TRANSCRIPT AVAILABLE: Sustaining U.S. Nuclear Forces on a Tight Budget

Transcription

1 TRANSCRIPT AVAILABLE: Sustaining U.S. Nuclear Forces on a Tight Budget Events Tuesday, March 19, :30am to 11:00am Carnegie Endowment for International Peace, Root Room 1779 Massachusetts Ave, NW, Washington, DC With the sequester now a reality, the Defense budget must come down. One place to look for savings is the $31 billion the United States spends each year on nuclear weapons. The Pentagon had been seeking to build a new generation of multi-billion-dollar nuclear delivery systems, including long-range missiles, submarines and bombers, as well as extending the service lives of nuclear warheads. Now, those plans are in doubt. At the same time, in his State of the Union address, President Barack Obama said he would "engage Russia to seek further reductions in our nuclear arsenals." The administration is also revising U.S. nuclear guidance policy. Both processes could allow additional reductions in U.S. nuclear spending. Meanwhile, some Republican senators are saying they will not allow a vote on a new U.S.-Russian arms reduction treaty unless spending on nuclear weapons is increased. As the Obama administration prepares its budget submission to Congress for fiscal year 2014, the Arms Control Association (ACA) will host an expert briefing on the actual cost of the nuclear stockpile and options for responsibly reducing spending on excess nuclear weaponry in a budget-constrained environment. The panel will include: Barry Blechman, Co-Founder and Distinguished Fellow, Stimson Center Russell Rumbaugh, Director, Budgeting for Foreign Affairs and Defense, Stimson Center, and author of "Resolving the Ambiguity of Nuclear Weapons Costs" in Arms Control Today, June 2012 Tom Z. Collina, Research Director, ACA. See: "Options for Reducing U.S. Nuclear Weapons Spending, ," an ACA Fact Sheet published on March 18, 2013 for a summary of Collina's presentation. Daryl G. Kimball, Executive Director, ACA (moderator) Transcript by Federal News Service Washington, D.C. DARYL KIMBALL: Good morning, everyone. Welcome to this morning s briefing on sustaining U.S. nuclear forces on a tight budget. I m Daryl Kimball. I m the director of the Arms Control Association here in Washington, D.C. We re Page 1 of 16

2 an independent membership-based organization and we ve been around since 1971, working to outline practical policy solutions to deal with what we call the world s most dangerous weapons nuclear, chemical, biological and certain conventional weapons. And we re here today to talk about the confluence of two developments the diminishing role of nuclear weapons in U.S. national security strategy and the difficult budget environment that we re in and how the United States is going to be maintaining its shrinking nuclear force in the years ahead. As we gather here we ought to remind ourselves sometimes we forget it s been 20 years since the end of the Cold War, 10 years since the beginning of the Gulf War, and over 10 years since 9/11. And clearly nuclear weapons are playing a different and I would argue a lesser role in U.S. defense strategy. And I m just going to mention one statement from President Obama from a year ago that drives this point home as an introduction to the presentations we re going to hear in a few minutes. He said, My administration s nuclear posture recognizes that the massive nuclear arsenal we inherited from the Cold War is poorly suited for today s threats, including nuclear terrorism. Last summer I therefore directed my national security team to conduct a comprehensive study of our nuclear forces. That study is still under way. It s actually probably concluded but it hasn t been announced. He went on to say, But even as we have more work to do, we can already say with confidence that we have more nuclear weapons than we need. I firmly believe that we can ensure the security of the United States and its allies, maintain a strong deterrent against any threat, and still pursue further reductions in our nuclear arsenal. And at the same time, today the Congress and the administration put into motion military spending cuts that require serious rethinking of earlier plans for rebuilding U.S. forces in the years ahead. Carl Levin, chairman of the Senate Armed Services Committee, said on National Public Radio just a few days ago that we can make some major reductions in the nuclear program. So today we are going to discuss how and why those reductions can be achieved. And we re going to start with remarks from two of our colleagues from the Stimson Center, which I should note recently received a MacArthur Foundation Award for Creative and Effective Institutions. So you ve got two semi-geniuses here speaking to you. (Laughter). And I mention that in part because the Arms Control Association won the same award two years ago, so we ve got a lot riding on our shoulders here to figure out these problems, a lot of expectations to live up to. So first we ll hear from Stimson co-founder Barry Blechman. He s going to be reviewing some of the national security rationale for further reductions in U.S. and Russian arsenals. Then we ll hear from Russ Rumbaugh who is the director of Stimson s Defense Budget Program, who is going to provide an updated look at some of those earlier, well-researched estimates on the costs of U.S. nuclear weapons programs to the U.S. taxpayer. And those earlier findings were summarized in an article that appeared last year in Arms Control Today, called Resolving the Ambiguity of Nuclear Weapons Costs. And then we ll hear from Arms Control Association s own research director, Tom Collina, and he is going to be outlining our newly updated and more detailed description of some options that we believe that Senator Levin, members of Congress and the administration should consider in the months ahead for reducing U.S. nuclear open spending. And then after each person speaks for about 10 minutes or so we ll take your questions, get into some discussion. So with that, Barry, I invite you to come up here if you d or you could stay there if you really want to. But come on up. Thanks for coming. BARRY BLECHMAN: Well, thank you, Daryl. Page 2 of 16

