A COMPARISON OF SOVIET AND US DEFENSE ACTIVITIES, 1976-85 AN INTELLIGENCE ASSESSMENT

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• Document Creation Date: December 22, 2016
• Document Release Date: November 18, 2011
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• Publication Date: May 1, 1986
• Content Type: REPORT

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i
Directorate of
A Comparison of Soviet an
Defense Activities, 19768
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Intelligence
A Comparison of Soviet and US
Defense Activities, 1976-85 (u)
This paper was prepared by
the Office of Soviet Analysi
Comments and queries are welcome and may be
directed t
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Secret
SOV 86-10028
May 1986
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A Comparison of Soviet and US
Defense Activities, 1976-85 25X1
Key Judgments Between 1976 and 1985 the Soviet Union committed substantially more
Information available resources to improving, operating, and expanding its forces than did the
as of 24 March 1986 United States. The Soviets procured more weapons of almost every type-
was used in this report
more than 10 times as many ICBMs, more than three times as many tanks,
nearly 60 percent more tactical combat aircraft, and more than twice as
existing systems, although several new systems were introduced I 25X1
many submarines. The United States emphasized the modernization of
Because of the larger size of the Soviet military establishment and higher
levels of military production, the cumulative dollar value of Soviet defense
activities over the past 10 years exceeded comparable US outlays by about
25 percent. Over this same period, however, the disparity between the
annual dollar costs of the two countries, which in 1976 favored the USSR
in all major resource categories and missions, decreased. In 1985, for the
first time since 1971, the dollar costs of Soviet defense activities were not
substantially larger than comparable US outlays (see figure).
Investment
The narrowing of the disparity resulted from markedly different trends in
the two countries, particularly in procurement costs, which comprise most
of investment:
? US procurement in military programs more than doubled over the 1976-
85 period, growing an average of about I 1 percent a year. Growth was
particularly rapid after 1980, when military procurement climbed by
more than 13 percent a. year.
? Soviet military procurement, after dramatic increases in the late 1960s
and early 1970s, leveled off after 1974
The costs of Soviet procurement over the 1976-85 period remained at a rel-
atively high level-about $60 billion annually-and exceeded comparable
US outlays during seven of the last 10 years. By maintaining their weapons
procurement at this level, the Soviets were able to produce significantly
more weapons than the United States. In contrast, the United States
emphasized the purchase of fewer weapons that individually were more
capable and more costly than Soviet equipment. The United States also
devoted an increasing share of its procurement outlays to improving both
combat readiness and sustainability by increasing war reserve stockpiles of
munitions and major spare parts
Secret
SOV 86-10028
May 1986
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Secret
US and Soviet Defense Activities, 1976-85
- us
o USSR
0 1976 77 78 79 80 81 82 83 84 85
The slower growth in Soviet military investment after 1976 affected each
of the three major military missions-strategic, general purpose, and
support. Prior to the mid-1970s, dollar investment in each mission grew
rapidly as the Soviets both equipped and modernized a rapidly expanding
military establishment. During the 1976-85 period, however, the manpower
levels and equipment inventories of most Soviet military forces stabilized,
and investment growth for each of the major missions slowed considerably.
In the United States, investment in each mission declined sharply through
1976, primarily because of the end of US involvement in Vietnam. In the
post-1976 period, US investment in each mission increased sharply.
Despite these trends, however:
? Soviet investment costs for strategic and support forces exceeded compa-
rable US investment outlays in each of the last 10 years.
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? The Soviets maintained an edge in cumulative investment in general
purpose forces, although US outlays for these forces experienced dramat-
ic growth throughout the period and, after 1982, were higher than the
Soviet values 25X1
Operating
The dollar value of Soviet operating activities was about 15 percent higher
than US outlays for the 1976-85 period. Personnel costs-which make up
almost two-thirds of Soviet operating costs-were nearly 70 percent
greater than US personnel outlays. Cumulative US outlays for the
operation and maintenance (O&M) of weapons, however, were about
35 percent larger than our estimate for the Soviets, even though the Soviets
deploy larger numbers of weapons. Moreover, the gap has been widening
since 1980. US O&M expenditures have been growing at twice the rate we
estimate for the Soviet costs and by 1985 were 50 percent greater.F25X1
The disparity in O&M costs results from a number of differences in US
and Soviet force structures and practices:
? Soviet military equipment, for the most part, is less technologically
sophisticated than similar US equipment and, therefore, less costly to
maintain.
? During peacetime the Soviets operate their equipment at lower rates than
does the United States. This is particularly true of Soviet military
aircraft, which are operated at less than half the rate of comparable US
aircraft.
? After 1980 the United States increased the intensity of its maintenance
practices to improve the combat readiness of its forces. 25X1
viet dollar costs were only about 15 percent greater than US outlays.
exceeded comparable US outlays by more than 35 percent. The disparity
was considerably greater in the mid-to-late 1970s when Soviet costs were
growing at almost twice the rate of US outlays. Since 1980, however, US
RDT&E outlays have accelerated, growing at an average of about
10 percent a year. As a result, the gap closed considerably, and in 19RS Sn-
Research, Development, Testing, and Evaluation
Over the 1976-85 period, the dollar value of Soviet military RDT&E
activities grew fairly steadily at about 4 percent a year, and cumulatively it
Extended Comparisons
The foregoing comparison is limited to US and Soviet military programs
that, in the US view, directly contribute to national defense. They include
national security programs funded by the Department of Defense, defense-
related nuclear programs funded by the Department of Energy, Selective
Service activities, the defense-related activities of the Coast Guard, and the
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comparable Soviet programs. We have also compared the costs of a
number of other activities that enhance national security or foreign policy
interests. They include activities such as maintenance of strategic reserves
and industrial surge capacity that contribute to mobilization and wartime
preparedness, international activities such as economic and military aid
that support a nation's global position, and costs lated to past defense ac-
tivities (pensions and veterans' benefits).
Comparing the dollar value of these categories for 1983, the most recent
year for which we have reasonably complete data, shows that:
? The USSR had a much more extensive preparedness program than the
United States, with a dollar valuation of roughly four times the
comparable US outlays.
? The dollar value of Soviet international activities was approximately two-
thirds greater.
? Costs related to past Soviet defense activities were only slightly larger.
Outlook
We expect the high level of military procurement the Soviets have
sustained over the past decade to continue over the next five years, albeit at
relatively slow rates of growth. At such procurement levels, improvements
to Soviet strategic and conventional forces will be substantial.
Most of the weapons to be deployed during this time period will be
manufactured in existing plants and thus, in the near term, will impose no
significant demand on the resources needed for General Secretary Gorba-
chev's industrial modernization program. However, the demand for new
investment for defense plant and production equipment will almost certain-
ly rise in the late 1980s and early 1990s when the Soviets will have to begin
tooling up for another generation of weapons
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Key Judgments
iii
Introduction
I
Force Trends and Comparisons
1
Manpower
1
Weapons Acquisition
2
Strategic Weapons
3
General Purpose Weapons
4
Comparisons of Investment Trends
4
Procurement and Construction Costs
4
Investment by Major Military Mission
7
Strategic Forces
8
General Purpose Forces
10
Support Forces
12
Comparisons of Operating Costs
13
Operations and Maintenance
15
Research, Development, Testing, and Evaluation Activities
16
Manpower and Floorspace
16
Cost Comparisons
18
Extended Dollar Cost Comparisons
21
Wartime Preparedness
21
Comparison of National Security Costs
21
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This assessment compares US and Soviet defense activities over the past
10 years, 1976 to 1985, using both physical and value measures. Physical
measures include data on the annual production and delivery of weapons
and equipment to military units, the inventory of major weapon systems,
and trends in military manpower. Such measures are useful in portraying
the weapons mix and the relative sizes of the various components of the two
opposing forces. They cannot, however, be used to produce an aggregate
measure of diverse kinds of activities. How, for example, can 2 000 tanks,
400 tactical aircraft, and four infantry regiments be summed?77
and shifts in resources among those activities
To aggregate such diverse activities, one needs to assign to each some
weight that captures its relative worth-in terms of military capability,
resource costs, or some other measure-and then calculate the weighted
sum. Because prices are a useful way to combine incommensurable
quantities and since the assessment of trends in defense activities is often
related to economics, it has become common practice to develop aggregate
measures based on the costs of the resources devoted to various defense ac-
tivities. These costs can be calculated in any currency, but dollars are the
frame of reference of US policymakers and force planners because they
can conceptualize what a "defense dollar" will buy. Dollar valuations of
Soviet programs in conjunction with US defense program data capture
differences in the technical characteristics of military hardware, the
number and mix of weapons procured, manpower strengths, and the
operating and training levels of the forces being compared. They can be
useful, therefore, in portraying the relative magnitudes of similar pro-
grams, general trends in the relative resources devoted to defense activities,
Dollar valuations, however, have the following important limitations:
? They do not measure actual Soviet defense spending, the impact of
defense on the economy, or the Soviet perception of defense activities.
The Soviets do not spend dollars. Issues of defense burden are properly
analyzed with estimates of ruble expenditures. Dollar costs measure
what it would cost the United States, at prevailing US prices and wages,
to develop, deploy, and maintain a military force of the same size and
with the same weapons as that of the USSR and to operate that force as
the Soviets do.
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? Dollar costs of Soviet defense activities do not reflect the Soviet view of
the distribution of the USSR's defense effort.
Because the price structures in the two countries are substantially
different, Soviet costs in rubles are distributed differently among the
resource categories. For example, Soviet investment in rubles accounts
for about half of total costs, but measured in dollars it accounts for only
about one-fourth.
? Dollar costs are not a measure of the overall military capabilities of US
and Soviet forces.
One of the most serious temptations in using dollar cost estimates is to
interpret them in terms of capabilities-Soviet capabilities relative to
those of the United States, or changes in Soviet capabilities over time.
These estimates are not intended to and cannot support such interpreta-
tions. Rather, they are useful for measuring medium- to long-term
trends in the yearly flow of resources allocated to the military. Because
dollar costs measure only the defense goods and services produced in a
single year, they capture only a small part of a country's total military
stockpile. Moreover, assessments of capability must take into account
military doctrine and battle scenarios; the tactical proficiency, readiness,
and morale of forces; the effectiveness of weapons; logistic factors; and a
host of other considerations. Dollar costs of defense activities do not
provide a reliable measure of these disparate factor
The purpose of valuing observed and estimated Soviet defense programs in
dollar terms is to provide an appreciation of the physical size of the Soviet
defense effort by showing the level of effort that would be required to
reproduce those programs in the United States. Thus, estimates of the costs
of individual items represent what we believe it would cost a US firm to
manufacture them, using Soviet design and material specifications but US
manufacturing practices and paying US price
Finally, we do not address the question of whether the Soviets would
choose to have the same military establishment if they had to pay dollar
prices instead of ruble prices for their weapons and manpower. Presum-
ably, if the Soviets were to make their decisions on the basis of a dollar
price list, they would buy a different mixture of weapons and manpower. In
this paper, however, we are concerned only with the value in dollars of the
defense activities they actually engage in.
