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M1A2 Abrams Tank from http://www.army.mil

A bipartisan group of 173 House members want to spend an additional $436 million on M1A2 Abrams tanks for the Army. Yet the Army says that the tanks are unneeded.

The Army is on record saying we do not require any additional M1A2s,

– Davis Welch, deputy director of the Army budget office

If we had our choice, we would use that money in a different way,

– Gen. Ray Odierno, the Army’s chief of staff

The Army’s plan was to stop buying tanks until 2017, when production of a newly designed Abrams would begin.

Associated Press

Why is Congress pushing to spend money on tanks that the Army doesn’t need?

Congressional backers of the Abrams upgrades view the vast network of companies, many of them small businesses, that manufacture the tanks’ materials and parts as a critical asset that has to be preserved. The money, they say, is a modest investment that will keep important tooling and manufacturing skills from being lost if the Abrams line were to be shut down.

Associated Press

It makes sense that cutting off all funds to manufactures of tanks could destroy the supply chain for producing tanks. If the businesses supplying parts and constructing tanks were shut down then it could be difficult to reinstate the supply chain should the Army need more M1A2s in the future. Also if the employees producing these are laid off due to cuts in the tank program then their skills could be lost. Employees and businesses can’t sit around for years on end waiting for the Army to decide to start buying tanks once again.

Should we be funding unneeded tanks simply to ensure that the supply chain continues to exist?

The argument against spending an additional $436 million on tanks is simple, we don’t need them therefore it is a waste of money. There are big concerns about out of control government spending, government wasting tax payer money, the national debt and the deficit. From that perspective the answer is a resounding NO!

The argument for spending an additional $436 million on tanks is far more nuanced. It is premised on the idea that defunding the program could negatively impact the supply chain which would make it more expensive and difficult in the future to produce tanks. There are a couple questions relating to this position.

How much would the supply chain atrophy without the additional $436 million?

Orders for Abrams tanks from U.S. allies help fill the gap created by the loss of tanks for the Army, according to service officials, but congressional proponents of the program feared there would not be enough international business to keep the Abrams line going.

Associated Press

Pete Keating, a General Dynamics spokesman, said the money from Congress is allowing for a stable base of production for the Army, which receives about four tanks a month. With the line open, Lima also can fill international orders, bringing more work to Lima and preserving American jobs, he said.

Current foreign customers are Saudi Arabia, which is getting about five tanks a month, and Egypt, which is getting four. Each country pays all of their own costs.

Associated Press

Well it appears that the US is receiving 4 tanks per month while 9 tanks per month are going abroad. Thus a majority of tanks is not going to the US, they are going elsewhere and would not be effected by US spending. So cutting the tanks for the US would significantly impact the supply chain but it would not destroy it. There are others purchasing tanks and keeping the supply chain running. Though Congress is concerned that those orders may dry up which is possible, but there is no mention of how probable that is. Do Saudi Arabia and Egypt have long term contracts for their tanks? If they have contracts extending till 2017 when the Army will begin buying new tanks again then there is absolutely no need for the federal government to support the supply chain. If not then I can see Congress’s concern about the supply chain.

Should the federal government support the supply chain despite not needing the products?

There are a couple ways to answer this question. There is the philosophical debate about the role of government, it’s responsibilities in regards to infrastructure and government involvement with business. Decades could be spent on these questions and still there would be no absolute and definitive answer. So I will skip past that on to the more logistical questions. If the supply chain completely collapses what would that cost the US? Well we would loose skilled employees and manufacturing capacity. The loss of skilled employees could make it difficult in the future to produce tanks since new employees would need to be hired and trained. Hiring and training cost money and takes time. Also we would loose the manufacturing capacity which would also take time and money to reinstate. Though the time issue is not going to be a problem. All that requires is that the Army notify businesses well in advance before they want to begin purchasing tanks. If the businesses are given adequate notice they should be able to hire and train employees as well as retool factories as needed. It is very unlikely that the US military will encounter a shortage of tanks thus any delays in tank manufacturing will not impact military operations. If time is not an issue what about money? Would the US spend more to get tank production restarted than continuing production? If restarting production would cost $436 million or more than it is clearly in our best interest to continue production. But I doubt that is the case. I can see where it might costs  a few million to reopen factory doors, hire employees and find suppliers for parts. It just doesn’t seem realistic that it would cost hundreds of millions to do that. Even if it cost $100 million to restart production the US could save the other $300 million.

What should we do?

We should listen to the Army. The Army states they do not need more M1A2 Abrams tanks so Congress should not purchase more. Yes there is a risk to the supply chain. But considering that the US purchases are not the majority of M1A2 purchases I find it unlikely that the supply chain will collapse. Furthermore if the supply chain collapsed it would not hinder US Army operations. The Army is not in risk of running out of tanks so a delay of months between ordering new tanks and receiving them is not an issue. Also the loss of skilled employees and closing of factories may cost a good deal of money to restart but it is unlikely it will cost $436 million to restart. That means the US could save money instead of wasting it. US Congress should not order $436 million in tanks that the US Army does not need or want.

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