I believe that US nuclear forces, policies and posture are mis-aligned with today’s security environment. The current budget crisis provides the best opportunity to fundamentally realign our approach to nuclear deterrence since the end of the Cold War. That simple fact — that this is a decisive moment — is why we have an intensely personal and partisan debate over the normally mundane question of how to calculate the nuclear weapons budget.
Some people are bitching and moaning about the Ploughshares estimate of $700 billion in spending “on nuclear weapons and related programs during the next ten years.” Many of them are only upset because they are losing the debate over US nuclear weapons policy. In particular, some of the same people screaming about $700 billion are the same people suggesting China might have 3,000 nuclear weapons. We’re aren’t exactly arguing with Socrates, here.
With that very clear starting point, I am going to try to sort through some of the numbers just so you don’t have to. Let’s start by recognizing that all of these estimates are simply good-faith guesses. No one knows, or ever has known, what nuclear weapons really cost or can reliably predict savings from future cuts. (Well, maybe Amy Woolf can.) If you are impugning the integrity of a particular participant or handing out Pinocchios, it just shows you don’t know what you are talking about.
Here we go.
The Administration Estimate
The Administration actually provides two apples and oranges estimates of spending on what we might call nuclear weapons and so forth — keeping in mind that “so forth” is an interesting category.
1. Major Force Program 1 Strategic Forces and Atomic Energy Defense Activities
Historically, “nuclear weapons spending” has been expressed in two very imperfect categories in the Green Book: Major Force Program 1 Strategic Forces (sometimes written Strategic Programs) and Atomic Energy Defense Activities (which reports certain spending in the Department of Energy.)
These numbers suck, though not for lack of effort.
MFP1 includes some non-nuclear programs like missile defenses, while it excludes an enormous amount of other relevant spending. Command-and-control investments are accounted for under a separate MFP, which irritates me. Command-and-control spending is probably the most important investment we can make in strengthening deterrence.
The Secretary of Defense Task Force on Nuclear Weapons recommended addressing some of the problems with MFP 1:
Funding for strategic capabilities has traditionally been addressed in the account for strategic forces: MFP-1, ‘Strategic Programs.’ Currently this budget program includes both nuclear and nonnuclear program elements. Nonnuclear programs have seen increases in funding as nuclear forces have been decreased in funding over the last 15 years. Some nuclear deterrence capabilities are categorized in MFPs other than Strategic Programs. To avoid further erosion of resources to the nuclear mission, the Task Force recommends that ASD(D) be responsible for funding execution oversight of nuclear capabilities. This is to be accomplished by the creation of a new capability portfolio composed of all program elements (whether currently categorized in MFP-1 or elsewhere in the defense program and budget structure) directly related to nuclear deterrence.
Atomic Energy Defense Activities is more straightforward in that it includes a bunch of cleanup costs. I happen to think clean-up costs should be included in cost estimates, but that isn’t how DOE budgets, so I can see a case for excluding it in this discussion. (Although it is deeply immoral to continue to pass costs on to future generations.)
If you just take these two numbers, the total easily averages out north of $30 billion a year over ten years. This number includes some things you would think do not belong, while excluding others.
2. The Administration’s 1251 Report, as amdended.
The 2010 1251 Report as amended, submitted as part of the ratification process for the New START treaty, offers a slightly different estimate, which I suspect is a good-faith effort to replace MFP1 and Atomic Energy Defense Activities with a more realistic number.
The 1251 Report outlines about $125 billion over ten years for delivery systems and another $90 billion or so for NNSA-related expenditures. As far as I can tell, the Administration intended the $200 billion 1251 estimate to be a comprehensive number, not merely new money. (Representative Turner quotes from the classified 1251 Report, which is a nice trick. The Administration really should declassify the actual 1251 number so we can at least reconstruct its estimate.)
Still, the 1251 estimate does not include funds for modernizing the Minuteman force, new bombers or new cruise missiles. I can’t blame the Administration for omitting these costs, since no one really knows the cost of these programs.
The 1251 Estimate also includes only a fraction of the monies in “Atomic Energy Defense Activities.” It excludes funding for Naval Reactors, Office of the Administrator in NNSA, as well as “Environmental and Other Defense Activities,” all of which one could argue about.
