How Will the National Defense Strategy 2022 Affect the Defense Enterprise?
The Biden Administration plans to issue its National Defense Strategy 2022 this month, which has the potential to drive significant changes to investment priorities, global force posture, and other aspects of US defense planning.
This is the first major revision of US defense strategy since the Trump Administration issued an NDS in 2018. That strategy signaled a clear shift away from counter-insurgency and counter-terrorism operations in southwest Asia toward a central focus on Great Power Competition with Russia and (mainly) China.
In this way, the Trump Administration clearly advanced a trend that was started in the Obama years with the much discussed (but in practice more limited) “pivot to Asia.”
Overall, Avascent’s expectation is that the National Defense Strategy 2022 will have a rather modest effect on the direction of the Department of Defense, US military forces and defense spending priorities, for several reasons:
- Recently the DoD has signaled favoring a “steady as she goes” approach. For example, DoD’s indication in November 2021 that the Global Posture Review, a key component of the overall strategy review process, will call for no significant change in the distribution or stance of US forces around the world.
- There is a widespread consensus among many in the national security field on the need to focus resources and planning on China and Russia, even if there may be deep disagreement on many aspects of implementation and response.
- The Biden Administration also aims to focus US foreign policy much more on diplomacy than on military forces. Thus, a substantial infusion of added funding is probably not in the cards, even if there is support among many in Congress for it.
The National Defense Strategy 2022 is likely to take an incremental approach to changes in defense strategy, force posture and resource allocation.
There are a few areas, like climate change, where we may see the NDS drive spending decisions that represent a clear break from the recent past. But these are likely to be very modest in scale. What is more likely is that the NDS will prompt a series of marginal adjustments in many aspects of DoD force posture and planning.
How the National Defense Strategy 2022 Will Approach 4 Major DoD Planning Areas
What follows is Avascent’s expectation of how the National Defense Strategy 2022 will approach several major areas of DoD planning, and how these may translate to shifts in funding in the FY23 budget and beyond.
Endstrength and Force Structure:
Whether measured in endstrength (military headcount) or force structure (the number and types of operating units), it is unlikely that the Biden Administration will call for significant reductions in the size of US military forces. Some marginal shift of functions from the active to the reserve components is possible in the interest of marginal cost savings. But substantial changes in the size or mix of US forces are unlikely.
For the US Army, this may come with a sigh of relief. Some officials in the Office of the Secretary of Defense have long considered reductions in the size of the Army to shift savings toward areas of greater relevance to the Indo-Pacific theater, like space, naval, strategic and cyber capabilities.
If the Army does indeed avoid this fate, it will have less to do with the Service’s argument that it can be highly relevant to Asia/Pacific scenarios than it does with events in Europe: With the ongoing crisis over Russia’s potential invasion of Ukraine, the strategic signal involved in cutting the strength of the Army could be very bad.
At the same time, while there is widespread support to build toward a larger Navy, this will be very difficult without a much bigger increase in the shipbuilding budget than the Biden Administration is likely to provide. Shifting funds from the other Services is not in the cards, given their own funding constraints.
A topline budget increase in FY23 is feasible, but not of the scale that would be required to ramp up ship construction and maintenance to a meaningful degree, particularly with shipbuilding capacity where it is currently in both public and private yards.
Operations & Maintenance:
The rising cost to operate and maintain many elements of US forces, particularly combat aircraft, could prompt some shifts in the FY23 President’s Budget (even if these issues do not rise to the level of emphasis in the NDS itself).
Leaders in US Air Force and US Marine Corps have indicated their desire to put less onus on near-term readiness and mission capable rates to invest in long-term capability improvement. This may have implications for the level of funding programmed for maintenance and training.
The O&M account is also one of the main areas in which the impact of inflation is felt in DoD. To be sure, inflation does not figure to show up as an issue in the National Defense Strategy 2022 document (indeed, the Biden Administration’s frequent assurances that recent inflationary pressures are “transient only” and not a long-term concern).
But the FY23 budget will need to account for rising prices on a wide range of goods and services, like fuel and others.
Infrastructure and Overseas Posture:
As noted above, the Global Posture Review did not propose any significant shifts of US forces around the world, even with increased concern about rising Chinese military power. Still, it is increasingly clear that many fixed US bases in Japan, Guam and elsewhere in the Indo-Pacific region are highly vulnerable to long-range missile strikes.
This means we might see increased spending to outfit Guam with stiffer missile defenses, and other moves to increase the staying power of all US bases in the region. This could take the form of capabilities focused as much on resiliency in the face of attack as it does on physical hardening.
Further, it is clear that DoD leaders intend the Department to join the Biden Administration’s wider focus on climate change. One manifestation of this could be spending in military construction or operations & maintenance (O&M) accounts on energy efficiency and climate change-related projects.
For low-lying and flood-prone places like Norfolk Naval Station, or those at risk from frequent hurricanes like Tyndall Air Force Base, DoD seems likely to step up its investment in resiliency.
Without a substantial increase in the total DoD budget, it will be difficult for the Department to bring about a sharp change in modernization priorities or truly speed the development of new capabilities.
Broadly speaking, the National Defense Strategy 2022 will emphasize the same technology and capability areas as DoD has prioritized for several years. These include space, cyber, autonomous systems, and strategic nuclear forces, among others.
But the Department will look to maximize resources toward emerging technologies and acquisition approaches that meet the challenge of rapid growth and innovation in Chinese military power.
The next edition of Avascent Proving Ground will focus in greater depth on what we should expect from the NDS in these areas.
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