A COMPARISON OF SOVIET AND US DEFENSE ACTIVITIES, 1976-85

Created: 5/1/1986

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A Comparison of Soviet and US Defense

A Comparison of Soviet and US Defenseu)

This paper was prepared by! Ihe Office of Sovici Analysis

Commems and queries are welcome and may be

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BLANK PAGE

A Comparison of Soviel and LiS DefenseK5

Judgments

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5 the Soviet Union commuted substantiallylo improving, operating, und expanding us forces ihun didStales. The Sovieis procured mure weapons of almost every(banimes as many ICBMs. more than ihree limes asercent more tactical combal aircraft, and more lhan Iwiccsubmarines. The Untied Slates emphasized lhe modemiz.itionsysicms, all hough several new systems were introduced,

of thc larger size of the Soviet military establishment and higher levels of military production, the cumulative dollar value of Soviel defense activities over ihc pastears exceeded comparable US outlays by aboutercent. Over this same period, however, ihc disparity between ihc annual dollar costs of lhe two couniries. which6 favored ihc USSR in all major resource categories and missions, decreasedor thc first limehe dollar costs, of Soviet defense activities were not substantially larger lhan comparable US outlays isce figure) (

Investment

Thc narrowing of thc disparity rcsulicd from markedly different irends in thc two countries, particularly in procurement costs, which comprise most of investment:

US procurement in military programs more lhan doubled overeriod, growing an average1ear. Growih was particularly rapidhen mililary procurement climbed by more lhanear.

Soviet military procurement, afier dramatic increases in thend, leveled off

The costs of Soviet procurement overeriod remained alillion annually and exceeded comparable US outlays during seven of the lastears. By maintaining Ihcir weapons procurement al this level, ihc Sovieis were able io produce significantly more weapons than lhe United Slates. In contrast, thc Unilcd Slates emphasized ihc purchase of fewer weapons lhat individually were more capable and more cosily lhan Soviel equipment. Thc United Slates also devoted an increasing share of iis procurement outlays to improving both combat readiness and suslainability by increasing war reserve stockpiles of munitions and major spare pans, j |

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The slower growih in Sovici miliiary investment6 affected each of the three major military missions strategic, general purpose, and support. Prior io the, dollar investment in each mission grew rapidly as the Soviets both equipped andapidly expanding military establishment. Duringeriod, however, the manpower levels and equipment inventories of most Soviet military forces stabilized, and investment growth for each of the major missions siowed considerably. In the United States, investment in each mission declined sharplyrimarily because of the end of US involvement in Viclnam. In Iheeriod. US investment in each mission increased sharply. Despite these trends, however:

Soviet investment costs for strategic and support forces exceededUS investment outlays in each of the lastears.

IV

Ihc Sovieis maintained an edge in cumulative investment in general purpose forces, although US outlay* forpcrii-oced draimit-ic growth ihrouglmui ilie period and, alterere higher lhan ihc Soviel values, f I

Operating

The dollarovni operaiinc activitiesercent higher lhan US outlays loreriod.lmost iwo-ihirds of Soviel operatingnearlyercent

lire; vr.. l- ivee operation and tnjinteiiat.ee iO&Ml of weapons. however, wcie about S> percent larger -tun our cmuiijic for thc Soviets,ough ihe Soviets deploy larger numbers of weapons. Moreover, the gap has been widening since 1'ISO US OiSM expenditures have been giowing al ;wicc the ralestinuie ior lhe Sovici sosis and by l')X5 were Ml percent greater I-

I lie disparityedictsumberdifferences in US and Sovici force ilires aad practices.

Soviet niiliiary equipmenl. for ihe most pan, is less technologically sophisticated thanquipment and.o maintain.

During peacetime the Soviets operate Ihcir equipment a' lower 'ales lhan docsihe United Stalesr'kiil.iriv trueSouc' military tirerail. .vhichess Than halfle of

Afterthe Untied Slates increased the inlcnsay of its maintenance practices lo improve lhe combai readiness of -ts tones T

Research. Development. 1'esling. and Evaluation

Over ihcperiod, ihe dollar value of Soviet militaryctivities grew fairly steadily atear, and cumulativelyxceeded'inlays bv moreercent The disparity, was considerablyhehen Soviet fusts, were growing alale of US Outlaysowever. USse!eu;ed. growing alagc ofear.esult, lhe gOpdosed considerably, andollar costs were only aboutcrceni greater than US outlays, ij |

f.xleiided Comparisons

I he 'oregoingn.or, is itiiuled to LS and Soviel military programshe US view. .Jircelly contribute to imI tonaley include national security programs funded by the Department af Defense, defense-related nuclear programs funded by ihe Dcpjuincni of Fncrgy. Selective Seiviee icUvities. lhe defense-related ae"iviiiesor ihe Coast Ouafd. and ihe

S.C, *|

compamblc Sovici programs ft'c have alsu eumparcd ihe costs olumber ol other activitiesnhance national sceurii} or foreign polio interests. They include activities such as maintenance ol slnilcgic reserves and industrial surge capacity ihut contribute to mobilization and wartime preparedness,on;tl activities .such as economic and imliUirj aid that supiwi aglobal position, and costs rehnedom defenceensions ;md veterans' benefits*

Comparing ihe dollar value ol those salcgOnes lor IflgJ. the moM recent year lor whichhave reasonably complete data, shows that;

The LSSRuch more extensive preparedness program lhan the United Slates,ollar valuation of roughly lour times the comparable US outlays.

The dollar value of Soviet international activities was ;ippioximatel> two-thirds greater.

i osis related to nasi Soviet defense activities wcie onK slightly larger.

a

Outlook

Wc expect the high level of military procurement the Soviets have sustained over the pasl decade to continue over the ncM five years, albeit at relatively slow rates of growth. At such procurement levels, improvementsovici strategic and conventional forces will be substantial

Most of the weapons to be deployed during this tune period will be manufactured in existing plants and thus, in the near term, will impose no significant demand on the resources needed for General Secretaryindustrial modernization program. However, ihe demand lor new investment for defense plant and production equipment will almostrise in thendhen the Soviets will have lo begin tooling up for another generation of weapons

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-Mill, I

Contents

Paxr

Key

Force Ircndsand

WeaiKins

Siraicfitc

General Purpose

Comparisons of Investment

Procurcmenl ant) Construction

Investment by Major Miliiaiy

Strategic

General Purpose

Support I

Comparisons of Operating

Personnel

Operations and

Research. Development. Testing, and Evaluation

Manpower and

Cost8

Trends in Total Defense'<

Dollar Cosi

Wartime

(Enhancement of Global

PilSt Defense

Comparison of National Security

22

Appendixes

Tables

Dollar Cosl Comparisons

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1 his assessment compares US and Soviel defense activities over6sing both physical and value measures. Physical measures include data on lhe annual production and delivery af weapons and equipmenl lo mililary units. thc inventory of major weapon systems, and trends in military manpower. Such measures ore useful in portraying thc weapons mix and the relative sizes of the various components of the iwo opposing torees Ihey cannot, however, be used to produce an aggrcgaic measure of diverse kinds of aclivitics. How. for example,actical aircraft, and four infantry regiments be summed?

To aggregate such diverse activities, one needs to assign to each some weight that captures its relativeterms of military capability, resource costs, or some otherthen calculate the weighted sum. Because pricesseful way to combine incom men arable quantities and since the assessment of trends in defense activities is often related to economics, it has become common practice to develop aggregate measures based on thc costs of thc resources devoted to various defenseThese costs can be calculated in any currency, but dollars are the frame of reference of US policymakers and force planners because they can conceptualizeefcnse dollar" will buy. Dollar valuations of Soviet programs in conjunction with US defense program data capture differences in thc lechnieaf characteristics of military hardware, the number and mix of weapons procured, manpower strengths, and the Operating and training levels of the forces being compared. They can be useful, therefore, in portraying thc relative magnitudes of similar pro* grams, general trends in the relative resources devoted to defense activities, and shifts in resources among those activities,F

Dollar valuations, however, have thc following important limitations:

They do not measure actual Soviet defense spending, ihe impact of defense on the economy, or the Soviet perception of defense activities.

Thc Soviets do not spend dollars. Issues of defense burden are properly analyzed with estimates of ruble expenditures- Dollar costs measure what it would cost thc United States, at prevailing US prices and wages, to develop, deploy, andilitary force of the same size and with thc same weapons as lhat of thc USSR and to operate that force as thc Sovieis do.

ils of Soviet defence activities do mil reflect lite Soviethe distribution of the USSR's defense effort

Because the price structures in ilie iwo countries arc substantially diffeient. Soviet costs in rubles are distributed differently among the resource catceorics. For example. Soviet investment in rubles accounts for about half of total costs, but measured in dollars it accounts for only about one-fourth.

