Behind the Army’s Cash Crunch

Our Army gets $168 billion a year to train and fight. So why do its chiefs keep complaining about a cash crunch? The Wall Street Journal’s Greg Jaffe explains, in maybe the best article on the subject to date.
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From 1990 to 2005, the military lavished money on billion-dollar destroyers, fighter jets and missile-defense systems. Defenders of such programs say the U.S. faces a broad array of threats and must be prepared for all of them. High-tech weaponry contributed to the swift toppling of the regimes in Iraq and Afghanistan, but has been of little help in the more difficult task of stabilizing the two countries.
Of the $1.9 trillion the U.S. spent on weaponry in that period, adjusted for inflation, the Air Force received 36% and the Navy got 33%. The Army took in 16%, it says. Despite the wars in Iraq and Afghanistan, both dominated by ground forces, the ratio hasn’t changed significantly…
It may seem hard to believe that a country which allocated $168 billion to the Army this year — more than twice the 2000 budget — can’t cover the costs of the wars in Iraq and Afghanistan. But the two pillars of the Army, personnel and equipment — both built to wage high-tech, firepower-intensive wars — are under enormous stress:
The cost of basic equipment that soldiers carry into battle — helmets, rifles, body armor — has more than tripled to $25,000 from $7,000 in 1999.
The cost of a Humvee, with all the added armor, guns, electronic jammers and satellite-navigational systems, has grown seven-fold to about $225,000 a vehicle from $32,000 in 2001.
The cost of paying and training troops has grown 60% to about $120,000 per soldier, up from $75,000 in 2001. On the reserve side, such costs have doubled since 2001, to about $34,000 per soldier.
At Fort Knox, Ky., the cash crunch got so bad this summer that the Army ran out of money to pay janitors who clean the classrooms where captains are taught to be commanders. So the officers, who will soon be leading 100-soldier units, clean the office toilets themselves.
“The cost of the Army is being driven up by [Iraq and Afghanistan]. That’s the fundamental story here,” says Brig. Gen. Andrew Twomey, a senior official on the Army staff in the Pentagon. The increased costs are “not from some wild weapons system that is off in the future. These are costs associated with current demands.”
Senior Army officials concede they mistakenly assumed prior to the Iraq war that if they built a force capable of winning big conventional battles, everything else — from counterinsurgency to peacekeeping — would be relatively easy. “We argued in those days that if we could do the top-end skills, we could do all of the other ones,” says Lt. Gen. Thomas Metz, the deputy commander of the Army’s Training and Doctrine Command. Iraq has proven that guerrilla fights demand different equipment and skills. “I have had to eat a little crow,” says Gen. Metz…
The Humvee stands as a metaphor for the problems the Army faces. First fielded in the early 1980s, it was designed to ferry soldiers around behind the front lines of a conventional war. In recent years, the vehicle, which troops drive on the streets of Iraq, has been modified countless times. The Army has bolted layers of armor onto it to protect troops from roadside bombs. It has added sophisticated electronic jammers, rotating turrets, bigger machine guns, satellite navigational systems and better radios.
The result is a Humvee that is much better than the version the Army took to Iraq in 2003. But the add-ons have driven up its cost. The modified vehicle is top heavy and tends to tip over at high speeds. Army officials say they can’t add more weight without overwhelming the engine or breaking the axle.
“The Army recognizes that the Humvee has reached a limit of our ability to improve it for the current fight,” Gen. Speakes says.
What the Army says it really needs is an all-new vehicle, designed to better withstand roadside bombs that have become part of life in Iraq. But such a vehicle likely won’t be ready until 2010 or 2012, Army officials say. In the interim, the Army wants to buy something on the commercial market — South Africa, Turkey and Australia all make alternatives. Yet it’s not clear whether the Army, which is struggling to equip the current force, has the money.

  • Cranky Observer

    Well, that is what happens when you practice dishonest budgeting in any large-scale endeavour. I have written letters to my 3 congresspersons in each of the last three years asking that the military budget be handled in an open, above-board manner with (1) a proper folding of the Iraq costs into the Army’s expense budget (2) no “supplementals” to hide further Iraq costs (3) proper depreciation accounting for the equipment being burned up (4) approprate pay raises for service personnel and accrual for VA costs (5) and oh yeah, a tax increase to pay for all this as per WWII.
    The response each year from each of them was a blast of political “staying the course; fighting them over there; support the troops” rhetoric with zero mention of honest budgeting.
    Now the consequences come home to roost. My guess is that the services are being told to defer every possible repair and replacement expense until 2009 so that the next administration can take the blame.
    Cranky

  • PresidenToor

    So, they have this HMMVV it was cheap.
    Then they put a bunch of stuff on it that was necessary.
    Now it’s to heavy, expensive, and downright a hazard.
    But they spent all them money putting stuff on it.
    So now they have no money to replace it.
    Talk about foresight.
    All militaries should be ever-evolving. Not stagnant, that’s why the HMMVV is a craptastic vehicle. When the army had no war to fight the evoloution of the HMMVV became stagnant while satellite navigation, turret systems, elec. jamming, and what not all grew up around it. If the army really wanted a vehicle they could design and build one anywhere between 90 days to a year, but oh wait they have no money.
    It’s true you can’t predict wars, but it sure doesn’t hurt to try, or at least have the design in some vault somewhere.

