Deliberative Working Document - Predecisional FOUO Supporting the Secretary’s Top Priorities Brad Berkson, Director, OSD Program Analysis and Evaluation

Deliberative Working Document - Predecisional

FOUO

FOUO

Supporting the Secretary’s Top Priorities

Brad Berkson,

Director, OSD Program Analysis and Evaluation


FOUO

FOUO

Agenda

• National Economic Outlook

• PB 07 Decisions

• QDR Themes


FOUO

FOUO

U.S. Unified Federal Budget Surplus/Deficit Projections

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Fiscal Year

The

n Y

ear

$Bill

ion

s

OMB July 2005 CBO August 2005

CBO January 2005

CBO January 2005 + No Sunset on Tax Cuts + AMT Reform + Discretionary Spending Growth at Rate of Nominal GDP Growth + 6 years of OEF & OIF then phased out

OMB February 2005

Katrina?


FOUO

FOUO

Total DoD Budget Authority

0

100

200

300

400

500

600

1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001

FY

06$B

KO

RE

A

VIE

TN

AM

RE

AG

AN

BU

ILD

-UP

GU

LF

WA

R

GW

OT


FOUO

FOUO

Benefits Growth from Past Congressional Actions

0

5

10

15

20

25

30

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

TY

$B

TRICARE for Life Reservists HealthcareFamily Separation Allowance Survivor Benefit ProgramRedux Repeal Concurrent ReceiptEnhanced Death Benefits

$22.8B

$17.4B

$12.7B

$21.4B$20.0B

$19.0B

Growth between FY03 ~ FY10

$13.9 Billion

$16.4B

$8.9B


FOUO

FOUO

Agenda


• PB 07 Decisions

• QDR Themes


FOUO

FOUO

PBR 07: Financial State of Play

2

Baseline Over-Programmed Fact of Life QDR

$B

419

443

462

6

7

7

9

400

420

440

460

480

FY06 FY07 FY08

2

3

15.4B

19.2B

440


FOUO

FOUO

Actions Taken in FY07-11 (1 of 2)• Cancel B-52 Stand Off Jammer• Cancel/Restructure ACS• Retire 39 B-52s over two years• Retire E-4B• Cancel E-10 Procurement, limit to technical demonstration• Retire 50% of C-21’s, accelerate U-2 and F-117

retirements• End C-130J production in FY08• End C-17 production in FY07• New Air Force tanker slip 6 months• Delete JSF second engine• AF manpower reduction (15K in FY07 to 40K in FY11)• Army Brigades; 42 vs 43 AC, 28 vs 34 RC


FOUO

FOUO

Actions Taken in FY07-11 (2 of 2)• Military pay raise at 2.2% plus targeting• Increase Medical premium (Retiree only)• Significant MILCON reduction• Significant reduction in Minor Procurement and non-readiness

O&M• Missile Defense Reduction (ABL Procurement)• Reduce peacetime OPTEMPO• FA-22; stretch production / restructure to multi-year• Slip 9th LPD-17 (FY07 to FY08)• TSAT/SBR and other Congressional reductions/reduce

unobligated balances• Restructure JTRS, ASDS• JUCAS restructure to Navy variant / Classified program• V-22 pricing changes


FOUO

FOUO

Nov 21 SPC: Balancing Risks(FY 2007 TY$ Billions Est.)

• Aircraft Production 17• Shipbuilding 12• Modularity / FCS 9• Helos 7• Ground Vehicles 4• C4ISR 36• BMD 10• S&T 11• Intel / Weapons / Minor 54

Force Management Operations

Institutional Future Challenges

• Base Pay 54• Bonuses 4• Retired Pay Accrual 13• Allowances, Special Pay 41

& Other

• Civilian Pay 56• Health Care 29

• Flying Hours 11• Steaming Days 3• Tank Miles 5• Depot Maintenance 11• Training 9• Base Ops / Environ / Other 18

• Battle Group / Wing 0.8• Air Wing 0.3• Army Brigade 0.4

• BRAC 5• Global Posture 1• Other MilCon 6• Facilities Sustainment 6

• Contractors 5

(~7K)(~5K)(~4K)


FOUO

FOUO

Nov 21 SPC: Balancing Risks(FY 2007 TY$ Billions Est.)

