Steve Blank

We just held our fifteenth session of our new national security class Technology, Innovation and Modern War. Joe Felter, Raj Shah and I designed a class to examine the new military systems, operational concepts and doctrines that will emerge from 21st century technologies – Space, Cyber, AI & Machine Learning and Autonomy.

Today’s topic was Midterms with Congressman Mike Gallagher.

Catch up with the class by reading our summaries of the previous fourteen classes here.

Our guest speaker Congressman Mike Gallagher, a member of the House Armed Services Committee.

Congressman Mike Gallagher is one of the leading thinkers in defense in Congress. He’s a Princeton and Georgetown graduate; served in the Marine Corps, with deployments in Anbar province; got his Ph.D; joined a startup; has been reelected to his third term, representing the 8th district of Wisconsin; and is on the House Armed Services Committee.

The Congressman was gracious enough to take on two roles in this class session: First he shared his views on the future of defense, and second, he received a formal policy recommendation – our midterm assignment – as a briefing from one of our students.

I’ve extracted and paraphrased a few of key insights and urge you to watch the video of his talk.

What’s life like as a Congressman?
If you watch the news, you’d think that all of us are consumed with whatever the Twitter controversy of the day is. But there is a ton of good work going on beneath the surface, beyond what you see on TV, particularly in national security. That doesn’t get headlines, it doesn’t get a lot of attention, but is incredibly important. As a member of the House Armed Services Committee, we pass an annual National Defense Authorization Act. It is the culmination of a year’s worth of work. And at a time when it seems like everything is divided, it represents an area of significant bipartisanship. When it comes to the big questions of the day, from a national security perspective I sense an emerging opportunity to rebuild something resembling that consensus.

The biggest misconception I had coming into this job four years ago was I thought that the dysfunction in Congress was purely a function of the people that were in Congress. That Congress was filled with charlatans, or people that were incompetent. Now certainly, there are examples of that. And certainly, there’s a lot of careerism that goes on. But Congress is also filled with a lot of incredibly smart, patriotic, well intentioned people with unique backgrounds that just want to serve the country. And I’ve been blown away by the quality of a lot of my peers on both sides of the aisle.

That’s an opportunity for more bipartisanship. If you look at a lot of the work of the Future of Defense Task Force, some of those issues are going to be debated right now by the Biden transition team and incoming Biden foreign policy team. And I think it would be a mistake for us to go back, given how much progress we’ve made on China in general and technological competition.

What do you expect from the new administration on National Security?
I think there’s a serious debate going on within the Biden national security camp about what direction to go.

There are two camps within the Biden advisory team. The first I associate with the return to the Obama era approach, which would focus on cooperation with China. And if you want to cooperate with China, that leads you down a path where you put Taiwan relations on the back burner. You’re less likely to press hard against Chinese tech giants like Huawei. And you kind of go out of your way to be on extensively good terms with Beijing, because you want their cooperation on transnational issues, particularly environmental issues.

But if the second, more realistic camp wins out – one that looks at malign activities of competitor states, like China and Russia, and focuses on defending American influence and liberal values internationally – I think there will be a striking amount of continuity. I think the Biden administration’s spin on great power competition will be different from the Trump administration’s. That’s okay, if the point of departure is about defending our values internationally, as opposed to better competing internationally, which was the Trump administration’s core focus in the national security strategy. Ultimately, both approaches lead you in a similar direction. I think it would be a mistake for them to view everything that the Trump administration did as tainted, and we throw the baby out with the bathwater. Because the fact is, there has been remarkable progress made on U.S./China competition the last three years.

You’re still likely to come down in a similar place in terms of how you approach adversaries like the CCP and Vladimir Putin. And I think the Biden administration will have an opportunity when it comes to placing values at the at the center of American foreign policy. I have Democratic colleagues who are influential in the Biden camp like Tom Malinowski, who would argue for doing just that. And we’ve worked very closely on things like calling out what’s happening in Xinjiang. Similarly calling out human rights abuses at the hands of Vladimir Putin. So I think you’ll see a movement just on sort of the overall position that values-based arguments play in the national security strategy. If you talk to H.R. McMaster, he’d say that values were an integral part of the national security strategy.

Should the New Administration Focus on Europe or IndoPacom?
I think Biden said that the top threat to America was Russia. I disagree with that. His team advocates for a Europe-centric approach to US foreign policy. To the extent they change the overall regional prioritization for our national security strategy and say that European command is the primary theater and IndoPacom is secondary, I think that would be a huge mistake because there’s absolutely no comparison.