The 1251 Report works out to about $20 billion/year. As far as I can tell, this number doesn’t include anything really profoundly odd, but almost certainly does so through an abundance of caution.
For example, in 1998, the Congressional Budget office estimated the annual cost of a START-1 force of 6,000 accountable warheads at $22 billion. That’s about $31 billion today. (I was too lazy to try to use differing Defense and Energy deflators. So sue me.) CBO’s notional 3,500 warhead force, which is rather closer to what we have today, produced negligible savings (less than a $1 billion/year) since reductions were offset by various modernizations of one sort or another. (A 2002 study omits a yearly estimate, but suggests the reductions to be undertaken due to the Moscow Treaty were also unlikely to save significant money.) It is very difficult for me to understand how the planned nuclear budget can be 2/3 the 1998 budget in real dollars in light of what CBO found, unless of course the 1251 Estimate excludes some important items.
My major complaint with MFP1 and the 1251 estimate is, as far as I can tell, neither fully accounts for command-and-control spending, which is an important (and expensive) investment. CBO, on the other hand, did account for some command-and-control spending, which added something like $6 billion a year to the total. Perhaps we would spend this money in any event, but a major recommendation of the 2010 Nuclear Posture Review was to increase investments in the command and control system. We are, I suspect, spending more than the Administration’s estimate of $20 billion a year by any reasonable metric.
Let’s close our discussion of the “official” number by noting that a ten-year time-frame is completely arbitrary. Everyone chooses ten years because that’s how many fingers are standard-issue. Ten years, however, is far too long for accurate estimates, but too short to fully capture the large expenditures on Triad replacement that will be made in the next few years. SSBN(X) procurement was set to run from 2019-2033 last I checked. Ten years is a handy time-horizon, but I am not sure that it is the relevant one.
The Ploughshares Estimate
Let me start by noting that I am not currently a grantee of Ploughshares. I have been in the past, and some of my colleagues at CNS are, of course. Still, Joe is a close friend. He introduced me to my wife and is my gym buddy. So, take that for what it’s worth.
Ploughshares did three things that seem to bother some people.
1. One Man’s “Related Programs” is Another Man’s … oh, you get the idea
Ploughshares included missile defense and other activities like environmental cleanup for nuclear activities. One can argue about whether these things ought to be included — some of them certainly are included in MFP1 (missile defense) and Atomic Energy Defense Activities (environmental clean-up). GAO used to argue with the Defense Department over whether to create a “virtual” Major Force Program for the “New Triad” that would include missile defenses and conventional strike, as well as command-and-control. That was before the budget crisis when everyone started pleading poverty. I am not particularly bothered by a “nuclear weapons and so forth” approach to accounting as long as one is explicit about the “so forth.” That’s about $270 billion of the $700 billion figure. Let’s set that aside, since reasonable people can disagree, as long they are consistent and transparent about including those sorts of costs.
2. New Money?
Since no one is disputing the numbers for weapons activities– that means the dispute is whether the number is $125 million/ten years or $385 billion/ten years for delivery vehicles — submarines, bombers, missiles and the like.
Ploughshares noted that it was unclear whether the $125 billion number was new money or not. This is where I really have trouble with some of the attacks on the integrity of Ploughshares — the working paper clearly notes this ambiguity:
It is unclear how much DoD’s proposed budgets would be new money above base budgets. If the full $125 billion were added, the total estimated ten-year cost of nuclear weapons and related programs could reach approximately $740 billion.
Now, I happen to think the Administration intends the $125 million over 10 years as all money, not just new money. But that was not clear from the earliest Administration statements. Moreover, given past CBO estimates in the $20 billion range (or more than $30 billion in current dollars), it was not unreasonable for Ploughshares to guess (probably incorrectly) that $12.5 billion a year was new money.