Dollar costs areeasure of the overall military capabilities of US and Soviet forces.

One of the most serious temptations in using dollar cost estimates is to interpret them in terms Ofcapabilities relative lo those of the United States, or changes in Soviet capabilities over lime. These estimates are not intended to and cannot support suchRather, they arc useful for measuring medium- to long-term trends in the yearly flow of resources allocated to the military. Because dollar costs measure only the defense goods and services producedingle year, they capturemall partountry's total military stockpile. Moreover, assessments of capability must take into account military doctrine and battle scenarios; the tactical proficiency, readiness, and morale of forces; the effectiveness of weapons; logistic factors;ost of other considerations. Dollar costs of defense activities do noteliable measure of these disparate factors.p

The purpose of valuing observed and estimated Soviet defense programs in dollar terms is to provide an appreciation of the physical size of the Soviet defense effort by showing ihe level of effort that would be required to reproduce those programs in the United States. Thus, estimates of the costs of individual items represent what we believe it wouldS rirm to manufacture them, using Soviet design and material specifications but US manufacturing practices and paying US prices. I 1

Finally, we do not address the question of whether the Soviets would choose to have the same military establishment if they had to pay dollar prices instead of ruble prices for their weapons and manpower.if the Soviets were to make their decisions on the basisollar price list, they wouldifferent mixture of weapons and manpower. In this paper, however, we arc concerned only with the value in dollars of the defense activities they actually engage

In addition to thc valuation of Soviet defense activities in dollars. LS military outlaws can be valued in rubles for comparison with Soviet ruble ixitlays Such an ctcrcisc rccog ni/cs ihc vjlidity of using cither currencyIhc common measureS-Soviet comparison. Ruble comparisons provide aseasure of lhe resources devoted to US and Soviet defense activities as dollar comparisons do The difference in results is ihc consequence of differences tn relative prices and (juantilies produced in thc two couniries. While an average could be taken of lhe two ratios produced (sucheometrichat ratio would be dilliculi to interpret. Q

Wc have developed ruble estimates of US defense activities for comparison with Soviet ruble outlays but have much less confidence in these than in out dollar cMim.ites Obviously.cannot jsk Soviel contractors estimate what il would cost to produce items of US equipment in thc

USSR.Q

A Comparison of Soviel and US DefenseIQ

The estimates of Soviet eotti presented in this paperderived nxing the building-block methodology (teche cost* of all Soviet defense activities in- developed b> identifying and listing Sovici forces aod iheir support Apparatuses, aadtir orders of bank, equipmentand new equipment purchase* To theseestimate* of physicaleollar price* | |

he bj tiding-block approach i* based on (he individual component* of the Soviet defense effort, we can estimate costs by resource categories operating; and research, development, testing, and evaluationnd apportion investment and operating costs among the strategic, general purpose, .nut supporthree-year study has calculated KDTftl: casts usingbuilding-blockthat focuses on resourceui wc arc not yet able to apportionosts by missionwe lack mission specific duta.Q

US data In ihis paper jr. ei pressed in terms of calendar year outlay* derived from the Five-Year Defense Pro&am (PYDPi issued bypartment of Defense tn5 and from ihe US budget Defense-related activities of the Department ofthe Coast Guard, and the Selective Service hare been added to improve the comparison with Soviel programs. The outlays arc eipresscd4 dollars so thai ircnds in cost estimates reflect real changes in military forces and activities and not the effects of inflation US order-of-bailie data were also derived fromDP. US production data were provided by the Department of

Force Trends and Comparisons

Kit ii re I

US and Soviet Manpower

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substantially more resource* to improving, operating, and expanding it* forces, which in many cases were aiready much larger than their US counterparts

Manpower

5 Soviet military manpower mm double lhat of the United Stales, numberingillion men Soviet manning les-cli base "sen every year since

ith tola) personnel cost* growing atear The Soviet* addeden over ihe period, wuh mosi of the increase (some

enl occurring in the land forces mission (see

n contrast, US manning levels declined

period65 was one of considerable force modernization in both the Soviet Union and the United Slates The Soviet Union, however, committed

I

US and Soviet Military5

Toll I

St raiijiciI1 menial

SiIwe defenic

Si.

Support tacci

US

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LOSS

2

Soviet Procurement uf Major VYc-afinn Systemshare of

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Armored pcnoiMCl ix'-eis

Taclixl cum Dm

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Miijoiin tan .ml)

'j* net jdd'.othi; (Willitn'c* MiJicjic control andi>iiki. Include* RDTiE and ttutc JctiiiiK'.

e

s Ihc Uniicd Stales found il incrcas-ingly difficuli In maintain its manpower levels with an all-volunteer force9 US manpower levels rose byen Most of thc increasehc tactical air and naval missions0 men!

Thc comparison of manpower levels in table Iseveral differences in Soviet and US missions and force structures:

Soviet strategic offensive manpower is about three times as large as that of ihe United Stales,because thc Sovietsarge peripheral strategic strike force to which the United States has no cqDivalcat Thc dispanly also reflect* tbe fact that thc Soviet intercontinental atlack force consistsarge force of liquid-propcllanl ballistic missiles, which require considerably more manpower lothan the solid-propeliani missiles that make up nearly the entire US force.

Sterel

potential war theaters in Europe ands! The United States hasmall force dedicated to ihis mission because of the relatively small threat posed by the Soviet heavy bomber force.

* Soviet manpower levels for general purpose forces arc twice as large as those of tbe United States. The Soviet Undhich are three lime* as large as the US counterpart, account for this difference. The disparity in land forces reflects Moscow'* decision lo maintain large forces oppositeoteniially homilc China in the East and NATO in thc West.

Weapons Acquisition

Over the pastean, the Soviets procured more weapons of almost every type than did the United State* more thanimes as many ICBMs. more

Sovietsarge force of men to strategic defenses because of thc threats posed by the US heavy bomber force and ihe USSR's proximity to

Tabic3

IIS and Soviet CumulativeUS and Soviet Strategic

of Major Weapon

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than three times as many tanks, nearlyercent more tactical combat aircraft, jnd more than twice as many submarines (seend tableThe United States emphasized the nsodcntiiation ofsystems, although several new sysiems wereMoreover, the I. nurd States purchased icch-fsolocically sophisticated weapons that individually were mote capable and more costly than similar Soviet equipment The United Slates also devoted an increasing share of it* procurement outlays iobolh combai readiness and sustainabilily byits war reserve stockpiles of munitions and spare naris.r^

Strategic H'atpont. Duringeriod, the Soviets outproduced the United Slates in nilof major strategic offensive and defensiveAt the same time, they continued to upgrade the capabilities of their fielded sysiems wiih theof improved tc mi luch as missile guidance components and aircraft avionics Over the entire period, tbe Sonet* more than tripled ihe number of nuclear weapons available for strategic ofTensivefrom6 tobey also continued longsunding efforts to improve their strategic defenses,arge and sophisticated defense against aircraft penetrating at medium and highc

-

; nun III ICBMi

HiiaMRBBl HI

ICBM. -unimj Hi|*wi

ctu SSBNt tM SftS T, -vC-*

label ind hit loniiul PMMNM ii>fitCM Si BW. IZoVaci Bcnfimin lianltm

Pi<KwriiKnl atomb crs.

rciiKoicm lieMil and impimcdB-S2 htivy

Procurement ot new cxmiiund

COneulircluili"!

rr

P.ivei mil I'-AH .in-borneii>

Tniiccici

l^ixuMvm o(llS-IH. and

SS IVi,il<in

ichm.

Irl-ijlutnoclJii!

imvrliimCBM.he SS-2S. <lei*)yoJ in bic

PfiKwreinem ol lli and TyphoonSSBNi .mdunSs andOs ibalrri MIR Vi

|ipiiblc

ircnttm al! MIR Veil SS -SI iai ermed mir-tjnitc talliuic mimlei 4nil jbaiiiixdmrn

.i> for ihe S'lviri An

Ptocuiemcn; d(OO in-

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* not)urface-to-oil olnilo. including ihe SAtiiih it eifi.itilc uii.aiitcr- ji al- altitudes

Table 4

LS and So>iei Procurement of Major General Purpose Weapon

nun

General I'urpow Weapons. Ihc Sonet Union boih expanded .indnearly .ill ol ns eenerjlct> over5 period Ltpa.ision andmd (orecs have Menificanl-

mpri

ofCO unKMI Atiiaim.i>niun>l-oftcli

Procunimrni tu

. -iichuW.

rnnrami al Two

d.onKD

aadnotarnam ol *S

MiMidX*

iera fwyih

Prw-urcmcmOtl oiiillcy niccn. lull "Ittiliwlf-propelled

-1 iactical

lk (or ibe Anrtt

fm.