The Biden Administration and the Defense budget
I think the new administration is going to face some very difficult budgetary choices. We just spent over $3 trillion on Coronavirus response; we’re not going to be able to continue a 3% increase in the defense baseline over the next two years. So there’s going to have to be hard choices. And the biggest and hardest choice they need to make right away is the prioritization among the services. If you look at our national defense strategy, all the things that Bridge Colby talked to you about, you’d probably conclude that if you just look at our priority theater, IndoPacom, you might notice some interesting things about that theater, notably that there’s a lot of water. Therefore, it would make sense to prioritize the Navy and the Air Force and not prioritize growing the Army. That’s a huge choice they’re going to have to make right away.

Trading Climate Issues for Security Issues
The Biden administration wants to prioritize environmental issues in the way that the Trump administration didn’t. I think Biden already announced his intent to rejoin the Paris Climate Agreement. I think it would be a mistake to subordinate our security issues, particularly those with China to the demands of cooperating with him on environmental issues. However, I think there’s room to make a smart investment in carbon capture technology and nuclear micro reactor technology. I have a bill with Chuck Schumer and Ro Khanna, a progressive Democrat. It would be the biggest investment from the federal government in research and development since the end of the Cold War, and a lot of that would be in clean energy technology.

Opportunities on Trade, Section 232 Tariffs and Allies
You can’t pick a trade fight with our friends at the same time you’re trying to pick a trade fight with China. You could immediately bring some of our disaffected friends into the fold, particularly if they continue to move in our direction when it comes to 5G, which is probably the most important disagreement we’ve had with some of our European allies.

There’s an opportunity to clean up any lingering disputes with allied countries when it comes to Section 232 Tariffs – the tariffs we placed on steel and aluminum. There’s a dissertation waiting to be written about the nature of 232 tariffs and the constitutional problems with Congress giving up its ability to regulate commerce with foreign nations to the executive branch. It created a situation in which the President was able to claim that we face a national security threat from Canadian steel and aluminum and effectively impose a tax on the American people. So let’s resolve the Section 232 disputes, I’ve opposed them from the start, at the same time you maintain pressure on the Section 301 investigations, which are the investigations into unfair Chinese trade practices.

There are economic opportunities for the incoming Biden team. I think there’s just an obvious slam dunk with the UK, now that they’ve navigated their withdrawal from the European Union, in the form of a free trade agreement with them. As well as a bilateral trade agreement with Taiwan. The reason that the US Trade Representative didn’t want to pursue a trade agreement with Taiwan was because they didn’t want to screw up the phase one trade deal with China.

The Future of 5G
For all the criticism of the Trump administration’s neglect of allies, the fact is, we’ve recently had some incredibly important diplomatic wins. When it comes to convincing the UK for example, to get on the same page with us with respect to Huawei. Shifting the Huawei/ZTE 5G debate in certain European countries like Germany. We have a long way to go. But it does seem like the concerted effort from the executive branch and the legislative branch to send a signal, at least to our closest allies, our Five Eyes allies, that we need to have the same basic principles when it comes to future control of the internet and 5G internet technologies.

I think it’s critical, at least on 5G, to be in the same position with our allies. But I would say for the last four years we’ve purely been playing defense. In other words, we’ve been going around the world saying Huawei is bad, Huawei is bad. ZTE is bad, ZTE is bad. See, look at all this stuff. We’re declassifying all this evidence. And that’s good, we had to do that. And it requires some tough conversations.

The next phase of this involves some sort of offensive-minded effort in concert with our allies to cooperate better on these technologies. To form a digital development fund to coordinate the R&D and the distribution pathways with our like-minded partners. Without reinventing the wheel of existing international efforts, America can take the lead by launching a coalition of countries dedicated to finding a coordinated solution, particularly when it comes to 5G, that cannot only compete on quality with Chinese state-owned or sufficiently state backed enterprises, but also compete on price.

Reshoring Manufacturing and Economic Decoupling From China
I think that some form of selective economic decoupling from China is inevitable and necessary. And you’re going to see efforts to selectively decouple when it comes to our capital markets. To make sure that if Chinese companies list in U.S. markets, they have to follow the same reporting and transparency requirements as U.S. companies. They’re going to see it in key technology areas, not just 5G, but AI, rare earths, medical devices, pharmaceuticals. I think there’s going to be a serious effort to reshore manufacturing, or perhaps revitalize Puerto Rico as a hub for manufacturing of advanced pharmaceutical ingredients. You’re going to see it reflected in a lot of different areas.

Congress and Long-Term Planning
It’s very hard for Congress to do long-term strategic planning. We’re not optimized as an organization to look beyond two years. And sometimes it feels like we’re just looking two weeks at a time or two days.

I pay attention to this stuff. I work hard to understand it. I have an academic and a professional background in it, which I think gives me a little bit of advantage. But I feel like I’m just scratching the surface because there’s no time to really dig into the bureaucratic labyrinth that is the Pentagon.