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In addition to the valuation of Soviet defense activities in dollars, US
military outlays can be valued in rubles for comparison with Soviet ruble
outlays. Such an exercise recognizes the validity of using either currency as
the common measure in a US-Soviet comparison. Ruble comparisons
provide as valid a measure of the resources devoted to US and Soviet
defense activities as dollar comparisons do. The difference in results is the
consequence of differences in relative prices and quantities produced in the
two countries. While an average could be taken of the two ratios produced
(such as a geometric mean), that ratio would be difficult to interpret.F_
We have developed ruble estimates of US defense activities for comparison
with Soviet ruble outlays but have much less confidence in these than in
our dollar estimates. Obviously, we cannot ask Soviet contractors to
estimate what it would cost to produce items of US equipment in the
USSR
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A Comparison of Soviet and US
Defense Activities, 1976-85F-
The estimates of Soviet costs presented in this paper
were derived using the building-block methodology
(see appendix B). The costs of all Soviet defense
activities are developed by identifying and listing
Soviet forces and their support apparatuses, and
estimating their orders of battle, equipment inven-
tories, and new equipment purchases. To these de-
tailed estimates of physical resources, we apply appro-
priate 1984 dollar prices
Figure 1
US and Soviet Manpower Growth,
1976-85
Because the building-block approach is based on the
individual components of the Soviet defense effort, we
can estimate costs by resource categories-invest-
ment; operating; and research, development, testing,
and evaluation (RDT&E)-and apportion investment
and operating costs among the strategic, general
purpose, and support missions. A three-year study has
calculated RDT&E costs using a building-block ap-
proach that focuses on resource inputs, but we are not
yet able to apportion RDT&E costs on be-
cause we lack mission-specific data.
US data in this paper are expressed in terms of
calendar-year outlays derived from the Five-Year
Defense Program (FYDP) issued by the Department
of Defense in January 1985 and from the US budget.
Defense-related activities of the Department of Ener-
gy, the Coast Guard, and the Selective Service have
been added to improve the comparison with Soviet
programs. The outlays are expressed in 1984 dollars
so that trends in cost estimates reflect real changes in
military forces and activities and not the effects of
inflation. US order-of-battle data were also derived
from the FYDP; US production data were provided
by the Department of Defense.ss
The period from 1976 to 1985 was one of considerable
force modernization in both the Soviet Union and the
United States. The Soviet Union, however, committed
substantially more resources to improving, operating,
and expanding its forces, which in many cases w
already much larger than their US counterparts
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Manpower
In 1985 Soviet military manpower was double that of
the United States, numbering about 4.5 million men.
Soviet manning levels have risen every year since
1976, with total personnel costs growing at about 1
percent a year. The Soviets added about 340,000 men
over the period, with most of the increase (some 25X1
280,000 men) occurring in the land forces mission (see
figure 1). In contrast, US manning levels declined
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Table 1
US and Soviet Military
Manpower, 1985
Figure 2
Soviet Procurement of Major
Weapon Systems as a Share of
US Procurement, 1976-85
Percent
Because of rounding, components may not add to the totals shown.
b Includes strategic control and surveillance activities.
c Includes RDT&E and space activities.
through 1979 as the United States found it increas-
ingly difficult to maintain its manpower levels with an
all-volunteer force. After 1979 US manpower levels
rose by about 100,000 men. Most of the increase
occurred in the tactical air and naval missions (some
75,000 men). F__1
The comparison of manpower levels in table 1 high-
lights several differences in Soviet and US missions
and force structures:
? Soviet strategic offensive manpower is about three
times as large as that of the United States, primari-
ly because the Soviets maintain a large peripheral
strategic strike force to which the United States has
no equivalent. The disparity also reflects the fact
that the Soviet intercontinental attack force consists
of a large force of liquid-propellant ballistic missiles,
which require considerably more manpower to oper-
ate than the solid-propellant missiles that make up
nearly the entire US force.
? The Soviets commit a large force of men to strategic
defenses because of the threats posed by the US
heavy bomber force and the USSR's proximity to
ICBMs and
SLBMs
Armored personnel
carriers
Tactical combat
aircraft
Major surface
combatants
potential war theaters in Europe and the Far East.
The United States has only a small force dedicated
to this mission because of the relatively small threat
posed by the Soviet heavy bomber force.
? Soviet manpower levels for general purpose forces
are twice as large as those of the United States. The
Soviet land forces, which are three times as large as
the US counterpart, account for this difference. The
disparity in land forces reflects Moscow's decision to
maintain large forces opposite both a potentially
hostile China in the East and NATO in the West.
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Weapons Acquisition
Over the past 10 years, the Soviets procured more
weapons of almost every type than did the United
States-more than 10 times as many ICBMs, more
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Table 2
US and Soviet Cumulative Procurement
of Major Weapon Systems, 1976-85
Major surface combatants (more 90 73
than 1,000 tons displacement)
than three times as many tanks, nearly 60 percent
more tactical combat aircraft, and more than twice as
many submarines (see figure 2 and table 2). The
United States emphasized the modernization of exist-
ing systems, although several new systems were intro-
duced. Moreover, the United States purchased tech-
nologically sophisticated weapons that individually
were more capable and more costly than similar
Soviet equipment. The United States also devoted an
increasing share of its procurement outlays to improv-
ing both combat readiness and sustainability by in-
creasing its erve stockpiles of munitions and
spare parts
medium and high altitudes (see table 3)
Strategic Weapons. During the 1976-85 period, the
Soviets outproduced the United States in all catego-
ries of major strategic offensive and defensive weap-
ons. At the same time, they continued to upgrade the
capabilities of their fielded systems with the procure-
ment of improved subsystems such as missile guidance
components and aircraft avionics. Over the entire
period, the Soviets more than tripled the number of
nuclear weapons available for strategic offensive oper-
ations, from about 3,000 in 1976 to over 9,000 in
1985. They also continued longstanding efforts to
improve their strategic defenses, building a large and
sophisticated defense against aircraft penetrating at
Table 3
Major US and Soviet Strategic
Weapon Programs, 1976-85
Procurement of 135 Minute-
man III ICBMs.
Retrofit of 350 Minuteman Ill
ICBMs with improved guidance
systems and higher yield
MIRVs.
Hardening of Minuteman silos.
Construction of six Ohio-class
SSBNs and 565 Trident C-4
SLBMs; conversion of launch
tubes and fire-control systems
to backfit Trident SLBMs on
12 older Benjamin Franklin-
class SSBNs.
Procurement of two B-1 bomb-
ers.
Procurement of 1,600 air-
launched cruise missiles
(ALCMs) and improved avionic
systems for B-52 heavy bomber
force.
Procurement of over 1,000
MIRVed SS-17, SS-18, and
SS-19 fourth-generation
ICBMs.
Introduction of a new solid-
propellant road-mobile ICBM,
the SS-25, deployed in late
1985.
Procurement of 25 Delta- and
Typhoon-class SSBNs and over
880 SLBMs, most of them
SS-N-l8s and SS-N-20s that
can carry MIRVs.
Procurement of 50 Bear-H
heavy bombers capable of car-
rying the AS-15 ALCM.
Procurement of about 720
MIRVed SS-20 intermediate-
range ballistic missiles and
about 140 Backfire medium
bombers for the Soviet Air
Forces.
Procurement of new command
and control systems, including
Pave Paws radars and E-4B air-
borne command posts.
Procurement of over 1,300 in-
terceptor aircraft for strategic
defense.
Procurement of about 45,000
strategic surface-to-air missiles, 25X1
including the SA-10, which is
capable of engaging targets at
all altitudes.
During the same period, US strategic force improve-
ments focused on the modification of existing offen-
sive weapons and the production of only 135 Minute-
man III ICBMs, six Ohio-class SSBNs, 565 Trident
C-4 SLBMs, and two B-1 bombers. The United
States also began series production of the MX Peace-
keeper ICBM, althou It none had been delivered by
the end of 1985
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Table 4
US and Soviet Procurement of Major
General Purpose Weapon Systems,
1976-85
Procurement of nearly 7,400
tanks, including 3,150 new M1
Abrams; modernization of
many existing M48 and M60
models.
Procurement of 8,400 armored
vehicles, including nearly 2,100
infantry and cavalry versions of
new Bradley fighting vehicle.
Procurement of 780 UH-60
Blackhawk utility helicopters
and initial production of 65
AH-64 Apache attack helicop-
ters for deployment in 1986.
Procurement of 1,700 artillery
pieces, half of which were self-
propelled.
Procurement of nearly 3,500
tactical aircraft, including 745
F-15s, 915 F-16s, and 705 A-
10s for the Air Force, and 330
F-14s, 255 F-18s, and 190 A-7s
for the Navy.
Procurement of 90 naval sur-
face combatants, including
three Nimitz-class aircraft car-
riers, eight guided-missile cruis-
ers, 34 destroyers, and 45
guided-missile frigates.
Procurement of 33 Los
Angeles-class nuclear-powered
attack submarines; five Ethan
Allen-class SSBNs converted
to attack submarines.
Procurement of about 23,700
tanks, primarily T-64s and T-
72s; introduction of T-80 in
1979.
Procurement of about 43,000
armored vehicles, nearly half of
which were BMP infantry
vehicles.
Procurement of about 2,600 at-
tack helicopters, mostly Ml-8
Hips and MI-24 Hinds; MI-26
Halo heavy-lift helicopter intro-
duced in the early 1980s.
Procurement of about 24,300
artillery pieces, primarily 152-
and 122-mm self-propelled
guns.
Procurement of about 5,545
tactical aircraft, including
2,300 MIG-23 and MIG-27
Floggers and 1,400 SU-17 Fit-
ters. Procurement of SU-25
Frogfoot, SU-27 Flanker, and
MIG-29 Fulcrum began in the
early 1980s.
Procurement of 73 naval sur-
face combatants, including two
Kiev-class carriers, eight cruis-
ers, 12 destroyers, and 20 frig-
ates-all equipped with guided
missiles.
Procurement of 41 nuclear-
powered submarines (seven
armed with missiles) and 25
diesel-powered submarines
armed with torpedos.
Procurement of over 300 IL-76
Candid jet-powered transport
aircraft.
General Purpose Weapons. The Soviet Union both
expanded and modernized nearly all of its general
purpose forces over the 1976-85 period. Expansion
and modernization of the land forces have significant-
ly improved the mobility, firepower, and survivability
of Soviet divisions. Soviet divisions are now better
able to operate as self-sustaining units against air and
antiarmor threats and to respond more quickly to
changing tactical situations. Similarly, modernization
of the tactical air forces has improved their ability to
provide close air support to ground forces, carry out
conventional strikes deep in the rear areas of combat
zones. and conduct aerial combat against other fight-
ers.
