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WASHINGTON (Reuters) - The U.S. military has essentially the same size, force structure and capabilities as it did a decade ago but costs 35 percent more, an independent public policy think tank said on Monday in an analysis of the 2012 defense budget.
The Center for Strategic and Budgetary Assessments, in a 75-page report, also said the Defense Department had spent some $46 billion over the past decade developing weapons systems that were ultimately never fielded, either due to cost overruns or technical challenges.
As a result, a significant portion of the Pentagon's effort to modernize its weapons systems did not result in force modernization, a task that will now have to be undertaken at a time of shrinking defense budgets
"This was the opportunity of the decade, to really recapitalize and modernize the military's equipment and that has been squandered," said Todd Harrison, who authored the report. "We're looking at the prospect of a declining defense budget over the next decade and we're not going to have the opportunity to do that again."
At the same time, the military faces significant capital equipment requirements in the coming years, from replacing aging aircraft carriers and building a new generation of submarines to fielding the F-35 Joint Strike Fighter and funding a new line of aerial refueling tankers.
That puts the Pentagon in the position of having to make difficult choices about whether to cut force structure -- like the number of aircraft squadrons or carrier strike groups -- in order to free up money for modernization, he said.
The center's analysis said half of the growth in defense spending over the past decade was unrelated to the wars in Iraq and Afghanistan and was attributable instead to a rise in the Pentagon's base budget.
Personnel costs grew by 19 percent, even as overall personnel numbers remained relatively flat, the report said. The cost of peacetime operations rose 10 percent, even as the pace of operations declined. And acquisition costs rose 16 percent, even as the inventory of equipment aged and shrank.