3 I m the theory guy so I m going to leave the facts to my colleagues and just throw out some ideas here, because deterrence and calculating requirements for deterrence for nuclear weapons is strictly in the realm of theory. It s not based on any physical principles. It s based on speculation about what might be required to deter a particular national leader in a particular circumstance. If you look at Israeli and U.S. policy toward Iran, apparently no number of nuclear weapons would be sufficient to deter an Iran with even one nuclear weapon. However, since the country with the largest number of nuclear weapons, the only one that has anything comparable to ours, is Russia, it s our theory about what s required to deter Russia that drives our so-called requirements for nuclear weapons. During the Cold War it was assumed that we needed to be able to survive a Soviet attack or actually it was assumed that we would fire under an attack or even upon warning of an attack and preempt against Soviet strategic forces, conventional military forces, war-supporting industries, and a whole range of other targets. This target set was changed somewhat during the Carter administration where industries were downgraded, leadership targets were given a higher priority. But the basic perspective was we needed to be able to fight and prevail in a protracted nuclear war in order to deter Soviet leaders from initiating such a conflict. Also important in calculating requirements is the degree of confidence we want to have that we will be able to destroy those targets. And during the Cold War the level of confidence assumed to be required was very high, which meant that we would put several warheads on high-value targets sometimes three or even four warheads. And the result was that there were literally hundreds of warheads targeted on the Moscow region and our requirements for 10,000 warheads or so overall to be able to deter the Soviet Union. Now, when the Cold War ended and we no longer confronted the Soviet Union but only Russia, some reductions were made. Russian forces were smaller than those of the Soviets and became smaller over time. Secondly we decided we probably didn t have to target countries like Czechoslovakia and other former allies of the Soviets or former parts of the Soviet Union that had become independent countries. But the basic principles still remain the same. The basic principle that still governs our calculations of requirements is this requirement to prevail in a nuclear war. Now, those requirements could be so the question is, not facing a country with an ideology that drives it toward world domination, a country which has been set back in many ways, politically and socially, a country which has changed dramatically and whose relationships with us and with European countries are completely different is does that still require this large number of nuclear weapons to deter them should we ever come into a crisis with them? We have conflicting interests with Russia, obviously, in some places, but nothing on the order of the struggle which led to the very large requirements for nuclear weapons that we saw many years ago and which still drive our force planning. Now, we could reduce these so-called requirements by eliminating certain kinds of target sets, by reducing the confidence we demand in our ability to destroy whichever targets remain, and by reducing the requirements that we respond promptly be able to respond promptly. For example, the CNO last year was asked why we required so many strategic submarines with so many warheads, and he said because he was required by STRATCOM to be able to deliver so many warheads promptly against an adversary, meaning Russia. Well, if that requirement for prompt response were reduced we could have fewer submarines because we no longer would need to maintain two on station in each ocean. I should also note reserve warheads. You know, we have 1,550 operation long-range warheads. We have more than that maybe 2,500 or so in reserves. In part these serve as a hedge against the failure of a warhead, if we discover there s some terrible technical flaw in a deployed warhead and Page 3 of 16

4 we need to replace them. But also it s driven the size of the reserve by a desire to be able to generate an even larger force during a crisis, that we could put additional warheads on our deployed weapons. And if we reduced that requirement, if we understood that was really not a very realistic need, we could certainly reduce the number of warheads we keep in reserve as well as those that we keep operational. As Daryl mentioned, the administration has looked at these questions in its NPR implementation study, once described as a 90-day study it perhaps is a 90-year study at this point until that study is completed and released and directions given to targeteers, to budget planners, to arms control negotiations negotiators, there will be no tangible change in the U.S. nuclear posture. So it s essential in my view that that study be completed and released and turned into operating instructions to the bureaucracy. Thank you. MR. KIMBALL: Thank you very much. And now we ll hear from Russell Rumbaugh, who is going to talk about the other side of this equation, which is estimated costs of our nuclear forces. Russell? RUSSELL RUMBAUGH: Well, thanks for having me. Thanks for coming. When I was asked to present today they used the phrase update my numbers from the study we did. I didn t have the heart to tell them that because of all the showdowns on the Hill there s actually not any new numbers. There s not an update going on. (Laughter.) Most of the time I kind of whine and say my job is a lot more difficult as we go from three-month showdown to three-month showdown, but it turns out when you don t have to redo an entire study, maybe sometimes these showdowns have an advantage to me. Anyway, we did this study last summer or released it last summer, trying to get at, as we said, resolving ambiguity, trying to really lay out what are we talking about and what costs can we apply for the different parts of the nuclear enterprise. You ll notice in my title I ve already dropped ambiguity to try to acknowledge maybe we didn t quite succeed as much as I hoped to. Nevertheless I m still pretty proud of it and do think this is about as good as you can get estimate of what we spend on nukes. We were primarily interested in offensive strategic nuclear forces or, if you ll forgive me the crassness of it, nukes that kill people. There s other things you could certainly include: the cleanup costs from our original nuclear weapons or our atomic weapons program; the nonproliferation costs we use to try to prevent these weapons from going elsewhere; and missile defense defending against others nuclear weapons. But even if you leave those out and just focus on this crass offensive side, there s still three problems. The first and easiest is two agencies own it. DOE owns the warheads; DOD owns the delivery systems. The second one that really flounders for people and why it came to us is DOD s really big, so big it ruins my graphic and I have to put in this little inset just to try to give you a sense of, you know, the big moon that is DOD or the big planet that is DOD with its tiny little moons called the Department of Energy rotating around it. And that opens up this ambiguity, right? How much of DOD should you include? What are the nuclear costs? And the way DOD accounts for itself, the way it budgets for itself doesn t lend itself to that. So that s why, you know, you get me coming in. Finally, there s a third theoretical problem dual use. I ve got a bomber. It can deliver a nuclear weapon but it could also fly over Afghanistan and deliver a conventional force, a conventional bomb Page 4 of 16

