As the debate intensifies on U.S. policy related to the defense of Taiwan, it is useful to examine when and why the United States would carry out such a mission and the potential obstacles to a successful outcome. Is the United States prioritizing national security in its resourcing and budgeting decisions? Is the U.S. military on a path to success in modernizing its equipment, processes, and capabilities to maintain a competitive edge over China? 

We may not have much time to align the answers to these questions. 

China regards Taiwan—an island democracy with 23 million citizens—as a renegade province to be folded back under Beijing’s control. The 1979 Taiwan Relations Act does not require the United States to defend Taiwan but ambiguously states Washington will maintain the capacity to do so.

It is evident that Taiwan matters to the United States. China’s control of Taiwan would give the People’s Republic of China (PRC) a forward base 150 miles off the mainland, bringing Chinese aircraft and missiles much closer to vital trade routes and important U.S. allies like Japan and Australia. 

As China’s fifth most important trading partner, control over Taiwan would provide Beijing with an important economic asset linked to a strong technology industry. Taking Taiwan would provide the PRC with semiconductor factories that are critical to microelectronics. 

The U.S.-China Economic and Security Review Commission’s most recent annual report to Congress, released in November 2021, finds that decades of improvements by China’s armed forces “have fundamentally transformed the strategic environment” and weakened military deterrence across the Taiwan Strait, diminishing the U.S. position.

Indications are that the moment of maximum danger in a conflict with China over Taiwan may be only a few years away.

Barriers to Success

If, as noted above, Taiwan matters to the United States and China’s capability to act against Taiwan is improving while the timeline for a potential action by China is shrinking, we must ask if the United States is properly resourcing the military to defend Taiwan if called upon to do so. Is the U.S. military currently set up for success? 

The short answer is no. 

The U.S. military currently has four key barriers to success. 

First, defense is not a priority for the current administration, demonstrated by the fiscal year (FY) 2022 budget request.

Second, delays in annual appropriations and authorizations reduce buying power, hinder readiness, and delay the pursuit of a competitive advantage.

Third, the definition of defense has been expanded to allow for diversion of defense resources and diffusion of attention to non-defense priorities. 

Fourth, institutional and statutory rules and processes do not promote speed and agility in testing, procuring, and integrating modern capabilities. 

The administration, Congress, and the Department of Defense created these barriers to success. So, they are also fixable.

Defense Is Not a Priority

When the Office of Management and Budget (OMB) released the FY 2022 discretionary top lines for defense and non-defense departments and agencies in early April 2021, it was clear that defense was not a priority. The OMB press release on the subject did not even mention defense. The discretionary totals contain a nearly 16 percent increase for domestic activities, while the proposed defense number would not have kept pace with inflation, which at the time was much lower than it is now.

Upon release of the fiscal year 2022 president’s budget request to Congress in late May, the lack of attention to defense was further emphasized. The White House budget summary mentions no actual military capabilities.

The Biden administration’s proposed $715 billion Department of Defense (DoD) topline would not keep pace with inflation. As inflation skyrockets and the defense budget stalls, officials are cutting investments essential to the readiness of our national security apparatus.

Why is this a problem? 

Since 2000, the DoD has spent about twice as much of its expenditures on operations and maintenance (O&M) costs as it did to procure new capabilities. As platforms age, their O&M costs skyrocket; and U.S. equipment is rapidly aging. The average aircraft in the Air Force is thirty-one years old, and some fleets average sixty years old. The majority of the Navy’s classes of ships are no longer in production. Additionally, in 2020, maintenance, refueling, and complex overhaul led to less than half of the carrier fleet available for deployments.

In contrast, the Pentagon recently reported that China’s People’s Liberation Army Navy had amassed the largest fleet in the world. It cited the acceleration of Chinese nuclear warfare development in its annual report to Congress on military developments involving China, and called a recent test-firing of a Chinese hypersonic missile “a near-Sputnik moment.”

Real Growth for Defense Spending

The solution to this first barrier is that the administration should support the recommendations of the National Defense Strategy Commission by providing 3-5 percent real growth for defense spending. It needs to be real defense spending that will result in readiness and modern military capacity and capability.