Procurement oluvulcill, including three Nima/ elan ainrili ear-

r.en. ci(o' iiimiIc dun OV , tM 4)

fidcc)lnu^i

W )l

itMlui

uncirt.han Allen-clawconvened

10allict nibaianllcv

"Diliecret

iiri.i.li ind T-

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Pwckiw o>urlf tat 0"

jBJliy vehicle*

Pvocurfniiiil.ilflOhrlicu|Hi'i> nicuil)lili htiRupiiiin ihr

Prarwer"

r>ISJ. aadm ftril ar^etlnl

rum

Piccaierncai ul aboucli'culi.

ler* PrcoifiiMnl ofragfM. SUIT Hiuo. aad MIG bet ielhe tarty

PlOtB'cnVM *1 Mi a

face cmtibaiaMi m. hidingimitii. ng'iI?quipped

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red iubmii tanllMaanutrilaad IS dMtdanoed wth laerilw _

Procaicnvealandidif.fi.pnii

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cli;ineinc iacile.il snualions Similarly, ntodernination ol the lactical air forces has improved ihctr ability io provide elosc air support to ground tV-.arry out conveuioul strikes deep In ihe rear areas of combat /ones, and conduct jernt combat against other fight-

lii United Stales nIso cipandcd nod modcrni/ed its general purptnc Torces, altbougli il noiiglnfewer weapons than ihc Soviets (vec tablehe weapons procured by the United Stales, however, were considerably more techtoloiically advanced and therefore more capable and cosily than the Soviet equipment In addition, thc United Sines accelerated il* procurement ol ammunilron.issiles, and major spare parts in order io improve both the combai

readineM and thc sustainabilityforces

( ompjrmim of Imotmcnt Trends

Invcsimcii activities can be divided into two caiegories:

Procurement Ihc acquisition of wedpon systems

and support equipment, including major spare pa Construction ihe building of military facilities

Procurement and Construction Costs foreriod, thc estimated cumulative dollar value of Soviet military investment was more lhanercent greater than US investment outlays (seche dollar value of Soviel military procurement exceeded comparable US procurement by more thanercent while the value of Soviet military construction was more than twoalf times LS construction outlays Tbe investmenthowever, was considerably higher at theof ihc periodihc cost of Soviet investment

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Figure 3

US and Sovici Military

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was more than twice that of the Un'ted States By the'eriod. US lesettincni outlay were "lightlv larger [tun the dollar value of cuninaraNc Sovici imcstmenirocurement outlays ciiccd-cd ihe estimated dollar value ot comparable Soviet activities by IS percent

The estimated dollar cost of Soviet investment grew an average of leu than one-halfercent per year duringersod Inveragegrowth55 wasearresents our estimates for those year*e deceleration resulted from slowei grnwih in the dollar value of Soviet weapons procurcntcni, which6 had been increasing alear.oviet procurement stabiliied at the high level ofillion annually and exceeded comparable US outlay* during seven of theears. Soviet military construction gre* byerceni per year over the period as the Soviets continued to expand thor military forces, but this category makes up only abouiercent of Soviet investment

US investment in military programs more6ncreasing an mveiagc o( aboutear Growih was pariieularly rapidhen miliiary investment wasbyear. The rapid rise in US investment reflects an acrosvthe-board modern-iution of niliury forces lhal emphasized theo( trxhrsologKalls sophisticated weapon* fi alsoecision in theo improve the combai readiness and tu si ai natality of US forces by building up war reserve slocks of ammunition and major spare parts.

Soviet procurement of each of the four mayorof weapon* missiles naval ships andaircraft, andhisarked departure fromeriod (seehen each of these procurement categories increased rapidly:

Aircraft procurement, the largest component of military procurement, declined during the65 period after havingajor source of procurement growth5

Figure 4

Averaiu- Annual Growth tit ihe Dollar Cost* of Soviet Procurement liy Major WeaponsK5

' I'r. -'i il; facthe Navy tmsearft. alter having grown byercent duringeriod.

Missile procurement declined byercentearfi5 after having Brown by-moreear.

Procurement of land arms -primarily tanks,vehicles, and artillery has grown Ihe fastest of the four categories6 but considerably less lhanercent per year average observed5[

A number of factors contributed to the leveling nil" of Sovici procurement Since the, forthe Soviets have had difficulties with theand manufactuie of several advanced weapon systems that incorporate Sovici statc-of-thc-ariTechnical problems have either significantly delayed Ihe start of scries produciion or have resulted in rales of produciion slower lhan we have seen for similar weapon systems in the past, and in some cases much slower than we believe the Soviets intended. Major programs lhat we have been able io idcniify us having encountered significant problems include theolid-propellanl ICBM. the SA-IO strategic surface-to-air missilend the two newulcrum and thelanker. The poor overall performance of the Sovici economy during the period, particularly for industry, also contributed to some extent to recent procurement trends. In some instances, shortfalls in the produciion of key industrial commodities resulted in bottlenecks and shortages lhat disrupted specific weapon programs. |

Yet ihe leveling off in procurement has lasted loo long and has affected too many categories of weapons lo be solely the result of unanticipated economic orproblems.year period. Ihe leadership of the Soviet Union could have used its control of industrial priorities toigher rate of growth or military procurement. It is more likely lhat Soviet leaders, facedlugeisti economy and perhaps

6

ln 5

nd Sosid ImiMim-nl In Military

Hi ImnflUUatu

IA

USSK

the kind* of icchnoJogica! indproblems mentioned above, made decision* in thehai allowed military procurement lo continue at its high level, but not to increase much. Such decisions may have been part of an effort to revitalize the economy Ihc failure of Soviet effoils to increase economic growth duringhrough the more productive use of resources and the

difficulty Ihc defense industries were having with the production of advanced weapons wimld pave argued foriversion of resources.

Investment by Major Military Mission The slower growth in Soviet military investment6 was apparent in each of the three major militarytrategic, general purpose, and support (see figure Sioviet

5mm

Scafoi

each of these missions had grown rapidly because of ihe needmli eyuip and4 rapidly expanding military establishment (see Jlipendisihef most military forces stabilized, and investment growth in eaeh ol* the major mission* stoweden so. insxst-ment remained atevels a* the USSR conunued to modernize its weapons irtvcntoockjuih the addition of newer, more capable systems.

US invcsiilicnl in each major military missiona different pattern, with costs declining through thend then increasing sharplyhe decline in US invesimcnt in generaland suppori forces resulted primarily from the end of US military involvement inet nam conflict The decline in US investment in strategic programs reflected (he completion of ibe Polaris SSBN andCBM program* Since thehe United Slates has invested heavily in each mission in an effort to both modernize its forces and rrhuild its stockpiles of war reserve materials.

A

US and Sovki liiu-slinenl in SlraleRtc Porcw.

Billion US$(IWM ilollmsi

us

USSK

ni. .1

these (rends, Soviet investment cosis for strntciic and support forces etvecoed comparable US investment outlays in eaeh of the lastears. US investmeni in general purpose forces began to exceed estimated Soviel consui the cumulative value of Sovici investment in these foercent higher for tbe entire period I

Strategic form. This mission include* all nuclear weapons and the forces assigned to intercontinental attack, strategic defense, and strategic control and surveillance. It also includes Soviet forces forattack, for which there arc no US counterparts

Over the period, the estimated dollar value of Sovietin strategic offensive and defensive forces (excluding RDT4E) was0 billion, cicccd-ing corresponding US outlaysO percent. Soviel investment costs for this mission declined slightly over the period while US strategic investment outlay* more than doubled, increasing aboutear.esult, (he investment gap wa* considerably smaller at the end of the period than a( Ihe beginning, when

c llilibi

III

a? s* a

.millj .mil ilinlr..

lllt.l* .f.