5 to support a Special Operations force. Well, how much of that do you ascribe to nuclear weapons and how much do you ascribe to conventional forces? It s a question that doesn t have and will never have a very fine answer. It s the same bomber doing both things. This was our effort to try to lay out some of those issues. Obviously I just said it has three big problems, and solving that with one chart is probably not likely. But hopefully this illustrates it. You can see the tan is the parts we re looking at again, the strategic offensive nuclear weapons. The blue are the parts you certainly are legitimate parts of the nuclear enterprise, although we didn t look at them. And then the brown are the other parts of the agencies that we felt didn t actually have anything to do with nuclear weapons. So all of that adds up into the number 31 billion (dollars). Thirty-one billion (dollars). Not that big a deal in the sense of the defense budget, right? Less than half a percent or about half a percent. So in some sense not or, I m sorry, 5 percent. Not super big dollars, but at the same time hopefully we re not sneezing at $31 billion a year. That s still real money. Half of the money goes to DOD. Of DOD s half I m sorry. Two-thirds of that money goes to DOD. Of DOD, half of it is the delivery systems. So a third of all of our nuclear weapons costs are the delivery systems themselves the subs, the bombers and the ICBMs. RDT should probably be included in those, the way DOD accounts it, but MFP1 there is Major Force Program 1. That s how DOD displays what it calls strategic offensive nuclear weapons. But that first showed up in the 60s and has slowly but surely been eroding as a useful metric. Certainly the RDT&E and that s just for 2011 so it s pretty small RDT&E but truthfully that should probably be included in the cost of the systems themselves. Then finally you have this other stuff, and this is where we really came about. So you have the command and control. We have these satellites. Those aren t in any of the standard accounting lines for how much nuclear weapons cost, but our nuclear weapons are only as good as our ability to tell them what to do, so all that C2 counts, and as you can see it s $5 billion. Now, the way we approached this study is when everybody talks about nuclear weapons we were doing we were trying to say, OK, what if you didn t have a Department of Defense? How much do nuclear weapons cost? So we want to capture all of that underlying support cost. So what does it take to recruit and train an airman, a security forces patrolman, airman at Barksdale Air Force Base? When we added that all up, that s about $4 billion. There s a billion of that which is a billion of that which is actual operating costs the tankers to support the bombers, some special units we have to move nuclear weapons around but most of that is what it would take to keep the infrastructure running. Obviously just having a bomber is not good enough. You have to get the person to pilot the bomb and all of the other work. Thirty-one billion dollars a big number. But even then nuclear weapons costs have been fairly flat for about 15 years now, since about the mid-90s when we did get through the Cold War drawdown. They ve been fairly stable even as in the last decade the rest of the defense budget took off, doubled in size and increased by 70 percent in real terms. Nuclear weapons didn t really take off. They stayed fairly flat through all of that. Again, it s real costs, but it s mainly sunk costs things we ve already spent. And in fact, if you were going to start shutting things down you would have to offset some of those costs. At one point now getting to be a decade ago, one of the experts called it the hunt for small potatoes. (Laughs.) But today we re at a different point. So not only do we now have these nuclear weapons and you already heard Barry s reasons, without thinking of cost at all, of why we should not have so many now not only do we have reasons like Barry provided for why we don t need all of these, we re about to embark or we have now embarked on two major modernization programs. We re going to buy a new bomber and we re going to buy a new sub. Everything I just said about stable costs, about oh, Page 5 of 16

