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When George W. Bush was inaugurated as president in 2001, he inherited a military budget from the Clinton administration totaling about $300 billion. In six months, Bush’s successor will inherit a military budget that has grown to nearly $700 billion counting supplemental appropriations, and a war that most Americans now say was a mistake.

Whether that successor is Barack Obama or John McCain, a change in military strategy and spending priorities is highly likely. What will the change portend for the ambitious investment program that Bush’s Pentagon team has assembled over the past eight years?

Past experience and present evidence suggest that weapons outlays will begin to shrink as a result of waning enthusiasm for the global war on terrorism, a federal budget deficit of more than $1 billion per day and competing domestic priorities. Overall defense spending may not decline — the Bush plan calls for stable buying power in the Pentagon’s budget between fiscal 2010 and 2015. But within the military budget, priorities probably will shift in a manner that benefits personnel and maintenance accounts at the expense of new weapons development and production.

Right now, neither of the presidential nominees is eager to talk specifics about how Pentagon plans will need to be adjusted to match available dollars. Obama has committed to an early withdrawal from Iraq while sticking with plans to increase the size of ground forces, and McCain wants to stay in Iraq until the war is won and expand the joint force well beyond goals set by Bush. But when these positions are viewed in light of various domestic initiatives the two candidates want to pursue, it is obvious that the numbers don’t add up unless something else gets cut at the Pentagon — not in an economy where growth has been averaging barely 2 percent annually and a vast population of baby boomers has reached retirement age.

What follows is an assessment of the outlook for weapons spending focused on three topics: the key drivers of demand for weapons outlays, the policy agendas of the candidates, and the processes by which some weapons programs survive and others die. It is not an uplifting story, because the fate of weapons programs ends up being determined as much by politics as by military considerations. But that is how such outcomes have always been decided in democracies, and understanding the political dynamics is essential to anticipating what sort of defense posture the nation will have one day.

KEY DEMAND DRIVERS

The conventional wisdom about weapons spending is that demand is driven by threats. The historical record strongly supports this explanation, with weapons outlays typically spiking after acts of aggression, such as the Confederate shelling of Fort Sumter, S.C., the Japanese attack on Pearl Harbor, Hawaii, and the terrorist attacks of Sept. 11. In fact, the modern defense industry owes its existence to the postwar military challenge posed by the Soviet Union, because before the Cold War, threats were too episodic to sustain a large private-sector defense industry. The industrial mobilization model that supported war production during the first 150 years of the republic gave way to a permanent defense industry only when persistent danger made such an industry necessary.

However, threats alone cannot explain the scale or composition of weapons outlays. Threats don’t get translated into spending priorities until they first are interpreted by politicians and policymakers. In the process of being interpreted, various beliefs and preconceptions get attached to the threats that shape the eventual response. For example, invading Iraq was one of many possible responses to the danger posed by al-Qaida, and numerous observers now suspect it wasn’t the right answer. But there are always uncertainties about the character of threats and the consequences of various policies, so no formula can predict precisely how the defense budget will change in response to emerging dangers.

Another factor strongly influencing demand for weapons is the prevailing alignment of domestic political interests. The ultimate customer for all U.S. weapons production is a political system that periodically renews its leadership through elections. The two parties that contest these elections have very different constituencies and policy agendas that profoundly influence the propensity of the system to purchase military goods. Over time, the two parties have tended to trade places in terms of which was more isolationist or militaristic — the anti-war Democrats of today are the same party that presided over most of the big military buildups of the past century — but there is little doubt that the two parties view weapons spending differently.

The importance of political control in driving demand for weapons was demonstrated in a pioneering study conducted by Merrill Lynch analysts Ronald Epstein and Stephanie Hwang in 2006. It found that about 90 percent of the changes in U.S. weapons outlays between 1955 and 2005 were traceable directly or indirectly to which parties controlled the White House and Senate. When Republicans were in control, weapons spending tended to increase, and when Democrats were in control, it tended to decrease. In the years after the Vietnam War, the relationship between political control and weapons outlays was especially pronounced, which the analysts attributed to growing polarization between the two parties on issues such as national security and fiscal policy.

