1. 1
Jason Wheelock
Visiting Fellow, the National Institute for Defense Studies and Council
on Foreign Relations-Hitachi International Affairs Fellow in Japan
June 11, 2013
These views are the presenter’s and should not be interpreted as that of
the Congressional Budget Office.
Understanding the Asia Pivot

2. 2
Introduction to Asia Pivot
• Fall of 2011 Obama Administration issued a series of announcements regarding an expanded
diplomatic, military and economic focus on Asia.
• Obama speech to the Australian Parliament and US as a Pacific nation (November 2011).
• Clinton Foreign Policy Article-Cost Benefit Approach to US Engagement (November 2011).
• Pivot Versus Rebalance-Politicians Pivot/Generals and Admirals Rebalance.

3. 3
Deficits Projected in CBO’s May 2013 Baseline and Under an Alternative Fiscal Scenario
Total
2014- 2014-
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2018 2023
In Billions of Dollars
CBO's May 2013 Baseline
Revenues 2,813 3,042 3,399 3,606 3,779 3,943 4,103 4,280 4,494 4,732 4,959 17,769 40,336
Outlays 3,455 3,602 3,777 4,038 4,261 4,485 4,752 5,012 5,275 5,620 5,855 20,163 46,677
____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ____ ______ ______
Deficit -642 -560 -378 -432 -482 -542 -648 -733 -782 -889 -895 -2,394 -6,340
Debt Held by the Public at the
End of the Year 12,036 12,685 13,156 13,666 14,223 14,827 15,537 16,330 17,168 18,118 19,070 n.a. n.a.
Alternative Fiscal Scenario
Revenues 2,813 2,988 3,305 3,519 3,696 3,862 4,022 4,198 4,409 4,643 4,864 17,369 39,505
Outlays 3,455 3,671 3,881 4,156 4,393 4,632 4,934 5,209 5,485 5,836 6,082 20,733 48,279
____ ______ _____ _____ _____ _____ _____ ______ ______ ______ ______ ______ ______
Deficit -642 -683 -577 -637 -697 -770 -912 -1,010 -1,076 -1,193 -1,219 -3,364 -8,774
Debt Held by the Public at the
End of the Year 12,036 12,808 13,477 14,193 14,965 15,798 16,771 17,841 18,973 20,228 21,503 n.a. n.a.
Fiscal Environment
Source: Congressional Budget Office, Updated Budget Projections: Fiscal
Years 2013 to 2023 (May 2013)

4. 4
Deficit Reduction and Public Opinion
• In January 2013 Pew
Foundation Poll, 72 percent of
respondents felt reducing the
budget deficit was a top
priority for the President and
Congress.

5. 5
Defense Spending and Public Opinion
• The wars are winding down and fewer people see defense spending as a high priority. China and
other security problems are offset by domestic concerns.

6. 6
FY0
0
FY0
1
FY0
2
FY0
3
FY0
4
FY0
5
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
FY1
6
FY1
7
FY1
8
Other 9 6 3 8 3 7 1
War 0 23 17 73 91 76 116 166 187 146 162 159 115 81 88 37 37 37 37
Base 279 287 328 365 377 400 411 432 479 513 528 528 530 525 527 541 551 560 569
Total 287 316 345 438 468 479 535 601 666 666 691 687 645 574 615 578 588 597 606
Intial BCA Caps 527 540 551 563 576
Seq/Adj Caps 493 475 488 499 511 524
287
316
345
438
468 479
535
601
666 666
691 687
645
574
615
578 588 597 606
0
100
200
300
400
500
600
700
800
BudgetAuthorityin$Billions
DoD Topline and Budget Control Act
Other
War
Base
Intial BCA Caps
Seq/Adj Caps
Data source for “Base,” “War,” and “Other” funding: Office of the Undersecretary of Defense (Comptroller)/Chief
Financial Officer, Fiscal Year 2014 Budget Request and FY 2013 Update, April 2013. Amounts for “Initial BCA
Caps” and “Seq/Adj Caps” based on presenter’s analysis of the Budget Control Act.

7. 7
Budget in Constant FY 2014 $
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Other 12 8 0 0 0 4 10 4 0 8 1 0 0 0 0 0 0 0 0
War 0 32 23 95 116 92 137 192 209 161 175 168 119 82 88 36 36 35 35
Base 401 398 445 480 480 488 486 497 537 567 569 558 550 501 527 533 535 533 530
Total 414 437 468 576 596 584 632 693 746 736 745 726 669 584 615 570 571 568 565
Intial BCA caps 527 533 534 536 537
Sequester/Adj Caps 475 481 484 486 489
414
437
468
576 596 584
632
693
746 736 745 726
669
584
615
570 571 568 565
0
100
200
300
400
500
600
700
800
BudgetAuthority
Observation #1: Using DoD FY2014 deflators to adjust for inflation, DoD’s Base Budget grew
in real terms by roughly 3.6% annually between 2000 and 2010. In 2000, DoD Base Budget
was $401 billion in FY2014 dollars and grew to $569 billion in 2010, as measured in 2014
dollars.
Observation #2: Using 2000 as the starting point, the cumulative increases in defense
spending between 2001 and 2013 were approximately $1.2 trillion. In comparison, the cost of
the war, measured in FY 2014 dollars, was approximately $1.5 trillion over the same period.
Source data: Office of the Undersecretary of Defense (Comptroller)/Chief Financial Officer, Fiscal
Year 2014 Budget Request and FY 2013 Update, April 2013.