The United States also expanded and modernized its
general purpose forces, although it bought considera-
bly fewer weapons than the Soviets (see table 4). The
weapons procured by the United States, however,
were considerably more technologically advanced and
therefore more capable and costly than the Soviet
equipment. In addition, the United States accelerated
its procurement of ammunition, bombs, missiles, and
major spare parts in order to improve both the combat
readiness and the sustainability of its general purpose
forces.
Investment activities can be divided into two
categories:
? Procurement-the acquisition of weapon systems
and support equipment, including major spare parts.
? Construction-the building of military facilities. F-
Procurement and Construction Costs
For the 1976-85 period, the estimated cumulative
dollar value of Soviet military investment was more
than 40 percent greater than US investment outlays
(see figure 3). The dollar value of Soviet military
procurement exceeded comparable US procurement
by more than 30 percent while the value of Soviet
military construction was more than two and a half
times US construction outlays. The investment mar-
gin, however, was considerably higher at the begin-
ning of the period when the cost of Soviet investment
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Figure 3
US and Soviet Military Investment,
1976-85
Billion US $ (1984 dollars)
US
Procurement
Construction
was more than twice that of the United States. By the
end of the period, US investment outlays were slightly
larger than the dollar value of comparable Soviet
investment. In 1985 US procurement outlays exceed-
ed the estimated dollar value of parable Soviet
activities by 18 percent. 25X1
The estimated dollar cost of Soviet investment grew
an average of less than one-half of 1 percent per year
during the 1976-85 period. In contrast, average annu-
al growth from 1965 to 1975 was about 4 percent a
year. (Appendix A presents our estimates for those
years.) The deceleration resulted from slower growth
in the dollar value of Soviet weapons procurement,
which before 1976 had been increasing at about
5 percent a year. During 1976-85 Soviet procurement
stabilized at the high level of about $60 billion
annually and exceeded comparable US outlays during
seven of the 10 years. Soviet military construction
grew by about 1 percent per year over the period as
the Soviets continued to expand their military forces,
but this category makes up only about 15 percent of
Soviet investment costs.
US investment in military programs more than dou-
bled between 1976 and 1985, increasing an average of
about 11 percent a year. Growth was particularly
rapid after 1980, when military investment was in-
creasing by about 13 percent a year. The rapid rise in
US investment reflects an across-the-board modern-
ization of military forces that emphasized the pro-
curement of technologically sophisticated weapons. It
also reflects a decision in the early 1980s to improve
the combat readiness and sustainability of US forces
by building up war reserve stocks of ammunition and
major spare parts.
Soviet procurement of each of the four major catego-
ries of weapons-missiles, naval ships and subma-
rines, aircraft, and land arms-remained nearly con-
stant during 1976-85. This was a marked departure
from the 1965-75 period (see figure 4), when each of
these procurement categories increased rapidly:
Aircraft procurement, the largest component of
military procurement, declined during the entire
1976 to 1985 period after having been a major
source of procurement growth between 1965 and
1975.
25X1
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Figure 4
Average Annual Growth of the Dollar Costs
of Soviet Procurement by Major Weapons
Category, 1966-75 and 1976-85
Percent
All major weapons
Land arms
Aircraft
Ships and boats
Missiles
All major weapons
Land arms
Aircraft
Ships and boats
Missiles
? Procurement of surface ships and submarines for
the Navy has declined by about 1 percent a year
since 1976, after having grown by about 5 percent
during the 1965-75 period.
? Missile procurement declined by about 1.5 percent a
year between 1976 and 1985 after having grown by
more than 7 percent a year during 1965-75.
? Procurement of land arms-primarily tanks, ar-
mored vehicles, and artillery-has grown the fastest
of the four categories since 1976 but considerably
less than the 4 percent per year average observed
between 1965 and 1971
A number of factors contributed to the leveling off of
Soviet procurement. Since the mid-1970s, for exam-
ple, the Soviets have had difficulties with the develop-
ment and manufacture of several advanced weapon
systems that incorporate Soviet state-of-the-art tech-
nology. Technical problems have either significantly
delayed the start of series production or have resulted
in rates of production slower than we have seen for
similar weapon systems in the past, and in some cases
much slower than we believe the Soviets intended.
Major programs that we have been able to identify as
having encountered significant problems include the
SS-X-24 solid-propellant ICBM, the SA-10 strategic
surface-to-air missile (SAM), and the two new fighter-
interceptor aircraft-the MIG-29 Fulcrum and the
SU-27 Flanker. The poor overall performance of the
Soviet economy during the period, particularly for
industry, also contributed to some extent to recent
procurement trends. In some instances, shortfalls in
the production of key industrial commodities resulted
in bottlenecks and shortages that disrupted specific
weapon programs
Yet the leveling off in procurement has lasted too long
and has affected too many categories of weapons to be
solely the result of unanticipated economic or techno-
logical problems. In a 10-year period, the leadership
of the Soviet Union could have used its control of
industrial priorities to ensure a higher rate of growth
of military procurement. It is more likely that Soviet
leaders, faced with a sluggish economy and perhaps
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Figure 5
US and Soviet Investment by Military Mission, 1976-85
US
USSR
I I I I I I I I I I I I I I I I I I I I I I I I I I I I I. J
0 1976 79 82 85 0 1976 79 82 85 0 1976 79 82 85
anticipating the kinds of technological and manufac- difficulty the defense industries were having with the
turing problems mentioned above, made decisions in production of advanced weapons would have argued
the mid-1970s that allowed military procurement to for such a diversion of resources
continue at its high level, but not to increase much.
Such decisions may have been part of an effort to Investment by Major Military Mission
revitalize the economy. The failure of Soviet efforts The slower growth in Soviet military investment after
to increase economic growth during the 1970s 1976 was apparent in each of the three major military
through the more productive use of resources and the missions-strategic, general purpose, and support (see
figure 5). Before 1976, Soviet investment-measured
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in dollars-in each of these missions had grown
rapidly because of the need to both equip and modern-
ize a rapidly expanding military establishment (see
appendix A). After 1976, the size of most military
forces stabilized, and investment growth in each of the
major missions slowed considerably. Even so, invest-
ment remained at high levels as the USSR continued
to modernize its weapons invent h the addition
of newer, more capable systems
US investment in each major military mission fol-
lowed a different pattern, with costs declining through 10
the mid-1970s and then increasing sharply through
1985. The decline in US investment in general pur-
pose and support forces resulted primarily from the 8
end of US military involvement in the Vietnam
conflict. The decline in US investment in strategic
programs reflected the completion of the Polaris 6
SSBN and Minuteman I ICBM programs. Since the
mid-1970s the United States has invested heavily in
each mission in an effort to both modernize its forces a
nn,dr-build its stockpiles of war reserve materials.
Despite these trends, Soviet investment costs for
strategic and support forces exceeded comparable US
investment outlays in each of the last 10 years. US
investment in general purpose forces began to exceed
estimated Soviet costs in 1982, but the cumulative
value of Soviet investment in these forces was over
10 percent higher for the entire periodF_~
Strategic Forces. This mission includes all nuclear
weapons and the forces assigned to intercontinental
attack, strategic defense, and strategic control and
surveillance. It also includes Soviet forces for periph-
eral attack, for which there are no US counterparts.
Figure 6
US and Soviet Investment in
Strategic Forces, 1976-85
Us
USSR
I I I I I I I I I I
0 0
25X1
Over the period, the estimated dollar value of Soviet
investment in strategic offensive and defensive forces
(excluding RDT&E) was about $210 billion, exceed-
ing corresponding US outlays by 130 percent. Soviet
investment costs for this mission declined slightly over
the period while US strategic investment outlays more
than doubled, increasing about 11 percent a year. As
a result, the investment gap was considerably smaller
at the end of the period than at the beginning, when
i i~ IIIII~I~~I
0 1976 79 82 85 0 1976 79 82 85
u Includes command and control systems, and the
production of nuclear materials.
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Soviet costs for strategic forces were about four times
comparable US outlays. By 1985 the Soviet costs were
40 percent greater than those of the United States.
Over the 1976-85 period, we estimate more than
15 percent of the cumulative dollar cost of Soviet
strategic investment-roughly $35 billion-was for
peripheral attack forces. These are forces we believe
are primarily dedicated to strategic targets along the
periphery of the Soviet Union, primarily in Western
Europe and China. They include the SS-20 intermedi-
ate-range ballistic missile (IRBM), the Backfire medi-
um bomber, and about 70 percent of the Fencer light-
bomber force. The United States has no direct
counterpart in terms of a discrete mission, although
certain US missiles, tactical air~raft_an1 ubmarines
could perform similar function
The disparity in investment costs reflects the steady
pace of Soviet modernization of both its strategic
offensive and defensive forces between 1976 and 1985
(see figure 6). In contrast, most of the growth in US
investment in strategic programs occurred after 1980
and was concentrated almost exclusively in programs
for intercontinental attack. The disparity also reflects
Soviet modernization of that portion of strategic
offensive forces intended for attacking targets along
the periphery of the Soviet Union. If investment in
those peripheral attack forces were excluded, the
dollar value of cumulative Soviet investment w
95 percent larger than that of the United State
Over the 1976-85 period, the cost of Soviet investment
in intercontinental attack forces-ICBMs, SLBMs,
and heavy bombers-exceeded comparable US out-
lays by over 50 percent. Soviet investment declined
over most of the period as a number of modernization
programs that had been started prior to 1976 neared
completion. The United States, on the other hand,
initiated several programs that resulted in a signifi-
cant rise in investment outlays. As a result, the
disparity was reversed, and by 1985, US investment
outlays exceeded the dollar value of Soviet investment
by about 45 percent:
? The decline in Soviet costs, which averaged about
5 percent a year, reflects the completion of the
SS-17, SS-18, and SS-19 ICBM modernization
programs and a slowdown in SSBN deliveries-
from seven boats in 1976 to fewer than two boats
per year in the late 1970s and early 1980s.
