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In the four years since the terrorist attacks on the Nation, the international security environment has changed dramatically. As a result, military commitments and especially the demand for Soldiers have increased both at home and abroad. With the support of the President, the Congress, and the Secretary of Defense, we have increased our capabilities to deal with the challenges we are facing today and accelerated our preparation for those we will face tomorrow.

COMPLEX SECURITY CHALLENGES

The National Defense Strategy identifies an array of traditional, irregular, catastrophic, and disruptive challenges that pose threats to the Nation (Figure 3). These threats are becoming increasingly complex. We no longer face only conventional armies who operate within clearly established political boundaries. In addition, we will face enemies that employ irregular tactics, terror, and asymmetric warfare. These enemies will be increasingly transnational and dispersed.

Fueled by ideologies that oppose our Nation’s bedrock values, al-Qaeda and other enemies are committed to reducing American global presence and to destroying our society. They have publicly stated their goal: to gain control in the Islamic world by establishing a unified caliphate, stretching from North Africa to Indonesia.

We are engaged in a long struggle against adversaries who are ruthless and unconstrained in achieving their ends. Our previous conceptions of security, deterrence, intelligence, and warning do not adequately address the threats we now face. To defeat our adversaries, who will be neither deterred by nuclear or conventional weapons nor defeated in battles with decisive outcomes, we must remain vigilant in employing all forms of national and international power – diplomatic, informational, military, and economic – in a concerted, integrated manner.

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INCREASING COMPLEXITY

The security environment in which our Soldiers will operate is characterized by challenges and uncertainties, including:

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COMPETING FISCAL PRIORITIES

The Army will remain engaged around the globe, while operating in a constrained fiscal environment. This will continue to limit the resources available to accomplish our missions.

National Budget Trends

The Office of the Secretary of Defense, Comptroller, projects 2007 Defense spending will be 3.9 percent of Gross Domestic Product (GDP), continuing a downward trend (Figure 4). Defense resources have not kept pace with growth in GDP.

Defense Budget Trends

The allocation of Defense resources has changed over time (Figure 5) in response to the focus and demands of the National Military Strategy. Today, despite providing the bulk of the forces for the war on terrorism, the Army receives the smallest share of programmed resources. Increasing pressure to reduce the federal deficit, coupled with rising fuel, health care, and other costs, may impact the resources appropriated to accomplish Army missions.

Army Budget Trends

The bulk of the Army’s funds are committed to sustaining people, maintaining vital infrastructure, and preparing equipment for combat deployment. As a result, our ability to fund investment accounts is extremely limited (Figure 6). This creates a perennial tension between current and future demands.

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INVESTMENT TRENDS

Since 1990, the Army’s share of investment dollars has been considerably smaller than that of the other Departments (Figure 7). Consequently, the Army has been unable to invest in the capabilities to sustain a rising operational tempo and to prepare for emerging threats. Supplemental authority has enabled the Army to “buy back” crucial capability to meet the operational demands of the war on terrorism and to improve our ability to sustain the full scope of our global commitments.

IMPLICATIONS FOR THE ARMY

The implications of the evolving security environment are clear.

Failure to invest in Soldiers to build the right capabilities – by improving our doctrine, organizations, training, materiel, leaders, people, and facilities – will increase risk for the Army, the Joint Team, and our Nation. Building the capabilities required to hedge against the uncertainty of tomorrow will require prudent investments today. These investments must be sustained at predictable, consistent levels over time. Investing in defense capabilities in this manner would reflect a significant departure from historic patterns of spending, which have increased America’s vulnerability prior to each of the major conflicts of the 20th century.

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