8. 8
“Retrenchment” versus “Foreign Policy
Begins at Home”
• In foreign policy circles, the term word retrenchment is often associated with
debates on reducing the size of US overseas commitments. The US has five
allies who fall under security treaties (Japan, ROK, Thailand, Australia, and
the Philippines). Prospects of a reduced military spending cause alarm and
raise fears of abandonment amongst allies and other security partners.
• Given the current fiscal environment, DoD is beginning the process to think
about the size, rolls and operations in a peacetime environment. Secretary
Hagel ordered a Strategic Choices and Management Review.
• Many analysts are now advocating a “Foreign Policy Begins at Home”
approach. Richard Haas states in his new book that “Core Defense
Spending” can be reduced to slightly below $500 billion without jeopardizing
American security.

9. 9
Air Sea Battle
• First mentioned in 2010 QDR, but did not receive much widespread attention until an article in
American Interest by General Schwartz and Admiral Greenert in February of 2012 that
outlined the concept and need for Air Sea Battle (ASB).
• Premise #1: Anti-Access Area Denial (A2AD) strategies and capabilities of potential
adversaries will erode the ability of the US military to project power to “hot spots” and will
erode security guarantees of the US, which will undermine US political influence.
• Premise #2: US military must retain ability to ensure access to all areas of the globe because
American interests are global and threats to US interests can develop from anywhere in the
World. Evidence provided was Iraq’s invasion of Kuwait, and Operations Desert Shield and
Desert Storm.
• Premise #3: A fixed focus on a particular geography and reliance on large, expensive
overseas installations is out of date.
• Budget Question: What will it cost for the US to field the necessary capabilities to ensure
access to critical regions, such as the Asia-Pacific or Southwest Asia (i.e. the Middle East),
and what tradeoffs, such as a much US ground forces, will be considered. The Air Sea Battle
Office was established, in part, to ensure such funding for such capabilities is retained despite
the constrained defense budget.

10. 10
First and Second Island Chains and Air
Sea Battle
Source: Center for Strategic and Budgetary Assessment. Greg Jaffe, Gene
Thorp, Bill Webster/The Washington Post. Published on August 1, 2012.

11. 11
Other Threats to US Forces in Asia
Pacific
Source: “Kim Jong Un Reveals His ‘US Mainland Strike
Plan’,” March 29th, 2013. Daily Mail.
North Korean Missile
Ranges (Max):
Nodong: 1,000 km
Taepodong-1: 2,200 km
Musadan: 4,000 km
Taepodong-2: 6,000 km
Source: BBC News, North
Korea Missile Program, April
12, 2013
How will capabilities of North Korea
and China evolve? Will a move to
Guam, which won’t be completed
till at least 2020, provide
significantly more protection than
the current posture?

12. 12
USMC Pacific Posture
• DoD’s stated policy is to have approximately 22,000 Marines west of the
International Dateline, the vast majority of which are assigned to Japan. That
was the goal before the pivot and will continue under the proposed
rebalancing.
• However, as of December 31, 2012, the number of Marines in East Asia and
the Pacific was about 19,000, with 18,676 in Japan. Because of OCO
deployments the number of units on Okinawa via Unit Deployment Plans is
less than before the wars in Iraq and Afghanistan.
• The current posture places the vast majority of the 22,000 Marines at bases
in Okinawa and the Marine Corps Air Station Iwakuni in Yamaguchi
Prefecture.
• The future posture calls for the 22,000 Marines to be in Okinawa, Iwakuni,
Guam and Australia.

13. 13
USMC Posture Challenges
• Command and Control because of the separation of HQ units at different
locations. Current the III Marine Expeditionary Force, the III Division, and the
III Marine Expeditionary Brigade HQs are all in Okinawa. Not the case under
the proposed posture.
• Tyranny of Distance in the Pacific and the effect on war plans and other
operational considerations, especially in light of an amphibious sealift
shortfall.
• Breaking up USMC presence into small, geographically distributed pieces
could result in a loss of economies of scale.
• Long Construction Timetable
• Costs

14. 14
Final Thoughts
• DoD faces challenges if they are faced with flat or declining budgets. Real
growth in the defense budget allowed for DoD to maintain personnel levels
during a time of significant increases in personnel and operation and
maintain costs.
• DoD might be faced with significant reductions in personnel levels for ground
forces that could affect basing plans for US forces.
• The current law (the Budget Control Act), long-term budget situation, and
diminished support for defense spending could significantly constrain
defense spending over the next decade.
• Although the Asia-Pacific is a region of great importance to the United
States, much more work is needed to make sure the structure, strategy and
funding of DoD is aligned if the “pivot” to Asia is to be successful.