6 it s not that big a deal that s now out the door for the next decade as we take on these very, very large programs. The bomber the Air Force has said, hey, we re really going to be cost-sensitive about this. We learned our lesson from the B-2 bomber of the 90s where it ended up costing so much they only got to buy 20 of them. They really would like to have 100 of them, so they re going to make sure it doesn t cost that much. Even then there are costs. It s a bomber. It s a big platform. They say 550 million (dollars) is their target. Well, geez, $550 million per bomber, you buy a hundred of them that s a $55 billion program over the next 20 or so years. The subs are even bigger $75 billion over its lifetime, and including the first boat is going to cost is estimated to cost $12 billion itself. As you saw in the RDT&E slide, that s not very big right now, right? We re spending about 300 million (dollars) today on the bomber and we re spending about $500 million today on the sub. But over the next decade that s going to slowly it s not even going to slowly it s going to ratchet up. If you see this is our big summary table. It may not be that exciting it s not that exciting to read when you re looking at it in the report; certainly not that exciting to read on a slide. But the key takeaway is, our total over 10 years was somewhere between 350 (billion dollars) and $390 billion, and our modernization costs from these two programs not counting modernizing satellites, not counting modernizing the ICBM are 50 (billion dollars) to $60 billion. So a sixth to a seventh of what we re going to spend on nuclear weapons is on these new systems. Regardless of even if we had gotten to a point where costs weren t that pressing a need, clearly as all of the Department of Defense faces restrictions or faces austerity, reducing nukes isn t going to solve that problem. But everything is going to need to pay, so even that those sunk costs need to be get at. Now looking into the future, it s a real problem. It s this is going to become an increasing force on the entire defense budget, all from maintaining the level of nuclear forces we currently have. So with that I hopefully that gives you a sense of taking out some of the rhetoric and just give you a sense of the scale and point out this is real money and it s about to become more real money. And if you did do need the cost reason, it s there although hopefully you just listened to Barry and recognized the reality of the weapons themselves. With that, I ll turn it over. MR. KIMBALL: Thank you, Russell. All right, everybody, hold on to your wallets so that the Defense Department doesn t try to pull them out. (Laughter.) Tom Collina is going to talk about some of the options for dealing with these issues. Tom? TOM COLLINA: Thank you, Daryl, very much. And thank you, Barry and Russ, for that great setup for my part of the conversation, which to me is the fun part anyway, which is how do we go about helping the Pentagon address what is a significant challenge, which is how do you reduce the budget by up to $1 trillion over the next 10 years but do it in a smart, sustainable way that we actually can deploy the nuclear weapons that we plan to deploy. Now, the good news is that the arsenal is declining anyway as a result of the New START treaty through 2018, and possibly through another round of reductions that President Obama has said he wants to pursue with Russia but, you know, we don t know where that s going yet. But the potential for additional reductions is there. And at the same time, as Barry mentioned, the administration is changing nuclear guidance, which Page 6 of 16

7 can also have a very helpful effect in terms of reducing the number of nuclear weapons we need to maintain. But and it s a significant but the nuclear arsenal will be with us for decades into the future. And as Russ mentioned, the delivery systems are aging, so we re at this pivot point right now where the Pentagon has to reinvest in the triad, in the delivery systems. Now, in some ways this comes at a great time because these decisions haven t been made yet. They re not set in stone. And so now is the time given the arms reductions that we re seeing and the budget pressures that are building, now is the time to revisit these plans. So that s what I m going to run you all through right now. And if you didn t pick it up outside, there s a new fact sheet that we produced on these options that I m going to go through with this chart in the back. So I m essentially going to be speaking from this, so if you have it it might help you understand what I m saying. So we applied two guiding principles to looking at the Pentagon nuclear weapons plans. We looked for ways to be more efficient with how the Pentagon deploys the warheads. In other words, how do we maintain New START levels of 1,550 weapons, for example how do we maintain that but save money at the same time? And since the future need for weapons is uncertain in other words we don t know if we re going to get this next follow-on agreement or process or understanding with Russia. The future need for the weapons is uncertain so let s not buy new systems until we have to. If we buy them too soon we may wind up buying too many. So, with those two guiding principles, let s take a look at what the plans are and how we might scale them back. So, currently, as Russ has already described, if you look at submarines, for example, which is the biggest piece of the modernization budget is going to the submarines, which over their lifetime could cost upwards of $350 billion. The current plan that the Navy has is to over time retire the current Ohio class subs that are out there starting in 2027, and starting in 2042 start deploying 12 new subs to replace the ones that are aging out. And if you again apply this principle of doing things more efficiently, if you think about it, those subs are going to be deployed only half to a little more than half full in terms of the warheads that they carry. So if we re using our efficiency principle and we put those boats instead with a full complement of warheads on them rather than about half, we could go down to eight subs. So the point here is that we can save a lot of money and still deploy the same number of warheads that we planned to deploy under New START by going down to eight submarines. And over the next 10 years that saves roughly $18 billion, which to us is a nice sum. And again, you can do that without any new arms reductions, just living under the New START treaty that we already we already have today. Going down a level, looking at bombers, you know, we applied the principle of don t build things until you need them. And right now the Air Force is looking, as Russ said, to build up to 100 new bombers at a cost of upwards of $68 billion. But the current bombers we have today are good until the 2040s or 2050s, so we really don t need to start this now. So what we propose to do is delay the development of the new bomber until the mid-2020s, which basically kicks all that out of the next 10-year window and saves the $18 billion in development costs. So there s another 18 billion (dollars) in savings. One of the warheads that would go on those bombers is the B61 warhead. Most of those are deployed in Europe. Some of them are also deployed on strategic bombers. The NNSA wants to spend about $10 billion doing a life-extension of those warheads. We would Page 7 of 16

