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The first large-scale American demobilization since the Korean War is proceeding as planned
Yes, Virginia, there will be a peace dividend after all. When President Bush ordered U.S. troops to the gulf last August, many Americans feared a long, costly commitment that would scuttle any defense savings from the end of the cold war. Instead, the gulf war was quick, with almost all costs defrayed by U.S. allies. That means the first large American demobilization since the Korean War will proceed more or less as planned. Even as U.S. forces were arriving in the gulf, Pentagon officials were finalizing a budget plan to cut U.S. military forces from the post-Vietnam peak of 2.17 million reached in 1987 to 1.65 million by 1995--a reduction of 521,000 troops, or about as many as fought in Desert Storm. By 1996 the United States will be spending 3.6 percent of GNP on defense, the lowest level since the eve of World War II. "Only the United States would fight a major war while figuring out how to take an ax to its [own] military," says Rep. Les Aspin, the chairman of the House Armed Services Committee.
The sweeping cutbacks herald nothing less than a revolution in the military establishment the cold war built. For openers, many of the weapons that proved so overwhelming their first time out in Desert Storm are already considered obsolete (chart). Funding for the Apache helicopter ran out last year. The Patriot is a last-generation antimissile missile. No more Harrier jump jets will be purchased after September. The Abrams tank and Bradley fighting vehicle are near the end of their production runs. The military will still use its existing stocks of these weapons. But the Pentagon is looking toward the next generation of "brilliant" military technologies. Military planners compare the process to what the United States did after World War II. In 1945 America possessed the world's greatest fleet of propeller-driven bombers and fighter planes. It junked them as quickly as possible, in favor of jet planes. As Deputy Defense Secretary Donald Atwood puts it: "The electronics revolution is upon us. We have only just begun to exploit its potential."
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These leaner American active-duty forces will also be meaner: less reliant on combat reservists and better equipped to ship out rapidly to face regional threats. As outlined by Joint Chiefs of Staff Chairman Gen. Colin Powell, the United States will prepare for three types of conventional war. An "Atlantic force" of armored forces and planes will remain in Europe, though this presence will shrink from 325,000 soldiers and airmen today to 120,000 by 1996. The "Pacific force" will consist of a down-scaled Army, Navy and Air Force based in Japan, Korea and the United States. A light "contingency force" would be designed for small-scale threats in the Third World or as the spearhead for heavy forces. Like the first troops to arrive in the gulf, Powell says, they will be "rapidly mobile, ready to go and highly lethal." The United States will retain a nuclear force as well, but it will be a bare-bones deterrent that presumes an eventual START treaty with the Soviet Union. Defense Secretary Dick Cheney wants to put on hold costly strategic plans for the rail-mobile MX missile and the Midgetman missile--and cancel further nuclear-armed Trident submarines.
The Bush administration feels these cuts are safe for a simple reason: the Soviet Union, while still possessed of a formidable military machine, is losing its ability to project massive conventional force beyond its borders on short notice. The collapse of the Warsaw Pact deprived Moscow not only of large satellite armies but also of forward positions on the frontier of Western Europe. At the same time, the Soviets' economic decay will inevitably mean deep cuts in standing forces. Despite recent signs of Soviet military backsliding, Pentagon officials remain confident that the Soviet withdrawal from Eastern Europe will be complete by the mid-1990s. They also feel that with the dismemberment of the Iraqi military, one of the two most threatening Third World powers has been neutralized. The other, North Korea, can be deterred primarily with air power.
For defense contractors, this peace dividend means near terminal agony. Industry experts say that if defense spending falls to the range of 3 percent of GNP over the next few years, any two of the country's six big-name defense contractors could go under or be obliged to merge. Norman Augustine, chairman and CEO of prime contractor Martin Marietta Corp., recently wrote of a defense "readjustment" in which "several million people (military, government, civilian and industry) will lose their jobs...if downstream economic impacts are included." Gordon Adams, director of the Defense Budget Project, puts it more pithily: "The defense industrial base is going over a cliff."
