The United States long ago gave up on having the world’s largest Army, Navy, or Air Force, in favor of having capabilities so advanced that numerical advantage wouldn’t matter. This so-called offset strategy leveraged superior technology, training, and strategy as force multipliers to make up for the disadvantages of a smaller force.
The First Offset came about under President Dwight D. Eisenhower. Recognizing that the U.S. could never match the Soviet Union division for division on the ground, Ike determined that the threat of nuclear annihilation could make up for America’s lack of military mass.
Eight years after the dropping of the first atomic bomb over Hiroshima in August 1945, Eisenhower put a personal twist on his staff’s dueling strategy offerings: He would brandish the threat of a nuclear counterstrike to deter a conventional war with Russia.
In “Ike’s Bluff: President Eisenhower’s Secret Battle to Save the World,” Evan Thomas argues that Eisenhower, ardent poker player that he was, used the nuclear specter as a foil. Just as he’d used Gen. George Patton’s “Ghost Army” to deceive Germany into thinking Allied forces would invade Europe at Pas de Calais, rather than the beaches of Normandy, Ike’s plausible nuclear threat was sufficient to ward off the Soviet menace.
The next President must reorient the nation’s defense priorities toward air and space.
This was “a maximum deterrent at a bearable cost,” said his Secretary of State, John Foster Dulles, in 1953. “A potential aggressor must know that he cannot always prescribe battle conditions that suit him.”
By the 1970s, however, The Soviet Union caught up to and then surpassed the U.S. in nuclear forces. Enter the Second Offset, by which the United States would overcome superior Soviet mass through technological superiority in space, precision-guided weapons, stealth aircraft, remote early warning, and lightning-fast global communications.
Just a few years later, President Ronald Reagan raised the stakes further with the promise of a nuclear shield that would neutralize Russia’s nuclear threat. Dubbed “Star Wars” by a skeptical media, the Strategic Defense Initiative was the coup de grâce on a destabilizing strategy, threatening to render Russia’s vast nuclear arsenal impotent against U.S. defenses.
Like the First Offset, which survived four presidential transfers of power, the Second Offset held steady from the Nixon administration through Presidents Ford, Carter, Reagan, and George H.W. Bush. Not only did it help bankrupt the Soviet empire, but it ushered in a new age of warfare, delivering a devastatingly lopsided victory over Iraq in the first Gulf War.
Yet in the absence of a rival superpower in the 1990s, and with the miscalculations of the post-9/11 counterinsurgency campaigns, the successive administrations, the Pentagon, and Congress managed to squander America’s technological edge.
By then China was rapidly building up military strength, having tailored its army, navy, air force, and missile force to neutralize American military advantages. This should not have surprised anyone. The Chinese made their intentions clear in their military journals and in public speeches: to supplant the U.S. as the world’s greatest military, economic, and technological power, China followed a reasoned and predictable strategy. Yet inspite of all that, China caught America asleep at the switch.
Thus was born the Third Offset Strategy in 2014. Then-Secretary of Defense Ash Carter and his Deputy, Robert Work effectively updated the Second Offset, but fell short of the budgetary steps needed to make it stick. As a Rand history noted in 2021, the Third Offset successfully shifted national defense strategy from a focus on counterinsurgency to one closely attuned to China’s military modernization—as evidenced by the 2018 and 2022 National Defense Strategies. But did not result in a fundamental change in the U.S. military itself.
The reason for that is clear: Unlike the previous offsets, the third failed to strategically realign defense investment.
At heart, each offset was an economic choice. For Eisenhower, it was more cost-effective to acquire nuclear weapons than maintaining standing forces on the scale of World War II. For Ronald Reagan, investing in stealth and space and missile defense imposed greater costs on Russia than building more tanks.
From 1946 to 1950, the Army consumed 45 percent of the U.S. military budget, compared to 31 percent for the Air Force and 35 percent for the Navy.
But with the advent of the First Offset, the proportions shifted dramatically. Between 1951 and 1961, the Air Force share grew to 42 percent compared to 28 percent each for the Army and Navy. The Air Force remained over 40 percent through 1965 and consumed a larger share than the Army through 1985. From then on, the Air Force budget has been smaller than the Army’s and/or the Navy’s every year with the sole exception of 2007.
Indeed, the underspending on the Department of the Air Force’s Air & Space portfolio is even worse than it appears: About a quarter of the department’s budget is siphoned off annually to intelligence agencies—the so-called pass-through that obscures how the nation’s national security funds are invested.
For the Third Offset Strategy to achieve its objectives, the next President must reorient the nation’s defense priorities toward strategic investment in the air and space domains, where American technological prowess can best be leveraged to counter Chinese advantages in scale.
Through the First and Second Offsets, American investment followed strategic priorities. Yet, 10 year after the Third Offset was introduced, The Pentagon has yet to put its money where its strategy points: the Air & Space Forces.
It is in these domains—and also in cyberspace and the crucial electromagnetic spectrum—where American technological ingenuity and industrial might can overcome China’s greater force structure and copycat technical prowess.
Air Force Secretary Frank Kendall, a product of the Second Offset Strategy and the Pentagon’s acquisition chief at the dawn of the Third Offset, returned to the Pentagon three years ago with a laser-eye focus on prioritizing exactly the kinds of capabilities needed to deter and defeat the Chinese juggernaut. Everything he’s done, from his Seven Operational Imperatives to Re-optimizing for Great Power Competition, aligns with the Third Offset.
What he has not been able to accomplish—what only a strong-willed President and clear-eyed Defense Secretary can achieve—is the necessary parsing of the defense budget to favor the effects-based advantages of investment in air and space capabilities.
The United States cannot compete with China on volume—not in people, not in ships, and not in airplanes, either. To be competitive, we must field superior capability in the domains that will be most decisive in any coflict. That requires a disproportionate investment in the Air & Space Forces.