As details continue to emerge about the Obama administration’s plans to slash defense spending and revamp America’s global security posture, U.S. allies are worried that their defense relationships and arms-trade agreements now hang in the balance.

In January, President Barack Obama announced $487 billion in cuts to the Pentagon’s budget over the next decade, which will include layoffs and limiting pay raises for personnel, redeployments of U.S. military assets, and cancellations or suspensions of several arms procurement programs.

Among the major changes abroad will be the pullout of two brigades from Europe, where they have served since the end of World War II. Currently, the U.S. military has about 80,000 troops based in Europe from all branches of the military. Cutting two Army brigades and the noncombat units that support them will result in a reduction of about 10,000 to 15,000 soldiers, according to the Washington Post.

However, Defense Secretary Leon Panetta told the Post in January that as the U.S. Army transitions to having battalions rotate around the world for trainings and temporary force increases, Europe may actually see more American boots on the ground.

“As a matter of fact, they will probably see more of the Americans under the new strategy because the brigades that were there were actually fighting in Afghanistan and weren’t even there…. What you are going to have is two [brigades] plus this large rotational presence that is going to be there,” he explained.

Credit: U.S. Navy photo / Lockheed Martin Corp.

The U.S. Navy variant of the F-35 Joint Strike Fighter aircraft conducts a test flight over the Chesapeake Bay in 2011.

In fact, despite the “cuts,” Pentagon spending will actually stay fairly stable when adjusting for inflation, climbing to $567 billion by 2017 (for reference, the fiscal 2011 base budget is $531 billion). And despite troop reductions, the size of the Army and Marine Corps will still be slightly larger than it was in 2001.

But after a decade of almost unlimited defense growth, the trend is clearly reversing. Overall, the Pentagon is expected to cut the Army from its current 560,000 active soldiers to about 490,000 as it repositions the military as a leaner, more agile force geared toward special ops, cyber-warfare, surveillance and intelligence, while being focused more on the Middle East and Asia than Europe. In November, Obama announced that the United States would deploy 2,500 Marines to Australia, with more Pacific deployments likely to come.

However, U.S. allies may be more impacted by changes to the Pentagon’s procurement plans than its soldier deployments.

Though critics questioned the need, the Navy will keep its prized 11 aircraft carriers for now, but it will lose 16 new vessels from its 30-year shipbuilding plan, retire seven cruisers and cut production of two littoral combat ships. Most of the ships excluded in the cuts will likely be the high-speed HSV-2 “Swift” vessels that defense analysts say are key to supporting the U.S. naval presence defending Taiwan from a potential Chinese strike. Still, some critics say the Pentagon plans to cut its naval presence counteract its new Asia-centric strategic posture.

Meanwhile, in the skies, the Joint Strike Fighter (JSF) project to produce a series of next-generation F-35 fighter variants is currently poised to be the most expensive arms deal in history, with a total operating cost estimated at around $1 trillion (that includes the purchase price tag of $382 billion and $650 billion to operate and maintain the aircraft).

Therefore, it has also become the biggest target of those hoping to trim the U.S. defense budget.

A commission formed by Obama to study ways to cut the nation’s debt recommended that the Pentagon save $9.5 billon by replacing half of the 2,443 planned F-35 purchases with upgrades to the existing fleet.

As officials begin to write up the Pentagon budget for the fiscal year 2013, Defense Secretary Panetta emphasized in January that the administration remains “committed” to the JSF project, but that it would have to be slowed “to complete more testing and make developmental changes … before buying in significant quantities,” according to Defense News.

The F-35 program, run by Lockheed Martin, has been plagued by a string of technical setbacks and delays, although Lockheed executives say they’re making progress on overcoming the various development problems.

“The F-35 is intended to be the primary fighter-attack aircraft for the Air Force and the Marine Corps and a major part of the Navy’s future carrier air wings,” wrote AOL Defense’s Otto Kreisher. “The three services are expected to buy 2,443 F-35s, and at least 10 other nations are partners in the program or have expressed interest in buying the fighter.”

In fact, although the United States is footing the majority of the $40 billion bill to develop the F-35 fighter, a number of American allies are also heavily invested in the project. Together, the United Kingdom, Italy, the Netherlands, Canada, Turkey, Australia, Norway and Denmark have agreed to contribute $4.375 billion to the project’s development. Furthermore, they and others are set to produce components for the 3,100 F-35s currently envisioned to be built.

Turkish company Kale Aero has already agreed to invest $150 million to upgrade one of its factories as part of a contract to build about 300 parts for the F-35 in a joint venture with American company Pratt & Whitney. At the deal-signing ceremony, Murad Bayar, Turkey’s chief defense procurement official, said the country’s aviation industry had already won $7 billion to $8 billion in JSF subcontracts.

Although Italy is among the few contract partners that has not purchased test aircraft for the development phase, its airbase in Cameri has been named as an assembly and maintenance facility for F-35 variants employed by allies — a potentially lucrative arrangement for the country.

Japan has also bought into the program to make the F-35 the Western allies’ standard-issue fighter moving into the 21st century. Although its domestic arms export ban officially made it unable to participate in the development of the F-35, Tokyo agreed in December to buy 42 F-35 jets for around $8 billion.

Canada in particular is keen to see the F-35 development stay on track, without any major cuts. America’s northern neighbor has invested heavily in the project, with plans to buy 65 of the next-generation stealth fighter jets for $9 billion as part of its effort to maintain an integrated air defense with the United States under the joint North American Aerospace Defense Command.

“Let me make very clear that the United States is committed to the development of the F-35 and to a cooperative relationship with the F-35 with our Canadian friends,” Defense Secretary Panetta said at a joint news conference with his Canadian counterpart, Peter MacKay. “We need to have this. It’s true for us. It’s true for our partners — and not only Canadians but others who are going to work with us and participate with us in the development of the … F-35.”

