Navy, and Air Force have on average received 28 percent, 31 percent, and 33 percent, respectively, of DOD’s annual budget. Hot war, cold war, or no war – the allotment of the services’ budgets has remained relatively constant over time.

The Pentagon spends precious budgetary resources on unnecessarily duplicative capabilities in order to keep the services’ budget shares roughly proportional, an arrangement that stifles back-biting and end-runs by the services. There have been exceptions to this pattern during eras when American leaders pursued strategic planning more aggressively, such as during the Eisenhower administration. But as Kathleen Hicks, Deputy Under Secretary of Defense for Strategy, Plans, and Forces, wrote before joining the administration, “Budget share is the DOD coin of the realm” because the services view it as a proxy metric for their strategic relevance – and thus will respond forcefully if it is disrupted.

While a full complement of ground, naval, and air forces is needed to defend America’s global interests, the tripartite apportionment of the services’ budgets represents “mere math, and very political math at that.” In an era of rapidly evolving threats and increasing fiscal pressure, DOD should make decisions about the services’ capabilities and budgets based on national security requirements, not a desire to ensure that everybody gets an equal share.

The Pentagon’s fundamental review must consider ways to rebalance the Pentagon’s Golden Ratio. There are several ways to approach the problem.

DOD’s senior civilian leaders should assess missions and capabilities outside the rigid framework of the services. Otherwise, they will spend their time listening to service briefers extol the indispensable virtues of the Army, Navy, Air Force, and Marine Corps – inspirational information, to be sure, but not very useful for making decisions about tradeoffs.

Instead, DOD leaders should consider cross-cutting approaches such as: 1) altering the force planning constructs used to size and shape U.S. forces; 2) rearranging the U.S. military’s global posture; 3) shifting the balance between the U.S. military’s active component and reserve component (i.e. the National Guard and Reserves); 4) reworking the division of labor between the United States and its allies; and 5) making greater use of unmanned technologies.

Though not an exhaustive list, these analyses can inform policies that rebalance the Golden Ratio to increase U.S. national security while decreasing defense spending. Threading this needle will require the services to accept that they do not each require the ability to do everything independently, and can rely on one another more to accomplish their missions.

Winning support for this hackneyed call for jointness will require DOD’s senior civilian leaders to use carrots in the form of targeted reinvestments in specialized capabilities identified as vital by the fundamental review. Rand’s 2007 Division of Labor report outlined how strengthening such specialized capabilities can make the U.S. military more effective and less expensive.

Osama bin Laden’s death represents a milestone in U.S.efforts to ensure its security against 21st-century threats. Yet there are many dangers left to confront. The Pentagon’s fundamental review offers an opportunity to avoid failures of imagination by challenging status quo policies like the Golden Ratio, a politically shrewd but ultimately anti-strategic way to spend the nation’s defense dollars.

Travis Sharp is a research associate at the Center for a New American Security and author of the Center’s recent report, “The Sacrifice Ahead: The 2012 Defense Budget.

Reader Comments (5)

I don't know where you got your data, but the "golden ratio" has changed dramatically over this time period, especially during times of war when the Army goes from the smallest share to the largest. Table 6.3 of the DoD Greenbook clearly shows your fundamntal assertion is wrong: Simply comparing 2000 to 2010, we find the shares for Army, Air Force, Navy (including USMC) go from 26%, 31%, 29%, respectively, to 35%, 26%, 24%. That's hardly a consistently proportional division.

May 4, 2011 | Unregistered CommenterPhil

[...] Rebalance the Pentagon’s Golden RatioTravis Sharp, The Will and the Wallet [...]

Thanks for pointing this out, Phil. If you look at total budgets, the ratio is skewed towards the Army because of the two large-scale land wars we’ve been waging for the past ten years. Take out war funding and supplementals and the golden ratio returns.
In 2010, for example, $105 million of the Army’s $242 million budget was for overseas contingency operations (according to the Greenbook Table 2-1). The Navy and the Air Force only got $21 and $22 million respectively. Excluding war funding and supplementals, base budget shares are roughly even: 32% Army, 36% Navy, and 33% Air Force. And this division is consistent since 2001.

May 6, 2011 | Unregistered CommenterMary Kaszynski

Mary, I concur. But the article clearly says, "Hot war, cold war, or no war – the allotment of the services’ budgets has remained relatively constant over time." Had the author said instead, "ignoring periods of war, the allotmentss are consistent," I would have agreed with him. But that is not what he said.

May 8, 2011 | Unregistered CommenterPhil

[...] As we reevaluate defense priorities, and tailor the force structure to match those priorities, reconsidering the budget breakdown will be [...]

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