ICBM programs
? US outlays averaged growth of about 12 percent a
year. Growth during the first half of the period, less
than 4 percent per year, was largely due to the
Trident SLBM and air-launched cruise missile pro-
grams. After 1980, costs grew about 18 percent a
year because of the B-1B bomber and Peacekeeper
Over the 1976-85 period, the cumulative dollar value
of Soviet investment in the modernization of strategic
defense forces-interceptor aircraft, strategic SAMs,
ballistic missile defenses, and warning and control
systems-was nearly $55 billion. This total represents
more than a quarter of the estimated cumulative
dollar value of Soviet strategic investment. In con-
trast, US investment outlays for strategic defenses
over the same period were roughly $1 billion, or about
1 percent of total strategic investment
The disparity in levels of investment activity reflects
significant differences in the two countries' approach-
es to strategic weapons. Since the early 1960s, US
strategic doctrine has emphasized the use of offensive
forces to deter an enemy attack rather than the
deployment of defensive forces aimed at limiting the
damage from an enemy strike. Moreover, after agree-
ing in the 1972 antiballistic missile (ABM) treaty not
to deploy a nationwide defense against the relatively
large Soviet ICBM and SLBM threats, the United
States decided not to commit the resources necessary
to modernize its air defenses against the somewhat
limited Soviet heavy bomber threat. In contrast,
Soviet military doctrine historically has favored more
balance between offensive and defensive forces. Al-
though the Soviets also agreed not to deploy a nation-
wide ABM system, they have continued to commit
substantial resources to the modernization of their
defenses against bombers. This emphasis was influ-
enced by the threats posed by the US strategic
25X11
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Figure 7
US and Soviet Investment in General
Purpose Forces, 1976-85
us
USSR
I I I I I I I I I I I I I
0
bomber force-a force much larger than its Soviet
counterpart-and by the threat from potentially hos-
tile aircraft in the European and Pacific theaters and
in China. In addition, the Soviets have continued to
modernize their ABM defenses around Moscow and,
while this effort remains within treaty limits, it puts
them in a position to deploy a more comprehensive
system in a relatively short period of time.
General Purpose Forces. This mission includes all
land, tactical air, general purpose naval, and mobility
(airlift and sealift) forces.
Over the period, the cumulative dollar value of Soviet
investment in general purpose forces (excluding
RDT&E) was about $340 billion-roughly 11 percent
more than comparable US outlays. The margin was
considerably higher in 1976, when our estimate of
Soviet investment was nearly twice the US level. Over
the next 10 years, however, Soviet investment costs
grew at a steady, but slow, pace of less than one-half
of 1 percent a year as the USSR continued to
modernize its forces and to expand them along both
the Sino-Soviet border and in the Warsaw Pact
region. Meanwhile, US investment outlays nearly
tripled, growing by more than 12 percent a year-a
reflection of growth in all categories of general pur-
pose forces, particularly in land and tactical air forces
(see figure 7). Thus, US investment in general purpose
forces by 1982 began to surpass our estimates for the
USSR by a growing margin and by 1985 were about
45 percent greater than the dollar value of Soviet
investment.
Over the 1976-85 period, the cumulative dollar value
of Soviet investment in land forces-primarily for
Ground Forces combat divisions, ground-attack heli-
copters, and certain elements of the Border Guards-
was nearly twice the US investment outlays for land
forces. The Soviet costs were nearly five times US
outlays in 1976. The margin declined each year, and
in 1985 they were only 10 percent greater than US
investment
25X1
25X1
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The substantial disparity in cumulative investment
costs reflects continuing Soviet efforts to both expand
and modernize land forces that in 1976 were already
significantly larger than those of the United States.
The USSR added 35 active divisions and independent
corps and increased the size of the equipment holdings
in each of its combat divisions. Thus, in 1985 the
USSR had 12 percent more tanks, 70 percent more
armored troop carriers, and more than 50 percent
more artillery pieces than it had at the start of the
period. At the same time, the Soviets replaced large
blocks of older equipment with newer, more capable
versions. By 1985, for example, more than 35 percent
of the Soviet tank force consisted of modern T-64,
T-72, and T-80 models compared with about 10 per-
cent in 1976. This modernization was undertaken at a
relatively steady pace and, when measured in dollars,
required average growth in investment costs of more
than 2 percent a year. F_~
US investment outlays for land forces climbed dra-
matically throughout the period, averaging growth of
about 20 percent a year. By 1985, US outlays for land
forces were nearly five times as high as at the start of
the period. However, the United States did not signifi-
cantly increase the size of its land forces or produce as
much new equipment as the USSR. The number of
tanks acquired over the period, for example, was only
about one-third of our estimate of total Soviet pro-
curement. Instead, the United States procured small-
er numbers of weapons-such as the M1 tank, the M2
infantry fighting vehicle, and the AH-64 attack heli-
copter gunship-that were not only much more ad-
vanced and therefore more capable than their Soviet
counterparts, but also considerably more costly. The
United States also made a concerted effort in the
early 1980s to improve both the combat readiness and
sustainability of its land forces by accelerating its
purchases of ammunition and major spare parts.
Both countries added sophisticated new fighter air-
craft to the inventories of their tactical air forces
(which include land- and sea-based fixed-wing aircraft
that are used in a tactical combat role, as well as
multipurpose aircraft carriers) during the 1976-85
period. US cumulative investment costs were about
85 percent greater than estimated Soviet investment,
even though the Soviets procured nearly 60 percent
more aircraft over the period. Moreover, the disparity
widened throughout the period; by 1985 US invest-
ment outlays for its tactical aircraft were two and a
half times our estimate for the Soviets
In part, the higher US figures reflect the costs
associated with the construction of three Nimitz-class
carriers; these accounted for about 20 percent of US
investment costs over the period. They also reflect US
efforts to increase its stockpiles of ammunition and
major spare parts. Primarily, however, the disparity in
investment costs resulted from the US purchase of
aircraft, such as the F-16 and F-18, that are more
sophisticated and considq- h expensive than
their Soviet counterparts
Since 1976, Soviet investment in tactical air forces
has followed an erratic but downward trend as pro-
duction of the Flogger and Fishbed programs neared 25X1
completion. In the early 1980s, the Soviets began
series production of two new fighters, the Flanker and
Fulcrum, which we believe have capabilities ap-
proaching those of current US fighters. Production of
these aircraft, however, has proceeded at a relatively
slow rate compared with past aircraft programs. In
fact, we believe production has been below the level
the Soviets intended, probably because of manufac-
turing difficulties. Partly because of these factors, by
1985 the dollar cost of Soviet investment in tactical
aviation was about 15 ercent less than it had been at
the start of the period 25X1
Over the 1976-85 period, the estimated cumulative
dollar cost of Soviet investment in general purpose
naval forces-including major and minor surface
combatants, attack submarines, antisubmarine war-
fare aircraft and carriers, amphibious warfare ships,
and naval auxiliaries directly supporting the fleet-
was about 15 percent larger than comparable US
investment outlays. The difference in costs reflects the
considerable modernization accomplished by the Sovi-
ets. The number of Soviet major surface combatants
(more than 1,000 tons displacement) increased by
19 over the period, and the number of nuclear-
powered submarines by 37.
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The difference in investment was greatest during the
first half of the period, when the dollar value of
annual Soviet investment was about 40 percent great-
er than US outlays. During the latter half of the
period, the disparity narrowed considerably as invest-
ment in the US Navy grew at an annual rate of nearly
8 percent a year. This spending growth reflected an
acceleration in the pace of ship and submarine con-
struction in order to achieve the projected goal of a
600-ship Navy by the late 1980s. Soviet naval invest-
ment continued at about the same pace as during the
first half of the period. As a result, US outlays began
to exceed our estimates for the USSR in 1983 and by
1985 were nearly 50 percent highe
Over the entire period, cumulative Soviet investment
in mobilityforces (airlift and sealift activities and
military port operations) measured in dollars was
about one and a half times that of the United States.
The Soviet costs reflect the modernization of the
transport aircraft fleet with the new IL-76 Candid
medium-range jet. Most US transport aircraft had
been procured before 1976, and investment was di-
rected toward the modification of existing aircraft,
primarily the C-141 and C-5A jet transports.
Support Forces. The support mission includes those
activities that are required to support US and Soviet
combat forces. Because of the diverse nature of each
country's support establishment, dollar costs are a
particularly useful way to compare these activities in
the aggregate. Some of the major elements of this
mission are:
? The operation and maintenance of fixed military
facilities.
? Training conducted at other than the unit level,
primarily recruit/conscript, officer, and skills
training.
? Administrative activities, including those of central-
ly located command personnel; recruitment, con-
scription, and personnel management services; and
the administrative costs of US participation in
NATO and the USSR's administration of the War-
saw Pact Alliance.
Figure 8
US and Soviet Military Operating Activities,
1976-85
Billion US $ (1984 dollars)
us
Personnel
O&M
USSR
I I I I I I I
0 1976 79 82 85
0 Personnel
O&M
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? Many other support services, such as satellite com-
munications, hospitals and medical clinics, data-
processing support, security, investigative and judi-
cial activities, and the maintenance of emergency
command posts.
In addition, the defense-related activities of the US
Coast Guard and the administration of the Soviet
KGB are includedF__1
Over the decade as a whole, estimated Soviet invest-
ment in support forces was about 55 percent greater
than comparable US outlays. The Soviet margin
reflects, in large part, the cost of su porting a much
larger military establishment
Operating activities are divided into two categories:
? Personnel-the goods and services provided active
and reserve military personnel, including pay, food,
clothing, travel, and other allowances.
? O&M-the operation and maintenance of military
equipment and faciitics~ the services provided
by civilian personn
The dollar value of Soviet operating activities was
about 15 percent higher than US outlays for the
1976-85 period. The costs for both countries increased
over the period, primarily because of the maintenance
required by increasingly more complex weapons of all
types (see figure 8). Through 1980, the trends in US
and Soviet operating costs roughly paralleled one
another, with each increasing at between 1 and
2 percent a year. After 1980, however, growth in US
operating expenditures accelerated to an average rate
of almost 5 percent a year. For the same period, our
estimates of Soviet dollar operating costs showed
continued steady growth at about the average rate of
the previous five-year period. As a result, by 1985
Soviet and US operating costs were nearly equal.
Personnel Costs
For the Soviet Union, military personnel costs ac-
counted for almost two-thirds of the estimated dollar
operating costs for the 1976-85 period (see inset).
They were more than 65 percent greater than US
The dollar value of Soviet military personnel costs is
derived by applying US military pay rates to the
relatively large Soviet force. US pay rates are applied
to the job structure of the Soviet military and not to
the rank structure because the Soviets often require
officers to perform functions that in the United States 25X1
would be assigned to enlisted personnel. This method,
therefore, is consistent with what the dollar values
represent-the cost of reproducing Soviet military
activities in the United States.