L

Soviet costs foi siraicgK forces were aboul four time' compilable US5 ihc Soviet coMs wereercent greater lhan those of ihc United Siaie? (1

The disparityinvest met" casts reflects thc steady pace of Soviel moderm/aiion of bolh its strategic offensive and defensive forces6S Isce figuren contrast, mosi of the growth in US investment in strategic progiams occurred0 and was concentrated almosi exclusively in programs for intercontinental attack lhe disparity also reflects Soviel modernization of that portion of strategic offensive forces intended for attacking largeit along tbe periphery of the Soviet Union If investment in those peripheral attack forces *ere excluded, lhe dollai value of cumulative Soviet investment would beercent larger than thai of thc United Stulct.i

Overeriod, lhe cost of Soviet ICBMs. SI.HMs.

and heavy bombers exceeded comparable USby overercent Soviet investment decluec over most of ihe periodumber of moderniration programs lhat had been started prior6 neared completion. The Untied Stales, on the other hand, initiated several programs that resulted in arise in investment outlay*esult. Ihc disparity was reversed, andS investment outlay* exceeded the dollar value of Soviet investment by aboulercent:

The decline in Soviet costs, which averagedear, reflects the completion of thendCBM modernization programslowdown in SSBN deliveries from seven boats6 to fewer than two boat* per year in thend

US outlays averaged growih of aboutear. Growth during the first hatf of the period, lessercent per year, was largely due to lhe Trident SLBM and air-launched cruiseost* grew aboutear because ofB bomber and Peacckccpei ICBM programs.^

Overeriod, we tsiimaie more thanc'ccni ol' thc cumulative dollar cost ol Soviet strategic investment lor prtifhrrol aiiattoc arc lorce*believe arc priniaiily dedicated to strategic targets along :lw periphery of thc Soviel Union, primarily in Western fcuropc ami China. They include tbentcrmcdi-atc-rangc ballistic missile (IRUMi. ihc Backfirebomber, and aboulercent of the Fencer light bomber force. The United States has on direct courier run in termsiwrctc mission, although certain US missiles, tactical aircraft, and submarine* could perform similar funcltons

Over6 SS period, thc cumulative dollar value of Soviet investment in thc moderni/atwn at strategic dtjease fortes interceptor aircraft, strategic SAMs. ballistic missile defenses, and warning and controlnearly SS5 billion. This total represents moreuarter of the estimated cumulative dollar value of Soviet strategic investment InUS investment outlays Tor siraicgic defenses over the same peiiod were roughly SI billion, orercent of total strategic investment i

Ihc disparity in levels of investment activity reflects iigmncani difference* in the two couniricVto strategic weapons. Since the, US strategic doctiinc has emphasized thc use of offensive ibices todeler tin enemy attack rather than ihc deployment of defensive forces aimed at limiting thc damage from an enemy strike Moreover, afterin2 anliballutic missile (AflMl treaty not ioationwide defease against the relatively large Soviet ICBM and SLBMhc United States decided not lo commit Ihe resources necessary to modernizeair defenses againsl thc somewhat limited Soviet heavy bomber threat In contrast. Soviet military doctrine hislork-ally ha* favored more balance between offensive and defensivel-lbough (be Soviet* also agreed not to deploy aABM system, they have continued to commit substantial resources to the nradcrnization of their defenses againsl bombers. This emphasis wasby thc threats posed by the US strategic

Figure 7

US anil Soviet imcMiiiini in liiiuru)

itiiiH.)

bomber forceorce much larger than itsi: throat from potentiallyaircraft in ihe European and Pacific ihcalcrs and in China. In addition, the Soviet* have continued toeir ABM defenses around Moscow and, while this effort remains within treaty limits, tt put* ihcmosition toore comprehensive systemelatively shori period of timer

Purpose Forces. This mission includes all land, tactical air. general purpose naval, and mobility (airlift and scalift) forces

investment

Over Ihe period, ihe cumulative dollar value of Sovici investment in general purpose forces (excluding RDT&li) was1 percent more than comparable US Outlays The margin was considerably higherhen our estimate of Soviet investment was nearly twice ihe US level. Over the nextears, however, Soviet investment costs grewteady, but slow, pace of less than one-halfear as the USSR continued to modernize its forces and to expand Ihcm along both the Sino-Soviet border and in the Warsaw Pact region. Meanwhile. US investment outlays nearly tripled, growing by more thanercent areflection of growth in all categories of generalforces, particularly in land and tactical air forces (sechus, US investment in general purpose forces2 began to surpass our estimates for the USSRrowing margin and5 were abouterceni greater lhan the dollar value of Soviet

Z

eriod, the cumulative dollar value of Soviet investment in landfor Ground Forces combat divisions, ground-attackand certain elements of the Border Guards-was nearly twice the US investmeni outlays for land forces. Tbe Soviet costs were nearly five limes US outlayshe margin declined each year, and5 they were onlyercent greater than US investment f

t

"

Sillies dive divisions andf the equipment holdings unions Thus.* the moic0 percentnd moic thanerceni tan it had at the start of the me. the Soviets replaced 'argc

The substantial disparti* ir cumulative investment costs reflects cunimuing Soviet effort* to both cipund aod modee land forces thatblrc^ds significantly larger than those of The USSR addedctive dim corps and increased the size of th in each of iis combaiSSR hadercent more lenk armored troop carriers, and mori more artillery pieces period. Al the same

blocks of older equipment with newer, more capable versions.or example, more lhanercent of the Soviet lank force consisted of0 models compared withhision wa* undertakenelatively steady pace anil, when measured in dollars, required average growth in investment costs of morej

US investment outlays for land forces climbed dia-malically throughout the period, averaging growth ol aboutearS outlays for land forces were nearly five times as high as at the sun of the period. However, the United States did notincrease ihe size of its land forces or produce as much new equipment as the USSR. The number of tanks acquired over ihc period, for example, was only about one-third of our estimate of total SovietInstead, the United States procurednumbers ofas the M1 lank, the M2 infantry fighting vehicle, and thettackwere noi only much moicand therefore more capable than their Soviet counterparts,o considerably more costly. The United States alsooncerted effort in theo improve both the combai readiness and

sustainability of its land forces by accelerating its.

purchases of ammunition and major spare parts.

Both coo nines added sopbistKaied new fighterto the inventories of their tactical air forces (which include land- and sea based fixed-wing aircraft lhat arc usedactical combat role, as well as multipurpose aircraft carriers) duringeriod US cumulative investment costs were aboulerceni greater than estimated Soviet investment, even though the Soviet* procured nearlyeitenl

more aircraft over the permd Moreover, the disparity widened throughout the period,5 USoutlays for us ucik.iI aircraft were twoalf limes our cslimalc for the Soviets ^

In pari, the higher US figures reltrxi the cost* associated with the construction of three Nimil?-dasshese accounted 'or abouterceni of US investment costs over the period Tbey also refleci US cflons lo increase its stockpiles of ammunition and major sparerimarily, however, the disparity in investment costs resulted from the US purchase of aircraft, such at6hat are more sophisticated and conswlcraply more expensive than their Soviet

oviel investment in tactical aitfollowed an erratic but downward Irend asof the Flogger and Fish bed program*In the. ihe Soviet*produciion of two nrsv fighters, the Flankerwhich we believe have capabilitiesthose of curreni US fighters Productionaircraft, however, has proceeded at arate compared with rusi aircraft programs.believe produciion has been below trieSovieti intended, probably because ofdifficulties Partly because of these factors,Ihe dollar cosi of Soviet investment inwas aboutercent less (ban it had beensurl of ihe period

Overeriod, the estimated cumulative dollarof Soviet investment in general purpose naval forces -including major and minor surface combalanu. aiiack submarines, antisubmarineaircraft and earners, anvpfeibvous warfare ships, and naval auxiliaries direcilv supporting ihe fleet-was aboutercent larger lhan comparable US investment outlays. The dilfcrcncc in costs reflects the considerable modernization accomplished by iheThe number of Soviet mayor surface combatant* tirtoreons displacement) increased byver ihe period, and the number of nuclear-powered submarines

S.dV.-i

7

differencenvestmentreatest during ihe first hali of ihc period,ihc dollar value of annual Soviet investment was aboutercentthan US outlays Duting the latter half of Ihc period, ihc disparity narrowed considerably asin the US Navy grew at an annual rate ofear This spending growih reflected an acceleration in the pace of ship and submarinein order to achieve thc projected goalhip Navy by theoviel navalcontinued at about the same pace as during the first half of thc periodesult, US outlays beganxceed our estimates for the USSR3 and5 were nearlyercent higher |

Over the entire period, cumulative Soviet investment in mobility forces (airlift and scnlilt activities .ind mililary port operations) measured in dollars WM about onealf tunes that of Ihe United Stales Thc Soviel costs reflect Ihe modernization of the transport aircraft fleet with the newandid medium-range jet. Most US transport aircraft had been procurednd investment wastoward the modiricaiiori of existing aircraft. primarilyA jet transports Q

Support Forces. Ihe uippon mission includes those activities lhat arc required to support US and Soviet combat forces. Because of thc diverse nature ol each country's support establishment, dollar cosisarticularly useful way to compare these activities in tbe aggregate. Some of the major elements of this mission are

The operation and maintenance of fixed military facilities.

Training conducied ai other lhan ihe unit level, primarily recruit/conscript, officer, and skills training.

Administrative activities, includingocated command personnel, recruitment,and personnel management services, and the administrative costs of US participation in NATO and the USSR's adminisiration of thePact Alliance

Figure 8

LS and Soviel Mililary Oprraliim

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Many oilier suppori services, such as soielliichospitals and medical clinics, data-processing suppon, security, invcsiiganvc and judi-

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command posts.

In addition, the defense-related activities of ihc US Coasi Guard and the administration of the Sovici KGB arc included.| |

Over the decadehole, estimated Sovietin support forces was auoulerceni greater lhan comparable US outlays. The Soviet margin reflects, in large part, ihc cost ofuch larger miliiary establishment.