Why the status quo wins out, why the primes are so good at defending their territory, it’s not member of Congress laziness. It’s just you have so many demands on your time and the demands of reelection. It’s hard to carve out a half-hour of my day to devote to serious defense work just because of the nature of being a member of Congress. And that’s a problem because it’s really Congress’s role. If you look at the history of some of our autonomous drone systems, it was Congress poking the Pentagon to get over their intransigence at the early stages. It requires the legislative branch to get in the game to force the Pentagon to do some things it often doesn’t want to do.

While it’s impossible to predict all the technologies that will dominate the future, if you talk to younger members of the armed services committee, some things are obvious. I think everyone agrees that we have to make an increased investment in AI, and the future will inevitably involve a lot more unmanned systems.

For example, I work a lot on naval issues. If you think about how we’re going to grow the future of the Navy, it’s obvious that we’re not going to be increasing the number of carriers we have from 11 to 15. In fact, it’ll probably be a glide path, down to 9 at some point. And then we’ll grow the fleet with smaller ships, i.e., small surface combatants, and then unmanned systems, both large, unmanned surface combatants as well as unmanned underwater vessels.

And if you look at the Marine Corps Commandant’s planning guidance, which I think is the most innovative thing that’s been written by any military service in the last decade, that’s exactly what he’s recognizing. He’s the only one I’ve seen so far that’s been willing to say, we are not going to invest in certain legacy systems like big amphibious ships that are optimized for doing a joint forced entry operation like Marines did back in World War II in the Pacific. Instead, we’re going to focus on fielding small teams of Marines, who can operate unmanned systems throughout the first and second island chain. Having the logistical infrastructure to constantly move them around to complicate our enemy’s decision-making cycle. Figuring out the basing agreements with our allied countries, so we can host missile systems there. I think he gets the mix right.

Personnel Costs and the DoD Budget
All of this is bound up in a bigger budget discussion. You can scrape together an extra $50 million or $100 million to invest in robotics, AI and hypersonics but If you look at the overall budget, what’s costing us more and more money, it’s human beings. In other words, if you compare the Reagan buildup in the 1980s, in the heady days of the 600 ship Navy real dollars adjusted for inflation, we spent more money during the Obama eight years then we did during the Reagan years.

And it’s not because our ships got more exquisite and fancier, though they did. It’s primarily because human beings got more expensive. The military has the same problem that the rest of society – funding health care and retirement costs. And that’s a very difficult problem to solve. Theoretically, unmanned allows you to have a similar impact with less human beings. But you’re still going to have a lot of human beings involved in the business of defending the country. I just bring that up to say the biggest and hardest choices that DoD needs to make have nothing to do with cutting-edge technology. They have everything to do with healthcare costs, and retirement costs and the cost of training human beings and making sure they’re ready to fight.

The Military Personnel System
The biggest problem I saw when I was in the military is really the best and brightest officers of my generation, (myself excluded) left – usually at the O-3 level. In part it wasn’t a pay thing. It wasn’t that they wanted to go to GSB and then make a bunch of money doing venture capital in Silicon Valley. It was more about flexibility. They wanted the Marine Corps to meet them halfway in terms of, “Hey, can I pursue civilian graduate school and I’ll pay the Marine Corps back on the back end? I don’t want to have to spend a year at Expeditionary Warfare School because it doesn’t make any sense to me.” And it was just more of a career flexibility and management thing. I think this is something we grappled with extensively on the Future Defense Task Force: How do you retain the best and the brightest? How do you attract the best and the brightest?

I think if you retain qualified officers and enlisted military service members throughout their career, you’ll start to get more innovative thinking at the top ranks when they become field grade officers, and when they become general rate officers. And you’ll have less of status quo military industrial complex.

Another area where we’ve given the Pentagon enormous latitude is to reach into private industry and make somebody a colonel or a lieutenant colonel if they have the appropriate skill set, and they really have been loath to use that authority.

Acquisition, Primes, Requirements and the DoD
We have a very brittle defense industrial base. It’s highly concentrated among five or six companies. I think there’s only been two defense related startups that have had a valuation north of a billion dollars in the last couple decades: SpaceX and Palantir. That’s because we build moats around these industries. And there’s a bunch of special interests that advocate for the status quo, and it becomes very hard for Congress to change anything.

Now we’ve tried. We’ve tried in the form of giving special acquisition authority to the services. Honestly, if you look at the U.S. Code when it relates to defense provisions, we don’t really need to give new authority to the services to allow them to experiment and invest in certain technologies and make bets on small and medium sized companies. We’ve given them a ton of authority. But there’s a general risk aversion among the services and almost an unholy alliance between the general officer and flag officer class and the primes. Because general and flag officers when they retire, go and work for the primes and get paid a million dollars a year as a consultant for Boeing or Lockheed. So there’s a “swampy” aspect to all of this that precludes innovation or a risk-taking mindset.