Critics argue that this approach makes the disparity 25X1
between the two defense establishments look greater
than it is, because the Soviet military consists of
numerous conscripts that are poorly paid, even when
compared to the average ruble wage in the USSR. If,
however, the dollar value methodology is to provide
comparisons that have validity and precision, US cost
factors must be applied equally to all Soviet activi-
ties; no part of the whole can be withdrawn for
calculation by a separate set of rules. Moreover, the
dollar valuation of Soviet military activities does not
and is not intended to address the question of whether 25X1
the Soviets would choose to have such a large
military establishment if they had to pay dollar
prices instead of ruble prices for their manpower.
outlays for military personnel, which account for less
than half of US operating expenditures. The USSR
has more than twice as many personnel, but a higher
percentage of them are at the lower end of the pay
scale
Over the entire period, the growth in US personnel
costs averaged about the same as in our estimates of
Soviet costs. Since 1979, however, annual US costs
have been increasing more than twice as fast as Soviet
personnel costs. In part, the acceleration in US per-
sonnel costs after 1979 reflects increases in manpower
levels. Primarily, however, it reflects increases in the
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Figure 9
US and Soviet Operation and Maintenance Costs, 1976-85
US
USSR
General
I I I I I I ~ I I I I I I I I
0 1976 79 82 85 0 1976 79 82 85 0 1976 79 82 85
25X1
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rate of reenlistment among US servicemen. As the
number of reenlistments increased, so did the number
of officers and enlisted men at the higher end of the
pay scales
Operations and Maintenance
Since 1976, the dollar cost of operating and maintain-
ing the Soviet armed forces (including civilian person-
nel costs) has been increasing at a fairly steady rate of
more than 2 percent a year. This trend is a result of
the continued growth in the weapons inventories of
Soviet general purpose forces (see figure 9). It also
reflects the maintenance and support required by
increasingly complex tactical weapons
Operation and maintenance costs for Soviet strategic
forces did not grow over the period, despite the
considerable force modernization that has taken place
since 1976. In part, this reflects the fact that the
inventories of most strategic weapons remained rela-
tively stable over the period. Moreover, while the
newer systems are more technologically sophisticated
than the ones they replaced, in many cases they are
not as hard to operate and maintain. For example, the
SS-20 solid-propellant IRBM is considerably easier to
operate and maintain than the older, liquid-fueled
SS-4 and SS-5 missiles. The chief reason for the lack
of growth in O&M costs, however, stems from a
reorganization of the Soviet Air Forces that occurred
during the early 1980s. This reorganization changed
the primary mission of about 1,000 aircraft from what
had been strategic air defense to a tactical one. This
required an accounting change, as the O&M costs
associated with these aircraft were shifted from the
strategic to the general purpose forces, and offset the
increases in the O&M costs for other strategic offen-
sive forces.
The costs of operating and maintaining the Soviet
general purpose forces grew steadily over the period
by 3.5 percent a year. The costs of each of the force
components increased as inventories were expanded
and equipment quality improved:
? The rise in the dollar value of Soviet land forces
O&M was the result of growth in the inventories of
most major land arms, particularly tanks and ar-
mored vehicles. Moreover, the quality of the forces
continued to improve as T-64 and T-72 tanks, late-
model BMPs, and self-propelled artillery accounted
for increasing shares of the Soviet inventories.
25X1
? The O&M costs of Soviet tactical air forces went up
over the first half of the period as third-generation
Flogger and Fencer aircraft were deployed and the
total number of tactical aircraft increased. During
the latter half of the period, O&M costs stayed
fairly level as those programs neared completion;
fourth-generation Flankers and Fulcrums began to
be deployed, but at a relatively slow pace.
? The O&M costs of Soviet general purpose naval 25X1
forces increased fairly steadily over the period with
the expansion in the inventory of major surface
combatants and general purpose submarines. The
higher O&M costs also reflect the growing sophisti-
cation of the forces; the newer ships and boats are
generally faster than the ones they replace and
incorporate more advanced weapons and electronic
systems.
The dollar value of Soviet O&M of support forces
increased an average of about 2 percent a year. In
part, the annual cost increases reflect the additional
requirements of supporting an expanding Soviet mili-
tary establishment. After 1980, O&M costs acceler-
ated sharply as Soviet military space programs began
to play a much larger support role, particularly in the
areas of communications and intelligence collection.
The United States devotes considerably more re-
sources to the operation and maintenance of its forces
than does the USSR. We estimate that in the 1976-85
period, US outlays for O&M activities were about a 25X1
third higher than the dollar value of comparable
Soviet activities, even though the weapons inventories
of most US force components were smaller than their
Soviet counterparts. Moreover, by 1985, US O&M
expenditures had increased by more than 50 percent
over their 1976 levels while our estimate of the dollar
cost of Soviet O&M activities had risen only about
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20 percent. The disparity in cost levels results primar-
ily from higher US operating rates-especially for
naval forces and aircraft-as well as the more techno-
logically complex nature of US equipment, which
makes maintenance more difficult and costly. In
addition, since 1980 the United States has made a
determined effort to upgrade the combat readiness
and sustainability of its forces by undertaking more
extensive maintenance of its military eg>>;~ men? nar-
development. Moreover, since 1976 Soviet resources
committed to the development and acquisition of key
advanced technologies-including microelectronics
and advanced manufacturing systems-appear to
have grown even faster than the resources committed
to the development of individual weapons.
Resources committed to US RDT&E grew rapidly
beginning in the early 1980s. This growth reflected:
ticularly for its tactical combat aircraft
Growth in US operation and maintenance require-
ments affected each of the major missions:
? A vigorous research program-the Strategic De-
fense Initiative-to assess the potential for an effec-
tive defense against strategic ballistic missiles.
? US O&M expenditures for strategic programs in-
creased an average of about 3 percent a year. Most
of the growth reflects increases in the cost of
maintaining the aging B-52 heavy bomber force.
? US O&M outlays for general purpose forces rose by
more than 8 percent a year, mainly reflecting
increases in the weapon inventories of each of the
major force components. It also reflects the growing
complexity of US forces as weapons like the MI
tank, F-18 fighter-bomber, and Aegis-class cruiser
make up an increasing share of the inventory.
? US O&M expenditures for support forces, account-
ing for about three-fourths of total O&M outlays,
grew by about 4 percent a year. The increased
outlays resulted primarily from increases in the pay
and benefits of civilian personnel who operate bases
hlisbments and serve in adminis-
and logistics esta
~
trative capacitie
Research, Development, Testing,
and Evaluation Activities
During the 1976-85 period the Soviets continued their
longstanding commitment to a large and growing
military RDT&E establishment. Over the decade we
identified 185 new or signficantly modified Soviet
weapon, aerospace, and military support systems. We
project that at least another 105 to 125 new systems
or major modifications will be ready for series produc-
tion by the mid-1990s, on the basis of our identifica-
tion of 76 that are currently in flight-testing and
? Efforts to improve strategic nuclear forces, includ-
ing enhancements to the command, control, and
communications systems that support strategic
forces; development of the Peacekeeper ICBM and
the B- l B bomber; and research on a small ICBM,
the Advanced Technology Bomber, an antisatellite
system, and the new D-5 SLBM for the Trident
submarine.
nology
? In the conventional area, development of precision
guided munitions and a conventional initiatives pro-
gram, both of which rely on microelectronics tech-
Manpower and Floorspace
We estimate that the floorspace devoted to Soviet
military RDT&E between 1976 and 1985 increased at
an average rate of over 3 percent per year. In 1985,
floorspace dedicated to military RDT&E programs
totaled more than 80 million square meters, and the
Soviets employed about 3 million people to support
their military RDT&E activities. Total manpower
increased over the period at an average rate of about
3 percent a year, somewhat faster than during the
1965-76 period.
Additional floorspace studies show that growth in
the allocation of military RDT&E resources has
been greatest in newer technological areas, such as
advanced electronic systems and lasers. The
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Resource Implications of Soviet Responses to SDI
The Soviet Union has long expended significant re-
sources on the strategic defense mission, including
development of ballistic missile defense and anti-
satellite systems, as well as an extensive national air
defense network. Existing military research programs
provide a solid base for exploration and development
of a variety of advanced technologies that the Soviets
will need to support efforts to either counter or
emulate the US Strategic Defense Initiative (SDI).
Some of these programs, however, are in the early
stages and are essentially intended to demonstrate
technology feasibility. To incorporate emerging tech-
nologies into viable system designs, the Soviets must
first overcome technological challenges in such areas
as advanced microelectronics, high-speed computers,
communications hardware and softgnal pro-
cessors, and electro-optical system
Since the United States announced its SDI program
in 1983, the Soviets probably have taken some steps
to refocus existing research efforts and to allocate
resources for new research initiatives to better under-
stand key SDI technology thrusts and to examine any
potential countermeasures existing programs may
offer.)
We believe, however, that the Soviets will wait until
the early 1990s-when the US architecture is more
clearly defined and SDI s likely impact on US strate-
gy and force posture can be assessed with greater
confidence-before deciding precisely how to respond.
To be effective, Soviet countermeasures must be
developed against specific US operational capabili-
ties.
The Soviets might choose to:
? Expand the size of their offensive nuclear forces to
saturate US defenses.
? Develop and deploy a variety of active and passive
measures to enable strategic weapons to better
penetrate their targets.
? Develop and deploy operational capabilities to di-
rectly attack space- or ground-based elements of
the US strategic defense system.
? Develop and deploy a nationwide, ground-based
ballistic missile defense system.
? Emulate the SDI approach and develop their own
integrated sp ground-based strategic de-
fense system. 7
None of these options are likely to require significant
increases in resources in the research phase, which
normally lasts for several years. But sharply increas-
ing production of existing strategic systems or moving
new strategic programs incorporating advanced tech-
nologies into advanced engineering development, test-
ing, and production would require a substantial
increase in resources]
Even though relatively small in absolute terms, Sovi-
et research and development efforts in response to
SDI could impair much-needed progress in other
areas. The initiation of major new programs in the
next several years would almost certainly conflict
with, or even preempt, resource allocations for other
projected priority military programs, such as smart
tactical weapons, as well as conflicting with General
Secretary Gorbachev's industrial modernization pro-
gram. Trade-offs with the economy as a whole would
be particularly severe in the allocation of scarce,
high-quality resources, such as microelectronics,
computers, and skilled personnel.
25X1.1
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Figure 10 New Methodology for Estimating the
US and Soviet Military RDT&E, Cost of Soviet RDT&E
1976-85
US
USSR
I I I I I I
0 1976 79 82 85
A new building-block methodology has been devel-
oped to estimate Soviet military RDT&E expendi-
tures, which makes maximum use of available all-
source intelligence data. The method has two stages.
We first build a file of all the Soviet facilities
identified as being involved in military RDT&E
activities. Then, using the data collected on individ-
ual facilities, we estimate the aggregate commitment
offloorspace and manpower to the Soviet military
RDT&E effort. These estimates are then used with
all-source data on resource costs to calculate total
expenditures for resource inputs such as the wage
bill; purchases of materials and equipment; expendi-
tures for travel, training, and other operating costs;
capital repair; and new construction. The sum of the
inputs in these categories represents our estimate of
total Soviet military RDT&E expenditures. We be-
lieve it unlikely that this estimate is in error by more
than 15 or 20 percen
The estimate is first calculated in rubles. The ruble
estimate is converted to dollars by using an average
dollar-ruble ratio for military procurement to reflect
differences in the productivity of research and devel-
opment resources in the two countries
trend toward developing weapon systems that incorpo-
rate higher levels of technology is apparently requir-
ing increasing support from the nondefense segment
of the Soviet RDT&E establishment. We estimate
that, together, the Academies of Science, the nonde-
fense industrial ministries, and the higher educational
institutes now account for about one-half of all the
manpower supporting military RDT&E activities.