  • Byron Skinner

    Good Evening Folks,
    This article in todays WSJ is most excellent and is must reading by anyone who has an interest in the budget process and the DoD.
    ALLONS,
    Byron Skinner

  • Ranger Jay

    “What the Army says it really needs is an all-new vehicle, designed to better withstand roadside bombs that have become part of life in Iraq.”
    Umm, I think we already have a design for such a vehicle. It’s called a “tank,” in some circles.

  • Robot Economist

    Ranger - Good point, but tanks are huge, hard to drive and require lots of flat, relatively obstacle-free space to run on. It’d be more expensive to convert every light and mechanized infantry BCT into an armor BCT. On top of that, tanks still wouldn’t offer protection against shaped-charge projectiles (RPGs and some mortars) or IED attacks from below (make-shift mines).
    Whatever happened to all of that early Bush administration rhetoric about “capabilities-based planning”? I must be gullible in my youth to believe force planners would take a more holistic approach to procurement - especially after 9/11.

  • Curt Swanson

    “…the cash crunch got SO BAD this summer that the Army ran out of money to pay janitors…So the officers, who will soon be leading 100-soldier units, clean the office toilets themselves.”
    OMG…how can this possibly be? Is this the state of our Army leaders today, actually having to clean up a mess they made themselves. This should be a good lesson to these young commanders in how to conduct military operations. These junior officers should consider it character building, while saving the American taxpayer a few dollars.

  • Chuck D.

    Amazing. Whatever happened to “We’re going to pay for Iraq’s freedom with Iraqi oil” That was a novel idea.
    Quote, ” The cost of basic equipment that soldiers carry into battle — helmets, rifles, body armor — has more than tripled to $25,000 from $7,000 in 1999″
    I’m all for supplying our Military with the most up to date technology and equipment. They deserve the absolute best equipment without a doubt, but gouging for the sake of the economy I don’t agree with this. It’s our tax dollars, and there needs to be accountability.
    For those of you that sell products to the Government, check out the costs of goods on any GSA, NASA, or AFWAY schedule. The government pays three to four times more for the same electronic goods that can be found in retail stores such as Wal Mart, and the products are the same quality.
    Who’s watching the store?
    I’m going to say this again. Whatever happened to “We’re going to pay for Iraq’s freedom with Iraqi oil”.

  • Jeff Moon

    What’s new!!
    It seems to me that the services for the most part either fight the last war or history just seems to repeat itself. Case in point the current Iraq war has a lot of same problems as the Vietnam war,IE corrupt government fractional fighting and the troops stuck inthe middle again.
    Jeff Moon

  • Major Riptide

    “‘…the cash crunch got SO BAD this summer that the Army ran out of money to pay janitors…So the officers, who will soon be leading 100-soldier units, clean the office toilets themselves.’
    OMG…how can this possibly be? Is this the state of our Army leaders today, actually having to clean up a mess they made themselves. This should be a good lesson to these young commanders in how to conduct military operations. These junior officers should consider it character building, while saving the American taxpayer a few dollars.”
    Posted by: Curt Swanson at December 14, 2006 04:15 AM
    As we now see the Army offering $20,000 a piece to these same Captains who are cleaning toilets at Fort Knox, I wonder if Mr. Swanson still thinks this was a good idea?
    How many of those Captains, disollusioned by repeated tours to Iraq and time away from family, only to return to Knox to clean toilets, decided to call it quits and get a new job? How many decided that their contemporaries in the civilian world didn’t have to clean toilets, much less clean toilets after risking thier lives and alienating their families for years on end?
    Now, we are faced with paying $20,000 a piece to keep them in, or watching them walk and paying on the order of $200,000 to train a new one - a new one that will not have the combat experience of the one who walked (that is gone forever).
    How may tax dollars did you really save? Did you really build some character into a young man who has endured IEDs, ambushes, and watched the guts of his men spilled across a dusty road in Iraq? Do you think you can make such a man clean toilets and teach him something?
    I would offer that your premise of both saving money and building character are fundamentally flawed. Not knowing you personally, I sincerely hope you are not in a position to influence the Army in any way.
    That’s the PC way to put it. Frankly speaking, you are and idiot and I know damn well you haven’t been downrange, so stop trying to sound smart about something you know nothing about. Stay home (like the rest of America) and let the men do the fighting.
    -Riptide