Effects of Lower Launch Costs on Previous Estimates for Space-Based, Boost-Phase Missile Defense

This letter provides CBO's estimates of how recent declines in the costs of launch services would change previous estimates of the costs to deploy a constellation of space-based interceptors (SBIs) designed to defeat one or two intercontinental ballistic missiles (ICBMs) fired at the United States by a regional adversary, such as North Korea. Those previous estimates appeared in studies published by CBO in 2004 and by the National Research Council (NRC) in 2012. Although launch costs are lower now, threats and U.S. policies have changed since those studies were published in ways that could increase the overall size and cost of an SBI constellation.

By themselves, decreases in launch costs could reduce the previous estimates of the 20-year costs of various SBI constellations by 30 percent to 40 percent, CBO finds. For the lowest-cost alternative that CBO examines here, the reduction in launch costs would cause the total estimated cost of deploying and operating the SBI constellation for 20 years to fall from $264 billion to $161 billion (in 2025 dollars). For the highest-cost alternative that CBO examines, the total estimate would fall from $831 billion to $542 billion. (The wide range of estimates among the alternatives, both before and after accounting for the reduction in launch costs, results from differing assumptions about the performance of the individual components that make up the SBI constellations.)

Although launch costs are much lower today than when the previous studies were published, two major factors could lead to higher costs for space-based missile defenses than CBO and the NRC estimated earlier. First, North Korea’s ICBMs have increased in number and sophistication since those studies were published. Second, a recent executive order by the President, titled The Iron Dome for America, calls for deploying a missile defense system to protect the United States not only from attacks by regional adversaries (ones with limited capabilities, such as North Korea) but also from attacks by peer or near-peer adversaries (ones with military capabilities similar to those of the United States). Such a defense could require a more expansive SBI capability than the systems examined in the previous studies. Quantifying those recent changes will require further analysis, which CBO is undertaking at the request of the Subcommittee on Strategic Forces of the Senate Armed Services Committee.