• Aircraft Production 17• Shipbuilding 12• Modularity / FCS 9• Helos 7• Ground Vehicles 4• C4ISR 36• BMD 10• S&T 11• Intel / Weapons / Minor 54

Force Management Operations

Institutional Future Challenges

• Base Pay 54• Bonuses 4• Retired Pay Accrual 13• Allowances, Special Pay 41

& Other

• Civilian Pay 56• Health Care 29

• Flying Hours 11• Steaming Days 3• Tank Miles 5• Depot Maintenance 11• Training 9• Base Ops / Environ / Other 18

• Battle Group / Wing 0.8• Air Wing 0.3• Army Brigade 0.4

• BRAC 5• Global Posture 1• Other MilCon 6• Facilities Sustainment 6

• Contractors 5

(~7K)(~5K)(~4K)

( 4)

( .8)

( 1.5)

( 1.5)

( 2.2)

( 1.6)( .8)

( 2)( 1)

( $15.4B)


FOUO

FOUO

Agenda


• PB 07 Decisions

• QDR Themes


FOUO

FOUO

Strategic Priorities

• The Quadrennial Defense Review – the first conducted in an era of global terrorism – continues this shift in emphasis by identifying strategic priorities

• The Fiscal Year 2007 Budget invests in capabilities and forces in these priority areas– Prevail in Irregular Warfare Operations– Defend the Homeland Against Advanced Threats– Maintain America’s Military Superiority – Support Servicemembers and their families


FOUO

FOUO

Irregular Unconventional methods adopted and

employed by non-state and state actors to counter stronger state opponents. (erode our power)

Disruptive International competitors developing and

possessing breakthrough technological capabilities intended to supplant U.S. advantages in particular operational domains. (marginalize our power)

Traditional States employing legacy and advanced

military capabilities and recognizable military forces, in long-established, well-known forms of military competition and conflict. (challenge our power)

Catastrophic Acquisition, possession, and possible

employment of WMD or methods producing WMD-like effects against vulnerable, high-profile targets by terrorists and rogue states. (paralyze our power)

Security Environment: 4 Challenges

LIKELIHOOD

VU

LN

ER

AB

ILIT

Y

Lower Higher

Higher

Lower

Capabilities-based planning should apportion risk across challengesCapabilities-based planning should apportion risk across challenges

(e.g., terrorism, insurgency, civil war, and emerging concepts like “unrestricted warfare”)

(e.g., conventional air, sea, land forces, and nuclear forces of established nuclear powers)

(e.g., sensors, information, bio or cyber war, ultra miniaturization, space, directed-energy, etc)

(e.g., homeland missile attack, proliferation from a state to a non-state actor, devastating WMD attack on ally)


FOUO

FOUO

DisruptiveTraditional

CatastrophicIrregular

QDR Focus Areas

Today's Capability Portfolio

Shape Choices

Defeat Terrorist

ExtremismCounter

WMD

DefendHomeland


FOUO

FOUO

New Investment in QDR Focus Areas– Defeat Terrorism ($12B)

• Increase SOF forces (10 K) and equipment, establish MARSOC, increase PYSOPS & Civil Affairs capacity

• Increase Predator procurement• Enhance littoral warfare capability

– Counter WMD ($2B)• Invest in research into advanced biological threats

– Homeland Defense ($2B)• Invest in NAOC, conventional TRIDENT, distributed COMMS,

E-6B

– Shape Choices ($9B)• SAP, IMINT, Long Range Strike, existing 3-Star Component

Operational HQ to Deployable JTF HQ


FOUO

FOUO

QDR Themes

Not a Radical Departure - Continuous Change

From a peacetime tempo . . .

to a wartime sense of urgency

From crisis response . . .

to shaping the future

From broad-based industrial mobilization . . .

to targeted commercial solutions

From massing forces . . .

to massing effects


FOUO

FOUO

Framework for Force-Sizing DiscussionsT

roo

p C

om

mit

men

t

Rotation Base forStability Operations

(nominally1 forward : 2 back)

Peak MCO Demand(full access to forces)

ORRotation Base for

Steady State Operations

(typically1 forward : 3 back)

Time

Stability Operations

MCO

Steady State Operations + GWoT

Homeland Defense Operations

Force sizing (for each force element) is determined by:

•Assumed Demand

•Sourcing Policy


FOUO

FOUO

Final ThoughtsAre We…• In a War

• Likely to Fight Massed Armies / Navies

• Countering Nation States

• Dealing with a Distant, Short-Lived Problem

Or…• In a Struggle

• Likely to Fight Small Groups / Networks

• Countering Extremists (Supported by Nation States?)

• Dealing with a Threat to World Freedom

While maintaining conventional forces that can dealwith emerging world situations

Documents

Deliberative Working Document - Predecisional FOUO Supporting the Secretary’s Top Priorities Brad Berkson, Director, OSD Program Analysis and Evaluation