3. Overhead and Support Costs
Finally, Ploughshares — following Kosiak, Schwartz and others — tried to allocate operations and support costs for US nuclear forces by adjusting MFP1. As far I as I can tell, both MFP1 and the 1251 estimate exclude very significant overhead costs associated with nuclear forces. But I also happen to think it is virtually impossible to figure out what the real cost is. That doesn’t make it right to simply pretend these costs don’t exist, so I understand what they were trying to do. Let’s take Minot Air Force Base — if the US did not have nuclear weapons, the Air Force would seek to close Minot by its own admission. But how much do we really spend on Minot? How much should we charge against the nuclear weapons “budget’? Would BRAC’ing Minot save any money? There is no good way to answer these questions, which I think is why Stephen Schwartz and others are always very modest about their efforts at estimation
This is a good point to make a clarification: What something “costs” is simply not the same as what one proposes to “spend” in a budgetary context, where many costs may be off-budget. And neither is the same as what one might “save” — since achieving savings often entails up-front expenditures. Dismantling bombs and closing bases is not free. I happen to be of the “hunt for small potatoes” school when it comes to nuclear reductions, unless the Administration makes some very brave cuts to force structure. That’s a Sir Humphrey joke, by the way. Sequestration, of course, may alter this political calculus. But to a first approximation, we might be spending $200, or $500, or $700 billion over ten years, but that doesn’t mean we can save that much.
The annual Ploughshares number of $40 billion a year is definitely higher than other estimates, but the CBO estimate of $30 billion in today’s money for our current force sits comfortably between the Administration at $20 billion and Ploughshares at $40 billion. If we really are spending new money or there a couple of Nunn-McCurdy breaches on procurement efforts? It’s a very interesting question whether we might get to $40 billion a year. I think it’s in the ballpark, to be honest. I’d really like to see CBO update the 1998 and 2002 reports to estimate what the Administration could save in this era of sequestration. My own thought experiment was not as disheartening as I had expected.
In Conclusion
In the meantime, if I am talking to other policy wonks, I tend use the Administration’s $200 billion number — but only because this is a tedious f’ing discussion. I can’t be bothered to explain all the items that $200 billion excludes. Other than command-and-control, which is my hobby horse. Maybe I’d make a little joke about how $200 billion is the estimate before correcting for the $600 toilet seats or something glib. This entire debate, from a policy perspective, is ultimately irrelevant: the coming cuts will occur to specific program elements, not the general-interest ballpark estimate. The $200 billion estimate isn’t all the spending on nuclear weapons, and certainly not their cost, but it is where the budget-cutters will turn first.
Just let’s not pretend that the Administration’s $200 billion number is anything other than an good-faith, rough approximation that undercounts the full cost of nuclear weapons. We may find that Ploughshares ends up being closer to the mark. Whichever number you prefer, my advice is not to be an a-hole about it. There is no reason to send partisan nastygrams or hand out Pinocchios to people who argue that business-as-usual is going to cost a fortune.
Because it will.
Update | 6 December 2011 I fixed some spelling mistakes and edited this sentence for clarity: “Moreover, given past CBO estimates in the $20 billion range (or more than $30 billion in current dollars), it was not unreasonable for Ploughshares to guess (probably incorrectly) that $12.5 billion a year was new money.” It was originally phrased in passive voice with an odd verb tense that might not even be English.
Just in passing you might want to note that there’s a problem with whatever package you’re using to maintain the comments portion of your postings. On all the recent postings the header “No Comments” appears regardless of whether or not comments have been posted.
The links to the 1251 report don’t work. Here’s one that does.
I’ve been writing on this subject at Nuclear Diner, several posts under House Blend, since the Ploughshares estimate came out in October.
Likely falling under your “and so forth” category, there is the DOE Inspector General’s report released the other week saying basically to either fully cut their programs that mirror the NNSA’s agenda or to re-absorb it under their purview.
It goes on to talk about other waste-cutting measures within DOE far outside the scope of this budgetary discussion, but surely the folding-in of the NNSA is a good move absent of any specific ideological objections.
http://energy.gov/sites/prod/files/IG-0858.pdf
One small observation: $30 billion a year, the cost to just maintain those 3,500 warheads, is approximately equal to the total amount spend on developing the first nuclear weapons, if you adjust for inflation from 1945 dollars.
So we spend, at a minimum, an entire Manhattan Project’s worth of money each year just keeping things running at a standstill.
In pushing back against non-governmental estimates of the costs of nuclear weapons, Rep. Turner and DOD’s James Miller insist that the $125 billion figure in the Sec. 1251 report is a complete and accurate representation of what DOD will spend both to sustain and modernize strategic nuclear weapons over the next decade (there are potential problems with the NNSA’s $88 billion figure, but as you note, at least we can see where that comes from). Apart from the likelihood of cost overruns, and the fact that spending will continue, and increase, well beyond the ten year planning horizon required in that report, is that a realistic figure?