The F-35 fighter has been under development since the early 2000s and boasts advanced fifth-generation stealth technology, which makes it virtually undetectable by most modern radars. However, the project has come under intense controversy in Washington and among U.S. allies for its soaring costs, now expected to top $150 million per unit. At a time when European governments have been squeezed to reduce spending, many U.S. allies have wavered in their commitment to the costly project. However, diplomatic cables made public by WikiLeaks revealed that Washington has utilized significant diplomatic pressure to keep them on board.

Mackenzie Eaglen, a resident fellow at the American Enterprise Institute, defends the F-35, pointing out in a recent article that over the last decade, the Pentagon has spent $38 billion to produce just 220 fighters, while during the Reagan administration’s military buildup, $68 billion was spent on 2,063 fighters.

Credit: DoD photo /
Mass Communication Specialist 3rd Class John Grandin, U.S. Navy

The aircraft carrier USS Carl Vinson, right, conducts a replenishment at sea with the fast combat support ship USNS Bridge in the Pacific Ocean on Jan. 2, 2012. Despite steep cuts to the defense budget, the Navy will keep its prized 11 aircraft carriers, in part to maintain a military presence in the Pacific.

He contends that the JSF program is “by far the most important program to the health of the American industrial base and many small businesses around the country.”

Furthermore, he argued, cost overruns and squeamish legislators combined to prevent the U.S. Air Force from modernizing at all over the last two decades, instead forcing it to rely on a small number of expensive aircraft and a motley of older models. In the end, he said the F-35 and other military modernization plans may go the way of the F-22 — 750 of which were originally planned to be built, with that number gradually shrinking to 187 by the time Obama put an end to the program.

However, Dominic Tierney, author of “How We Fight: Crusades, Quagmires, and the American Way of War,” says the F-35’s exorbitant costs outweigh its benefits, which don’t amount to much in a world of complex asymmetric conflicts against weaker opponents, where manpower and intelligence are more critical.

In an article for the Atlantic last year, he wrote that the lifetime costs of the F-35 amount to more than the entire GDP of Australia. He also noted that within the next decade, the United States hopes to have 15 times as many modern fighters as China has, and 20 times as many as Russia.

“The F-35 is the most expensive defense program in history, and reveals massive cost overruns, a lack of clear strategic thought, and a culture in Washington that encourages incredible waste,” Tierney argued.

“Money is pouring into the F-35 vortex. In 2010, Pentagon officials found that the cost of each plane had soared by over 50 percent above the original projections. The program has fallen years behind schedule, causing billions of dollars of additional expense, and won’t be ready until 2016. An internal Pentagon report concluded that: ‘affordability is no longer embraced as a core pillar.'”

Meanwhile, America’s European allies also face a cash crunch — and an even more vexing dilemma.

Last April, after the Netherlands announced extensive defense cuts despite a $144 million renewed commitment to the second phase of the F-35’s development, defense analyst Daniel Darling wrote in the Faster Times that regulations are pulling the budgets of NATO-EU countries in opposite directions.

NATO members are required to allocate at least 2 percent of their GDP toward defense, while the European Union requires its members to keep their budget deficits below 3 percent and their national debt below 60 percent of GDP.

“Juggling the two (albeit toothless) requirements has proven difficult for virtually every dual EU-NATO member in the best of times; coming off a banking crisis, an economic recession and government stimulus measures, such a task is rendered that much more difficult,” Darling wrote.

He said these high costs and economic pressures mean fewer overall aircraft for NATO countries, and a reduction in the bloc’s capability to engage in several small missions at once — as the alliance members did in 2011, with several fielding aircraft in Iraq, Afghanistan, Libya and against Somali pirates in the Gulf of Aden.

NATO’s European members have long been criticized by U.S. officials for not carrying their weight. Shortly before stepping down as defense secretary, Robert Gates described the security bloc’s future as “dim” and “dismal” if members did not shoulder more of the financial burden.

“The blunt reality,” Gates warned, “is that there will be dwindling appetite and patience in the U.S. Congress — and in the American body politic writ large — to expend increasingly precious funds on behalf of nations that are apparently unwilling to devote the necessary resources or make the necessary changes to be serious and capable partners in their own defense — nations apparently willing and eager for American taxpayers to assume the growing security burden left by reductions in European defense budgets.”

NATO Secretary-General Anders Fogh Rasmussen said at the Munich Security Conference last month that defense cuts on both sides of the Atlantic call for closer cooperation and increases in joint training. Rasmussen also made an increased push for the Smart Defense concept, which calls on NATO member states to focus on developing their militaries in ways that complement each other’s capabilities rather than building expensive redundancies within the alliance.

For example, he explained at a press briefing previewing the Munich talks that small countries like the Baltic states, which do not have the budgetary means to invest in high-tech jets or anti-missile platforms, could instead count on coverage in those areas from NATO allies, while specializing in building effective ground forces for the alliance’s collective defense.

A NATO official told Defense News that the long-term Smart Defense approach will be “at the heart” of a joint NATO declaration at the alliance’s May summit in Chicago, saying he expects “20 to 30 projects on which groups of nations will have committed to go forward.”

Meanwhile, in a press release, Lockheed Martin, the primary defense contractor involved in the JSF project, said it will work closely with the Pentagon’s customers “to understand the details of recommendations and the impacts on our business” in the changes to the Defense Department’s 2013 budget.

Eaglen of the American Enterprise Institute though was much less hopeful for what the economically restrained future might bring, saying the new budget “will surely kill what little is left of the U.S.’s modernization agenda.”

About the Author

Nicholas Clayton is a contributing writer for The Washington Diplomat.