U.S. air defense supply shrinks during Iran war, leaving experts concerned

Geoff Bennett:

The high-intensity exchange of fire between the U.S. and Iran paused over the weekend. And, today, President Trump played up the prospects for negotiations.

Our Nick Schifrin reports now on the state of the war.

Nick Schifrin:

Today, on the waters where one-fifth of the world's oil and natural gas used to flow, ships are stuck, and there is an eerie quiet. It's a very different sound than the last two weeks of nightly U.S. fire and Iranian missiles and drones launched at the U.S.' Gulf allies.

Today, President Trump said the recent sound of silence was giving diplomacy a chance.

Donald Trump, President of the United States: We're having good talks. So we will see what happens. I think there's a good chance that something could happen. And if it does, good. If it doesn't, we go back to doing what we were doing two days ago.

Nick Schifrin:

Although Iranian spokesperson Esmaeil Baghaei said there were no direct talks.

Esmaeil Baghaei, Iranian Foreign Ministry Spokesman (through interpreter):

Mediators may convey messages from the American side to us regarding the current developments in the region, but at present we have no negotiations with the American side.

Nick Schifrin:

But the U.S. pause isn't only about diplomacy. It's also about the inventory of American air defense and Arab warnings. Two U.S. officials tell me that, late last week, the military presented the president with multiple options.

The military argued, if the president decided to escalate, that would erode Iran's capability to attack ships and U.S. bases and would therefore save precious American air defense interceptors. But the U.S.' Gulf allies were warning the president against escalation, fearing Iranian attacks on Arab capitals, desalinization plants, and commercial centers that the U.S. could not prevent.

The military also told the president that if instead the strikes are continued at the same level as they had been over the past two weeks, Iran would continue its missile and drone attacks and that could challenge the U.S. ability to defend its own bases from Iranian attacks. In the end, the president opted to pause entirely.

And, today, the president denied the pause was because of weapons shortages.

Donald Trump:

We're in very good shape. But for some of the more sophisticated stuff, we'd certainly like to have more.

Nick Schifrin:

But war has its own momentum, and this one is threatening to escalate. Today, the Iran-backed Houthis released video of what they said was a shot-down Saudi drone. This weekend, Houthis struck two major Saudi oil facilities on opposite coasts separated from each other by 900 miles.

Earlier this month, the Saudis bombed a Houthi-controlled airport. The violence threatens to end the Saudi-Houthi shaky 4-year-old cease-fire. Today, the Houthis threatened that the war would widen.

Brig. Gen. Yahya Saree, Houthi Military Spokesman (through interpreter):

We will not hesitate to expand our military movements and escalate our actions in the coming hours and days, in line with our policy of blockade for blockade and escalation for escalation.

Nick Schifrin:

Saudi Arabia is leading the military response to the Houthis with U.S. encouragement. But, today, President Trump expressed a willingness to help.

Donald Trump:

But we're not involved with that, but we may. If they're a problem, we will probably have to get involved.

Nick Schifrin:

But the U.S. military is still involved in an ongoing Iranian port blockade. The military said it boarded two ships and redirected a dozen after they did not comply despite -- quote -- "repeated warnings."

In a statement sent to the "News Hour," Steven Cheung, White House communications director, said -- quote -- "The United States military has enough weapons and munitions to serve all of the commander in chief's strategic goals. It would be wise for Iran to work toward a negotiated deal. Otherwise, they know what will happen."

We look now at one challenge the U.S. confronts in the war with Iran, as well as in other conflicts over the last few years, a shortfall in air defense.

For that, we turn to Jerry McGinn, a former senior official in the Defense Department's Office of Manufacturing and Industrial-Based Policy who's also worked for defense contractors. He's now a senior fellow at the Center for Strategic and International Studies.

Jerry, welcome. Thanks very much for being here.

Jerry McGinn, Center for Strategic and International Studies: Great to be with you, Nick.

Nick Schifrin:

As we just heard, President Trump today denied that shortages had anything to do with the pause. But he did acknowledge the U.S. wanted more -- quote -- "sophisticated weapons." That's presumably a reference to things like the Patriot air defense.

The U.S. has used Patriots for years in many places. But is there a shortage today? And why?

Jerry McGinn:

Well, we have done analysis on Operation Epic Fury in Iran and other recent areas. And there has been -- we have used a lot of munitions, as you have seen over the past several months, particularly interceptors like Patriot and theater air missile defense.

