As the United States has supported Ukraine in its struggle against Russia’s invasion, our nation’s stocks of munitions and military equipment have been strained. Ostensibly in response, the Biden administration recently released its National Defense Industrial Strategy (NDIS), calling it a plan for “enabling a modernized defense industrial ecosystem.” In practice, this strategy amounts to a massive taxpayer-funded subsidy for one of the largest industries in the nation: the military industry. While some increased investments in military production and capacity are warranted given U.S. support for Ukraine, this strategy calls for putting the military industrial base on a permanent war footing that will fuel Pentagon waste to the detriment of taxpayers and national security.

The strategy itself acknowledges that it will require “a public recognition of the associated burden to the taxpayer and the economy…” And yet, the Pentagon downplays these burdens as minimal compared to historic military spending levels, lamenting that its budget as a percentage of GDP shrank from 5.8 percent in 1985 to 3.2 percent in 2021. Of course, it doesn’t acknowledge that GDP grew 430 percent over that same period, so its slice, while slightly smaller on a percentage basis, is now cut from a massively larger pie. Moreover, basing defense spending on GDP is a ridiculous measure—spending shouldn’t rise simply because of economic growth, and surely the Pentagon wouldn’t want cuts to its budget in a recession. Not to mention the fact that the national debt was less than $2 trillion in 1985 (roughly 40 percent of GDP) and is $34 trillion today (more than 100 percent of GDP). According to the Congressional Budget Office (CBO), the interest payments on our nation’s debt will actually surpass military spending sometime this decade. All of which is to say that yes, whether through a historic or contemporary lens, the economic burden of this plan will be significant.

As for the burdens on the taxpayer, the strategy comes with many.

Rather than temporarily scaling capacity to meet current needs, the NDIS calls for maintaining significant excess capacity as a standard practice. Specifically, it encourages Congress to “explore allocating additional funding for contracts and other incentives (tax incentives, regulatory relief, long-term contracts) aimed specifically at building and maintaining spare production capacity.” Maintaining is the operative word there, and the strategy is very clear that in incentivizing companies to maintain spare production capacity, the Pentagon will “seek to establish risk-sharing mechanisms and technology-sharing structures to jointly fund, develop, and secure spare production capacity.” In other words, taxpayers will pay for Pentagon contractors to develop and maintain excess production capacity beyond the market’s demand so that if demand should rise, the industry can meet it immediately.

Ironically, while the war in Ukraine has fueled concerns over military industrial base capacity, it also offers a clear example of the industry’s ability to quickly scale production based on current needs, and to do so without all the sustained investments and incentives called for in the NDIS. As the war drove increased demand for 155mm artillery ammunition, expansions of existing manufacturing facilities and development of new facilities led to a 200 percent increase in production capacity over a two-year period, which “demonstrates the DIB’s (defense industrial base) ability to scale rapidly,” according to the NDIS. This adaptability undercuts the administration’s argument for maintaining excess production capacity.

In another costly proposal, under this strategy, the Pentagon “will seek to expand the use of multi-year procurement (MYP) to create sustained demand signals that will promote investment into the capacity of the industrial base, which have typically been reserved for only the most expensive acquisition types, such as procurement of large sea-going Navy ships.”  Multi-year procurement is a great deal for Pentagon contractors as it ensures consistent profits while reducing accountability for cost-overruns, underperformance, and delays. For the Pentagon however, it’s a bad deal for all the same reasons. While MYP contracts make some sense for programs like shipbuilding, handing them out like candy in the name of supporting the industrial base is a recipe for more wasteful Pentagon spending.

Perhaps most troublingly, the NDIS calls for orienting acquisition policies to aggressively expand production capacity. It notes that “typical peacetime acquisition reform tends to place more emphasis on greater efficiency, cost effectiveness, transparency, and accountability.” In contrast, it argues that “today’s threat environment, however, necessitates… a change of acquisition mindset that includes increased flexibility and risk tolerances…” This is a horribly misguided approach. Ensuring acquisition policies are rooted in the pursuit of greater efficiency, cost effectiveness, transparency, and accountability is essential to national security, as meeting those goals both improves program outcomes and reduces wasteful spending that could otherwise be spent on effective national security programs. With this proposal, the administration is giving the Pentagon’s acquisition officers, who aren’t exactly known for their fiscal restraint, a green light to throw caution to the wind in their contract decisions in the name of meeting today’s threat environment.

We’ve seen what happens when the Pentagon throws caution to the wind during acquisition decisions. The F-35 is projected to cost taxpayers $1.7 trillion over the course of its lifecycle. It’s been plagued by cost overruns, schedule delays, and sustainment challenges, and has a mission capable rate (the percentage of time it can fly and perform at least one of its missions) of 55 percent, as of March 2023. These plagues are largely a result of aggressive acquisition decisions, such as the decision to concurrently develop, produce, and field F-35 aircraft all at the same time in the name of getting the F-35’s promised capabilities sooner. The result is that the most expensive weapon ever built is still literally struggling to get off the ground more than twenty years after the first contract for its development was signed.

The NDIS argues that the Pentagon “must balance the needs for speed and scale with cost… to ensure the development and sustainment of capabilities critical to national security.” But with numerous proposals that will increase wasteful spending and by its own admission increase the taxpayer’s burden, this strategy fails to balance those needs. Congress should scrutinize this strategy with clear eyes and adopt only those measures necessary to meet our current national security needs, while eschewing those that seek to put the military industrial base on a costly and unnecessary war footing in perpetuity.