The statistical reliability of these findings was so strong that the study discounted both threats and public opinion as drivers of demand for weapons, predicting there would be a variance of up to $100 billion annually in weapons-related outlays, depending on which party prevailed in the 2008 elections. Regardless of where weapons spending falls within this imposing range, it is clear that politics plays a huge role in shaping military investment plans — especially given the inclination of the parties to reward key constituencies by protecting specific programs. A review of campaign-trail pronouncements by Obama and McCain reinforces the impression that the November elections will strongly influence subsequent weapons outlays.

CANDIDATE AGENDAS

Although each of the national political parties cobbles together a platform of issues with which to contest presidential elections, the more reliable indicator of party plans is the campaign pronouncements of the candidates. For instance, Bush’s emphasis on military transformation was foreshadowed by a campaign-trail speech delivered at the Citadel in South Carolina on Sept. 23, 1999, that set forth in considerable detail how Pentagon priorities would be realigned. Obama recently issued a similarly detailed agenda titled “A 21st Century Military for America.” It commits the candidate to ending the war in Iraq, rebuilding the reserves and restoring global partnerships, but then goes on to make some fairly specific statements about weapons priorities.

In particular, Obama said, “Each major defense program will be re-evaluated in light of current needs, gaps in the field, and the likely future threat scenarios in the post 9/11 world.” He continued: “We must rebalance our capabilities to ensure that our forces can succeed in both conventional war fighting and in stabilization and counterinsurgency operations.” This formulation is similar to the agenda former Defense Secretary Donald Rumsfeld sought to implement under the banner of transformation, and it leads Obama to call for a more “affordable” naval fleet focused on vessels such as the Littoral Combat Ship and riverine craft. He also calls for a different kind of Air Force that funds programs such as the C-17 transport and KC-45 tanker while shifting money from fighters to unmanned aerial vehicles, electronic warfare and other “revolutionary” capabilities.

Obama commits, in principal, to expanding ground forces along lines proposed by the Bush administration and building more rigorously tested missile defenses, but the overall tenor of his defense vision suggests a scaling back of weapons modernization plans. He has said elsewhere that he would slow development of the Army’s Future Combat Systems while investing in more immediate troop requirements such as body armor, and there is little evidence he would continue funding costly next-generation conventional weapons such as the F-22 fighter and DDG 1000 destroyer. When this lukewarm support for military modernization plans is considered in light of his ambitious domestic spending goals, it is clear Obama would follow precisely the path Merrill Lynch analysts predict, slashing weapons outlays to free up money for other purposes.

McCain presents more of a puzzle, because his campaign pronouncements are less complete. Although he has questioned several major programs in his capacity as a member of the Senate Armed Services Committee, including the F-22 fighter and the C-17 transport, it is not clear from his campaign statements how these programs would fare in a McCain administration. McCain calls for increasing the size of the entire military so that it is better matched to global commitments and continuing to invest in advanced weapons systems, including robust national missile defenses.

However, McCain also says this on his campaign Web site: “The missions of the 21st century will not center on traditional territorial defense or mass armor engagements. Instead, the men and women of the armed forces will be engaged in, among other things, counterinsurgency, counterterrorism, missile defense, counterproliferation and information warfare.” Based on this assessment of future challenges, McCain calls for a “new mix” of forces placing more emphasis on civil affairs, special operations and global mobility. McCain also stresses the need to reform the military procurement process in terms similar to those used by Obama.

McCain does not propose the kind of ambitious domestic investment agenda championed by Obama, but he does advocate a broad range of tax cuts that could put similar pressure on the federal budget. And although Obama could cover much of the cost of his domestic programs by cutting outlays for the Iraq war, McCain is committed to staying there indefinitely. Faced with a federal budget already substantially in deficit and a Congress unwilling to cut entitlement programs, McCain, too, probably would need to look to weapons accounts as a bill-payer for other items.

WINNERS AND LOSERS

Even when demand drivers and candidate agendas are well understood, predicting which weapons will survive and which will die over the next four years is a speculative exercise. The military plans of the Bush administration were radically altered by the actions of a handful of Islamic fanatics on 9/11. Similar traumas may happen again. Even if they do not, to specify the circumstances in which budgetary tradeoffs will unfold, assumptions must be made about the presidential nominees and the new Congress. For example, it seems highly likely as of June that McCain and Obama will be the nominees of their respective parties, and that regardless of which candidate wins, both chambers of Congress will continue to be controlled by the Democrats. But it is a long time until November, and longer still until the new administration populates key policy positions.