8 recommend to scale that back. The warheads in Europe, for example, may not be there a decade from now when this upgrade is done, and they can be upgraded in a much more cost efficient way than the current plans are. So we would scale that back and save $5 billion. And then in terms of the ICBMs, you know, there s the new ICBM program is just in its infancy. It s just starting up. The Air Force has put out an options paper about different ways it might go with that from underground railroad systems, which don t seem very likely, to just extending the life of the current Minuteman 3 until And so we would suggest that s the way to go, and we don t need to do this now because those missiles again will be around into the 2030s. So that s another process that we suggest be delayed out of this 10-year window. We don t know what the savings on that would be because we don t know how much it s going to cost. But certainly if we get another round of arms reductions with Russia we could cut the current force of ICBMs from the current level of about 400 down to 300 and save some money through that. And finally, if you look at the missile defense account, we got a little help here already just on Friday from the Pentagon. The Pentagon was planning to deploy the fourth phase of the European Phased Adaptive Approach, the SM3 IIB, and it just canceled that which we feel was a necessary step because the technology wasn t going to pan out anyway and because Russia had raised concerns about whether this system might threaten its long-range missiles. So it opens the door for that process to move ahead. It also saves a lot of money because we don t have a firm estimate but the National Academy of Sciences has estimated that that program to develop just to develop would have cost about $9 billion over the next 10 years. So that s a pretty significant savings from that as well. So if you take this all together, you see about 50 billion (dollars) in potential savings just under the New START treaty, without any additional agreements or understandings with Russia about $50 billion, deploying the same number of warheads that we plan to deploy today. If we get a new agreement or a new understanding with Russia, whether that be a mutual thing or however it s actually done, we could go beyond that another 8 billion (dollars) at least, and there are other categories that we didn t add in here. And in fact we re only looking at the next 10 years here. A lot of the significant savings from reductions would come beyond the 10-year window, but because we re only looking at 10 years because I think in many ways, you know, looking beyond 10 years it gets a little crazy in terms of Washington politics and who knows what s going to happen. But in terms of the next 10 years there will be additional savings as well, and beyond that potentially more. So again, I think what this shows is that arms reductions are going to save us money and can save us a lot of money if we plan it smartly and if we are efficient about it and if we don t build things too soon before we need we know how much we need. Thanks very much. MR. KIMBALL: Thank you, Tom. I hope all of that has been thought-provoking. Our goal here, as Tom said, is to provide some realistic, practical ideas for solving the problems that are ahead, making sure that we don t pursue weapons systems that we don t need and have a hard time affording. So with that let me open up the floor to questions. If you could just identify yourself, let us know who you d like to have answer the question, that would be that would be great. Anyone? Page 8 of 16

9 Yes? Q: Hi. Thank you MR. KIMBALL: And there s a microphone that Marcus will hand over to you. So thank you. Q: Hi. I m Chris Lindborg with the British-American Security Information Council. Thank you all for your presentations. It s good to see all of you today. I m just wondering, looking I know there s probably a reluctance to look past 10 years, but further down the road is there a sense of which part or leg of the triad might be the most likely to be cut or which one at least theoretically might make the most sense to take out and then leave the other two legs, or if there are any longer-term scenarios either theoretically and taking into account some of the costs and that is understandable but just, you know, on a theoretical basis, you know, as far as deterrence issues are concerned, what would be the most likely let to be cut? Thank you.; MR. KIMBALL: All right. Well, let me let me take a quick stab and then maybe Russell or Barry have some thoughts about this from a budgetary or strategic standpoint. I mean, one of the things you ll notice about Tom s presentation and outline is that you still have a triad at the end of this process. And part of the point there is that we can we believe that we can achieve significant, meaningful U.S. and Russian reductions while maintaining the triad, which in many ways is a product of inter-service rivalry and bureaucracy and history and not necessarily good strategic policy. But you can maintain that triad, avoid some of the unfortunate nuclear pork-barreling politics that you see when one or another leg of the triad is thought to be threatened. And you can achieve significant savings. And I would say that, you know, even in our own office at the Arms Control Association in the hallway we have polite arguments about, you know, which leg of the triad 25 years from now or 15 years from now could most easily and smartly be eliminated. So, I mean, we have kind of held that question in abeyance, but perhaps my colleagues from Stimson are bolder and are of some genius thoughts that they might want to offer on this issue. Barry? MR. BLECHMAN: Well, I actually think there is advantage in keeping the triad. Each leg bears some advantages. The submarines, of course, are the most survivable. But particularly if we went down to eight submarines, which I think is a good idea, myself, the ICBMs provide a hedge against some unexpected threat to those submarines. And the bombers have the advantage of permitting the president to delay the fateful decision longer than he could if he had just gave an order to fire missiles. And I think any president would want to have in many situations a person in the loop flying the mission. So the ICBMs also have the advantage of being the cheapest leg. As Tom mentioned, you can keep Minuteman alive well and through into the century at very small cost. So I d keep all three legs down to the very low numbers. MR. KIMBALL: Russell? I think one thing I d just like to ask you, Russell, that s related to this is what have been some of the considerations about the strategic bomber program and the budgetary pros and cons or the implications of pursuing a bomber that is nuclear-capable because, as you pointed out, you can still Page 9 of 16

