How the U.S. Can Cut, Not Gut, Defense
Tough economic times mean we must be smart about cutting national defense without gutting our security. Fortunately, we have time-tested tools to help the President and Congress make smart reductions.
Last week President Barack Obama called for shaving another $400 billion from U.S. security-related spending. If all the cuts fall on the Defense Department, then this is the President’s third attack on Pentagon spending and likely not the last.
It is important to put defense spending in perspective, however. Our budget deficit is due primarily to entitlement spending such as Social Security and Medicare. By comparison, current defense expenses are not out of line with past spending. It remains below the 60-year trend as a percentage of our gross domestic product.
But there is a problem. The 2010 Defense Business Board states that U.S. defense spending is at its highest level since World War II, and the Pentagon consistently pays “more for less.” The “more for less” view is echoed by a 2010 Congressional Research Service report that indicates the Pentagon’s base budget has grown at the rate of 2% per year above inflation per troop since 1955, and operation and maintenance costs grew at 2.7% per year above base inflation since 1998.
Last month Defense Secretary Robert Gates issued a memo attacking “more for less” inefficiencies, and since April 2009, Gates has scrapped or scaled down more than 20 troubled arms programs, saving an estimated $300 billion in long-term costs. But the President’s latest cutting proposal, if it is applied exclusively to defense, will lead to real reductions in “force structure and military capability,” warns Gates.
That’s why Gates intends to conduct a “comprehensive review” of his options, but the outcome of that review is predictable: He will meet the President’s budget-cutting target.
Congress doesn’t have to accept the President’s “review.” It ought to use three tried-and-true policy tools to improve efficiency while making smart cuts.
First, the Pentagon structure needs another transformation such as the 1986 Goldwater-Nichols Reorganization Act, which will provide significant long-term savings.
Goldwater-Nichols made the most sweeping changes to the Defense Department since the National Security Act of 1947. It streamlined the military chain of command, changed the way the services interact, changed the personnel management of military officers, and created a shared procurement system.
Congress should pass a 21st century Military Transformation Act targeting service efficiency by collapsing functional capabilities to cut costs. Specifically, Congress should ask hard questions, such as, “Why do we need two ground forces (Army and Marines)?” “Why do we need four air forces (each service has an air force)?” “Why do we need three navies (Coast Guard, Navy, and Army’s fleet of tugs, barges, and boats)?” And “Why do we need eight Defense Department intelligence agencies?” Organizing functions under single headquarters can truly reduce bureaucracy, and create numerous efficiencies and produce long-term cost reductions.
Second, Congress should appoint three independent teams of national security experts to craft Pentagon policy plans similar to President Dwight Eisenhower’s competitive Solarium Project of 1953. That effort led to Eisenhower’s New Look Policy, which balanced military capabilities and the defense budget.
The three teams would define the threat, identify critical defense roles and missions, and recommend the forces and systems needed. Congress should take the best recommendations to form a plan to compare with the administration’s plan.
The administration’s plan will be the Pentagon’s congressionally mandated Quadrennial Roles and Missions Review (QRMR), which is due February 2012. That review is similar to the long-in-the-tooth Quadrennial Defense Review, which is corrupted by service rivalries and the administration’s political priorities.
The plan that comes from the melding of the two must prioritize roles and missions, recommend the right force mix, and address cost savings from procurement, personnel, and posture recommendations.
Procurement plans must be suited to current and future military needs. That is why Secretary Gates pressed to end production of the costly Air Force F-22, Raptor. The stealth fighter failed the “needs” rationale. The same rationale should apply to the over-budget F-35 Joint Strike Fighter, the Marine Corps’ costly V-22 Osprey vertical takeoff aircraft, and the $15-billion-each aircraft carriers that are becoming vulnerable to China’s DF-21D missiles, which are specifically designed to sink carriers.
Recently, Secretary Gates told an Air Force audience that it needs to concentrate on mundane platforms such as unmanned aircraft, cargo airlift, and medical evacuation capabilities. Even the Congressional Budget Office (2009) plugged legacy platforms such as the F-15E fighter over gold-plated new systems such as the F-35s, which will save the taxpayers multiple billions and still be effective against future threats.
Military personnel cost $141 billion in 2010 and should be put under the cost-cutting microscope as well. The plan must protect the successful all-volunteer force while right-sizing the services and the civilian government workforce (650,000 strong). The military’s 20-years-and-out retirement system needs retooling to keep hard-learned skills longer, and health care premiums need a re-look to offset skyrocketing costs. Also, between 1998 and 2009, according to the Congressional Research Service, military personnel pay and benefits rose 45% above inflation, which makes it a fair target for cuts as well.
The plan must also address global posture and foreign partner obligations. We can save billions by withdrawing tens of thousands of U.S. troops from Europe and Asia. We should also look again at our treaty obligations, such as the North Atlantic Treaty Organization, which receives 25% of its operating costs from America and heavily depends on our forces while European partners enjoy a defense-spending holiday.
Finally, the Pentagon has an oversized and too expensive infrastructure. The Congressionally mandated Base Realignment and Closure (BRAC) process has closed more than 350 installations during five BRAC rounds: 1989, 1991, 1993, 1995, and 2005. But the Defense Department still operates 539,000 facilities at nearly 5,000 sites covering more than 28 million acres. This includes very expensive foreign sites in Germany (281 sites), Japan (115 sites), and South Korea (86 sites).
Congress should launch the next BRAC round before the 2005 BRAC is completed this September. The 2005 BRAC closed 185 sites and realigned an additional 135 sites, which cost $35 billion but provides a recurring savings in the billions each year. The new BRAC must have a laser focus on reducing excess capacity and must save rather than cost money up front.
Tough economic times combined with serious security threats demands Congress make smart national security decisions. That would include passing a 21st century Defense Department Transformation Act that combines functional capabilities to improve efficiency and cuts costs. Congress should launch an independent review process that leads to a plan that cuts costs but not security. And Congress should create a new BRAC that cuts and realigns more properties, especially expensive foreign facilities.