CBO's fuzzy math shouldn't stop nuclear defense modernization

CBO's fuzzy math shouldn't stop nuclear defense modernization
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An October 2017 report by the Congressional Budget Office (CBO) is garnering headlines by stating that it will cost $1.24 trillion to sustain and modernize the U.S. nuclear arsenal over the next 30 years. A former secretary of Defense and a former vice chairman of the Joint Chiefs of Staff have just invoked a larger inflation of that number to substantiate their view that modernizing our nuclear deterrent forces would be too expensive.

Much of the media’s reaction to the CBO’s report has been to suggest that modernization costs are out of control and are ratcheting up higher, and that some programs will have to be cut.

But are the CBO’s numbers correct with respect to the actual cost of modernizing the U.S. nuclear deterrent force? Or have they been purposely exaggerated to justify opposition to some or all of the proposed recapitalization of our nuclear forces that now range from over 20 to more than 50 years old?

By Congressional mandate, the CBO must largely follow the guidelines handed down to it by members of Congress or by Congressional committees who request such assessments. Under this rule, the requesting members of Congress can require the CBO to use various assumptions that invariably result in the answer they want, or at least something close.

The CBO’s October 2017 nuclear report was requested by one senior member of the Senate Foreign Relations Committee. As one Senate defense staffer explained to us, “The request was carefully designed to reinforce a narrative that our pending nuclear deterrent modernization effort is simply much too expensive to continue.” Thus, the $1.24 trillion number was published higher than a similar estimate provided by CBO in its 2015 assessment. An earlier CBO report in 2015 comparable to its 2013 estimate projected that nuclear costs would actually be $7 billion less expensive over the coming decade.

Did the CBO’s 2017 report explain why the projected nuclear budget numbers had climbed to such a level that modernization of our successful nuclear deterrent force should now be reduced, postponed, or halted? To its credit, the CBO explained how the larger number was arrived at in a footnote on its report’s summary page. As the Jen DeMacio wrote in her Aviation Week story on November 3, 2017, the $1.24 trillion figure included all nuclear sustainment — not just modernization — as well as continuing sustainment over a 30-year period.

In her story, DeMacio explained that nuclear sustainment and operations would cost $843 billion and that less than half that amount, $399 billion, would go to actual force “modernization.”

In other words, the assessed cost to modernize our nuclear capability over the next 30 years is not $1.24 trillion — let alone the more inflated $1.7 trillion claimed critics. It is at most $399 billion — one-quarter to one-third of the headline-grabbing numbers.  

Incorporating “operations and sustainment” costs as if they were part of “modernization” costs is misleading at best. Operations and sustainment (O&S) costs will continue to be paid irrespective of nuclear modernization decisions. Furthermore, modernizing our nuclear weapons and their associated command and control facilities and other related systems will likely reduce current O&S costs, thereby providing a savings over what is now spent on O&S of our nuclear forces.

To put this discussion into a more meaningful context for the average American citizen, let us consider an analogous comparison through the lens of personal car buying.

If a new Ford Taurus costs $30,000, a normal person’s financial calculus will turn on whether he or she can afford to spend $30,000 on a new car or should instead keep the old clunker. Assuming they keep the new car for 10 years and spend $8,500 each year (the average in 2017 according to the American Automobile Association) on the operations and sustainment costs of fuel, maintenance, tires, insurance, and registration fees, they will spend a total of $115,000 on the car over the duration of their ownership ($30,000 + $8,500x10).

Of note, the Ford Taurus will become more expensive over time to maintain as all cars do, and it will spend more time in the shop as parts wear out over time — just as our bombers and missiles do. 

However, the typical car buyer does not look at a new Ford Taurus and think that its price tag is $115,000. Why? Because, regardless of whether they choose to “modernize” or not by acquiring a new Taurus, they will spend $8,500 a year in any event on fuel, maintenance, tires, insurance, and registration fees for their existing vehicle. Therefore, it is just as misleading to cite $1.24 (or $1.7) trillion as the presumed cost when discussing nuclear modernization as it would be to cite $115,000 as the presumed cost to modernize an individual’s personal transportation needs when buying a new car.  

If we look further into how the CBO calculates the projected “modernization” cost for our nuclear forces, Appendix A unmasks a critical erroneous assumption in forecasting the program’s $399 billion modernization estimate: 100 percent of the cost of the Air Force’s future B-21 bomber program, as well as that for the B-2 and B-52 inventories, is included in the overall total despite the fact that for the entirety of the existing B-2 and B-52 inventories’ lifetimes, those aircraft have never delivered a single nuclear weapon in combat. They have only delivered conventional weapons in the course of conducting non-nuclear missions.

Based on this past experience, the B-21 will most likely be employed solely for conventional missions as well. While the B-2 and B-52 now have, and the B-21 will have, a nuclear weapons delivery capability — and are deemed to be adjuncts of our nuclear deterrent posture — attributing as a presumed “cost” of nuclear modernization 100 percent of the cost of aircraft that have only delivered (and will likely only deliver in the future) conventional weapons in combat is a completely misleading example of budgetary sleight of hand.

Previous CBO reports acknowledged the distinction between nuclear and conventional force employment and attributed only 25 percent of the B-21’s projected cost, as well as that for the existing B-2 and the B-52 inventories, for the nuclear mission. Former Undersecretary for Defense Jim Miller has assessed the actual cost for nuclear delivery capability at only 3 percent of our existing bomber inventory’s actual total cost.

Quite apart from the grossly overinflated costs that CBO has wrongly ascribed to our bomber force’s nuclear capability, other serious problems remain. The CBO in fact attributed all costs associated with those military personnel sustaining our nuclear forces in its overall $1.24 trillion estimate. More plainly put, CBO included in its assessment of the overall cost of nuclear force modernization the salaries, housing allowances, medical care, and related sustainment costs of all the bomber pilots, maintainers, missileers, and submarine captains serving in the nuclear mission.

In fact, these military personnel will be paid to execute their mission irrespective of the equipment they may be using. By the same token, these costs have nothing to do with the modernization of our nuclear deterrent force per se and are instead being invoked by CBO to inflate a specious final assessed cost number so as to reinforce a narrative that our pending nuclear deterrent modernization effort will simply be too costly to accomplish.  

In reality, the actual cost likely to be incurred to modernize our nuclear deterrent posture, now more than five decades old for the most part, will be less than $399 billion. Over the course of a future time span of 30 years, that will average out to be less than $13.3 billion dollars per year.

In Fiscal Year 2017, the U.S. government spent $1.005 trillion on Social Security, $582 billion on Medicare, $404 billion on Medicaid and $48.9 billion on housing assistance. The likely cost to modernize the backbone of our nation’s security should be less than a third per year of what the U.S. Department of Housing and Urban Development (HUD) now hands out to subsidize rent.

Our nuclear deterrent force is the irreplaceable foundation of our nation’s wherewithal for averting the existential threat of nuclear war. It is past time that we treated it with the attention it both needs and deserves in order to remain viable and potent. Making the right decisions in support of this preeminent American national security priority requires, first and foremost, avoiding falling prey to false narratives that seek to manipulate public discussion rather than to accurately inform it.

David A. Deptula is a retired lieutenant general in the U.S. Air Force with extensive combat command experience in joint and combined operations. He is currently the dean of the Mitchell Institute for Aerospace Studies. Peter R. Huessy is director of Strategic Deterrent Studies at the Mitchell Institute and president of Geostrategic Analysis and a guest lecturer at the U.S. Naval Academy on nuclear deterrent policy. He was formerly senior fellow in national security at the American Foreign Policy Council.