Future spending to modernize U.S. nuclear arsenal likely to remain strong

Andrew Clevenger, Defense News
10 August 2015

WASHINGTON - Modernization costs for America’s aging nuclear arsenal will be expensive but will not exceed 5 percent of national defense spending in the coming decades, according to projections by the Center for Strategic and Budgetary Assessments.
Upgrading and maintaining the US nuclear force posture will cost more than $700 billion over the next 25 years, the CSBA’s study states. Even as annual costs exceed $34 billion in the 2020s and 2030s, they will account for 5 percent or less of overall defense spending.
With the return of spending caps under sequestration looming, some liberal lawmakers have seized upon America’s nuclear arsenal as a source of potential savings. Earlier this year, Sen. Ed Markey, D-Mass., and Rep. Earl Blumenauer, D-Ore., introduced legislation they maintain would save $100 billion, in part by reducing the number of nuclear submarines from 14 to eight, removing nuclear missions from the F-35’s portfolio, and postponing development of new intercontinental ballistic missiles (ICBMs) and the long-range strike bomber (LRS-B).
CSBA’s report concludes that cuts to the nuclear program will not provide much relief to the Pentagon, particularly over the next five years, when sequestration’s caps cut the deepest.
“Simply put, any plausible cuts would only save a very small amount of money over the next five years, when those savings are needed most,” wrote authors Todd Harrison and Evan Montgomery. “Cutting nuclear weapons is unlikely to provide enough savings to help manage the near-term resource constraints, unless the United States were to make wholesale changes in nuclear strategy and force structure—changes that are not only unlikely but could not be easily undone.”
For example, the report concludes that cutting an entire wing of 150-US based Minuteman III missiles and associated facilities, and delaying the Ground-Based Strategic Deterrent by five years, would produce only $1 billion in cost savings by the end of the decade.
Much of the spending associated with modernizing the nuclear defense program is linked to the development of new platforms whose production would likely continue even if they were not involved in nuclear missions, the report states. The Pentagon is unlikely to scale back its F-35 buys if the fighter’s nuclear missions are removed, and production of the LRS-B and Ohio Replacement nuclear-powered ballistic missile submarines (SSBNs), both major cost drivers in the coming decades, are also likely to proceed unless the US reworks significantly its nuclear strategy.
For Byron Callan, an analyst with Capital Alpha Partners, this suggests that the nuclear sector has stronger growth potential than many defense-minded investors may realize.
“Ask most defense investors what they believe are growth markets within the sector and the answers are apt to include cyber, intelligence/surveillance/reconnaissance and unmanned systems,” Callan wrote in a recent note to investors. “Modernization of the U.S. nuclear arsenal and the platforms to deliver these weapons is another growth theme and one that may be more secure from encroachment by non-traditional, commercial firms than the ‘hot’ markets usually cited within defense.”
The looming costs of modernization are a result of a multidecade procurement holiday taken by the US military, said Tom Karako, director of the Missile Defense Project at the Center for Strategic and International Studies, where he is also a fellow with the Project on Nuclear Issues.
“We’ve had an allergy to anything new. The word new was sort of a four-letter word in a post-Cold War nuclear context: No new capabilities, fewer delivery systems, no new weapons,” he said.
Karako noted that as recently as November, then-Defense Secretary Chuck Hagel called the US’ nuclear deterrent capability the “DoD's highest priority mission.” Nuclear sabre rattling by Russia reaffirms the importance of the US’ nuclear program, which serves as a kind of fire insurance, he said.
“The cavalier attitude towards our current nuclear capabilities that you sometimes see presupposes that they could be cut without damaging our deterrent security capabilities,” Karako said. “I think that’s not the case. It would be a pretty high burden to truly compensate for our nuclear deterrence with purely conventional forces. I’m not even sure it could be done.”
James Acton, co-director of the Nuclear Policy Program and senior associate at the Carnegie Endowment, and a proponent of disarmament and nonproliferation, conceded that the US will most likely keep all three legs — land, sea and air — of its nuclear triad. But the coming budget crunch, where Pentagon leaders must choose which programs to keep and which to cut, could spur a debate of the appropriate size of the nuclear arsenal, he said.
“The key question for me is one of priorities," Acton said. "To prioritize everything is to prioritize nothing, and that is essentially DoD’s strategy at the moment, to say we need everything in the nuclear enterprise, there is nothing we can do without. What I think is necessary is a serious conversation in order to identify modernization priorities and to determine strategically which systems are needed.”
The relative cost of the US nuclear program should not be used to avoid a reevaluation of what is needed in the future, he said.
“As a matter of policy, it may be possible just to say nukes only cost 5 percent, and we can just afford to pay for it all. As a matter of policy, though, I think it is much better to acknowledge there are trade-offs with nuclear and non-nuclear systems, and to try to make those trade-offs in a strategic way,” Acton said.