Costs of U.S. Nuclear Forces, 2014 to 2023

December 22nd, 2013
in econ_news, syndication

from the Congressional Budget Office (CBO)

In its most recent review of U.S. nuclear policy, the Administration resolved to maintain all three types of systems that can deliver nuclear weapons over long ranges—submarines that launch ballistic missiles (SSBNs), land-based intercontinental ballistic missiles (ICBMs), and long-range bombers—known collectively as the strategic nuclear triad.

Follow up:

The Administration also resolved to preserve the ability to deploy U.S. tactical nuclear weapons carried by fighter aircraft overseas in support of allies. Nearly all of those delivery systems and the nuclear weapons they carry are nearing the end of their planned operational lives and will need to be modernized or replaced by new systems over the next two decades. In addition, the Administration’s review called for more investment to restore and modernize the national laboratories and the complex of supporting facilities that maintain the nation’s stockpile of nuclear weapons. The costs of those modernization activities will add significantly to the overall cost of the nation’s nuclear forces, which also includes the cost of operating and maintaining the current forces.

As directed by the Congress in the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112 239), CBO has estimated the costs over the next 10 years of the Administration’s plans for operating, maintaining, and modernizing nuclear weapons and the military systems capable of delivering those weapons. CBO’s estimates should not be used directly to calculate the savings that might be realized if those forces were reduced: Because the nuclear enterprise has large fixed costs for infrastructure and other factors, a partial reduction in the size of any segment of those forces would be likely to result in savings that were proportionally smaller than the relative reduction in force.

How Much Funding Did the Administration Request for Nuclear Forces in 2014?

The budgets requested by the Department of Defense (DoD) and the Department of Energy (DOE) for fiscal year 2014 include $23.1 billion for nuclear delivery systems and weapons, CBO estimates—$9.7 billion for DoD’s strategic and tactical nuclear delivery systems; $8.3 billion for DOE’s nuclear weapons activities, the laboratories that support those activities, and nuclear reactors for ballistic missile submarines; and $5.1 billion for the command, control, communications, and early-warning systems that are necessary to operate U.S. nuclear forces safely and effectively (see the table below).

In addition to the costs directly attributable to fielding nuclear forces, the costs of several related activities are included in some published estimates of the cost of nuclear weapons. Examples include the costs of addressing the nuclear legacy of the Cold War, including dismantling retired nuclear weapons and cleaning up the environment around contaminated historical nuclear facilities; the costs of reducing the threat from nuclear weapons fielded by other countries, including efforts to halt proliferation, comply with arms control treaties, and verify that other countries comply with their treaty obligations; and the costs of developing and maintaining active defenses against nuclear weapons from other countries, primarily defenses against ballistic missiles. CBO estimates that DoD’s and DOE’s budgets for 2014 include $20.8 billion for such other nuclear-related activities, comprising $7.0 billion for nuclear legacy costs, $3.2 billion for threat reduction and arms control, and $10.6 billion for defenses.

Table 1 — Costs of U.S. Nuclear Forces

What Will the Administration’s Plans for Nuclear Forces Cost Over the Next Decade?

Between 2014 and 2023, the costs of the Administration’s plans for nuclear forces will total $355 billion, in CBO’s estimation. Of that total, $296 billion represents CBO’s projection of the amounts budgeted for strategic and tactical nuclear delivery systems ($136 billion over 10 years); for nuclear weapons, DOE’s nuclear weapons enterprise, and SSBN nuclear reactors ($105 billion over 10 years); and for nuclear command, control, communications, and early-warning systems ($56 billion over 10 years). The remaining $59 billion of the total represents CBO’s estimate of the additional costs that will ensue over the coming decade, beyond the budgeted amounts, if the nuclear programs experience cost growth at the same average rate that similar programs have experienced in the past.

In addition to operating and maintaining current systems, DoD and DOE plan to modernize or replace many weapons and delivery systems over the next few decades. Planned nuclear modernization programs include new SSBNs, long-range bombers, ICBMs, and cruise missiles, as well as major life-extending refurbishments of current ICBMs, submarine-launched ballistic missiles, and nearly all nuclear warheads. Of the $241 billion budgeted for nuclear delivery systems and weapons over the next 10 years (combining the $136 billion and $105 billion figures in the preceding paragraph), CBO estimates that $152 billion would be spent to field and maintain the current generation of systems and $89 billion would be spent to modernize or replace those systems. Because most of those modernization efforts are just beginning, annual costs for nuclear forces are expected to increase. From 2021 to 2023, nuclear costs would average about $29 billion annually, roughly 60 percent higher than the $18 billion requested for 2014. Annual costs are likely to continue to grow after 2023 as production begins on replacement systems.

CBO formulated its estimates using a three-step approach: identify all budget line items relevant to nuclear forces; extrapolate from budget documentation, as necessary, to estimate budgets over the 10-year period (most of DoD’s programs have five-year estimates); and estimate cost growth beyond budgeted amounts on the basis of historical growth in similar programs. CBO estimated cost growth for various types of activities on the basis of historical average growth for similar activities because predicting cost growth for individual programs is particularly complicated. CBO used only the unclassified portion of DoD’s budget to formulate its estimates.

The costs of other nuclear-related activities will total $215 billion from 2014 to 2023, CBO estimates, with $74 billion in legacy nuclear costs, $34 billion for threat reduction and arms control, and $107 billion for defenses.

What Are the Most Significant Sources of Uncertainty in CBO’s Estimates?

There are two primary aspects of uncertainty in CBO’s estimates of the costs of nuclear forces: The actual cost of executing current plans could be higher or lower than CBO has estimated, and the plans on which the estimates are based could change.

In terms of estimating the cost of current plans, the largest source of uncertainty is cost growth. Although CBO based its projections of cost growth on historical experience, the amount of growth that will actually occur could be higher or lower than in the past. Another source of uncertainty is the allocation of costs for systems that have both nuclear and nonnuclear missions. CBO estimated the fraction of those systems’ total costs that pertained to the nuclear mission; different estimates of those values would yield somewhat different cost estimates for nuclear forces.

Uncertainty also arises from the possibility that plans will change, which could occur for several reasons, including budgetary pressures, technical difficulties in the development of new systems, or changes in military strategy. One significant source of uncertainty of this type is that DoD and DOE are still formulating the plans for several new systems—specifically, the new long-range bomber, the new cruise missile, the future ICBM, and a new concept for modernizing warheads that would make them compatible with both ICBMs and submarine-launched ballistic missiles. Future plans for nuclear forces might also change if the budgets of DoD and DOE are reduced between 2014 and 2021 to comply with the funding caps enacted in the Budget Control Act of 2011 (as modified by subsequent legislation). Those funding caps are about 14 percent below CBO’s projection of the costs of the Administration’s defense plans, on average, for those years; a proportional cut in the cost of nuclear activities would total $39 billion between 2014 and 2021.

(The funding caps are about 10 percent below CBO’s projection of the budgeted amounts for defense plans as of November 2013, leaving aside CBO’s estimate of cost growth beyond the budgeted amounts. Therefore, a proportional cut in the cost of nuclear activities would total $23 billion between 2014 and 2021. For CBO’s projection of the overall defense budget, see Long-Term Implications of the 2014 Future Years Defense Program (November 2013). The Bipartisan Budget Act of 2013, which had just been passed by the Congress when this report was released, would have only a small effect on the cumulative limit on defense funding for 2014 through 2021. Therefore, updating these calculations to incorporate the effect of that act would have little impact on the conclusions presented here.)


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