But we have enough for the current contingency. The question is, the risk is in if we were -- if a situation were to happen elsewhere in the world.

Nick Schifrin:

Meaning we have enough for the Iran war, according to your analysis, but if something were to happen in Taiwan or elsewhere, that's where the U.S. would actually be short.

Jerry McGinn:

Exactly. Exactly.

Nick Schifrin:

Why can't Patriots, why can't air defense systems be made like trucks, where they come off the assembly line in high batches quickly?

Jerry McGinn:

Yes, that's a great question.

Well, you see, the Patriot and the munitions we use today were principally designed for performance, for having dramatic effects on the targets. And they are tremendous. They are exquisite weapons. However, they were not built and designed to be built like Ford trucks. They are essentially handmade in a lot of ways.

And it takes 24 months to create a -- from contract award to delivery to create a Patriot missile. Likewise, Tomahawks take about three years. So you can't stamp them -- crank them out in a really quick manner.

Nick Schifrin:

So perhaps this is a stupid question, but is there a way to make them like Ford trucks, rather than, I don't know, Faberge eggs?

Jerry McGinn:

Yes. No, well, that's what they're the department is trying to do. They have launched efforts to build lower-cost interceptors that can be built quickly, as well as munitions, a whole new class of munitions, which we will talk about hopefully.

Nick Schifrin:

Whole new class of munitions, but it's still the challenge that the department faces, that the U.S. military faces...

Jerry McGinn:

Yes.

Nick Schifrin:

... that simply it is not possible to build more quickly for the challenges that we face today, right?

Jerry McGinn:

Well, it is, but you have to start building more Patriots in different places, in other facilities or in other countries. So you can get there. It's just going to take a while to ramp up.

And, likewise, what the department is doing is building what I call the breadth of munitions, building lower-cost options that can deliver sooner, or as opposed to some of these more exquisite munitions.

Nick Schifrin:

So talk about that. I mean, we have heard efforts from the Biden administration. We have heard efforts from the Trump administration. We have heard announcements by companies like Lockheed, the PAC-3 ACE, a kind of cheaper version of the Faberge egg-style Patriot air defense missile.

Jerry McGinn:

Right.

Nick Schifrin:

I mean, how much improvement has there been over the last few years between the Pentagon and industry to try and make more faster?

Jerry McGinn:

Well, I think there has been a lot of effort.

What's different since the Trump administration has arrived is the real scale, that they really have put a lot of effort and a lot of money into -- in production, through the agreements to build more Patriots and these exquisite munitions to building what the Air Force calls the family of affordable mass munitions.

These are simpler designed munitions that are much less expensive, but have about 85, 90 percent of the capabilities. And these are going to be delivered in fiscal year '27 or '28, according to the president's budget requests.

Nick Schifrin:

And when I talk to industry, they always complain that the budgets aren't long enough, guaranteed for long enough, right?

Jerry McGinn:

Yes.

Nick Schifrin:

I mean, you have heard this for years. Is that a legitimate complaint that the Pentagon can't guarantee a steady order stream from industry, or is industry being greedy?

Jerry McGinn:

No, I think both things are correct. I mean, the demand signal -- for ultimate demand signal for a company is a contract.

But the Pentagon can only obligate the money that it has. Congress has to appropriate money. So, like, these longer-term deals that the Pentagon is signing with companies are seven years, but they can't -- they're not guaranteed. They're not contracts. They are best effort agreements.

And so they are about as good as the government can give of the demand signal for the companies. And, in return, the companies are making investments. And they're doing things like -- RTX announced last week almost 700 million in capital expenditures for this quarter alone, a 26 percent increase year over year.

Nick Schifrin:

And, quickly, how would it improve things if Congress were able to actually pass budgets and so we had less fluctuation and longer-term expectations that we could actually predict?

Jerry McGinn:

Yes, there's a couple things.

Well, one Congress can grant multiyear appropriations, which they have done on a number of munitions, that allows for longer two-year contracts that allows money to be spread over period of time, which again helps with that demand signal. And then passing budgets on time is very critical.

And that's been a challenge, as you know.

Nick Schifrin:

Yes, it has for many years.

Jerry McGinn, thank you very much.

Jerry McGinn:

Great.