Friday, February 14, 2025

Why We Need a Trillion-Dollar Defense Budget

By Seth Cropsey

Friday, February 14, 2025

 

Donald Trump has returned to the White House at a particularly parlous moment for American interests. Russia’s assault on Ukraine is unrelenting, with a real chance of sliding into a broader European war. Israel has mauled key Iranian proxies, but the Islamic Republic retains the bulk of its long-range missile and drone arsenal and could well sprint for nuclear weapons. China is in the midst of the largest conventional and nuclear military buildup since the 20th century, with the obvious goal of gaining military superiority over the United States and ultimately absorbing Taiwan. A policy of Peace Through Strength — a return to traditional, muscular American foreign policy — is the best solution for America’s national-security predicament. If Mr. Trump is serious about shoring up the U.S.’s international position and restoring its credibility, he must work with Congress to raise the defense budget well past the $1 trillion mark.

 

The Biden administration dragged the United States into an intense global crisis, beginning with its withdrawal from Afghanistan. Biden’s foreign-policy team was convinced that the cost of maintaining a limited presence in the country was significantly greater than the benefit Biden would receive for ending America’s longest war. In the event, this calculation was horrendously incorrect. The Taliban toppled the Afghan government in a lightning offensive, while six months later, sensing American and European weakness, Russia invaded Ukraine.

 

The Biden administration notched only one major foreign-policy success in its four years. It increased the cooperation between our Asian allies through a series of basing agreements, informal and formal diplomatic contacts, and intelligence and information-sharing mechanisms. The Trump administration should build off this cooperation, formally integrating allied militaries in Asia to raise the costs of a Chinese assault against Taiwan.

 

In every other respect, however, the Biden administration presided over a strategic disaster. It prevented Israel from taking decisive action against Iran or its proxies. Only because Israel consistently refused American strategic advice after October 7, 2023, do Jerusalem and Washington now face a reasonable strategic position, with Iran on the back foot. In Ukraine, the Biden administration has drip-fed support to the Ukrainian military, restraining potentially decisive blows against Russia early in the war, while never actually articulating a security architecture that could preserve America’s European interests in the long-term.

 

Most concerning, however, is the long-term decline of U.S. military power, accelerated by the Biden administration’s strategic malpractice.

 

Budgets provide the context for this crisis. In 1990, U.S. military expenditure amounted to just under 5 percent of GDP. This bought a Navy of nearly 600 ships, an Air Force with a robust tactical fighter fleet and stealth strike aircraft, and an Army that could fight the Soviets in Europe and deploy to other areas as needed. In fact, the U.S. military was designed to fight two regional wars concurrently, backed by a dominant nuclear umbrella. But the post-1991 “peace dividend” reduced defense expenditure to just over 3 percent of GDP by 1999. Perhaps this was reasonable during the ’90s-era holiday from history, when Russia was weak and fractious, China more interested in economic integration than military adventurism, and Iran and North Korea largely isolated from the international system. Yet current defense spending, at around 3.5 percent of GDP, is far closer to that of the late 1990s than the Cold War — even as the U.S. faces a renewed cold war that threatens to boil over into active major-power conflict.

 

The Biden administration never recognized the demands on American power. While budgets grew in nominal terms, they never outpaced the rate of inflation, amounting to a real-terms cut in defense spending. After two decades of small wars in the Middle East, which traded investments in long-term high-end air-naval combat capacity for immediate ground-force capacity, and budget sequestration in the 2010s, the past four years have sharply curtailed American military power in real terms.

 

Deterring major-power war requires preparing to fight it. This demands resourcing a capable American military, one with sufficient air-naval power to dominate the maritime highways between the United States and America’s Eurasian rivals, sufficient space power to surveil targets across Eurasia and facilitate communication between friendly units, and sufficient land power to stage either limited or large-scale land campaigns as necessary. It also demands a nuclear arsenal that can maintain strategic superiority over China and Russia, no easy task given Russia’s persistent emphasis on nuclear weapons and China’s rapid nuclear buildup.

 

The Trump administration cannot downplay the sheer cost of rearmament. The China challenge alone demonstrates this. Today, Chinese shipyards outbuild their American counterparts by 252 to one. The U.S. Navy struggles to field its appropriated attack submarines due to maintenance backlogs. The Air Force lacks the long-range strike aircraft to fill the gap. A constrained industrial base compounds these issues. The naval industrial base faces a spiraling crisis, in which old, underfunded yards require more personnel to staff, but major shipbuilding contractors lack the funding to provide competitive salaries for shipyard labor. The aerospace industrial base fares better, but its supply chain is extremely constrained, particularly for key inputs like engines and missile guidance systems.

 

Rearmament thus requires not only investment in short and long-term military procurement, but also extensive industrial investment to create a defense industrial base that can produce and sustain sophisticated warships, aircraft, and missiles. Wartime sustainment will also matter. The current naval industrial base, for instance, takes around three years to repair damaged warships: This will amount to a de facto loss during any major conflict.

 

In the short-term, the Trump administration must increase the shipbuilding account. High-end warships cost around $3 billion each, a top-line submarine around $4 billion, a carrier around $13 billion. Even if the U.S. were to freeze carrier procurement — a poor choice for its naval force structure — it would still need to appropriate $12–20 billion in the near-term to jump-start subcomponent construction for its surface warships.

 

Airframes are also expensive, particularly the long-range bombers the U.S. Air Force needs to break down the Chinese military. Each B-21, for instance, will cost around $700 million — adding five bomber squadrons, a reasonable plan given requirements, will thus cost at least $50 billion. Much of this money must be appropriated in the next two or three defense budgets to accelerate production: Hence an air-naval procurement increase only for platforms of $70–100 billion over the next few years is necessary.

 

All told, simply for platforms, the U.S. must inject perhaps up to $150 billion into the next several defense budgets.

 

Munitions are also costly. While low-cost missiles have operational benefits, they lack the range, speed, and payload to break apart China’s anti-air network. The U.S. needs a larger arsenal of long-range, high-performance cruise and ballistic missiles, ranging from anti-ship and land-attack cruise missiles that cost $2 million-plus each, to fast hypersonics that can cost $40 million or more. Air-defense interceptors also matter to defend U.S. warships and bases. They cost $4–5 million each — the U.S. has used over 100 to intercept Houthi drones since late 2023. Near-term missile procurement will require at least $5–7 billion to build a baseline margin of safety for an initial crisis. This does not count air-to-air missiles, torpedoes, mines, and other weapons. Hence each defense budget, for the next few cycles, will need a $10 billion-plus top-up to accelerate munitions procurement.

 

Building these weapons requires new facilities, both for shipyards and aerospace manufacturing. Refurbishing old shipyards requires a $5–15 billion investment, building a new yard several billions more. All told, new aerospace and naval facilities will require between $15 billion and $25 billion in investment over the next few years. This does not count the cost of new workforce training programs, or measures to onshore specific components in the defense supply chain, raising total costs to north of $35 billion.

 

A right-sized defense budget must therefore break the $1 trillion mark, both to rebuild our military power and to sustain it.

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