“All of these factors — the strategic environment, the fiscal environment, the political environment and bureaucratic realities of the defense enterprise — point to the conclusion that the military must get smaller over the next five years,” Fox said Tuesday at the West 2014 Expo at the Convention Center.
The expo is the largest West Coast event for communications, electronics, intelligence, information systems, imaging, military weapons systems, aviation and shipbuilding,
“It is not an ideal course of action: It contains real risks," Fox said about downsizing. "A smaller force, no matter how ready or technologically advanced, can go fewer places and do fewer things. But given current realities, it is the only plausible way to generate the savings necessary to adequately fund training, readiness and modernization, and avoid the prospect of a hollow force in the future.”
Those realities she is referring to include the rebalance to the Pacific and its strategic consequences, particularly for the Navy, and an expected return to sequestration-level Department of Defense budgets in 2016 after two years of a slight reprieve. There is still uncertainty, however, surrounding the final budgets.
Fox said the two issues are linked, with a U.S. Navy that has been largely untested since World War II in serious need of modernization funds to maintain its superiority in the newly prioritized Pacific.
“In an era where China’s defense budget is increasing at around 10 percent each year, the United States, due to a variety of political and fiscal factors, is disproportionately reducing the very investments that are intended to sustain our technological superiority,” she said.
“As a result of the sequester in 2013, the Defense Department cut close to $16 billion from its modernization accounts-procurement, research development — and this year looked to be even worse until the department released some money from the Bipartisan Budget Act.”
Fox said U.S. dominance and military superiority in all domains can no longer be taken for granted, but as the Pacific is a largely maritime sphere, with 60 percent of U.S. Navy forces set to be stationed there, she focused her remarks on the Navy.
She said as threats grow from advanced military powers and precise anti-ship munitions alike, undersea capabilities such as submarines will be vital, but budget constraints mean the service can’t simply tailor its output to different niche platforms.
“With limited resources and global responsibilities, we simply can’t afford to build a navy tailored for one region or one kind of fight. We need a flexible portfolio of capabilities that can operate in a full spectrum of conflict and military operations,” Fox said.
“Nonetheless, with more advanced anti-ship munitions being developed by potential adversaries, I believe it is imperative to devote increasing focus and resources to the survivability of our battle fleet.”
In addition to a fleet focused on surviving in a range of situations, Fox also stressed the importance of acquiring modern technology — particularly electronic warfare — which hasn’t been necessary for some time.
“In many respects, the U.S. Navy has been so dominant for so long at sea that I worry we never really embraced these solutions at all. The time to start investing in the next generation of electronic warfare is now.”
Again, this comes back to the budget, as spending on modernization and technology means less spending on personnel and overhead. Fox said that Secretary of Defense Chuck Hagel’s decision last summer to cut civilian and contract personnel by 20 percent was a difficult one, but the right move in the long run.
Additional tough calls loom, as half of all defense spending goes toward active and retired military, and civilian pay and benefits — compensation packages that Fox says will be difficult to sustain without making dangerous cuts elsewhere.
The compensation situation also has Fox worried about the defense industry’s ability to attract top talent, both on the civilian and industry side. However, she said she is not as worried about the uniformed military sector, which has been focusing on this issue.
“The interactions I’ve had with industry leaders, I worry about their ability to attract a young, vibrant, talented workforce into a declining budget situation,” she said. “So we have to all work tougher to find ways to keep our work thriving. Let’s face it: Yes, budgets are going down, but still this is the coolest work in the world.”
Despite her confidence in the defense industry’s ability to weather whatever challenges are thrown its way, Fox admitted that both the forecasts and uncertainty surrounding them are troubling.
“To be quite honest, we don’t really know what the future will bring in terms of defense budgets or geopolitics … I’d like to think that returning to sequestration budgets in 2016 with the $50 billion across-the-board annual cuts is highly unlikely, given the consequences I just described to our military and national security, but I worry.”