Cost Comparisons
Over the 1976-85 period, the dollar value of Soviet
military RDT&E activities grew steadily at about
4 percent a year and exceeded comparable US outlays
25X1
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by more than 35 percent. (The Soviet estimate is
based on a new methodology; see inset.) The disparity
was considerably larger during the 1976-80 time
period when Soviet costs were growing at almost twice
the rate of US outlays (see figure 10). Since 1980,
however, US RDT&E expenditures have accelerated,
increasing an average of more than 10 percent a year.
As a result, the RDT&E dollar cost gap closed
considerably, and in 1985 Soviet costs were about
15 percent greater than US outlays.
Figure 11
US and Soviet Defense Activities,
1976-85
Us
USSR
Because of the larger size of the Soviet military and
the higher levels of military production, the estimated
cumulative dollar cost of Soviet defense activities
exceeded comparable US defense outlays by about
25 percent in 1976-85. The margin narrowed through-
out the period (see figure 11). In 1976 the costs were
45 percent higher, but by 1985 they were virtually the
same as US defense outlay
Growth in the dollar cost of Soviet defense activities
averaged 1.5 percent a year over the entire period.
Military investment was fairly level, accounting for
the slow pace of total growth compared with the
previous decade. Thereafter, RDT&E was the prima-
ry source of growth, although operating costs also
increased somewhat due to the steady pace of Soviet
modernization. In mission aggregations (excluding
RDT&E), the costs for general purpose forces and
support activities showed some growth over the neriod
while the costs of strategic programs declined
0 1976 79 82 85
In contrast, US defense outlays at the beginning of
the period were rising at an average rate of nearly
3 percent a year, and in the early 1980s this growth
accelerated to a rate of about 8 percent a year. The
rapid growth after 1980 reflected large increases in
military investment-which more than doubled over
the period-as well as moderate growth in operating
costs. Substantial growth occurred in each of the
major missions. US spending on strategic and general
purpose forces doubled over theme; support costs
grew at a more modest rate.
Secre
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Table 5
Estimated Costs of Selected
US and Soviet National Security Activities in 1983
USSR as
Share of US
(percent)
Traditional defense activities 208 232 112
(baseline definition)
Cash flow (interest on national 7.6
debt attributable to defense less
new debt created for defense)
Traditional defense plus other 295.9 356 to 364 120 to 123
national security activities
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Extended Dollar Cost Comparisons
The baseline definition of defense used in this paper is
the one commonly used in the United States. It
includes current activities of the Department of De-
fense and a few closely related activities of other
government agencies (see appendix B for a complete
definition). This section examines the dollar costs of a
wider set of activities that support national security in
a broad sense but are only loosely related to tradition-
al concepts of defense. (Appendix C describes these
activities extensively.) We have estimated these costs
for a single year, 1983-the most recent year for
which we have r asonably complete information (see
table 5))
The additional activities are arranged into three
functionally related sets. The first set includes activi-
ties that bolster mobilization or wartime prepared-
ness. The second set includes activities that enhance a
nation's global position. It includes the costs of the
foreign policy establishment and of such international
activities as military and economic aid. The final set
includes the continuing cost of past national security
activities, such as military pensions and veterans'
benefits. These activities are not usually included in
defense cost comparisons because they do not directly
contribute to national war-fighting potential.
Wartime Preparedness
The Soviet Union has a much more extensive pre-
paredness program than the United States, and its
dollar valuation in 1983 was roughly four times
higher than comparable US outlays:
? Civil defense activities are much more extensive in
the USSR than in the United States and include
about 150,000 full-time military and civilian per-
sonnel, blast shelters, and military civil defense
installations.
? We believe the Soviets hold reserves of industrial
materials at their factories sufficient to support
military production for four to 12 weeks. In con-
trast, US industry sets its own inventory level. These
inventories fluctuate widely with economic trends
and are not driven by defense policy.
? In addition to material reserves, the USSR builds
industrial surge capacity into its machine-building
sector to permit increases in military production
during a war. The United States does not have an
extensive program to set aside excess capacity.
Although it exists in varying degrees in defense
industries, it is also largely dictated by economic
trends rather than defense policy
Enhancement of Global Position
Soviet international activities in 1983 were approxi-
mately two-thirds greater than those of the United
States:
? The largest costs for both countries were incurred 25X1
for economic and military aid. Almost 45 percent of
Soviet economic aid was in the form of price
subsidies in trade with other Communist countries.
The Soviet trade deficit with Eastern Europe consti-
tuted another 20 percent. US economic assistance
was smaller because the United States had no
provisions for subsidizing its trade.
? Soviet costs for conducting foreign affairs were
higher than US costs because Moscow has about
twice as many diplomats
Past Defense Activities
The dollar valuation of past Soviet defense activities
was only slightly higher than US outlays:
? The costs of Soviet veterans' benefits were consider-
ably less than US costs. Stricter Soviet eligibility
rules and higher mortality rates limit the number of
beneficiaries to a little more than one-third the US
level.
25X1
25X1
? Soviet military pension costs, on the other hand,
were much larger than US costs. Although the
Soviets have fewer career enlisted men than the
United States, they have more retired officers~25X1
Comparison of National Security Costs
The dollar value of Soviet national security activities
in 1983 exceeded comparable US costs, no matter
what collection of activities is selected (see figure 12).
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Figure 12
US and Soviet Extended
Comparisons for 1983
Baseline activities
plus mobilization/
wartime preparedness
Baseline activities
plus mobilization/
wartime prepared-
ness plus enhance-
ment of global posi-
tion
Baseline activities
plus mobilization/
wartime prepared-
ness plus enhance-
ment of global
position plus past
defense activities
The USSR's margin ranged from 12 percent (for the
traditional definition of defense) to 26 percent (de-
fense plus the first two categories above). Under the
broadest definition (defense plus all three of the other
national security categories), Soviet activities exceed-
ed those of the United States by almost $70 billion, or
by about 23 percen
Soviet General Secretary Gorbachev has firmly estab-
lished industrial modernization as a top priority, and
his plans for refurbishing the country's industrial base
imply increased demands for many of the resources
involved in the production of weapon
Table 6
USSR: Procurement of Selected
Weapon Classes
Weapon Class
1981-85
(estimated)
1986-90
(possible)
12,600 a
(350)
18,000,
(9,700)
Medium and heavy
bombers
200
210
a Includes major retrofits of older tanks (number shown in
parentheses).
b Although our projections suggest lower overall numbers in these
categories, the fighters and helicopters the Soviets will procure
during 1986-90 are more complex, capable, and costly than those
purchased during 1981-85.
In the near term, the Soviet defense establishment is
well positioned to accommodate these demands be-
cause of major investments made in defense industrial
facilities since the late 1970s. As a consequence, most
Soviet weapons expected to be delivered to the Soviet
forces through 1990 will be manufactured in plants
already built and operating. For these reasons, we
expect the high levels of military procurement the
Soviets have sustained over the past decade to contin-
ue, albeit at relatively slow rates of growth.F_~
Table 6 compares 1981-85 production of major weap-
on systems with representative levels of production of
the same systems that are feasible over the next five
years if procurement remains at its current level. The
specific mix of weapons may be somewhat different,
but, because of the sunk costs and the momentum of
ongoing programs, the Soviets are unlikely to make
major adjustments to key programs. Therefore, we
believe these figures reflect the general level of pro-
curement that will occur during the 1986-90 period.
At such a level, improvements to Soviet strategic and
conventional forces will be substantial.
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Over the longer term, competition between industrial
modernization and force modernization is likely to
build. The demand for new investment for defense
plant and production equipment will almost certainly
rise in the late 1980s and early 1990s when the
Soviets will have to begin tooling up for the next
generation of weapons. New weapon systems will
require advanced microelectronics design, fabrication,
and testing capabilities and, consequently, will also
require new production machinery. Military pressures
for the same resources needed for industrial modern-
ization will intensify, particularly if tensions in the
US-Soviet relationship heighten and the Soviets think
they have to initiate additional, costly weapon pro-
grams such as a space-based ballistic missile defense.
production of new weapon systems
On the other hand, such pressures could be mitigated
if the United States and the USSR conceived a
comprehensive arms control agreement that called for
sizable reductions in strategic forces and prevented or
delayed deployment of a US SDI. Reductions in
deployed forces would enable the Soviets to save
material and labor, and even greater savings would
accrue if the agreement allowed the Soviets to forgo
or postpone the investment in plant and equipment for
25X11
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Appendix A
Table A-1
Dollar Value of Soviet Defense Activities and
US Defense Outlays by Resource Categories, 1965-85 a
Personnel
56 57 59 61 63 65 67 69 69 70 71 72 73 73 74 76 76 77 78 78 79 1,465
O&M
26 27 29 30 32 33 35 37 38 40 41 43 44 44 45 46 47 49 49 50 52 838
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Table A-2
Dollar Value of Soviet Defense Activities and
US Defense Outlays by Missions, 1965-85 a
Strategic forces
20
18
17
17
16
.15
14
14
13
12
11
11
11
12
13
13
14
16
17
19
21
315
Intercontinental attack
12
10
10
10
10
9
8
8
8
7
7
7
8
8
8
9
9
10
11
13
14
194
Intercontinental
bombers
4
4
5
5
5
4
3
3
3
3
3
2
2
2
3
3
4
4
5
7
7
83
Intercontinental
submarines
4
3
3
3
3
3
3
3
3
3
3
3
4
4
5
5
4
4
4
4
5
76
Intercontinental
missiles
4
3
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
2
2
35
Intercontinental NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL NEGL I 1 I 2 It
bombers
Intercontinental I I 3 4 5 6 5 6 8 8 6 6 6 6 5 6 6 4 5 5 5 107
submarines
Intercontinental 3 6 9 7 7 8 7 6 6 8 9 8 8 7 8 7 5 5 5 5 4 138
missiles
Because of rounding, data may not add to totals shown.
b Because a number of US mobility services are charged to other
US defense missions, the total shown for general purpose forces will
be less than the sum of its components. The mobility component
includes these other service charges in order to illustrate the true
mobility mission size. They have been excluded from the general
purpose_forces'totaLto_avoid_double_counting
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Table A-3
Dollar Value of Soviet Military Investment and
US Investment Outlays by Missions, 1965-85 a
Intercontinental
bombers
1
2
2
3
3
2
1
1
1
1
1
1
1
1
1
1
1
2
3
5
5
37
Intercontinental
submarines
2
2
1
1
2
2
2
2
2
2
2
2
2
3
3
3
3
3
2
2
2
45
Intercontinental
missiles
3
2
2
2
2
2
1
1
1
1
1
1
1
1
NEGL
NEGL
NEGL
NEGL
1
1
1
27
Strategic other
3
3
2
2
2
2
2
2
2
2
2
2
2
2
3
3
4
4
5
5
5
59
General purpose
23
31
40
43
38
31
24
20
19
18
17
17
18
20
23
25
29
35
41
44
48
608
Land
6
9
13
14
12
9
6
4
3
4
3
3
4
5
6
7
8
9 .