First, it’s worth noting that the problem of non-nuclear spending in MFP 1 is a little larger than you suggested. When MFP 1 was created in the early 1960s, strategic bombers, intercontinental ballistic missiles, and ballistic missile submarines were exclusively nuclear delivery systems. So creating a special budgetary category just for them made sense. Today, however, there are 113 B-2 and B-52H bombers, of which 18 and 76, respectively, are nuclear capable. But only 60 total bombers are believed to be nuclear tasked. Nevertheless, the costs for all 113 aircraft are counted under MFP 1. Similarly, there are 18 Ohio-class Trident submarines, but between 2002-08, four were converted to carry non-nuclear Tomahawk land attack cruise missiles and support Navy SEAL missions. Yet the costs of those four converted submarines are almost certainly included in MFP 1 (though the weapons they carry may not be; were the approximately $4 billion in conversion and refueling costs included as well?). In short, MFP 1 both overstates the costs of the US nuclear arsenal (by including systems that no longer perform a nuclear weapons mission) and understates those costs (by excluding a host of essential support programs, as well as the smaller but not insignificant costs of tactical nuclear weapons).
Second, here are DOD’s own actual and projected numbers for MFP 1 spending (in FY 2012 dollars):
FY 2001 – 8.991
FY 2002 – 10.585
FY 2003 – 10.224
FY 2004 – 10.676
FY 2005 – 10.497
FY 2006 – 10.940
FY 2007 – 11.034
FY 2008 – 11.311
FY 2009 – 10.391
FY 2010 – 10.221
FY 2011 – 11.367
FY 2012 – 11.395
FY 2013 – 11.301
FY 2014 – 11.477
FY 2015 – 12.622
FY 2016 – 12.911
Before parsing the numbers, let’s take a quick look at what happened to the strategic triad between 2001 and 2011:
2001 2011
Bombers 115 113 (reflects total inventory, not just nuclear-tasked)
ICBMs 550 450
SSBNs 18 14
SLBMs 432 288
As we can see, even while there were some noteworthy reductions, overall costs actually increased during that period.
If Miller and Turner are correct, then average annual spending going forward for maintaining and updating the strategic arsenal will be $12.5 billion a year. But the average annual spending for MFP 1 from 2001-2011 was $10.567 billion, which means that any “new” modernization spending would amount to roughly $1.9 billion a year. (It’s possible and likely that at least some of this new spending will come from MFP 6 – Research & Development. But that MFP, which covers much more than nuclear weapons programs, falls from $54.563 billion in FY 2010 to $40.776 billion in FY 2016, suggesting either that any increases for nuclear weapons R&D will come at the expense of conventional weapons, or that R&D spending is going down across the board.)
Is $1.9 billion extra each year (or $19 billion over a decade) sufficient to design, test, and build a next generation bomber, new ICBMs, and new submarines and SLBMs (the first two of which aren’t even fully counted in the estimate even though STRATCOM and Congress seem determined to maintain the triad even if forces fall further)? No. Which brings us back to the key question DOD has not yet fully answered: How much of that $125 billion is for things we’re not already doing?
Another way to do a quick reality check on Turner’s claim is to examine what happened to MFP 1 the last time we decided to make substantial new investments in all three legs of the triad: the last years of the Carter administration and the Reagan administration. In billions of FY 2012 dollars, here’s what that buildup/modernization effort (which included the B-1 and B-2 bomber, the Advanced Cruise Missile, the SRAM II, the MX missile, the Small ICBM or “Midgetman,” the Ohio-class SSBN, and the Trident II/D-5 SLBM) looked like:
FY 1978 – 29.568
FY 1979 – 25.522
FY 1980 – 29.151
FY 1981 – 29.327
FY 1982 – 33.694
FY 1983 – 40.639
FY 1984 – 51.456
FY 1985 – 50.129
FY 1986 – 45.468
FY 1987 – 41.255
FY 1988 – 36.035
FY 1989 – 36.772
Granted, the Obama administration’s plans are, by comparison, more modest, but this is another indication $125 billion is likely to be the tip of the iceberg.