Comparisons of Operating Costs

Operating activities are divided into iwo categories:

goods and services provided active and reserve military personnel, including pay. food, clothing, travel, and other allowances.

O&M- the operation and maintenance of miliiary equiprnem and facilities and the services provided by civilian personnel. Q

The dollar value of Soviet operating aciiviiies was aboutercent higher than US outlays foreriod The costs for both couniries increased over the period, primarily because of the maintenance required by increasingly more complex weapons or all types (seehe trends in US and Soviet operating costs roughly paralleled one another, wiih each increasing a(ear.owever, growth in US operating expendiiures accelerated to an average rale ofear. For the same period, our estimates of Soviet dollar operating costs showed continued steady growth at about the average rate of Ihe previous five-year period.esult,5 Soviel and US operating costs were nearly equal.

Personnel Costs

For the Soviet Union, miliiary personnel costsfor almost two-thirds of the estimated dollar operating costs foreriod (sechey were more lhanerceni greater than US

Estimating Soviet Personnel Com in Dollars

The dollar value of Soviet military personnel com* is derived In- applying. US military pay rateshe relatively large Soviet force US pay rates are applied to the Job Structure of the Soviet military and not to the rank structure became the Soviets often require officers to perform functions that in the United States would be assigned to enlisted personnel. This method, therefore, is consistent whh what the dollar valuescost of reproducing Soviet military activities in ihe United States.]

Critics argue lhat ihis approach makes the disparity between the iwo defease establishments look greater than it is. because ihe Soviet military consists of numerous conscripts thai are poorly paid, even when compared to the average ruble wage in the USSR If. howver. the dollar value methodology is to provide comparisons that have validity and precision. US cost factors must be applied equally to all Sovietno pan of the whole can be withdrawn for calculationeparate set of rules. Moreover, the dollar valuation of Soviet military activities does noi and/ intended to address the question of whether the Soviets would choose to havearge military establishment if ihey had to pay dollar rices instead of ruble prices for their manpower

prices tn

i :

Outlays for military personnel, which account for less than hair of US operating expendiiures The USSR has more than twice as many personnel,igher percentage of ihcm are at the lower end of the pay scale,

Over the entire period, Ihc growih in US personnel costs averaged about ihe same as in our estimates of Soviel cosis.owever, annual US costs have been increasing more than (wtce as fasl as Soviet personnel cosis. In part, the acceleration in UScosts9 reflects increases in manpower levels. Primarily, however, ii reflects increases in ihe

raie of rccnlitinwniS servicemenIhc number of rccRlistmcnt* increased, so did ihe number of othCcrs and cnlutcd men ai ihe hi|hci end of ihe pay| |

Operations and Mainlcnanee

o, ihc dolUif operating andthe Soviet armed forces (including civiliancosts) has been increasingairly steady rule of moreear This trendesult of Ihe continued growth in the weapons inventories of Soviet general purpose forces (see figurel also reflects the mai(iterance and support required by increasingly complei tactical weapons, j j

Operation and maintenance costs for Soviet strategic forces did not grow over the period, despite the considerable force modernization that lias taken placen part, this reflects Ihe fact that the inventories of most strategic weapons remainedstable over ihe period. Moreover, while ihe newer systems are more technologically vophislicatcd than the ones tbey replaced, in many cases they are dm as hard to operate and maintain For example, the SSolid propdlant IRBM t* considerably easier io operate and maintain lhan the older, liquid-fueledndissiles. Ihc chief reason for the lack of growthosts, however, stemseorganization of Ihe Soviet Air Forces thai occurred during the. This reorganization changed the primary mission ofircraft from what had been strategic air defenseactical one This required an accounting change, as theosts associated with these aircraft were shifted from the strategic lo the general purpose forces, and offset the increases in the OAM costs for other strategicforces

The costs of operating and maintaining the Soviel general purpose forces grew steadily over Ihe periodear. The costs of each of the force components increased as inventories were expanded and equipment quality improved'

The rise in ihe dollar value of Soviet landthe result of growih in the inventories of most major land arms, particularly tanks and ai mans] vehicles Moreover, the quality of the forces

coniinuud io improve42 Links, mudcl IIMl's. and mil.iriillcrv accounted for increasing shares ol the Soviet intcnioticv

Iheosts of Soviet lact<al air forces *eni up over the first half ol the period asoggernccr aircraft wereand the total number of tactical aircraft increased During the lalicr half of ihe period. OAM costs slaved fairly level as those programs ncarcd completion, fourth-generation Flankers and Fulcrum* began to be deployed, bulelatively slow pace.

The OAM costs of Soviet general purpose naval forces increased fairly steadily over the period wub the expansion in ihc inventory of ma tor surface comtviuRi* and general purpose submarines The higher OAM com* also reflect the growing sophisti-calion of the forces, the newer *tnp* and boat* arc generally fasiei lhan the ones they replace and incorporate more advanced weapon* and electronic |

The dollar value of Soviet OAM of support forces increased an average ofear In pari, the annual cosi increases reflect the additional requirement or supporting an expanding SovietestablishmentAM cost*sharply as Soviet military space program* began to playmuch larger support role, particularly in the areas of communications and intelligence collection

tzn

The United Stales dcvoics considerably moreto ihe operation and maintenance of its forces lhan does the USSR. We estimate that ineriod. US outlays for OAM actmiic* werehird higher lhan the dollar value of comparable Soviet set Kitough ihc weapon* inventories of most US force components were smaller than their Soviet counieiparts Moreover,S OAM expenditure* had increased by more thanercent over6 levels while our estimalc of the dollar cost of Soviel OAM activities had risen only about

he disporil* in eosi level* rc*ull* printir-it* !hag her US opctjiinfespecially furforce* and aitcrallell as ibe morecomplex nature of US equipment, which make* maintenance mure diflicull and cosily. In addition,he United States hascicimined effort to upgrade ihc combat icadincss and sutlainabiliiy offorces by undertaking moree nance of its military equipment,for us uciical combai aircraft

Growih in US operation and maintenanceaffected each of the major missions.

OAM cKpcndiluics (oi strategic programsan average ofear Most of the growth reflects increases in the cosi of maintaining ihe2 heavy bomber force

" US OAM outlays for general purpose forces rose by moreear, mainly reflecting increases in the weapon inventories, of each of ihc major force components It also reflects the growing complexity of US force* as weapons like the MI lank. I fighter-bomber, and Aegis-class cruiser make up aa increasing *hare of ihe inventory

OAM expenditure* for suppon forces,for about three-fourths of toial OAM outlays, grew byear. The increased outlays resulted primarily from increases in the pay and benefit* of civilian personnel who operate bases ande* establishment* aod *erve incapacities (j

Research, Development. Testing, aad Evaluation Activities

Duringeriod the Soviets continued their longstanding commitmentarge and growing military RDTAE establishment Over the decade weew or signficantly modified Soviet weapon, aerospace, and military supporte project that at leastew sysiems or major modifications will be ready for seriesby the, on ihc basis of ourofhai are currently in flight-testing and

development Moreover,oviet resources commuted to the development and acquisition of key advanced technologies -including microc Ice ironies and advanced nianafaciuiiiigto have grown even faster lhan Ihc resource* commuted lo ihc development of individual weapons I

Re*ourccs commuted lo USrew rapidly beginning in the* This growih reflected

A vigorous research program ihc StrategicInitiative- to as*cts ihc potential for an eflec-livc defense agamsl strategic ballistic missiles

Effortsmprove strategic nuclear forces,enhancements to ihc command, control, and communications systems that support strategic forces; development of the Peacekeeper ICBM andB bomber, and research onsmall ICBM. the Advanced Technology Bomber, an anlisatellilc system, and theI.RM for the Trident submarine.

