During his farewell address in 1961, President Dwight D. Eisenhower expressed his concerns about the growth and political power of the American military-industrial complex. Fueled by massive federal spending in the years following WWII, defense contractors dominated an entire sector of the American economy, created tens of thousands of jobs, and generated billions of dollars in revenues and profits. The defense industry became not a wartime necessity, the so-called “arsenal of democracy” during WWII, but a permanent addition to the national security state that emerged during the Cold War.
The end of the Cold War, however, never yielded a “peace dividend” from reduced defense spending. The US defense budget, $295 billion in 1991, now tops $841 billion—more than the next nine countries’ defense outlays combined. American procurement contracts, financial assistance, and research and development in FY25 total more than $300 billion. While defense spending as a percentage of GDP has declined, it remains the single largest discretionary outlay of government funds.
Today, US defense procurement is expensive, increasingly concentrated, strained, and inefficient: dogged by schedule delays, saddled with legacy platforms, and unable—perhaps unwilling—to adapt to the changing nature of modern warfare.
Costs, Delays, and the Cost of Delay
Defense procurement across several sectors is concentrated in a handful of major corporations (i.e., Boeing, General Dynamics, HII, Lockheed Martin, Northrop Grumman, RTX). Normally, concentrated manufacturing creates specialization, resulting in greater economy and efficiency. This has not been the case for US defense procurement. Both cost overruns and scheduling delays are common. Acquisition of major weapons systems and upgrades to existing platforms are stalled and overbudget. A few examples show these problems well.
For a variety of reasons, CVN-79—the new USS John F. Kennedy aircraft carrier—will not join the fleet until at least March 2027. This is two years later than the first re-scheduled date, and nearly three years later than the original delivery date of June 2024. Every planned delivery of future Gerald R. Ford-class nuclear-power supercarriers has been delayed, and costs are climbing. The Navy has already requested an additional $2.75 billion in cost-to-complete funding for Ford-class carriers.
The program to re-engine the US Air Force’s aging (one might say ageless) B-52 Stratofortress bombers is also behind schedule. Construction of the original 744 bombers took ten years (1952–62). New engines (and electronics) for the remaining 76 B-52H bombers were to be built and installed over a fifteen-year period, with full conversion completed in 2030. Now the target date is 2036, and the cost has risen from eight to nine billion dollars.
In a similar vein, replacements for the Minuteman III—first fielded in the 1970s and now the oldest deployed strategic ballistic missile in the world—are more than a decade behind schedule. The new LGM-35 Sentinel missiles are also coming in over budget; the original 2020 cost of $78 billion has ballooned to $160 billion.
The issues here are not simply those of delay and cost overruns in Major Defense Acquisition Programs (MDAP). Years-long delays force the military to fall back on older equipment and compromise operational readiness. This degrades the nation’s ability to quickly respond with full force to the exigencies of contingencies, crises, and war. Aging weapons and platforms that outlive their supplies of maintenance and replacement parts undercut the strength, readiness, and capabilities of combat units.
In addition, the ability to project power and the deterrent value of forward-deployed forces is further compromised by failures to bring replacements into service. With continued delays to the completion and delivery of Ford-class carriers, for example, the Navy will eventually be forced to conduct operations with only ten carriers. Navy planners have argued (and statute, 10 USC 8062, requires) that a minimum of eleven aircraft carriers must be maintained.
Procurement delays also undermine America’s alliances and partnerships. The latest AUKUS (Australia, United Kingdom, United States) agreement, for example, calls for a British-Australian partnership to build a new class of nuclear-powered submarines beginning in 2032. Before those new subs come on-line, the United States agreed to sell second-hand Virginia-class attack submarines to Australia. Production of Virginias, however, has fallen behind schedule to complete two boats a year. The shipyard is straining to produce just more than one submarine a year. This shortfall casts into doubt plans to sell submarines to Australia, shakes confidence in the AUKUS partnership, and jeopardizes Australian and Indo-Pacific security.
More worrisome is the outright degradation of the US nuclear deterrent. Be it a shortage of submarines, benched nuclear-capable bombers, or aging intercontinental ballistic missiles—all point to real strategic vulnerabilities that will be exploited by America’s adversaries. While US nuclear weapons delivery capabilities atrophy, China is committed to a long-term plan to grow its nuclear arsenal and modernize its nuclear delivery systems. Beijing plans to double its number of warheads from 300 to 600 in 2025 and to 1,000 by 2030. Most recently, at its Victory Day Parade, China displayed its air-launched, subsurface-launched, and land-based intercontinental missiles. This purposefully staged demonstration showcased the modernization and diversification of Beijing’s nuclear triad and unveiled a new ICBM intended to stock the network of hardened, below-ground missile silos in Western China.
Legacy Platform Deadweight
For the better part of eight decades, American aircraft carriers conducted missions in support of the national interest in largely uncontested waters. That all changed beginning in 2023 when Houthi rebels, armed by Iran, targeted commercial and naval traffic in the Red Sea, the Gulf of Aden, and the Bab el-Mandeb Strait. Houthi forces have since launched drones, anti-ship cruise missiles, and ballistic missiles at US Navy ships and claimed to have targeted the carrier USS Harry Truman.
This is a foretaste of things to come. In future wars, American aircraft carriers will face adversaries, like China, loaded with anti-access and area denial (A2AD) missiles and drones. Those A2AD weapons cost a small fraction of the $13 billion cost of a Ford-class supercarrier. The asymmetrical advantage now belongs to nations that can mass-produce and equip their forces with these weapons and arm their proxies. Ukraine, for example, sank 15 of 36 Russian vessels (including the guided missile cruiser Moskva) with anti-ship missiles and naval drones. With no fleet of its own, the Ukrainians drove the Russian Navy from the Black Sea.
