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.