10 build a new strategic bomber that has conventional capabilities and you can build in, with some additional marginal cost, a nuclear weapons delivery capability, or not. And so can you just offer any just thoughts on what that conversation has been in the last couple of years inside the Pentagon? MR. RUMBAUGH: Well, that certainly seems to be where the Air Force is going. They, for the first time, have said, we re going to build the conventional part of the bomber first and then worry about certifying it nuclear after we ve fielded it. In the past the nuclear mission was always the primary driver and what led why the bomber was trying to enter the force in the first place, and this time they re hoping to have the bomber developed, tested, possibly even fielded before they then go and move on to the nuclear certification. That doesn t mean the nuclear aspects the hardening and various other things to make it nuclear capable won t already be embedded, but the final decision of when to bring it in to the nuclear force has been pushed off a little bit. So I think exactly your point, Daryl, that it s more up in the air than we ve usually seen at this point in the program. MR. KIMBALL: OK. Tom? MR. COLLINA: Just the hard part about trying to save money through taking out one leg of the triad is that most of the money is in the submarines and that s probably the last leg of the triad that we will get rid of. So that forces you to look at the other legs, and as we ve said, the bombers are dual-capable so they ll probably be built even if they re not built for a nuclear mission, and the ICBMs are relatively cheap. So it s so if you re not taking out the subs, it s hard to find a lot of money in the other legs, and as I said, the subs are the least leg to be taken out. MR. KIMBALL: All right. Other questions? Yes, sir? Q: Andrew Pierre (sp). The decision to last Friday announce last Friday to cancel the SM32B Phase IV was accompanied of course by another decision, which was to increase the interceptors by 14, and I don t see that on the chart here the costs of that. So I m wondering what the tradeoff actually is with the additional interceptors. Beyond that I d be interested in the views of anybody as to whether that interceptor program makes sense in terms of North Korea and whether 14 is enough and how far we might now go in terms of reorienting our missile defense somewhat from Iran towards North Korea. MR. KIMBALL: All right. Tom, Barry, you want to take a stab? MR. BLECHMAN: You go on the cost. MR. COLLINA: On the cost actually it s they estimate, as you said, about a billion dollars to deploy the 14 additional interceptors. That compares quite favorably to just the development costs of $9 billion I m sorry $1 billion for the 14 interceptors; 9 billion (dollars) just for development of the SM32B. So this is a very good cost-saving approach from that perspective. And again, these are just development costs for the SM32B. In terms of whether we need the 14 interceptors, I mean, I would say, you know, no, we don t need Page 10 of 16

11 them. And we certainly shouldn t deploy them until they ve been tested and shown to be effective, which the administration said they would do. So we ll see how that process goes. MR. BLECHMAN: It s a you know, it s a missile, an interceptor that doesn t work against a missile that doesn t exist. (Laughter.) So there s a certain symmetry to it, that the missile hasn t they did launch one out of a silo a month ago but there was no target. Before that there weren t any tests for two years. It failed most of the tests, and those that did succeed were highly scripted. The target was going, here I am, here I am! And it managed to hit it. So it was obviously a political move to reassure the South Koreans that we wouldn t be deterred, and the Japanese, I suppose. But if it costs a lot of money, it s a waste. Q: Could I just add to that that it was also perhaps a brilliant political move. It was also perhaps a very (inaudible) because it opens up better than hitherto, the last two or three years, the prospects of arms control negotiations with the Russians. They come to see the elimination of the Phase IV as, you know, something which they can then work with. At the same time, in terms of our own Neanderthals in the U.S. Congress, it s spending more money on missile defense, which they ought to welcome. MR. BLECHMAN: Well, the problem is that it also it complicates things with China because, you know, we say Pyongyang and the Chinese think, you know, Beijing when we re talking about the target of the West Coast missile defense system. So it will just make it even harder to get China to the table. MR. KIMBALL: Well, and I think you re right, however, and Tom has pointed this out in previous written pieces lately, that the cancellation of Phase IV should address what the Russians have stated is their primary concern about the U.S. missile defense program in Europe. Of course, Russia s stated concerns have been based in part on internal politics. It s based upon their own bureaucratic politics, and we ll see if they really do shift. But you know, from a technical basis, Russia no longer has an argument to make about the 2B interceptors having strategic capabilities that could counter some of the ICBMs on Russia s western western side of Russia. And I think the early statements we re seeing out of the Russian foreign ministry in the last couple of days my guess is that they don t yet reflect a deeper analysis of how this changes the dynamics with discussions between the U.S. and Russia on missile defense cooperation and on the prospects for further Russian reductions along with the United States. I mean, we should also point out that this is another briefing in Moscow someday, but Russia faces its own budgetary strains with respect to replacing some of the aging ICBM systems that they have. And so there are strong budgetary reasons for Russia to also pursue reductions below the New START ceilings. So, other questions? Yes, in the middle, and then we ll go over here on the other side. Q: Terri Lodge, American Security Project. I d like to hear your ideas or views about ICBM modernization U.S. ICBM modernization. Do we need to modernize? In truth what are the options? Do we need to build a new warhead? What are the costs of that? There s not a lot of discussion about where we are regarding those choices. Thank you. MR. COLLINA: Thank you for the question. You know, the Air Force is in the very earliest stages of planning ICBM modernization, so they ve put out this request for proposals to get some ideas. And the range is pretty stark from, you know, building an underground subway track to have mobile ICBMs to just continuing with a life-extension of the current Minuteman III. My guess is there won t be any money to do any of the sort of adventurous ideas that they have, and Page 11 of 16