In the conventional area, development of precision guided munitionsonventional initialise*both of which rely on mkroclecironic* )

Manpower and Floorspacc

We estimate thai the rtoorspacc devoted io Sovici military RDTAE65 increased al an average rale oferceni per yearooispaee dedicated to military RDTAE programs totaled more lhanillion square meters, and (he Soviets employedillion people to support Iheir miliiary RDTAE activities. Toial manpower increased over the period at an average rate ofear, somewhat faster than duringeriod. | |

Additional floor space *tudic* show ihai growih in the allocation of military RDTAE resources ha* been greatest in newer technological areas, such a* advanced electronic sysiems and lasers. The

Resource Implumtions of Soviet Responses to SDI

Soviet IM> has long expended ngni/icant rr source* on Ihe Strategic defenve mission, including development of ballistic missile defense and anit-satrllite systems, as well as an Intensive national an defense network. Existing militarv rnearch program*olid base lor exploration ond developmentariety of advanced technologies that the Soviet* will need to support efforts to either counter or emulate the US Strategy Defense Initiative SPI Some of these programs. howe>rr are In the early stages and are essentiallt intended to demonstrate technology feasibility To incorporate emerginginto viable system designs, the Soviets must first overcome technological challenges in such areas as advanced microelectronics, highspeed computers, communications hardware and software, signaland electro-optical systems ( ]

SlrKt the United States announced Us SDI programhe Soviets probably have taken some steps to refocus existing research efforts and to allocate resources for new research initiatives to betterkey SDI technology thrusts and lo examine any potential counlermeasurei existing programs may

We believe, however, thai thel watt until the when lhe US architecture is more clearly defined andikely impact on USand force posture can be assessed with greaterdeciding precisely how so respond. To be effective. Soviet countermeasures must be developed againsl specific US operational

DeiTlop andariety ul active and passive measures to enable strategic weaponselter penmate their targets

Develop and deploy operational capabilities toattack space- or ground based elements oj the US strategic defense system

' Develop andationwide, ground based halliuic mtsstlt defense system

ihe SDI approach ond develop their own integrated space-and ground-based strategicwtiem j |

Ncm of these oplions are likely to require significant increases in resources in lhe research phase, which normally lasts for several years Bui sharplypnnluction of txisling strategic systems or moving new strategic programs incorporating advancedinto advanced engineering development,and production wouldubstantialesources.

t ven though relatively small in absolute terms.research and development efforts tn response to SDI could Impair much needed progress in other areas Ihe imitation of mafor new programs in the next several years would almost certainly conflict with, or even preempt, resource allocations for other profected priority military programs, such as smart tactical weapons, as well as conflicting with General Secretary Gorbachevs industrialTradeoffs with the economyhole would be particularly severe in ihe allocation of scarce, high-quality resources, such as microelectronics, computers, and skilled personnel j j

Soviets might choose la

Expand thef their offensive nuclear forces to saturate US defenses

S and

Methodology for Estimating the Com of Sonet RDT&E

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block methodology has her"oviet vpendi-lies maximum use of availabledata The methodages hie of all the Sowr facilities ng involvedsing the data collected onmmatr the aggregate commitment of floor space and manpower to themilitary RltTAE effort. These estimates arc then usedall-source data on resource costs to calculate total expenditures lor resource inputs such as the wage Ml; purchases af materials and equipmentfor trail, training, and other operating COUS: capital repair, and new construction The sum of the inputs in these categories represents our estimate of total Soviet militaryxpenditures H'eit unlikely that this estimaterror by more lhanr }Q

Sen

The estimate is first calculated in rubles. The ruble estimate is converted to dollars by using an average dollar-ruble ratio for military procurement to reflect

opment resources inountries.

trend toward developing weapon systems thai incorpo-ralc higher levels of technology is apparentlyincreasing support from the rtondefense segment of the Sovietsublrshmem We estimate that, together, ihc Academies of Science, the nonde-fense industrial ministries, and the higher educational institutes now account for about one-half of all the manpower supponing militaryctivities

Comparisons

Overeriod, the dollar value of Soviet militaryctivities grew steadily atear and exceeded comparable US outlays

by mare thanercent. (The Soviet estimate is basedew methodology; seehe disparity was considerably larger during'6-HO time penod when Soviet costs were growing at almost twice the rate of LS outlays (secowever. US RDTAH expendiiurcs have accelerated. Increasing an average of more thanear.esult, ihc RDT&Fdollar cost gap closed considerably, and5 Soviet costs were about I5 percent greater than US outlays. ^

11

US and Soviel Defense

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In lolalosts

Because of the larger size of thc Soviet military and thc higher levels of military production, thc estimated cumulative dollar cost of Soviet defense activities exceeded comparable US defease oatlays by aboutercent. The margin narrowedtbe period (see.6 the costs wereercent higher, but5 they werehe same as US defense ouilays l| |

Growth in the dollar cost of Soviet defense activitiesear over the entire period. Mililary investment was fairly level, accounting for thc slow pace of total growth compared with the previous decade Thereafter, RDTAC was thesource of growth, although operating costs also increased somewhat due io the steady pace of Sonet modernization In mission aggregations Icxcludinghe costs for general purpose forces and support activities showed some growth over thc period while thc costs of strategic programs declined.

In contrast, US defense outlays at ihc beginning of the nenod were rising at an average rate ofear, and in thehis growih acceleratedate ofear. The rapid growih0 reflected largeililarymore than doubled over thewell as moderate growth in operating costs Substantial growth occurred in each of tbe major missions US spending on strategic and general purpose forces doubled over the period, support costs grewore modesi rale. |"

Src in

7

lM.rnI.il Dollar CoM Cumtiailuin*

Ihc baseline ilcion of defense used inhis paper is ihc one commonly used in (lie Lnjied Stale* Il includes cur rem activities of the Departmentew closely related activities of other govctnmcnl agencies (secomplete detinitionl This section examines the dollar costsider set of activities that support national securityroad sense but are only loosely related loconcepts of defenseescribes these activitiese have estimated these costsiagle year.most recent year forwe have reasonably complete information (sec table

The additional activities are arranged into three functionally related sets Thc first set includesthat bolster mobilization or wartimeThc second sel includes activities thatation's global position. It includes thc costs of thc foreign policy establishment and of such international activities as military ,md economic aid The final sel includes the continuing cost of past, national security activities, such as mililary pensions and veterans* benefits These activities arc not usually included in defense cost comparisons because they do not directly contribute to national war-lighting potential.

Wartime Preparedness

The Soviet Unionuch more extensiveprogram lhan the United States, and its dollar valuation3 was roughly four times higher than comparable US outlays

efease activities are much more extensive in (he USSR than in thc United States and includeull-time military and civilianWast shelters, and military civil defense installations

We believe the Soviets hold reserves of industrial materials at their factories sufficient to support mililary produciion for four toeeks. InUS industry sets Its own inventory level. These inventories fluctuate widely wiih economic trends and are not driven by defense policy

additionaterial reserves, the USSR builds industrial surge capacity into its iiueliine-building scclo" to permit increases in military produciion,ar. Thc United Siaies docs not have an extensive program lo set aside excess capacity. Although il exists in varying degrees in defense industries, it is also largely dictated by economic trends rather lhan defense policy. Q

Enhancement of Global Position Soviet international activities3 wereiwo-ihirds greater lhan those of thc United States

The largest costs for both countries were incurred for economic and military aid Almost -is percent of Soviet economic aid was in Ihc form of price subsidies in Iradc with other Communist countries. The Soviel trade deficit wiih Eastern Europeanotherercent. US economic assistance was smaller because thc United Stales had no provisions for subsidizing its trade.

- Soviel costs for conducting foreign affairs were higher than US costs because Moscow has about twice as many diplomats. |j j

Past Defense Activities

The dollar valuation of past Soviet defense activities was only slightly higher lhan US outlays:

Thc cosis of Soviet vcierans' benefils wereless than US costs. Stricter Soviet eligibility rules and higher mortality rates limit lhe number of beneficiariesittle more lhan one-third the US level.

Soviet mililary pension cosis, on ihc other hand, were much larger than US costs. Although the Soviets have fewer career enlisted men than the United States. Ihey have more retired olTicers.1

Comparison of National Security Costs The dollar value of Soviet national security activities3 exceeded comparable US costs, no matter what collection of activities is selected (sec.

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The USSR's margin ranged fromercent (for the traditional definition of defense) loercentplus lite first two categoriesnder ihe broadest definition (defense plus all three of ihe other national securityoviet activitiesthose of the United Stales byillion. Or by aboulercent. Ij |

In the near term, the Soviet defense establfshment is well positioned to acconimodaie these demandsof mayor ir.scttmetin made in defense industrial facilities since theonsequence, most Soviet weapons expected to be delivered to the Soviet forces0 will be manufactured in plants already built and operating. Ft* these reasons, we expect the high levels of military procurement the Soviets have sustained over the nasi decade tocontin-ue. albeit at relatively slow rates of giowih. | |

Outlook

Soviet General Secretary Gorbachev has firmlyindustrial modernizationop priority, and bis pitns for refurbishing the country's industrial base imply increased demands for many of the resources involved in ihc production of weapons | |

roduction of mayorsystems with representative levels of production of the same sysiems that aic feasible ovct the next live years if procurement remains at lis current level The specific mix of weapons may be somewhat different, but, because of the sunk costs and the momentum of ongoing proerams. the Soviets are unlikely to make major adiustmenis to key prog rami Therefore, we believe these figures reflect ihc general level ofthai will occur during0 period Ate*d. improvemenii to Soviet strategic and cccvemicoal forces will be substantial | |

crel

Over the longer icrm. competition betweent"ii'! force model vjitotihkclv u> buiki Theew investment for defense plant and pfidveiion ojjipnieni will almost ccrtaialy rise in ihcndhen ihc Soviets will have lo begin looting up for ihe nest generation of weapons. New weapon systems will require advanced microelectronics design, fabrication, and testing capabilities and. consequently, will also require new produciion machinery. Military pressures for thc same resources needed for industrialwill intensify, particularly if tensions in theoviet relationship heighten and thc Soviets think they have lo inmate additional, costly weapon pro-suchpace-based ballistic missile defense.

grams si

On the other hand, such pressures could be mitigated if the United States and the USSRomprehensive arms control agreement that called for suable reductions in strategic forces and prevented or delayed deploymentS SOI Reductions in deployed forces -ould enable the Soviets to save material and labor, and even greater savings would accrue if the agreement allowed the Soviets to forgo or postpone thc investment in plant and equipmenl for production of new weapon systemsf"

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sacra

ethodology

The following US activities and their Sovietarc included tn Ihc baseline comparisons in this report:

National security programs funded by ihcof Defense.