On the issue of whether DoD’s estimate of $125 billion in planned spending on nuclear weapons is plausible, I would note what STRATCOM Commander Gen. Kehler told Turner and his subcommittee on Nov. 2. After outlining the schedule and need for delivery vehicle modernization, Kehler stated:
GEN. KEHLER:
…
And then there’s the part about the warheads that we’ve been discussing here as well as some of the other pieces that go with this — command and control, intelligence, surveillance, reconnaissance, other things that make this a credible deterrent.
Are these “other pieces” fully accounted for in the administration’s cost estimate? Kehler appears to separate them from the 1251 specific costs.
It’s impossible to know, Kingston, because the full Sec. 1251 report is classified. But I can tell you that very little if any of what Gen. Kehler lists is included in MFP 1. And because DOD is almost certainly using MFP 1 as the basis for its estimate, I am reasonably certain they are not. Keep in mind, too, that these are not minor or incidental things: they are essential to having a functional nuclear force.
To reiterate what I told Glenn Kessler last week:
“It’s a little like saying it costs me $1,000 a year to operate my car, except that I am not counting the cost of insurance, repairs, registration, taxes, etc. The actual cost is higher, maybe even much higher.”
Jeffrey,
I’ve actually been looking forward to seeing your response to the “China tunnel” argument. Can we expect one in the near future?
Tomorrow, am. Working away at it now.
Jeffrey and others:
This is a useful discussion of some of the methodological challenges in calculating the enormous monetary costs of nuclear weapons. What is clear is that whatever and however the calculation is made, its a heck of a lot of dough.
What is lost in all of this, however, is the question of whether the United States needs and can afford the planned future years expenditures for “modernizing” the strategic nuclear delivery systems and new NNSA nuclear weapons complex projects.
This is the real-world question the Pentagon, OMB, and Congress have to answer in the coming months.
The DoD’s own 50-year lifecycle cost estimates to build and operate 12 new Ohio class replacement subs ($350b) its estimate for building and operating a fleet of new long range strategic bombers ($55b) really add up to a hefty amount.
Rather than build a new, more expensive version of the Cold War-era nuclear triad, we must recognize that the world has changed and come to grips with the fact that U.S. and Russian arsenals far exceed what is necessary to deter nuclear attack by the other or by any other nuclear-armed state. As one classic 1980s bumperstickers noted: “One nuclear bomb can ruin your whole day.”
ACA and others have been pointing out that the United States can save at least $45 billion over the next 10 years and still maintain a formidable and survivable nuclear force by:
1) Trimming the size of the submarine force: Current Navy plans call for 12 new ballistic missile submarines—each with 16 nuclear-armed missiles—to replace the existing fleet of 12 operational Trident subs. Each new sub would cost an average of $7 billion. The United States can rightsize the current and future ballistic missile submarine fleet from 12 to 8 and save $27 billion over 10 years (and $120 billion over the life of the program). Eight operational boats would allow the Pentagon to deploy the same number of sea-based warheads (about 1,000) as planned under New START.
2) Delaying the new strategic bomber: The Air Force plans to retain 60 nuclear-capable, long-range B-2 and B-52 bombers into the 2040s, but has begun research on a new nuclear-capable heavy bomber. It would carry a new air-launched, nuclear-capable cruise missile. There is no rush to field a new bomber given that the Pentagon’s plan to deploy 60 heavy bombers under New START will be be achieved with existing aircraft. Delaying this program would save $18 billion over the next decade, according to the Pentagon.
For additional savings, the Pentagon could consider reductions to its land-based strategic missile force. The Air Force plans to maintain a force of up to 420 land-based missiles through 2030, and wants to buy a follow-on missile in the future.
“Needs” and “can afford” are two very different questions.
Sorry if this is labouring the obvious, but whatever estimate you use, nuclear weapons are a very small component of the United States’ fiscal problems.
The United States’ GDP in 2011 is 15 trillion dollars. Current military expenditures are – what – around 700 billion dollars a year.
In that context $7b a year for submarines is loose change, if it’s decided that it’s a worthwhile allocation of resources.
For what it’s worth, I agree with you that much of the money being spent on a nuclear deterrent could be better used elsewhere. But, clearly, the United States can afford, if it chooses, to maintain its nuclear deterrent at present levels for as far forward as one can realistically project.
Jeffrey,
I will include a link to this interesting discussion on my original column. Sorry if you didn’t like the Pinocchios, but that’s the format!
Glenn
You even gave yourself a Pinnochio once. I understand that’s just the format.