Nonetheless, there is extensive evidence that defense outlays are approaching a near-term top. Moreover, the two likely nominees agree on many aspects of future military policy once they get beyond the subject of Iraq, so there is reason to believe that some changes in weapons plans will occur regardless of which party prevails in the election. Among the areas where Obama and McCain sound alike are in the need to direct more money to unconventional warfare capabilities, the need to grow ground forces, the need to build missile defenses, the need to enhance global mobility and the need to reform the weapons acquisition process. In fact, the language with which they discuss such matters is so similar that it implies the emergence of a bipartisan consensus on what needs to be done with vast swaths of the Pentagon budget. Several implications emerge from this similarity.

First of all, many of the big-technology initiatives begun under the banner of military transformation look likely to be terminated or scaled back over the next four years. These include the Space Radar program to track and image ground vehicles from orbit, the Transformational Satellite Communications program to provide troops with a secure “Internet in the sky,” the Future Combat Systems family of networked combat vehicles, and the Joint Tactical Radio System family of software-reconfigurable communications devices. Although the operational case for each of these systems is fairly persuasive, they are expensive, take a long time to deliver new capabilities into the field and lack political constituencies proportional to their claim on the budget.

A second major concentration of weapons outlays during the Bush presidency, recapitalization of conventional war-fighting systems, also looks likely to take big hits over the next four years as a result of high costs and a perceived lack of relevance to current threats. The main target within the Navy budget will be the plans to build a next-generation destroyer configured for shelling targets ashore, designated DDG 1000. Unlike the Littoral Combat Ship, DDG 1000 is not viewed as well-suited to dealing with current threats, and its high cost has been attacked even by legislators in states where it will be made. Although other new warships, such as the CVN 21 aircraft carrier and the Virginia-class attack submarine, have experienced cost problems, they enjoy strong bipartisan support and are viewed as essential to future sea control and force projection missions.

Air Force plans to purchase 2,000 stealthy fighters are certain to be challenged, no matter which candidate is elected, because they cost hundreds of billions of dollars at a time when air-to-air threats are at a low ebb. Service efforts to explain the vulnerability of current fighters to increasingly agile air defenses have not persuaded the candidates that so many fighters are needed, so there will be moves to pare tactical aircraft outlays and shift money to other items such as the C-130 and C-17 cargo planes used to move soldiers, and unmanned reconnaissance drones such as Global Hawk that can support counterinsurgency operations. Most of the political pressure will fall on the F-22 fighter, because three U.S. services and eight allied nations are counting on the lower-cost F-35 Joint Strike Fighter.

Other than Future Combat Systems, the conventional war-fighting systems of the Army and Marine Corps look likely to suffer the least damage from shifting political priorities over the next several years. Programs such as the Stryker armored vehicle, the CH-47 Chinook helicopter and the V-22 Osprey tilt-rotor all enjoy strong political support and obvious relevance to near-term operational needs. With both likely nominees proposing to increase the size of ground forces and at least one emphasizing the need to replenish National Guard arsenals, there may be a surge in demand for items such as the Stryker and the Army’s Armed Reconnaissance Helicopter.

The third and final cluster of technology investments made during the Bush years has included items developed to wage the global war on terrorism, including the counterinsurgency campaign in Iraq. Although most of the weapons and vehicles deployed to southwest Asia originally were acquired as conventional war-fighting systems, the Army and Marine Corps have successfully adapted them to irregular warfare missions. In the process, they have learned valuable lessons about how to develop next-generation systems such as the Joint Light Tactical Vehicle to be useful across the full spectrum of potential contingencies. With both likely nominees stressing the need to be better prepared for unconventional challenges, especially in terms of force protection, programs such as JLTV are likely to fare well in the years ahead. In addition, systems valued by the special operations community, such as the CV-22 variant of the Osprey and specialized versions of the C-130J transport, will continue to attract strong political support.

More generally, though, the economic and fiscal outlook over the next four years does not bode well for weapons accounts. The federal budget is likely to remain substantially in deficit, while demand for new domestic initiatives from universal health care to middle-class tax cuts will pressure policymakers to ransack the military budget for bill payers. Because personnel accounts are now much harder to cut than they were in the days of conscription, and readiness has become the prevailing measure of managerial competence at the Defense Department, it is obvious that the greatest pressure will fall on weapons accounts. In such circumstances, programs that are not immediately relevant to the needs of forces in the field and lack deeply rooted domestic political constituencies are likely to be doomed.