The Goldwater/Nichols Act governs the requirements processes for the services. Today, the Navy says, we need to do X. And here’s our strategy for doing X and all these documents go bounce around the Department of the Navy. We need to change that entire process. Because the result is the services generate requirements that do not align with the national security strategy. Or they’re just published prior to those documents, or without taking into account changes those documents make. It’s a totally incoherent strategy process that doesn’t drive our budget choices and allows the status quo to win out and legacy systems to dominate.

As an example, we have a shipyard in Northeast Wisconsin, Fincantieri Marinette Marine, where we built the Littoral Combat ship. The Littoral Combat ship was supposed to be the ship of the future for the Navy. You can Google “Bob Work LCS“, he wrote a great white paper on how the Littoral Combat ship went awry. And it was really a story of the Navy just getting too ambitious with its requirements and trying to do too much with one ship. They constantly changed requirements, which then screwed up the manufacturing, making it extremely complicated.

I worry that we get too enamored with the new technology and the next big thing and create these hyper exquisite platforms that are extraordinarily difficult to build, let alone operate and maintain. When sometimes a simpler, less technologically advanced approach might do just as good.

There are also some huge opportunities they have now that we’re no longer bound by the Intermediate Nuclear Forces Treaty. Because we can field missile systems that we already have, that have ranges between 500 and 550 kilometers that can do things that otherwise require a destroyer or a big, fancy expensive ship to do.

How do we stop special interest groups in the military industrial complex from influencing Congress to make decisions that are perhaps better for business but maintain the status quo?
It comes down to the way in which the Pentagon awards money. The Pentagon needs to stop making very small and insignificant bets on a variety of small or midsize companies that can never make that next step to becoming a prime. They need to start making bigger bets on a smaller subset of non-prime companies. That’s one way you could start to get less of a military industrial complex culture.

I wonder if there’s not some sort of ethics reform or drain the swamp proposal that could be applied to the Pentagon without unleashing some unintended consequences. I’ve long thought it’s a good idea for members of Congress to be prohibited from lobbying for the industries that they oversee, in Congress, I prefer for a lifetime. But I’d take five years. That that seems like a sensible, drain-the-swamp proposal that myself, Ro Khanna and Alexandria Ocasio Cortez could get behind.

And I wonder if you couldn’t have a similar prohibition when it comes to general officers and flag officers. Or at least extend the cooling off period, so they can’t immediately go and collect a paycheck from some of these companies. Now that may sound naive and populist to some of your more cultured teachers, but you’ve got to do something about it at the end of the day. Otherwise, you won’t get any change.

Advice to Our Students
I profited from the advice and mentorship of a lot of people, including your professor Raj Shah. So I’m happy to pay that forward. I was where you guys are a few years ago, just slugging it out in grad school. And you never know when you’re going to be the person making big decisions. Whether it’s a legislator, or member of the executive branch.

And so, I would encourage you guys to keep pursuing your current policy studies. You’ll find yourself in a position where you can make a real impact very quickly. And if you can write well, and if you can work well with others, you’ll you have limitless potential.

Watch the video of Congressman Gallagher’s talk below.

If you can’t see the video click here.

Our Midterm
Our students completed their midterm assignment–- described below – months ago. In this class session, we competitively selected one student to present their proposal to Congressman Gallagher and get his feedback. The midterm assignment is below and Janani Mohan’s presentation to the Congressman follows.

Read the entire transcript of Janani Mohan’s midterm presentation to Congressman Gallagher and watch her video below.

If you can’t see the video click here.

Lessons Learned

• The new administration will have a series of decisions:
  • Whether to cooperate with China or continue to counter their activities
  • With a limited defense budget, to decide on the prioritization among the services
  • Whether to subordinate our security issues, to the demands of cooperating with China on environmental issues
  • Whether to remove the tariffs we placed on steel and aluminum on our allies
  • Whether to selectively decouple our economy from China and reshore manufacturing
• The U.S. has a highly concentrated defense industrial base – five or six companies
  • General/flag officers have a risk aversion and prefer the primes rather than new entrants
  • We’re enamored with new tech and the next big thing and create these hyper-exquisite platforms that are extraordinarily difficult to build, let alone operate and maintain
  • The Pentagon needs to stop making very small bets on lots of new entrants
    • They need to start making bigger bets on a smaller subset of non-prime companies.
• Ethics reform for members of Congress to be prohibited from lobbying for the industries that they oversee

Filed under: National Security, Technology Innovation and Modern War |