The Democrat-led Congress even acknowledges the dangerous lack of attention paid to the national security budget. The FY2022 National Defense Authorization Act increased the DoD budget by $25 billion, or 3 percent over the requested amount. With appropriations still pending, the final FY2022 top line is unknown, but the Senate has also proposed increasing the budget by $23 billion over the request. The increases provided by Congress are admittedly a bit of a mixed bag since Congress has been guilty for years of diffusing defense resources to non-defense spending. Still, the signal that increases in defense spending are necessary is clear. 

Within this top line, resources should be aligned to the readiness of the current force—to include incrementally integrating new capabilities into that force—and procurement of new capabilities that should be emerging from research, development, test, and evaluation (RDT&E) investments made over the last five to ten years.

The FY2023 budget should request real growth for defense and recognize that the United States is a global power that must be able to engage simultaneously in multiple areas.

Killing Continuing Resolutions

Second, delays in annual appropriations and authorizations reduce buying power and hinder the pursuit of competitive advantage.

The DoD is currently operating under a continuing resolution (CR) through February 18, 2022, the second so far for this fiscal year. CRs essentially extend last year’s funding and priorities into the new year to avoid a lapse in appropriations and government shutdown when Congress can’t agree on regular annual spending. When the current CR ends, DoD will have operated under temporary, damaging funding extensions like this one for nearly 1,400 days during the last twelve years.

CRs are expensive and damaging to national security. The longer the CR, the more the damage. In this way, and as noted frequently during Congressional testimony, CRs compound the harm already done by insufficient top lines.

Secretary of Defense Lloyd Austin explained in a statement that a full-year CR for FY 2022 “would cause enormous, if not irreparable, damage for a wide range of bipartisan priorities.” He said: 

The department’s efforts to address innovation priorities such as cyber, artificial intelligence and hypersonics programs would be slowed. … It would misalign billions of dollars in resources in a manner inconsistent with evolving threats and the national security landscape, which would erode the U.S. military advantage relative to China, impede our ability to innovate and modernize, degrade readiness, and hurt our people and their families. And it would offer comfort to our enemies, disquiet to our allies, and unnecessary stress to our workforce.

During floor debate on the current CR on December 2, 2021, members of Congress repeatedly conveyed the importance of full-year funding. They stated that passing annual appropriations is their “most basic constitutional responsibility.” Industry has also conveyed the destructive nature of CRs through letters that members included in the congressional record. But despite clear comments on the cumulative, damaging nature of CRs to national security, the industrial base, uniform personnel, military competitiveness, and local communities across the country, and the unambiguous acknowledgment that enacting annual appropriations is Congress’ primary constitutional responsibility, members spent most of the recent debate in Congress blaming each other for not getting the job done. 

Meanwhile, time ticks by, and the lack of sufficient and appropriately placed resources further inhibits the military capability necessary to carry out the nation’s strategy or defend Taiwan.

The solution to this second barrier is straight forward. Congress must start taking its responsibility to pass annual appropriations on time seriously instead of relying on continuing resolutions almost every fiscal year.

Defining National Security

Third, non-defense spending in the defense budget continues to grow as definitions are expanded and resources and management attention are diverted to non-defense priorities. 

Public perception is that the DoD budget is growing exponentially, and it only pays for military capabilities and operational spending. This is misleading. For years, the defense budget has included funding for programs and activities that do nothing to advance military capability or increase national security. 

The Biden administration is redefining what is included in “national security.” It has further increased the amount of non-defense spending in the defense budget, compounding the problems associated with the declining defense top line and unreliable funding, and diffusing the U.S. ability to successfully carry out a defense of Taiwan mission. 

The secretary of defense’s concept of Integrated Deterrence, which he indicates will be foundational to the revised National Defense Strategy, furthers the subservience of hard power and military capability—which should be his primary function in backing foreign policy.

Every time a new mission is assigned to DoD, it must manage, plan, execute, assess, and report on the activity. This draws personnel, management focus, and resources, beyond those appropriated for the function, away from what should be its core mission: preparing for, fighting, and winning America’s wars. 

