Reagan's Defense Buildup Bridged Military Eras

Huge Budgets Brought Life Back to Industry

The U.S. military has a lot of planes, ships and tanks thanks to Ronald Reagan, but also a lot fewer companies remaining to make such weapons.

The Reagan defense buildup was a hallmark of his presidency, a free-spending crusade that lifted the nation's military industry out of the doldrums after the Vietnam War. He created a war-machine economy in a time of uneasy peace, with defense spending in amounts not seen since the heights of the Korean and Vietnam conflicts and sustained for longer than either of those wars.

Most of the fighter planes and armored vehicles used by today's U.S. military were purchased during the Reagan years.

"At the time it was going on it was a whole resurgence of the defense industry," said Kent Kresa, the former chairman of Northrop Grumman Corp., which won the contract to build the world's most expensive aircraft -- the $2 billion B-2 Stealth bomber -- from the Reagan administration.

Military spending levels are near Reagan-era levels, but for a very different type of military and world. Gone is the Soviet Union and the threat of a nuclear holocaust, and with it the World War II-style defense industry that had its last hurrah during the Reagan years. Today's Pentagon budget is aimed partly at cleaning up the remnants from that era: paying for maintenance on aging weapons systems, paying for costly programs from the days when money seemed no object, and catching up to private sector technology that has raced past Defense Department labs.

"The Reagan buildup was important from both the Pentagon's and the industry's perspective in terms of building back up a strong posture, but the problem is that . . . it was almost as though the way to strengthen the Pentagon was to give it a lot more money" instead of investing in long-term strategy, said Jacques S. Gansler, interim dean of the school of public policy at the University of Maryland and an undersecretary of defense in the Clinton administration. "The emphasis was much more on building stuff."

Once the money stopped flowing so freely by the early 1990s, the defense industry had too many factories and too many workers to support. So it went through a decade-long restructuring, with companies that had been around since the dawn of aviation snatched up by competitors until only a handful of giant companies were left. A Pentagon report last year found that the 50 largest defense suppliers of the early 1980s have become today's top five contractors.

The Reagan administration's drive to have the best of everything drove up prices for weapons systems. Some of the programs got so expensive they disappeared or shrank -- the A-12 bomber was canceled because of excessive cost, as were the Comanche helicopter and Crusader artillery gun. The B-2 and the F-22 fighter were drastically cut back. Missile defense, which as "Star Wars" was the emotional centerpiece of the Reagan buildup, has survived but as a much smaller, ground-based system rather than the grand, space-based umbrella that Reagan envisioned. And it still doesn't work.

So while some credit the great buildup with driving the Soviet Union to bankruptcy and collapse, its ramifications for today's defense industry have been mixed.

"While he was certainly more good than bad for the defense industry, there were some down sides as well," said Michael E. O'Hanlon, senior fellow in foreign policy studies at the Brookings Institution. The defense buildup "was less good for the defense industry than most people presumed."

Coming out of the Vietnam War, the defense industry was much as it had been since World War II, with scores of companies competing for work, but Pentagon budgets declined. Stores of weapons had been depleted by the war and not replaced. The companies were venturing into new areas of innovation -- such as radar-evading stealth technology -- and had developed two fighter planes that would be the finest in the world, the F-15 and the F-16.

Reagan came along and brought such programs to life with an infusion of money. Defense spending hit a peak of $456.5 billion in 1987 (in projected 2005 dollars), compared with $325.1 billion in 1980 and $339.6 million in 1981, according to the Center for Strategic and Budgetary Assessments. Most of the increase was for procurement and research and development programs. The procurement budget leapt to $147.3 billion from $71.2 billion in 1980.