Challenges Facing the U.S. Defense Industrial Base: A Call for Reform and Investment
The United States is facing a critical national security challenge as it grapples with the need to adequately resource its defense posture in the face of escalating global threats. With conflicts brewing in Ukraine, the Middle East, and the prospect of conflict with China over Taiwan, policymakers are engaged in heated debates over how to prioritize resources across these theaters.
One common concern that all positions share is the inadequacy of the U.S. defense industrial base to produce the necessary materiel to meet mission objectives in any one theater, let alone all three. For example, Ukraine requires a staggering number of artillery shells per month to remain operational, far surpassing the current production capacity of the United States. The U.S. Army is working to ramp up production, but it still falls short of the demand.
Despite the urgent need for substantial investment in defense production, progress has been slow in Congress. The root of this issue lies in what can be described as a collective action problem, where a broad coalition is needed to drive significant legislative reforms that address production deficiencies.
The concentration of defense contract awards in just a few states has further complicated efforts to push defense industrial base reform to the forefront of the congressional agenda. This political dynamic is a relatively recent development, stemming from the consolidation of the defense sector following the end of the Cold War.
As the U.S. faces renewed great-power threats and a stagnant defense budget, the need for systemic reform of the defense industrial base has never been more pressing. One proposed solution is to focus on reforming the defense industrial sub-base, which includes basic building blocks of weapons production such as energy, minerals, and alloys. By increasing domestic supply and decreasing input prices, this approach could generate a strong coalition to support overdue investments in defense production.
If successful, this reform could not only increase the real purchasing power of the current defense budget but also pave the way for further reforms, including new defense spending increases, enhanced competition between defense contractors, and better federal support for workforce training. Ultimately, expanding the political base of the “arsenal of democracy” is crucial to addressing the complex security challenges facing the United States.