For example, the DoD spends more on the Defense Health Program than on new ships. It spends almost $10 billion more on Medicare than on new tactical vehicles. It spends more on environmental restoration and running schools than on microelectronics and space launch combined.

Solving this barrier by redefining national security, and therefore what belongs in the DoD budget, to focus on military capability should be a U.S. priority. Removing lower priority expenses or transitioning their funding to another, more appropriate department or agency will result in a real sense of what defense costs and make room in the budget for military readiness, modernization, and operations, including those critical to Taiwan efforts.

Time Is of the Essence

Fourth, institutional and statutory rules and processes do not promote speed and agility in testing, procuring, and integrating modern capabilities. 

The United States must compete with China and any other adversary that threatens U.S. national security. With the small wiggle room DoD has left after the aforementioned obstacles have wreaked havoc on its budget, the department must spend its funding as economically as possible. Barriers to doing so come in many forms, including incentive structures that support bureaucracy and risk-aversion over innovation, agility, and speed; legacy and diverse business systems that don’t communicate; and general stagnation and opposition to creative change. 

The ability to integrate and operationalize new technologies will likely determine success on the future battlefield. Unfortunately, technology companies find it difficult to work with the DoD. With technology solutions being ideal for defense adoption, many start-up firms decline to enter or quickly exit the federal market. DoD needs to maintain access to these cutting-edge businesses to ensure that the warfighting capabilities it delivers are relevant and remain relevant. 

Transforming future concepts of operations into actionable programming guidance will require a new construct that abandons the legacy lifecycle funding model where a technology slowly moves from research, development, test, and evaluation to procurement and concludes with operations and maintenance. Instead, the budgeting process needs to support timely movements of funding to capture technology solutions and move them quickly from concept to a fielded capability. This approach also forces a reevaluation of how DoD conducts oversight and management.

The seemingly immense changes necessary to solve this fourth barrier and modernize how DoD operates can be made more manageable by adopting an acquisition approach built around evolutionary innovation. This will require leadership, cultural change, and funding lines that are flexible and responsive to rapid iterative development, testing, and fielding.

To seize the opportunities of an evolutionary approach to modernization, the Pentagon needs three things.

First, it needs stable lines of funding that can accommodate the open-ended nature of an evolutionary development process and provide current year funding for any type of appropriation aligned with joint and combatant command needs.

Second, it needs business systems that can track metrics for an information-age military capability to keep up with the speed of continuous development and enable effective oversight. The Advancing Analytics capability, initially developed to support the DoD’s full financial statement audit, can meet this need when fully implemented.

Third, it needs congressional support to modernize the Planning, Programming, Budgeting, and Execution (PPBE) process to match acquisition reforms made over the last decade with agile, responsive, and transparent funding not tied to a specific stage in development or fiscal year. The recently enacted NDAA provision that requires a commission to look at this issue, if structured correctly, should help shed light on what works, what does not work, and specifically what changes will have the most positive impact. 

Conclusion

Any defense of Taiwan planning must fix the above four barriers to succeed. 

Proper budgeting is essential in the success of all U.S. military priorities. The defense budget must account for inflation, which increases the cost of must-pay bills, and it must support the modernization necessary to remain competitive. 

Congress should prioritize and hold itself accountable for executing its fundamental constitutional responsibility of passing annual appropriations bills. We can’t spend good intentions or fall back on blaming others when it comes to defense priorities. 

Defense should remain focused on its primary and core function, deterring, preparing for, and winning America’s wars. Administration officials and Congress should remove non-defense spending from the defense budget to make clear what the nation is really spending for its security and to support federal priorities within other agencies with corresponding missions. 

And finally, DoD and Congress should shake off the chains of the past in the way it plans, programs, budgets, and executes the sustainment and advancement of the world’s best fighting force. 

With these four barriers solved, the United States exponentially increases its ability to succeed in all future endeavors, including defending Taiwan.

Elaine McCusker is a senior fellow at the American Enterprise Institute (AEI). She is a former Acting Under Secretary of Defense (Comptroller). 

Emily Coletta is a project coordinator and research assistant at AEI.

Image: Flickr