Why Cutting Defense Spending Should Be Easy

There is a need to cut at least $450B from the defense budget over the next decade, with perhaps another $500B required, depending on Congressional outcomes. Lawrence J. Korb has provided an article in Foreign Affairs, Why Panetta’s Budget Cuts Are Easier Than You Think, that describes how much fat is there waiting to be excised. He points out that howls of pain will emanate from what he refers to as the "military-industrial-congressional" complex.

Korb provides some background in making the case that the Pentagon’s problems arise mainly through mismanagement.

"But the Pentagon does not have a resource problem. As even the Pentagon's strongest supporters agree, it has a management problem. Norbert Ryan, the president of the Military Officers Association, summed it up well in a recent Washington Times op-ed: ‘Almost weekly we see reports of gross mismanagement and cost overruns in expensive programs, few of which have any relevance to the wars our troops are fighting today,’ he wrote. ‘The level of mismanagement is so severe that the Pentagon's books have been deemed "unauditable," and Pentagon leaders have said they won't be able to pass the test before 2017’."

"Senator John McCain (R-Ariz.), a career naval officer and war hero, went further. In a December 15, 2011 speech on the Senate floor, he unleashed a blistering attack on virtually every weapon system under development. He called the F-35 program a mess, lamented significant problems with the Marines' Expeditionary Fighting Vehicle, criticized the Army's Future Combat Systems as worse than a ‘spectacular, shameful failure,’ and said that the F-22 may well be the most ’expensive corroding hangar queen’ ever.

Kolb points out that while the Secretary of Defense has too many responsibilities to be able to devote the necessary time to management, the Pentagon was run relatively efficiently when there was a strong deputy secretary in place as the chief operations officer. Unfortunately, it has been a long time since such a person has been on duty.

"Yet, for the most part, the deputy secretaries of defense over the last decade have lacked the management experience or the stature to do the job effectively. Defense Secretary Donald Rumsfeld's deputy, Paul Wolfowitz; Robert Gates' deputy, Bill Lynn; and Panetta's deputy, Ashton Carter, had never managed a large organization, or even served in the military."

Without a strong person in charge, decisions are left to military personnel and civilians whose careers depend on participation in successfully concluded programs, not in cancelling programs. Congressional participation usually focuses on protecting defense work in the various congressional districts with the active "encouragement" of the contractors. So operates the "military-industrial-congressional" complex.

Given weak leadership, many fiscal sins are committed.

"As the wars in Iraq and Afghanistan continued, the Pentagon brass hid baseline spending. Over the last decade, Pentagon leaders paid for core items, such as the F-22 Raptor and missile defense systems, which had nothing to do with the ongoing battles, out of the war supplemental budget. Doing so allowed them to cover up the escalating costs of several systems and make it appear that the investment portion of the defense budget was not growing too rapidly. A strong deputy would have been forced to make tradeoffs between high-performing systems, such as the F-22, and the less capable F-35."

"Meanwhile, Pentagon leaders have repeatedly failed to penalize defense contractors for cost overruns. They did not lack the tools to do so: In the 1980s, Congress passed a law mandating that weapons programs be voided when they exceed cost estimates by 15 to 50 percent, unless the administration requests a waiver on national security grounds. Since 1997, about half of all weapon-systems projects breached this law, and yet most were allowed to move into full production."

"In 2010, Gates, realizing that the taps for defense spending were closing, asked the services to identify inefficiencies. In a matter of weeks, they identified about $200 billion of redundant expenses....Yet, rather than using the gains to cover the overruns, Gates allowed the Pentagon to plow most of it back into new weapons programs."

Korb believes that the Pentagon will continue to avoid making hard decisions unless someone is put in place with the will and clout to make the necessary moves.

LAWRENCE J. KORB is a Senior Fellow at the Center for American Progress was Assistant Secretary of Defense from 1981 to 1985.

Thom Shanker and Elisabeth Bumiller provide some insight into what actions are being considered by Panetta and the administration in an article in the New York Times. The overall defense strategy is being modified to be consistent with these goals:

"....the military would be required to fight and win one war, spoil the military aspirations of another adversary in a different region of the world, and all the while be able to conduct humanitarian relief operations and other contingencies, like continuing counterterrorism missions and enforcing a no-fly zone."

Panetta is expected to support reductions in manpower beyond those already planned.

"The Army is already slated to drop to a force of 520,000 from 570,000, but Mr. Panetta views even that reduction as too expensive and unnecessary and has endorsed an Army of 490,000 troops as sufficient, officials said."

Cuts in a number of weapons systems are expected to be announced eventually, but the authors only indicate one specific action: a delay in production of the F-35 Joint Strike Fighter.

"Delaying the F-35 would leave its factories open, giving the manufacturer, Lockheed Martin, a chance to work out continuing problems in developing the plane while freeing up money that otherwise would be devoted to buying the warplane in the next year or two."

As unpopular as program cuts will be moves aimed at containing ballooning personnel expenditures.

"Mr. Panetta is also examining personnel costs, with cuts to future retirement benefits and fees for health care offered to Defense Department retirees on the table."

The areas that Panetta is expected to protect from cuts include cyber security, Special Operations, and intelligence-related activities.

Stay tuned! It will be interesting.