12 so we will just be continuing to modernize, as we ve been doing for decades already, the Minuteman III, and there s no reason why we can t keep doing that. So that would certainly be our recommendation, and that process can be put off outside of the 10-year budget window to create some more budget space. In terms of the warhead, my guess is that there will be some sort of a consolidation of warheads. There s two warheads that can go on ICBMs right now, and they ll probably do a life-extension of one, which will save some money. And that will happen I m not sure what the timeframe is on that, but I think that s a relatively low-budget scenario of keeping the Minuteman III and life-extending one warhead for the future. MR. KIMBALL: Barry, do you want to we had an interesting exchange about some of these scenarios. Do you want to just remind us about some of the debates before when tunnels were MR. BLECHMAN: Well, this is back this is back to the 70s again. And I love ICBM modernization because you get the craziest ideas. There was one where the asterisk built out of railroad tracks and one for each missile. The missile would sit in the middle and on warning of attack the missile would randomly choose one of the legs, dash out to the end where there was a shelter and close the door behind it and no one would know which one it was in except the missile. (Laughter.) But I agree with Tom the Air Force doesn t want to spend money on ICBM modernization. They can keep Minuteman with only modest expenditures for many decades, and that s what I suspect will happen. MR. KIMBALL: Yeah. Just think of MR. BLECHMAN: But there will be a lot of fun and games before then. MR. KIMBALL: Just think of how difficult it s been for Metro to build the silver line out to Dulles, all right (laughter) and then think about doing that for a hundred ICBMs. Question over here, please? Q: Greg Thielmann, Arms Control Association. I kind of suspect that a lot of the resistance to future cuts in strategic funding will have to do not with strategic thinking but rather with jobs. So, Russ, I wondered if you could tell us a little bit about where the 31 billion (dollars) is spent today, in which states it s concentrated. And then talk about as we move to modernization where that geographic profile will shift as more money is spent on acquisition rather than operations of the systems. MR. RUMBAUGH: Sure. First of all, I m a little skeptical that jobs is really that big a driver. At some point if a member of Congress has a large proportion of their constituents working on something, well, that s not just jobs; that s their job to represent those people. And that s certainly true for things like the subs. We build the subs in one place and it turns out they care very deeply about building the subs there, so that is a really powerful force. But that s less true for the bomber, which will not have nearly as single-point for it. And then certainly the other dynamic you have, which some of my colleagues here may be better able to speak for, is the labs themselves, which are very much geographically located and do channel political influence because of that. And that is translated into their own modernization plans which does involve infrastructure at those places. So that is a very real political consideration that is certainly coloring the debates. And I d turn it over to the colleagues for comment about that. MR. KIMBALL: Well, and one other related question, Russ, which I think is relevant here is that in Page 12 of 16

