Budgetary Implications of H.R. 3144
The Defend America Act of 1996

This document addresses the budgetary implications of H.R. 3144, as ordered reported by the House Committee on National Security on May 1, 1996. The Defend America Act of 1996 would require the United States to deploy a national missile defense by the end of 2003 that provides "a highly effective defense of all 50 states against limited, unauthorized and accidental attacks ... [that would be] augmented over time to provide a layered defense against larger and more sophisticated ballistic missile threats as they emerge." Those two requirements form the basis of CBO's estimate. According to the bill, the initial defense must include interceptors, ground-based radar, space-based sensors including the Space and Missile Tracking System (SMTS), and a battle management and command and control system to tie the components together. The interceptors can be ground-, sea- or space-based. The space-based weapons could be lasers or kinetic energy interceptors (also known as Brilliant Pebbles). The layered defense that would eventually follow, according to the bill's second requirement, would likely be achieved by adding space-based weapons to the ground-based system.

CBO estimates that H.R. 3144 would cost nearly $10 billion over the next five years, or about $7 billion more than is currently programmed for national missile defense. Through 2010, the system would cost between $31 billion and $60 billion. None of the estimates include the cost to operate and support the defense after it is deployed. Our estimates are derived from data provided by the military services and the Ballistic Missile Defense Organization (BMDO). While we have been unable to review many of the details behind these estimates, we believe that they are the best that are currently available. In some cases, though, we adjusted the Department of Defense's (DoD) estimates to better reflect procurement costs and potential risks. For example, we added about $3 billion to hedge against technical and schedule risks in the development programs. We also reduced the estimated cost of deploying 500 space-based interceptors by $6 billion. We did not, however, adjust the estimates to reflect cost increases that typically occur in developing systems that advance the state of the art.

Mininum Requirements and Costs. The low end of the range of estimates reflects what we believe would be the smallest system that would meet both of the bill's principal requirements. As proposed by the Army, the initial defense would consist of 100 interceptors based at Grand Forks, North Dakota. Combined with SMTS, this system would be able to defend all 50 states against an unsophisticated attack of up to 20 warheads under many scenarios, according to BMDO. The inteceptors would be armed with the Army's Exoatmospheric Kill Vehicle (EKV). To track incoming warheads, four new phased-array radars would be deployed, one each at Grand Forks, Alaska, Hawaii, and New England.

This initial defense would cost $14 billion -- about $8.5 billion for the ground-based system and $5 billino for the SMTS space-based sensors. (The ground-based system could cost roughly $4 billion less if the Air Force's proposal for a Minuteman-based system was adopted). The upper layer, which would be added sometime after 2006, would employ 500 space-based interceptors similar to Brilliant Pebbles -- the less expensive of the two types of space-based weapons. It would make the defense capable of protecting the United States from a more sophisticated attack of up to 60 warheads according to BMDO, and would cost an additional $14 billion. CBO adds another $3 billion to these estimates to hedge against potential risks associated with the development programs. Thus the total cost of the layered defense would be about $31 billion.

Potential Increases in Requirements and Costs. The bill specifies that the defense shall protect the United States against limited or unauthorized attacks, but does not specify how big the attack might be. The high end of the range reflects the costs of a system to protect the United States against a more potent threat -- for example, an attack that could have 200 warheads accompanied by sophisticated countermeasures. DoD bases its operational requirements for a national missile defense on such a threat.

CBO assumes that the ground-based layer would include 300 interceptors deployed at 3 sites and would cost $13 billion, or about $4.5 billin more than the costs of meeting the minimum requirements. SMTS satellites would be deployed at a cost of $5 billion. The space-based layer would include a combination of 500 space-based interceptors ($14 billion) and 20 space-based lasers ($25 billion) for maximum effectiveness. Again, $3 billion is added in anticipation of technological and integration problems. The total cost of this high-end layered defense would be about $60 billion. Except for the lasers, this system would be similar to the Global Protection Against Limited Strikes (GPALS) system proposed by past administrations.

Cost Comparison. The estimate of the ground-based systems described above is about two-tirds less than previous estimates associated with earlier proposals, for example the GPALS system. The earlier proposals focused on the challenging threat of an unauthorized attack by the Soviet Union. Today the focus is on smaller and less capable threats -- as a result, the defense's components may be somewhat less capable. Past proposals also called for a robust program that included substantial efforts to test the systems and to reduce and manage the technical and schedule risks associated with such an ambitious development effort. It is unclear how much these efforts can be reduced without increasing risk to unacceptable levels. But if current plans must be revised to include more thorough testing and larger efforts to reduce risks, and if the purpose of the defense evolves into protecting against larger and more sophisticated threats, costs of the groung-based system could greatly exceed $60 billion by 2010.