Defense-rc la led nuclear programs funded by thc Department of Energy.

Selective Service activities.

The defense-related activiiies of the Coast

Thc following are excluded from thc comparisons:

All costs of mililary retirement and veterans1which reflect payment for past rather than current military activities.

Soviet space activities thai in the tinted States would be funded by the National Aeronautics and Space Administration (NASA)

Military assistance (except for thc pay andnf uniformed personnel) 3nd foreign military

N"

defense programs. 1

Methodology

We develop the dollar cosis of all Soviet defense activities by identifying and listing Soviet forces and their support organizations. Our modelescription ofistinct defenseexample, individual classes of surface Ships: Ground forces divisions, divided into categories on Ihc basis of lype and readiness level: and air regiments- categorized by aircraft type for eachIt also contains Our latcsl estimates of the Order of battle, manning levels, equipment inventories, and new equipment purchases of each component.

To ihcse detailed estimates of physical resouiccs, we apply appropriate US pricesge rates. This procedure is complex, but in general wc do the

following:

For procurement, wc estimate what il would cost to build ihc Soviet weapons and equipment in the United States at prevailing dollar prices forand labor (including overhead andsing US produciion technology. It is assumed themanufacturing capacity, materials, and labor would be available.

Tor operations and maintenance, we apply dollar pnecs to estimates of the labor, materials. Spare pans, overhead, and utilities required lo operate and maintain equipment thc way the Sovieis do.

Tor military personnel, wc estimate thc military rank of the person in ihe United Slates who would be assigned Ihc duties of each Soviet billet. We then apply ihc appropriaie US pay and allowance rales io thai billei

Thc results are ihen aggregated by mililary mission and by resource category.

Our previous estimates for Sovietere basedresidual" methodology, which derived totalosts in rubles using published Soviel data on resources devoted ioivilian expendi-uires were subtracted from ihc total RDT&Eio derive expenditures for military RDT&E. This was the only clement of our estimate ihai was derived in the aggregate, and it was (he one to which wcaitributed the greatest uncertainly.

Sc*tet

improve our understanding ot* Ihc Soviet military-industrial complex, wc haveewihc "resource costs" method, to estimate Soviet military RDT&F. expenditures Ihe newassigns ruble values to the resources used in Soviet military RDTotE activities These include wages, materials, equipment. capital repair, capital construction, travel, training, and other operating costs ' j

Thc ruble estimate is converted to dollars by using an average ol our mililary procurement dollar-rubleThe purpose ofrocurement dollar-ruble ratio is to reflect the different productivities ofand development resources in the twoIn effect, wc are assuming that thc ratio of the dollar value of tbe research and development work performed in the Soviet Union to the ruble cost of ihese resources equals thc ratio of lhe dollar value of military hardware produced in Soviel defense plantshc ruble coat of lhe resources employed in ihose plants, i

Thc resource cost mclhodology dchncs mililary RDT&F. according to thc definiiun used by (he US Department of Defense in its reporting of US outlays for military RDTAFonsists of all phases of programs and activities from research through full-scale testing and includes the improvemeni orof operational systems. ^

US data in this paper are expressed in terms of outlays derived from the Five-Year liejeme Program issued by the Department of Defense in5 and from ihc US budget Defense-relaled activities of the Department of (Energy, the Coast Guard, and Ihe Selective Service have been addedmprove the comparison with Soviete data have been converted from fiscal lo calendar year terms and indexed4 dollars using detailed price indexes for each type of military expenditure. The US figures in this report, therefore, do not match actual budget authorizations or appropriations Q

The physical quantity data for weapon systemsm this paper are of two types: delivery data, which refer to lhe quantities of selected weapon

sysicms acquiredalendar year, .md order-of-baille data, which refer to lhe existing inventory of weapon sysicms in active unitsiven time 'the middle of ihe calendar year for ihc Soviet Union and the end of thc fiscal year for the UnitedS order-of bait Ic data -ere derived from thc FY DP; US production data were provided by the Department of Defense Q

Confidence in the Dollarimales

The annual revision to incorporate new informationethod of assessing how well we estimate thc dollar costs of Soviet defenseis method examines bow much change Ihe estimate undergoes each yeareriod of several years Presumably, our estimates for any one yes' (forould improve as lime passes because wc should know more aboul the quantities and chai -aetenstics uf thc weapon systems and facilitiesin that year,

If estimatesiven year changed greatly with every levie- indicating that diflcrcnind new methodologies produce very differentcould have little confidence that wc had discovered the accurate level of military activities in that year On the other hand, if thc estimates fluctuated onlyew years after ihey were first made, and bymall amount,ould feel confident thai they were substantially correct, given the methodology used for example, nur tolal6 as it was estimated each year75 did not change greatly, it increased by lessear.

Thc use ol this and other statistical techniques leads us io beliesc that our dollar cost estimate for total defense activities is unlikely to be tn error by more

la Ifttthi US fctcai mm aawluarrJ* nmcipufi ivrwr-Sraaeaiber Thcrctart. ihr rod ul ihc littal yxw itadrpiimtV' Iheudlei

0 pcrccnl for any year6 inThe margin of error can be much wider for some individual uerrn and categories than for the total. We are more cor Went in our estimates for the higher levels of aggregation 'ban in those for the lower levels because of the tendency for errors to bcpanully offsetting We generally have moreata that represent fends lhan in data lor absolute levels, especially the levels lor individual years. {

All Ihe Sovici cost data in this paper, whetherin graphics or in tables, are presented for the readers convenience as point estimates ralher than as ranges The reader should remember, however, lhal around each one of these estimates there is aa imphcii confidence band and lhat. in general, when theis more detailed, the margin of uncertainty is greater

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Appendix C

Extended Dollar Cost Comparisons

problem of how io identify defense-relalcdnot heretofore captured in Our estimate* was submitted to an interdisciplinary working group. The group concluded that, since the nontraditiona)would be hard lo boundingle definition, they should be aggregated in layers or tiers ofrelated activities, lhe group developed three broad tiers:

Thc costs of activities thatation's mobilization and wartime preparedness capabilities.

Thc costs of activities thatation's global position.

Thc continuing cost ofjjjcs that were related to national security. I

Wartime Preparedness/Mobilization

This category consists of measures that enhance national war-fighting capability or contribute tosecurity but arc not baseline activities. .Soviet costs for these activities3 were roughly four times higher than comparable LS outlays. Q

Internal Securily Troops

Soviet Internal Security Troops are not intended to fight enemy mililary fotees. SO they are noi in ihe baseline costs. They do, however, assist in controlling Soviet borders andartime role of maintaining order in rear areas and occupied territory WeIhcir cost3 athc United Stales docs nol have an exact counterpart but wc have included the costs of CS bolder control and state costs for the National Guard and Reserves as Ihe nearest equivalents

Construction and Railroad Troops

We include the Soviel construction and railroad troops because their wartime mission is to build fortifications, repair battle damage, and maintain

existing structures and rail lines, although in time they also work on civilian projects We count only the costs of those personnel who worked on civilian projects because labor on military projects is already pan of ihe baseline estimate. Thc large number of personnel with civilian tasks, estimated at. accounted for the large costsutlays for thc closest US counterpart, the civilian Corps of Engineers,0 billion in

Civil Defense

Civil defense activities are much more extensive in the USSR than in ihc United States and includeull-time personnel (mililary andrban and exurban blast shelters, and civil defense installations run by the military. Other ptogams. whose details are largely unknown, includeindustrial plants, hospitals, power plants, and lood and fuel storage, as well as individual protective gear and equipment and material reserves. Ourof Soviet civil defense costs is presentedange of9 billion because of our uncertainty about the probable size of the shelter program."