The United States is in a defense spending trap of its own making.
The US Navy’s response to this changing threat environment, backed by corporate lobbying, has been to double down on legacy systems and capabilities. For example, the Navy’s efforts to develop robotic and autonomous systems (RAS), which include surface and subsurface drones, took a back seat to continued procurement of existing surface platforms. RAS, until recently, was aligned to a single Program Executive Officer (PEO) for both unmanned and small combatants. Critics say that the Navy’s troubled littoral combat ship and frigate programs drained time, attention, and resources away from RAS, and set the unmanned vehicle program back years. Now Navy is scrambling to reset RAS development with a new PEO and a temporary halt to all acquisition and contracting.
It’s also telling that shortly after successful aircraft carrier trials of the Northrup Grumman X-47B in 2013, the Navy scrapped plans for further development of this unmanned strike aircraft. Instead, the service placed its bets on an unmanned aerial tanker (Boeing’s MQ-25A Stingray) to increase the range of manned aircraft launching from ever-increasing stand-off distances outside A2AD envelopes. Production delays have pushed the operational debut of Stingray to 2026.
If the supercarrier has become too big and too expensive to risk in war at sea against missiles and drones, the death knell is also tolling for large (and costly) armored vehicles on the battlefield. In less than six months, 20 of the 31 Abrams M1A1 tanks that the US furnished to Ukraine were lost in battle. Both cheap anti-tank missiles and camera-operated drones (first-person view, FPVs) on kamikaze missions proved successful in crippling or destroying the 63-ton, eight-million-dollar-a-piece Abrams tanks. Now, France has developed an autonomous anti-tank vehicle that can launch missiles outside the line of sight to the target; no FPV needed.
Despite these rapid advances in anti-tank capabilities, the US Army intends to keep the Abrams production line operating even as it plans a new armor design with features for upgraded “survivability.” These new tanks will likely not replace all existing Abrams tanks until at least 2030.
Building a New Arsenal
The United States is in a defense spending trap of its own making. Lack of competition, a powerful lobby with entrenched political constituencies, years of risk-adverse leadership, and even federal law, encourage resistance to change and discourage innovation. As a result, defense procurement is locked into buying ever more expensive but modest, linear improvements to increasingly vulnerable legacy weapons systems and platforms. Moreover, the lessons of modern battlefields and the innovations fielded there—from Ukraine to Iran—are not shaping new defense acquisition plans.
Simply expanding, modernizing, and making the existing defense industrial base more efficient will not resolve its systemic problems. What is needed is a comprehensive approach that can only be accomplished with leadership, legislation, innovation, and oversight.
To that end, there are signs that changes are forthcoming. President Trump’s executive order Restoring America’s Maritime Dominance, calls for a Maritime Action Plan to revitalize the US maritime industry and enhance national security. More recently, Secretary of War Hegseth issued his own memorandum to leadership. This unambiguous and overdue directive, “Unleashing US Military Drone Dominance,” recognizes “modern battlefield innovation demands a new procurement strategy.” Battlefield innovation today will also increasingly rely on expanded and integrated AI in weapon systems and platforms, adding another dimension to defense procurement.
The United States can no longer be the sole arsenal of democracy.
These changes to policy ought to be coupled with reviews of current MDAPs and existing Multiyear Procurement (MYP) vehicles to free up defense spending for new initiatives. This “divest to invest” strategy has been endorsed by the Defense Innovation Board. Efforts to amend procurement contracts for aircraft carriers, tanks, planes, and other weapons—much like long-overdue Base Realignment and Closing (BRAC) proposals—however, always face stiff “pork barrel” opposition. Congress also needs to rescind laws and modify budgetary provisions that force the War Department to maintain legacy systems in the face of growing obsolescence and, worse, new technologies that render US platforms defenseless.
Congress must reaffirm its “power of the purse,” and demand accountability and performance for every MDAP. The Nunn-McCrudy Act (1982)—intended to put the brake on defense acquisition program overspending—brings to bear too little oversight too late. Congressional notification is only triggered when an MDAP is 15 percent over budget (for a $13 billion Ford-class carrier, this is already a $1.5 billion overrun), and can only be cancelled when it runs 25 percent over budget. A revised act with real teeth would require notification anytime an MDAP is over budget and suspension of that program until it is reauthorized by Congress.
All these efforts will come to naught, however, unless US leadership also recognizes the global nature of supply and innovation. Current law that requires US defense products to consist of 50 percent wholly American-made parts is misguided protectionism. The United States can no longer be the sole arsenal of democracy. What is needed are strong partnerships with allies to build and maintain mutually supporting arsenals of democracies.
NATO, for example, has long maintained standards for small arms ammunition. The looming shortfall of munitions in Western nations, occasioned by the massive consumption of ammunition in Ukraine, can be a strategic opportunity. The reduction of ammunition stockpiles in the United States and Europe ought to be leveraged to recapitalize and modernize common ammunition production capabilities on a multinational level. This could be the prototype for geo-political partnerships and defense alliances to build a broader and more cost-effective defense industrial base for development and production of everything from drones to fast combat support ships.
All these initiatives should be launched with wartime urgency; the rehabilitation and revitalization of American defense procurement is overdue. The sluggishness, inefficiency, and resistance to change that hamstrings procurement have been more than 60 years in the making. Today, this legacy military-industrial complex puts at risk America’s nuclear deterrent and the warfighting and war-winning capabilities of its air, land, and sea forces.
These are risks the United States cannot afford to take.