13 those shipbuilding areas of the country, you know, there s also a great deal of interest in continuing to contribute to the to rebuilding the surface fleet of the Navy. And part of the conflict within the Pentagon about the sub program is where do we spend our shipbuilding dollars. So, you know, with that in consideration, you know, 10 years down the roads, I mean, my question to you would be would the impact of building one-third fewer new SSBNs be as great if some of the same shipbuilding industries and states are engaged in, you know, new building new destroyers and other surface ships. MR. RUMBAUGH: I think your broader point is basically right partly because there s not a linear connection between how many you re building and what industry you re supporting, right? As soon as you decide to build the sub, that s the vast bulk of the investment. That s the vast bulk of the jobs. Certainly how many you build matters over time and matters a little bit in scale, but for the most part just building it will achieve most of that. I think Daryl s point is very true, especially at the Navy level. We haven t heard as much about it in the last year, but two years ago you heard this a great deal. The Navy is very aware of the pressure building these 5 (billion dollar), 6 (billion dollar) 4 (billion dollar) to 5 (billion dollar), $6 billion submarines is going to do to their shipbuilding budget, and they re very aware that if they have to buy those at a time when the defense budget is being squeezed, it s their other ships that are going to be squeezed out. We heard them float the idea that, oh, we should think of these other ships as Navy ships but we should think of submarines as national submarines. The great irony about that is that that s the same argument we heard from the Navy back in the 60s when we were first fielding the Polaris, and the joke was Secretary McNamara s systems analysis guy made the joke, we were a little sad to hear that the submarines were the only national program the Navy had; we had tended to think of the entire U.S. Navy as a national program. (Laughter.) And that although it certainly was floated, it was floated not in a very formal way and has been squelched at every turn. Nevertheless and now to say something nice about the Navy the Navy better than any of the other services makes its hard decisions itself. We saw that in the last decade, right? It took Bob Gates to kill the Army s premiere system the future combat systems. It took Bob Gates to kill the Marines premiere system. It took Bob Gates to kill the Air Force s premiere system, the F-22. But the Navy is the one who killed DDG-1000, their new destroyer. They looked at that and said, hey, this one ship is a threat to too many things; we re just not going to build it. So that is an interesting question when the Navy grapples through that, which they re going to continue to grapple in the next decade. MR. BLECHMAN: I just had the SSBN missile the SLBMs are built in California, which tends to have an effect on Democratic senators. And also the ICBM caucus has a strangely a disproportionate number of Democrats, so it has more influence on this administration than one would imagine. That s why I understand there s a big dispute about whether to go down on ICBMs or take more missiles off submarines, because of this political influence. MR. KIMBALL: All right. MR. BLECHMAN: It s like 20 jobs involved. (Laughter.) MR. KIMBALL: We have a question over here. Ben? Q: Ben Loehrke, Ploughshares Fund. Russ, just a quick follow-up. The Navy has expressed its awareness of the cost of the submarine squeezing out other programs. How about the Air Force? Are they aware that they re about to try to build a new bomber, modernize its tankers and choke on the F-35? (Laughter.) Page 13 of 16

14 MR. RUMBAUGH: Well, certainly they ve expressed an awareness of it. All senior leaders in all the public statements have been very conscientious to say, hey, we ve learned our lesson. We know how expensive these programs can become. We know they re unaffordable and we know we re the ones who will suffer at the end of it. I m not quite sure conscientiousness leads to action. One of the dynamics is it s not just a bomber to the Air Force, right? It is the modernization program that s also pushing the envelope on stealth capabilities, on ISR capabilities, on avionics capabilities. It is the program that will lay in the seeds for the future on all of the Air Force s program. So it s not just the bomber part of the Air Force that likes it. Everybody is supporting the bomber program. It is the Air Force s premiere acquisition program. And because it s the premiere one, it is those other programs the tanker, the F-35 that are threatened by the bomber program. MR. BLECHMAN: Also, because of its conventional mission and concerns about advances in Chinese air defenses, I believe it will remain number one priority for the Air Force. MR. KIMBALL: All right. Yes, sir? Q: Brian Moran (sp). I guess people in the Pentagon, you know, who are looking at this people in the Pentagon who are looking at this issue right now, at whatever level of weapons you want to talk about, there are going to be people saying, but high numbers of delivery systems are important to us because they give you additional flexibility, they give you additional targeting capabilities, they give you additional survivability. So how do you balance and have you worked to sort of balance the cost savings vis-a-vis, you know, what DOD strategic planners would say would be the loss of, you know deterrent value or the loss of flexibility, the loss of the ability to react to technical failures of part of the force? You know, because your savings are not huge, as you pointed out, by DOD standards. MR. KIMBALL: Barry, do you want to take a stab at that? MR. BLECHMAN: Yeah. I think there will be some that argue that way, but there s really not much of a constituency for the nuclear forces within the Pentagon. Certainly the Army doesn t care about them. There s the SSBN people. And in the Air Force, you know, frankly I think they d rather be rid of the mission. It s more trouble than it s worth. It s cost the chief his job and a lot of other headaches. But the there is some will make the argument on about flexibility, but I think you ll have to get down to about a thousand before people will become concerned at that about that. At the level we re at, 1,550, it s very hard to argue that we can t make substantial reductions. Once you get down to a thousand Q: (Off mic) which is probably what the number is that we re going to for the warheads. MR. BLECHMAN: Right. Q: So then, you know the number of delivery systems, from many people s perspective at the Pentagon, you know, or those who support nuclear weapons at the Pentagon, the number of delivery systems then becomes the critical issue of how many of those do you cut as opposed to how much flexibility do you keep by keeping, say, 450 or 400 Minutemen rather than going down to 300 or MR. BLECHMAN: Right. Right. I think you ll see that argument made more on going to eight subs. I think that will get a lot of resistance. They ll want to stay certainly at 10 at a minimum. MR. KIMBALL: Let s remember a couple of things that you talked about at the beginning, Barry, Page 14 of 16