Gates Shifts Military Spending: 'Not Every Defense Dollar is Sacred'

Defense Secretary Robert M. Gates, citing a "grim financial outlook'' but also the "growing peril of the future,'' Thursday announced minor shifts within the defense budget of about $178 billion over five years.
"Not every defense dollar is sacred,'' he told reporters at the Pentagon.

But, he warned, "We shrink from our global responsibilities at our peril,'' and he said under the current Obama administration plan, the defense budget will continue to rise modestly over the next five years.

The plan that Gates outlined at the Pentagon Thursday doesn't actually cut defense spending. Instead, he said it shifts money from wasteful and inefficient uses to more effective ones. Earlier this year, Gates had demanded that the military services find $100 billion of programs and personnel that could be cut -- and allowed them to plow the savings back into higher-priority programs.
The budget plan thus falls far short of the drastic cuts called for by the deficit commission, which last month recommended an immediate freeze in spending and future increases limited to half the rate of inflation.

In reaction to such ideas, Gates said simply: "As far as I'm concerned, that's math – not strategy.''

The cost savings and efficiencies Gates announced, which include halting development of a new amphibious tractor for the Marine Corps, trimming the number of contractors, and troop reductions in the Marine Corps and Army, came after months of argument and arm-twisting inside the Pentagon, and the modest results suggest why so many attempts to rein in defense spending often have no long-term impact.

Standing in the way of major reform: an immense and unchecked bureaucracy (the office of the defense secretary alone employs more than 5,000 people, including 2,000 contractors, at a cost of $5.5 billion a year), and a Congress that when it faces the military just can't say no.

Collectively, they have engendered an annual defense budget of more than $700 billion -- twice as high as the 2001 budget and the highest since World War II in inflation-adjusted dollars. Previous efforts to streamline Pentagon operations -- including a directive by President Reagan in 1981 to make government smaller -- have failed to stem spending.
Nor are the changes announced by Gates final: the most significant ones, including the proposed cancellation of the Marine Corps' expeditionary fighting vehicle -- must pass congressional muster when the defense budget goes to Capitol Hill later this winter.

Congress is expected to push back against Gates' proposed reforms, and some early reaction to the proposals was not encouraging.

"We are fighting two wars, you have China, you have Iran: Is this the time to be making these types of cuts?" demanded Rep. Buck McKeon, the California Republican, who heads the House Armed Services Committee.

On the Army side, Gen. George Casey, the service's top officer, told reporters Thursday he intends to protect his top priorities: the size of the force, the new weapons it intends to buy, and the benefits enjoyed by Army families.

Underlying these minor squabbles, though, are the major drivers of the booming defense budget: one is skyrocketing personnel costs and a growing reliance on contractors. The other is that the Obama administration, like the Bush administration that preceded it, has set no strategic priorities for what it wants the armed services to do. The Pentagon's most recent strategic review, completed last spring, said the military ought to prepare for wars big and small, for major conventional war and counterinsurgency operations, for cyberwarfare and high-tech conflicts.

The actions announced by Gates appear to have little, if any, impact on these two budget drivers. A major factor in exploding personnel costs, for instance, is health care and pensions. Thanks to the generosity of Congress, military personnel can retire with 20 years of service at age 38 or 40 and transition to another full-time career while receiving a full pension and lifetime health care at a cost of $460 a year.

In his announcement, Gates warned against making "drastic and ill-conceived cuts'' in defense capabilities, but he did not provide any further strategic context for the reductions he proposed.

For instance, he recommended halting the Marine Corps' $14 billion trouble-plagued effort to develop a high-tech amphibious tractor, the expeditionary fighting vehicle. But Gates, acknowledging that this would be controversial, said his decision "does not call into question'' the Pentagon's commitment to maintaining a Marine Corps amphibious war-fighting capability, and he directed that the savings be used to spruce up the current inventory of amphibious tractors..

The Marine commandant, Gen. James Amos, said last fall that the expeditionary fighting vehicle, designed to carry 17 Marines from ship to shore under fire, is vital to the Marines' ability to fight their way across a hostile coastline. Amos termed it an amphibious warfare capability that "the United States cannot live without.''

But there is mounting concern that the growing ability of potential foes like Iran and China to fire salvos of sophisticated missiles at an approaching naval force makes amphibious warfare a risky bet. Some strategists have questioned whether amphibious operations make sense at all.

Gates also said he will propose that health care premiums for retirees working full time be subject to "modest'' increases, a move certain to be opposed by the veterans lobby.

Gates vowed to cut the size of the Defense Department's contractor work force, which by a Pentagon account numbers some 766,000 at a cost of $155 billion a year. Gates said he will reduce that force by 10 percent a year for three years.

Maintaining the current troop levels is becoming more expensive because of generous and increasing pay and benefits. The cost of one active-duty soldier per year has gone in a decade from about $60,000 to about $206,000 today, according to the Defense Business Board.

Gates said he would recommend that by 2015 the size of U.S. ground forces could be reduced, cutting the Army by 27,000 and the Marines by 15,000 to 20,000. Those two services have grown by about 92,000 troops since 9/11, and some critics say deeper manpower cuts could be made.

"By and large the world today is a pretty safe place,'' said Gordon Adams, professor of foreign relations at American University.

In an essay in "Foreign Affairs," Adams and co-author Matthew Leatherman observe that after the Cold War ended, the Pentagon trimmed its budget 28 percent and cut back active-duty troops from 2.2 million to 1.4 million – and that was the very capable force that toppled the Taliban in 2001 and overran the Iraqi military in 2003.