Inflation has been quite low for years, but even a 2.5 percent annual rate adds up with time. Of course the QDR did scale back planned purchases of several major weapons. In the 40 years from 1951 through 1990, procurement spending averaged about 26 percent of total Pentagon outlays. Its planned buys of weapons may be smaller than in the past, but the basic philosophy is unchanged. Although some weapons like the Joint Strike Fighter, are being designed with cost containment in mind, the Pentagon generally remains committed to an aggressive modernization agenda.
More sophisticated methods point to the same conclusion.
Initial CBO findings on the QDR, released in the form of briefing slides in late 1997, reach the same general range of figures. At their core, these types of calculations rely on the historical fact that weapons typically cost much more to produce than initially forecast. For example, fighter aircraft usually grow in unit procurement cost by 25 percent. Cost growth is to be expected in high-performance weapons that are being designed and built for the first time. More likely, with all politicians emphasizing social security, Republicans interested in tax cuts, Democrats interested in domestic initiatives, and everyone jostling for a surplus than remains quite modest in size, the Pentagon will be fortunate if its budget holds the line against inflation.