Yet only two things can stand in the way of this Republican-led downsizing of the military-industrial complex: objections from the branches of the military, or from the Democrat-controlled Congress. Both can be expected to cite the performance of weapons in Desert Storm to bolster their arguments; the Air Force is already using the Stealth fighter's yeoman service as a reason to stick with the embattled $600 million B-2 Stealth bomber. And Secretary of the Army Michael Stone has asked for a year's delay in the troop reductions called for under the budget plan. The plan's consolidation of disparate forces may also run afoul of the military's 10 "unified and specified commanders"--otherwise known as CINCs, or commanders in chief--who are the real warlords of the military. The CINCPAC, based in Hawaii, is known as "the Duke of the Pacific." Powell has acknowledged "drastic changes" are in store for the CINCs. Some entire military baronies could be swept away.
The House last week approved a $438 million "emergency" spending bill to pay for 500 new and upgraded Patriot missiles--far more than were actually fired during Desert Storm. Michigan Sen. Carl Levin has already made known his displeasure that the Army wants to shut down tank-assembly lines in his home state. The New York delegation is howling over the catastrophe facing Grumman if Cheney's plan to end production of the F-14 fighter goes through.
Though the representatives are worried about home-district jobs, they will inevitably cast their resistance as concern for the country's preparedness. There is a real issue here. Can the United States afford to shut down complex production systems that might take years to restart--precious time the country might not have in a crisis? This would mean making weapons for which there is no foreseen need. But with the Soviet threat so diminished, can the United States afford not to scrap its defense industry, or at least a good part of it? According to a senior congressional budget analyst, it would eventually cost a full 1 percent of GNP per year to keep existing production lines "warm"--that is, producing a few weapons at a high cost per unit but prepared to surge in an emergency. The administration has hinted this price is too high. Asked by Hawaii Democrat Sen. Daniel Inouye if the Pentagon was prepared to see "a lot of companies...close their doors," Atwood replied pointedly, "Market forces will determine that." The defense industry has helped secure the peace; but unlike the troops of Operation Desert Storm, it will not regard the idleness ahead as a well-earned rest.
The debut of some of the most effective U.S. weapons used in the gulf conflict was also their curtain call. The Pentagon has already stopped purchasing these arms, though it will be years before it develops more advanced replacements. Examples:
Weapon system Last year of Prewar Years until procurement inventory replacement on line
Apache helicopter 1989-90 604 15 to 20 years F-15 Eagle fighter 1990-91 911 20 years M1 Abrams tank 1990-91 6,756 20 to 25 years Patriot surface- to-air missile 1990-91 3,249 10 years Maverick air-to- surface missile 1989-90 25,000* 15 years
*Approximate
Sources: Defense Budget Project; NEWSWEEK estimates
It was a case more of chutzpah than blackmail. But when Israel handed the United States a bill for war costs, some officials balked. The Jewish state claimed direct damages from Scud attacks ($200 million), and indirect damages due to lost production and absenteeism during the attacks ($300 million) and increased insurance for El Al and other enterprises ($180 million). It said it lost $250 million in export orders and $400 million in lost tourism. When the Defense and Finance ministries added it all up, war costs were a staggering $2.4 billion.
That dwarfed Israel's request for only $1 billion--on top of the $3 billion annually it already receives from the United States. But the Bush administration thought that too high a reward for staying out of the gulf war, particularly when the outcome was to eliminate the military threat the Israelis feared most. Days of unseemly haggling ensued. Washington offered $500 million and Patriot missile batteries. Israel's counterproposal: $750 million. The two sides finally agreed to $650 million in cash--not enough to satisfy some in Prime Minister Yitzhak Shamir's cabinet, who grumbled the compromise would cause "irreparable damage" to the economy. Some U.S. officials weren't ecstatic either, claiming they had been railroaded into the agreement by the pro-Israel lobby, which threatened not to back certain Republican candidates in 1992.
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