12
14
15
165
Tactical air
9
13
17
18
16
13
10
9
8
8
8
8
8
9
10
11
13
16
17
18
19
257
Naval
6
6
7
8
8
7
7
7
6
6
6
6
6
6
7
7
8
9
10
10
12
154
Mobility
2
3
3
3
3
2
2
1
1
1
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
1
1
2
2
3
31
USSR total investment
46
47
52
55
58
61
60
60
63
68
69
70
71
71
73
74
73
72
72
73
73
1,359
Strategic forces
13
15
19
19
21
21
19
16
19
21
20
20
21
20
21
22
22
20
20
19
19
409
intercontinental attack
3
6
10
9
10
11
9
8
10
11
11
10
9
9
9
9
8
6
7
7
6
176
Intercontinental
bombers
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
NEGL
1
1
3
Intercontinental
submarines
1
1
3
4
5
5
5
5
7
7
5
4
4
4
4
4
5
3
4
3
3
88
Intercontinental
missiles
2
5
7
5
5
5
4
2
3
4
5
5
5
5
5
4
3
3
3
3
2
85
Peripheral attack 2 2 2
1
1
1
1
1
1
1
1
2
2
3
3
3
5
5
4
3
3
47
Strategic defense 5 6 6
6
7
7
6
5
5
6
6
6
6
5
5
5
5
5
5
5
6
119
Strategic other 2 2 2
2
2
2
2
2
3
3
3
3
4
4
4
4
4
4
4
4
4
66
General purpose 22 21 22
23
24
26
27
28
29
31
32
32
33
35
35
36
33
33
33
34
33
621
Land 9 10 10
13
13
13
13
14
15
14
14
14
14
15
15
16
16
17.
17
17
17
293
Tactical air 4 3 3
2
2
4
5
7
7
7
9
8
7
8
8
8
6
6
6
6
7
124
Naval 8 8 8
7
7
7
7
6
7
8
8
8
10
10
10
10
9
9
9
9
8
174
Mobility 1 1 1
1
1
1
1
1
1
2
2
2
2
2
2
2
1
2
2
1
1
30
Support 11 10 11
13
14
14
14
15
15
16
16
18
17
17
17
17
18
18
18
20
20
329
a Because of round' not add to totals shown.
This table is Secre
Reverse Blank
29
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Appendix B
Methodology
The following US activities and their Soviet counter-
parts are included in the baseline comparisons in this
report:
? National security programs funded by the Depart-
ment of Defense.
? Defense-related nuclear programs funded by the
Department of Energy.
? Selective Service activities.
? The defense-related activities of the Coast Guard.
(U)
The following are excluded from the comparisons:
? All costs of military retirement and veterans' pro-
grams, which reflect payment for past rather than
current military activities.
? Soviet space activities that in the United States
would be funded by the National Aeronautics and
Space Administration (NASA).
? Military assistance (except for the pay and allow-
ance of uniformed personnel) and foreign military
sales.
? Civil defense programs. F1
We develop the dollar costs of all Soviet defense
activities by identifying and listing Soviet forces and
their support organizations. Our model contains a
description of over 1,300 distinct defense compo-
nents-for example, individual classes of surface
ships; Ground Forces divisions, divided into categories
on the basis of type and readiness level; and air
regiments, categorized by aircraft type for each ser-
vice. It also contains our latest estimates of the order
of battle, manning levels, equipment inventories, and
new equipment purchases of each component
To these detailed estimates of physical resources, we
apply appropriate US prices and wage rates. This
procedure is complex, but in general we do the
following:
? For procurement, we estimate what it would cost to
build the Soviet weapons and equipment in the
United States at prevailing dollar prices for materi-
als and labor (including overhead and profit), using
US production technology. It is assumed the neces-
sary manufacturing capacity, materials, and labor
would be available.
? For operations and maintenance, we apply dollar
prices to estimates of the labor, materials, spare
parts, overhead, and utilities required to operate and
maintain equipment the way the Soviets do.
? For military personnel, we estimate the military
rank of the person in the United States who would
be assigned the duties of each Soviet billet. We then
apply the appropriate US pay and allowance rates to
that billet.
The results are then aggregated by military mission
and by resource categoryF_~
Our previous estimates for Soviet RDT&E were based
on a "residual" methodology, which derived total
RDT&E costs in rubles using published Soviet data
on resources devoted to "science." Civilian expendi-
tures were subtracted from the total RDT&E esti-
mate to derive expenditures for military RDT&E.
This was the only element of our estimate that was
derived in the aggregate, and it was the one to which
we attributed the greatest uncertainty
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To improve our understanding of the Soviet military-
industrial complex, we have developed a new ap-
proach, the "resource costs" method, to estimate
Soviet military RDT&E expenditures. The new meth-
odology assigns ruble values to the resources used in
Soviet military RDT&E activities. These include
wages, materials, equipment, capital repair, capital
construction, travel, training, and other operating
systems acquired during a calendar year, and order-
of-battle data, which refer to the existing inventory of
weapon systems in active units at a given time (the
middle of the calendar year for the Soviet Union and
the end of the fiscal year for the United States).' US
order-of-battle data were derived from the FYDP; US
production data were provided by the Department of
Defense.
costs
The ruble estimate is converted to dollars by using an
average of our military procurement dollar-ruble ra-
tios. The purpose of using a procurement dollar-ruble
ratio is to reflect the different productivities of re-
search and development resources in the two coun-
tries. In effect, we are assuming that the ratio of the
dollar value of the research and development work
performed in the Soviet Union to the ruble cost of
these resources equals the ratio of the dollar value of
military hardware produced in Soviet defense plants
to the ruble cost of the resources employed in those
plants
The resource cost methodology defines military
RDT&E according to the definition used by the US
Department of Defense in its reporting of US outlays
for military RDT&E. RDT&E consists of all phases
of programs and activities from research through full-
scale testing and includes the improvement or modifi-
cation of operational system
US data in this paper are expressed in terms of
outlays derived from the Five-Year Defense Program
issued by the Department of Defense in January 1985
and from the US budget. Defense-related activities of
the Department of Energy, the Coast Guard, and the
Selective Service have been added to improve the
comparison with Soviet programs. The data have been
converted from fiscal to calendar year terms and
indexed to 1984 dollars using detailed price indexes
for each type of military expenditure. The US figures
The annual revision to incorporate new information
provides a method of assessing how well we estimate
the dollar costs of Soviet defense activities. This
method examines how much change the estimate
undergoes each year over a period of several years.
Presumably, our estimates for any one year (for
example, 1976) would improve as time passes because
we should know more about the quantities and char-
acteristics of the wgan~tems and facilities pro-
duced in that year.
If estimates for a given year changed greatly with
every review-indicating that different analysts, im-
proved data, and new methodologies produce very
different results-we could have little confidence that
we had discovered the accurate level of military
activities in that year. On the other hand, if the
estimates fluctuated only for a few years after they
were first made, and by only a small amount, we
could feel confident that they were substantially
correct, given the methodology used. For example, our
total for 1976 as it was estimated each year from
1977 to 1985 did not cha , it increased by
less than 1 percent a year
The use of this and other statistical techniques leads
us to believe that our dollar cost estimate for total
defense activities is unlikely to be in error by more
25X1
25X1
in this re
ort
therefore
do not
t-
ctual bud
et
, In 1976 the US fiscal year was changed from a July-June
,
,
p
g
Therefore
the end of the
timespan to October-September
25X1
authorizations or appropriations
.
,
year is 30 June through 1976 and 30 September thereafter
GJ/\1
The physical quantity data for weapon systems con-
tained in this paper are of two types: delivery data,
which refer to the quantities of selected weapon
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than ? 10 percent for any year from 1976 to 1985.2
The margin of error can be much wider for some
individual items and categories than for the total. We
are more confident in our estimates for the higher
levels of aggregation than in those for the lower levels
because of the tendency for errors to be partially
offsetting. We generally have more confidence in data
that represent trends than in data for absolute le els,
especially the levels for individual years.
All the Soviet cost data in this paper, whether dis-
played in graphics or in tables, are presented for the
reader's convenience as point estimates rather than as
ranges. The reader should remember, however, that
around each one of these estimates there is an implicit
confidence band and that, in general, when the infor-
mation is more detailed, the margin of uncertainty is
greater.
2 We are most confident in our estimates for the middle years of the
I 970s because those estimates are based on the most data. Our
confidence is somewhat less for more recent years. We are even less
confident in the historical data for the 1960s in appendix AF_
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Appendix C
Extended Dollar Cost
Comparisons
The problem of how to identify defense-related activi-
ties not heretofore captured in our estimates was
submitted to an interdisciplinary working group. The
group concluded that, since the nontraditional activi-
ties would be hard to bound within a single definition,
they should be aggregated in layers or tiers of func-
tionally related activities. The group developed three
broad tiers:
? The costs of activities that enhance a nation's
mobilization and wartime preparedness capabilities.
? The costs of activities that enhance a nation's global
position.
? The continuing cost of past ?C}j s that were
related to national security.
Wartime Preparedness/Mobilization
This category consists of measures that enhance
national war-fighting capability or contribute to na-
tional security but are not baseline activities. Soviet
costs for these activities in 1983 were rou hl four
times higher than comparable US outlays
Internal Security Troops
Soviet Internal Security Troops are not intended to
fight enemy military forces, so they are not in the
baseline costs. They do, however, assist in controlling
Soviet borders and have a wartime role of maintaining
order in rear areas and occupied territory. We esti-
mate their cost in 1983 at $3.0 billion.' The United
States does not have an exact counterpart but we have
included the costs of US border control and state costs
for the National Guard and R rves as the nearest
equivalents ($2.1 billion).