Industrial Reserves

Thc Soviets maintain reserves of industrial materials for mobilization as well as lo hedge against seasonal or temporary interruptions of supply Wc have little information on Ihcir exact sice and disposition but believe they arc intended io support mililaryfor four toeeks. The cost to maintain them was aboutillion

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Ji.jvi-iI urn* ii'i-ii

economic rcQuircincnii. "lib new pbntt ollcn bo lit noil ii or ciiuiuJaJ fium viixinp pUno. <q

Wc esclude ihc estimatednternal Trow*jiriuxlor vampse* Jo noialHinal defeme (ok | |

In contrast. USoc not depend cm govcrn-men! inventories for iis daily operation, and inven-loriesecause of economic trends rather than defense policy. Therefore, wel> US Government-owned stockpiles, which consist of raw matcnals such as bulk and packaged ores,mctali. concentrates, and crude oil in thcPetroleum Reserve. The cost of operating these stocks3illion

Surge Capacity

In addition lo maintaining material reserves, the USSR builds industrial surge capacity into its machine-building sector to increasear We have only fragmentary datamall number of plants, so we do not haveood measure of costs We have estimated them by taking what we believerobable rangeercent of the machine-building sector's annualor I

la contrast, the United States docs not have an eitcnsrve program to set aside excessxists in varying degrees in defense industry The Defense Loguucs Agency, however, acquires some industrial machinery for mobilization purposes Although none was procuredhecost was SOillion. J |

Railroads

Nciihci lhe United States nor the USSR subsidizes its railroads primarily for defense purposes. Therail system has had to siruggle to meet economic needs forecade, and ongoing improvement un be clearly linked to civil needs. The Baikal-Amur Mainlinehich costs about S2ear, was probably intended for defense needs when work first began in, butbelieve that,hen most of the line was laid I. ihe RAVIeconomic valuetbe driving force for its completion j j

Highways

Defensere behind the rJcvelopmcnt of somehighway systems in bothr the past dciade. however. US defense needs have been cormd errd only in the distribution of reconsiructionather than in the level of funding. Civilian economic needs have been sufficientnsure continued lund-ing support The Soviets havemile

network to provide all weather supply routes from Moscow to thc western borders Wc estimate the annual costs of maintaining this network alillion In addition, cost for upgrading other roads (or defense purposes could be as much asillion

Merchant Shipping

To provide for expanded wariime shipping, the United Slates subsidized ihe operating cosis of its merchant shipping byillionc believe the Soviet* do not subsidize their fleet for nationalpurposes. Indeed, itource of much-needed hard currency. ^ |

Synthetic ruck

Both countries arc developing synthetic fuelsfor national security and commercial motives Our estimate of annual Soviel4 billion, is an order of magnitude lower lhan US costs We believe, however, the Soviet effortore defense oriented than the US effort because of its emphasis on liquid synfueh (which can be used by existing mililary equipmentl rather lhan on gas j

I nhan.tni.il! of Clonal Position

This category covers activities that serve foreign policy goals The dollar value of Sovietivides3 exceeded those of the United States byercent. ^

Eeonomlc and Military Assistance

Isi* .inld States use economic and military assistance to support their allies and clients and lo expand their presence and influence in less developed countries. Wc estimate that the net vnluc ol Soviet economic3 wasillion Alnwsiercent of ibis was the result of price subsidies in trade wither Communist couniries Alto includedillion trade deficitstern turope. financed by Soviet credits iha: we doubt will be paid back. The estimated net value of Soviet military assistance1 bdlon

Comparable net US Outlays for economic assistance programs10he Uniied Slates had no provisions for subsidizing its trade as the USSR did, so its economic assistance was smaller by comparison. US international security assistance8 billion, which included the financing of military aid and outlays for foreign military sales credit loans j

Conduct of Foreign Affairs

This category primarily includes the costs offoreignpersonnel and operating costs of the US Department of Stale and the Soviet Ministry of foreign AlTairs. Soviet costs3illion) were higher because we estimate lhat the USSR hadiplomats, about twice as many as the United Stateslso driving the Soviel costs upward were several semiofficialinstitutes that advise ihc government on foreign affairs. Such as the Institute of the USA and Canada (IUSAC) and the Institute of World Bconomics and International RelationsllMEMOl The Uniied Slates has no direct counterpart to these organizations; Studies that private "think tanks" would perform for the US Government ate included in Department of Defense or Slate Depariineiii budgets, r j

Foreign Information and Fxchange Activities Foreign information and exchange activities arcattempts toountry's image abroad. The USSR has been much more active in this area than the United Stajcs. US outlays for these programs3 wereoviet costs were0 billion.'

ieaniMiKini. we Agency loi micwiiionalcni. Public in- 4S0 food uid. list Pciccse:tin**from ifliciiuiKinul llnancwEclngcen llm fi(U'f Jlicmplcdctudeersonnel.

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Ii*iuilii:<nl and ihc lirlenrll.ii.iI

Informatics Imparl mcnt of ihe Con: mumPart* ol ihe

3?

The USSR has long given support lo foreign students to attend its universitiesay of enhancing its reputation abroad, and il has expanded this program rapidly We estimate there wereuch students in die Soviet Unione assume all of these were sponsored by Moscow,ew less developed countries apparently made partialihat would have reduced the cost to the Soviets'. Although the United States had many more foreign students, onlyere governmentUS costsillion) were therefore much lower than the Sovici Union'sillion).

Civil Space

US and Soviet civil space activities are frequently undertaken to enhance national prestige. We estimate that the dollar cosis of Soviet civil space programs were approximately equal to the outlays for NASA

Pas) Defense Activities

Some of the costs of maintaining miliiary forces, such as rciircmcni benefits, are pushed into ihc future. When due. they represent payment for past goods and services and do not directly contribute to current war-fighting capability. Yet. they arc bills that have to be paid if the military is to keep functioning The estimated costs o: past Sovici defense activitiesUS costs by aboutoercent

Veterans' Benefits

Veterans' benefits in the USSR differ considerably from those in the Uniied States because stricter Soviet eligibility rules and higher mortality rates limn ihc number of beneficiaries to well below ihe level in the United States I'or this exercise, we estimate lhat the total number of Soviet veteians3 who arc

" Sovicim> I'incliilt irmii mihi.ii>

I " .. ll* 1 iV

. ' .: : I

tvnixn.1ii.irv purpose un ihc Ikiii tjf whetheri'lM-liiieni of Detenu* NASA "uulcliritjr pieicvi

Military Pensions

Soviet military pension costs valued in dollars were muchillion* lhan US outlaysillion)hc larger number of Soviet men undet aims meant the number receiving pensions was correspondingly larger. In addition, the Soviets had relatively fewer career enlisted men. so ihc proportion of officers receiving pensions was over twice that of the United States, raising Soviet per capita casts to nearly twice thc US level.I

Civilian Pensions

Civilian pensions consist of Ihc payments to former employees Of the US Department of Defense or ihc military services and to their Soviet counterparts Because thc Soviets use military personnel to perform many tasks lhat in the United States would be performed by civilians, wc estimate that there were somewhat fewer Soviet defense civilians than in the United Stales despite the larger size of the Soviet military. Soviel dollar costs for civilianillion) were therefore slightly less than US| |

la?gal Action

If the US Governmentegal action brought againsl thc Department of Defense, thc award is paidjudgment fund" in general revenuesby thc General Accounting Office.isbursements from the fund for this purpose were1 billion. The Justice Department boic thc associated costs of administering and litigating the cases, which totaled anillion Wc have no evidence of lawsuits involving the Soviet Ministry of Defense and believe that the cost of judgments is negligible. Q

Deficit Financing

Deficit financingarge part of ihe costs of past US defense activities. Deficits raise the cost ofactivities by the cost of borrowing, or thc amount of inlerest paid Of course, government debt is not incurred specifically for any single identifiable

activity: it is the result of financing ihc whole array of government activities Nevertheless, had lhe pattern of past defense spending been different, thc level uf the national debt, and the inlerest paid Ihcrenn, would have been different. Wc estimateillion in net federal interest payments could have beento defense* Offsetting thisillion in new borrowing, which was defense's share of the increase in the national debt in lhat year.

Thc USSR, oa thc other hand, has no concept of dctkil financing comparable to that in the United States The Soviet system of central planning strives to balance resource mputi and outputs and to avoid borrowing The government owns all the banks,and it has access to the savings deposits of private citi/cnt. These amounted toercent of Sonet GNP0 tn effect, interest payments on depositsind of national debt that assists ihcinancing ihc budget. We estimate lhat thc dollar cost of defense's share of ihis Soviet "debi"illion3 Defense's share of new deposits3 amounted lo anillion, q |

Thu is bawd un appiuiuii of ihr annual-lwn' ols.iui> io ihr flr.im.ili Ictkrjl mind ruynwiis eath yraihe I'l'l'l ite*ioil

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