end of the Cold War, and America’s traditional en-
emy for the previous forty years no longer existed.
America now had to reconsider what threats re-
mained, decide what weapons systems were needed
to counter those threats, and, most important, how
much money to spend to defend against those
threats. Coupled with this was a desire to reassess the
budget priorities of the U.S. government. After
spending massive sums of money to counter the
Cold War threat posed by the Soviets, some politi-
cians now hoped to divert those funds to domestic
programs. This “peace dividend,” as domestic-
minded politicians called the decline in defense
spending, could now fund education, health, and
welfare programs.
Base Closures and Shifting Resources Declines in
defense spending began during the presidency of
George H. W. Bush (1989-1993). From a high of
$376 billion (adjusted for inflation) in fiscal year
1989, defense spending declined to $317 billion by
the end of Bush’s presidency. While part of the
spending decline came from a reduction of Cold
War military forces and the end of procurement for
some weapons systems, the bulk of the cuts came
from the Base Closure and Realignment Commis-
sion (BRAC). Formed to evaluate the value of Amer-
ica’s defense infrastructure, BRAC recommended
the closing of redundant military facilities and alter-
ing the mission of other bases to make them relevant
in the post-Cold War era. The closing of numerous
bases and facilities (twenty-six during Bush’s presi-
dency) allowed the Defense Department to trim its
budget without reducing its military effectiveness.
During the presidency of Bill Clinton (1993-
2001), the decline in defense spending accelerated.
From $312 billion in his first full fiscal year as presi-
dent, Clinton continued to spend less on defense,
reaching a low of $262 billion in 1999. The cuts came
from a variety of sources. First, Clinton permitted
BRAC to continue its work, and the commission rec-
ommended additional base closings throughout the
1990’s. Throughout Clinton’s time in office, BRAC
closed fifty-five bases and realigned another fifty-
seven, saving the Defense Department several bil-
lion dollars. Second, the Pentagon began to draw
down the number of military personnel and amount
of equipment that was forward-deployed for poten-
tial operations against the Soviet Union. Without a
real Soviet threat, the Defense Department could re-
deploy those soldiers and equipment back to the
continental United States, reducing the costs of
transporting and supporting those forces. Next, the
military began to “outsource” many of its support
obligations, such as logistics, administrative, and
medical care, finding that outside suppliers could
perform these tasks cheaper than the military could
itself.
Trimming budgets and finding more efficient
ways of spending existing dollars was not enough;
units and personnel would have to be cut as well.
Over the course of Clinton’s presidency, all branches
of the armed forces saw significant cuts in the num-
ber of available formations. The Army, for instance,
saw a decrease of more than 600,000 troops, as the
number of maneuver units dropped from eighteen
divisions to ten. The Air Force shrank from thirty-
nine operational fighter wings to twenty, along with
a nearly 40 percent cut in the number of personnel.
The Navy shrank from 569 ships (including fifteen
aircraft carriers) to 315 (including eleven aircraft
carriers). One side effect of the reduction of stand-
ing military forces was the increased reliance on the
National Guard and Reserves. When the Pentagon
disbanded standing units, their equipment often
wound up in the hands of the National Guard and
Reserves, improving the latter’s ability to carry out
its missions. On the other hand, because of the
shortage of personnel in the standing military, the
Pentagon planned to use National Guard and Re-
serves formations more frequently in the advent of
future combat.
Lastly, the Pentagon trimmed its budget through
early retirement of some equipment and cancella-
tion of some procurement programs. Forced to
make budget decisions, the military services opted
to keep new weapons systems and to suspend the use
of older systems that still had some useful service
left. The Navy, for instance, began to decommission
its fossil-fueled aircraft carriers in favor of its nu-
clear-powered ones. The Navy also decommissioned
a large number of nuclear-powered submarines sev-
eral years before the end of their intended service
lives rather than pay to update or refuel them. In a
similar manner, the Air Force suspended use of the
C-141 cargo plane and EF-111 electronic warfare air-
craft. The Army scrapped its fleet of older M-60 bat-
tle tanks in favor of its newer M-1 tanks. New defense
projects were canceled outright or had the programs
stretched out to lower their costs. The Navy, for ex-The Nineties in America Defense budget cuts 245