Construction and Railroad Troops
We include the Soviet construction and railroad
troops because their wartime mission is to build
fortifications, repair battle damage, and maintain
' We exclude the estimated 280,000 Internal Troops who guard
prisons and labor camps because they do not perform a national
defense role.
existing structures and rail lines, although in peace-
time they also work on civilian projects. We count
only the costs of those personnel who worked on
civilian projects because labor on military projects is
already part of the baseline estimate. The large
number of personnel with civilian tasks, estimated at
over 600,000, accounted for the large costs ($9.0
billion). Outlays for the closest US counterpart, the
civilian Corps of Engineers, totaled $3.0 billion in
1983)
Civil Defense
Civil defense activities are much more extensive in the
USSR than in the United States and include about
150,000 full-time personnel (military and civilian),
urban and exurban blast shelters, and civil defense
installations run by the military. Other progams,
whose details are largely unknown, include under-
ground industrial plants, hospitals, power plants, and
food and fuel storage, as well as individual protective
gear and equipment and material reserves. Our esti-
mate of Soviet civil defense costs is presented as a
range of $7.5-8.9 billion because of our uncertaint 25X1
about the probable size of the shelter program. 25X1
Industrial Reserves
The Soviets maintain reserves of industrial materials
for mobilization as well as to hedge against seasonal
or temporary interruptions of supply. We have little
information on their exact size and disposition but
believe they are intended to support military produc-
tion for four to 12 weeks. The cost to maintain them
was about $0.1-0.4 billion in 1983
Soviet writings discuss the need to protect industries by dispersing 25X1
and hardening them, but we find no evidence of widespread
geographic dispersal. Industrial siting seems to be driven more by
economic requirements, with new plants often built next to or
expanded from existing plantsF I 25X1
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In contrast, US industry does not depend on govern-
ment inventories for its daily operation, and inven-
tories fluctuate widely because of economic trends
rather than defense policy. Therefore, we include only
US Government-owned stockpiles, which consist of
raw materials such as bulk and packaged ores, pre-
cious metals, concentrates, and crude oil in the Strate-
gic Petroleum Reserve. The co rating these
stocks in 1983 was $0.2 billion.
Surge Capacity
In addition to maintaining material reserves, the
USSR builds industrial surge capacity into its
machine-building sector to increase military produc-
tion during a war. We have only fragmentary data
from a small number of plants, so we do not have a
good measure of costs. We have estimated them by
taking what we believe is a probable range of 0.5 to 5
percent of the machine-buil toy's annual in-
vestment, or $0.3-3.0 billion
In contrast, the United States does not have an
extensive program to set aside excess capacity, al-
though it exists in varying degrees in defense industry.
The Defense Logistics Agency, however, acquires
some industrial machinery for mobilization purposes.
Although none was procured in 1983, the mainte-
nance cost was $0.01 billion.)
Railroads
Neither the United States nor the USSR subsidizes
its railroads primarily for defense purposes. The Sovi-
et rail system has had to struggle to meet economic
needs for over a decade, and ongoing improvements
can be clearly linked to civil needs. The Baikal-Amur
Mainline (BAM), which costs about $2 billion a year,
was probably intended for defense needs when work
first began in the 1930s, but we believe that, since
1974 (when most of the line was laid), the BAM's
economic va driving force for its
completion.
Highways
Defense needs were behind the development of some
major highway systems in both countries. For the past
decade, however, US defense needs have been consid-
ered only in the distribution of reconstruction funds,
rather than in the level of funding. Civilian economic
needs have been sufficient to ensure continued fund-
ing support. The Soviets have built a 30,000-mile
network to provide all-weather supply routes from
Moscow to the western borders. We estimate the
annual costs of maintaining this network at $0.7
billion. In addition, cost for upgrading other roads for
defense purposes could be as much as $4.5 billion.
Merchant Shipping
To provide for expanded wartime shipping, the United
States subsidized the operating costs of its merchant
shipping by $0.4 billion in 1983. We believe the
Soviets do not subsidize their fleet for national securi-
ty purposes. Indeed, it is a source of much-needed
hard currenc
Synthetic Fuels
Both countries are developing synthetic fuels technol-
ogy for national security and commercial motives.
Our estimate of annual Soviet costs, $0.04 billion, is
an order of magnitude lower than US costs. We
believe, however, the Soviet effort is more defense
oriented than the US effort because of its emphasis on
liquid synfuels (which can be used by existing military
equipment) rather than on gas.
This category covers activities that serve foreign
policy goals. The dollar value of Soviet international
activities in 1993 exceeded t se of the United States
by 61 percent.
Economic and Military Assistance
The USSR and the United States use economic and
military assistance to support their allies and clients
and to expand their presence and influence in less
developed countries. We estimate that the net value of
Soviet economic assistance in 1983 was $11.3 billion.
Almost 45 percent of this was the result of price
subsidies in trade with other Communist countries.
Also included is a $2.3 billion trade deficit with
Eastern Europe, financed by Soviet credits that we
doubt will be paid back. The estimated ne
Soviet military assistance was $5.1 billion
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Comparable net US outlays for economic assistance
programs in 1983 were $3.0 billion.' The United
States had no provisions for subsidizing its trade as
the USSR did, so its economic assistance was smaller
by comparison. US international security assistance
totaled $6.8 billion, which included the financing of
military aid and outlays for foreign military sales
credit loans.
Conduct of Foreign Affairs
This category primarily includes the costs of adminis-
tering foreign policy-the personnel and operating
costs of the US Department of State and the Soviet
Ministry of Foreign Affairs. Soviet costs in 1983 ($2.9
billion) were higher because we estimate that the
USSR had roughly 7,000 diplomats, about twice as
many as the United States had.' Also driving the
Soviet costs upward were several semiofficial academ-
ic institutes that advise the government on foreign
affairs, such as the Institute of the USA and Canada
(IUSAC) and the Institute of World Economics and
International Relations (IMEMO). The United States
has no direct counterpart to these organizations;
studies that private "think tanks" would perform for
the US Government are included in Department of
Defense or State Department budgets
Foreign Information and Exchange Activities
Foreign information and exchange activities are offi-
cial attempts to project a country's image abroad. The
USSR has been much more active in this area than
the United States. US outlays for these programs in
1983 were $0.6 billion.' Soviet costs were much
larger-an estimated $4.0 billion.F__1
5 This figure includes outlays for multilateral development banks,
international organizations, the Agency for International Develop-
ment, Public Law 480 food aid, the Peace Corps, offsetting receipts
from international financial programs, and refugee assistance
6 In this figure we attempted to exclude intelligence personnel,
whose costs are counted in the baseline estimat
' This represents outlays for the United States Information Agency,
which conducts academic and leadership exchanges as well as
broadcasts the Voice of America worldwide, and Radio Free
Europe and Radio Liberty, which broadcast to Eastern Europe and
the USSR.=
8 This represents the estimated costs of the overseas media activities
of TASS, Novosti, Pravda, Izvestiya, and Radio Moscow, as well as
press sections in foreign embassies, clandestine radio stations, radio
jamming, contributions to international Communist fronts, subsi-
dies to foreign Communist parties, academic and cultural ex-
changes, and the International Department and the International
Informs epartment of the Communist Party of the Soviet
Union
The USSR has long given support to foreign students
to attend its universities as a way of enhancing its
reputation abroad, and it has expanded this program
rapidly. We estimate there were about 100,000 such
students in the Soviet Union in 1983. We assume all
of these were sponsored by Moscow, although a few
less developed countries apparently made partial pay-
ments that would have reduced the cost to the Soviets. 25X1
Although the United States had many more foreign
students, only about 8,000 were government support-
ed. US costs ($0.1 billion) were therefore much lower
than the Soviet Union's ($1.5 billion).
Civil Space
US and Soviet civil space activities are frequently
undertaken to enhance national prestige. We estimate
that the dollar costs of Soviet civil space programs
were a roximately equal to the outlays for NASA in
1983.
Some of the costs of maintaining military forces, such
as retirement benefits, are pushed into the future.
When due, they represent payment for past goods and 25X1
services and do not directly contribute to current war-
fighting capability. Yet, they are bills that have to be
paid if the military is to keep functioning. The
estimated costs of past Soviet defense activities ex-
ceeded US costs by about 10 to 14 percent in 1983.
Veterans' Benefits
Veterans' benefits in the USSR differ considerably
from those in the United States because stricter
Soviet eligibility rules and higher mortality rates limit
the number of beneficiaries to well below the level in
the United States. For this exercise, we estimate that
the total number of Soviet veterans in 1983 who are
9 Soviet civil programs benefit greatly from military support
through dual-use programs. There is some evidence that the
military funds much of the civil effort. We allocate Soviet space
costs to civilian or military purposes on the basis of whether the US
Department of Defense or NASA would fund a similar project.
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eligible for benefits under US rules was 9.8 million
persons compared with 28.2 million in the United
States. The dollar costs of Soviet veterans' benefits
were about one-half the US costs.F__1
Military Pensions
Soviet military pension costs valued in dollars were
much larger ($43.0 billion) than US outlays ($17.1
billion) in 1983. The larger number of Soviet men
under arms meant the number receiving pensions was
correspondingly larger. In addition, the Soviets had
relatively fewer career enlisted men, so the proportion
of officers receiving pensions was over twice that of
the United States, raisin Soviet per capita costs to
nearly twice the US level
Civilian Pensions
Civilian pensions consist of the payments to former
employees of the US Department of Defense or the
military services and to their Soviet counterparts.
Because the Soviets use military personnel to perform
many tasks that in the United States would be
performed by civilians, we estimate that there were
somewhat fewer Soviet defense civilians than in the
United States despite the larger size of the Soviet
military. Soviet dollar costs for civilian pensions
($6.6 billion) were therefore slightly less than US costs
($7.9 billion)
Legal Action
If the US Government loses a legal action brought
against the Department of Defense, the award is paid
from a "judgment fund" in general revenues adminis-
tered by the General Accounting Office. In 1983,
disbursements from the fund for this purpose were
about $0.1 billion. The Justice Department bore the
associated costs of administering and litigating the
cases, which totaled an estimated $0.02 billion. We
have no evidence of lawsuits involving the Soviet
Ministry of Defense and believe that the cost of
judgments is negligible.
Deficit Financing
Deficit financing is a large part of the costs of past
US defense activities. Deficits raise the cost of gov-
ernment activities by the cost of borrowing, or the
amount of interest paid. Of course, government debt
is not incurred specifically for any single identifiable
activity; it is the result of financing the whole array of
government activities. Nevertheless, had the pattern
of past defense spending been different, the level of
the national debt, and the interest paid thereon, would
have been different. We estimate that $52 billion in
net federal interest payments could have been attrib-
uted to defense in 1983.10 Offsetting this was $44.5
billion in new borrowing, which was defense's share of
the increase in the national debt in that year
The USSR, on the other hand, has no concept of
deficit financing comparable to that in the United
States. The Soviet system of central planning strives
to balance resource inputs and outputs and to avoid
borrowing. The government owns all the banks, how-
ever, and it has access to the savings deposits of
private citizens. These amounted to 25 percent of
Soviet GNP in 1980. In effect, interest payments on
deposits represent a kind of national debt that assists
the government in financing the budget. We estimate
that the dollar cost of defense's share of this Soviet
"debt" was $13.5-15.6 billion in 1983. Defense's
share of new deposits in 1983 amounted to an offset-
ting $8.6 billion.
10 This is based on application of the annual defense share of total
federal outlays to the annual increment in net federal interest
7cy1
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