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former IAEA Director-General

Nuclear Costs to Jump, Pentagon Says
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By Kingston Reif

The Defense Department’s plan to modernize the U.S. nuclear arsenal “is a very expensive proposition” and will “roughly double” the percentage of the budget allocated to nuclear weapons for a period of time during the 2020s and 2030s, according to a senior department official.

In testimony before the House Armed Services Committee on June 25, Deputy Defense Secretary Robert Work said the cost to build and sustain new nuclear missiles, submarines, and bombers and to make needed improvements to nuclear command and control systems is projected to average $18 billion per year from 2021 to 2035 in constant fiscal year 2016 dollars.

When combined with the cost to sustain the current arsenal as the new systems are built, this will increase spending on nuclear weapons from the current level of approximately 3 percent of the overall defense budget to about 7 percent, Work said.

Work’s testimony marked the first time the Pentagon has provided cost information about nuclear forces beyond 10 years. He did not specify for how long nuclear weapons would consume 7 percent of military spending, but he said spending would peak “around 2026 and 2027.”

The projected increase “will require very hard choices and increased risk in some [non-nuclear] missions without additional funding above current defense budget levels,” Work added.

U.S. Strategic Command estimated in September 2014 that maintaining and modernizing the U.S. nuclear arsenal “will require close to 10 percent” of the Defense Department budget “for a period of time.” The command has since backed away from that number, stating that the cost is likely to be closer to 5 to 6 percent of the budget. (See ACT, April 2015.)

The Defense Department and the Energy Department’s semiautonomous National Nuclear Security Administration are required by law to submit a joint annual report to Congress that includes 10-year budget estimates for nuclear forces and their supporting infrastructure.

The most recent joint report, submitted to Congress in May 2014, projected $298 billion in spending between fiscal years 2015 and 2024 in then-year dollars, according to a July assessment by the Government Accountability Office (GAO), the investigative arm of Congress.

In the past, the GAO and some members of Congress have criticized the joint report for undercounting the cost of certain nuclear modernization programs. (See ACT, July/August 2014.) The July GAO assessment found that the May 2014 joint report was much more comprehensive than previous iterations, but said “opportunities exist to further enhance transparency.”

Bloomberg, however, reported on Aug. 17 that, apparently unbeknownst to the GAO, last year’s joint report and the 2015 version, which has yet to be publicly released, misstated the 10-year cost estimate for the long-range strike bomber program. The Air Force is developing a new nuclear-capable bomber to complement and then replace the existing B-52H and B-2A aircraft.

Whereas the May 2014 joint report included a 10-year estimate of $33.1 billion in then-year dollars for the new bomber, the Air Force is now saying the correct number should have been $41.7 billion, according to Bloomberg.

The Air Force told Bloomberg that the estimated cost of the program between fiscal years 2016 and 2025 is also $41.7 billion, a reduction of nearly $17 billion from the $58.4 billion figure cited in the original version of the 2015 joint report submitted to Congress.

In an Aug. 24 press conference at the Pentagon, Air Force Secretary Deborah Lee James said the misreporting of the bomber cost to Congress was a “regrettable error” and blamed a lack of “coordination” within the Air Force and the Office of the Secretary of Defense. James did not provide an explanation for why the two corrected estimates are now the same.

Earlier on Aug. 24, Rep. Jackie Speier (D-Calif.), the top Democrat on the House Armed Services oversight subcommittee, sent a letter to James, expressing concern about “recent reports indicating massive discrepancies” in 10-year cost estimates for the new bomber. She called on the Air Force to detail the steps it is taking “to ensure the accuracy” of future cost estimates for the program.

Amid questions about the credibility of the Defense Department’s budget estimates for nuclear weapons, an August report published by the Center for Strategic and Budgetary Assessments sought to provide a more detailed, long-term assessment of nuclear costs and put them in the context of overall national defense spending.

Written by Todd Harrison and Evan Braden Montgomery, senior fellows at the center, the report estimated that sustaining and modernizing nuclear weapons and their supporting infrastructure will cost $222-253 billion in then-year dollars over the 10-year period between fiscal years 2015 and 2024 and $836-963 billion over the 30-year period between 2014 and 2043.

Harrison and Montgomery concluded, “Although the costs of sustaining and modernizing U.S. nuclear forces are projected to grow in the years ahead…those costs will still account for a small fraction of total defense spending, even at their peak.”

The two analysts calculate that nuclear weapons will not exceed 5 percent of the total national defense budget over the next 25 years, even at the peaks of the anticipated nuclear spending bow wave in the mid-2020s. They dispute the notion that nuclear weapons impose a uniquely significant budget burden, saying, “What the United States can or cannot afford depends on the priorities set by policymakers.”

Harrison and Montgomery’s estimate is lower than the government’s projection due to different assumptions about how to count nuclear costs. For example, they attribute the bulk of the cost of acquiring and operating nuclear-capable bombers to conventional needs and only a fraction to the nuclear mission. The Pentagon includes the full cost of the bombers in its estimate of nuclear costs. 

Posted: September 2, 2015