Saturday, April 6, 2013

Hagel: Pentagon Prepared to Make ‘Big Choices’ to Reduce Spending

By Sandra I. Erwin

Defense Secretary Chuck Hagel speaks at the National Defense University.
The Pentagon is not in denial about the coming austerity, Defense Secretary Chuck Hagel said. The prospect of $500 billion in sequester cuts over the next decade, he cautioned, means sacred cows will no longer be tolerated in the military’s budget.

In his first comprehensive policy speech since taking office, Hagel told military and civilian leaders at the National Defense University in Washington, D.C., that the sequester cuts are only the beginning of what could be a steeper downturn.

“A combination of fiscal pressures and a gridlocked political process has led to far more abrupt and deeper reductions than were planned for or expected,” Hagel said April 3.

He noted that Pentagon spending has been on a downward trend for the past three years. Cuts already have been mandated in areas such as official travel and facilities maintenance, in addition to hiring freezes.

“We will have to do more,” said Hagel. “Cuts will fall heavily on maintenance and training. … Meanwhile, our investment accounts and the defense industrial base are not spared damage as we take indiscriminate cuts across these areas of the budget too.”

To soften the impact of the sequester — and of whatever other fiscal blows might come — the Defense Department must set priorities, he said. That would prepare the Pentagon to “deal with further reductions in the defense budget that could result from a comprehensive deficit reduction deal or the persistence of sequester level cuts.”

Hagel recently ordered a reexamination of the Obama administration’s 2012 strategy that calls for a “rebalancing” of the military towards Asia-Pacific and a greater emphasis on unconventional warfare and high-tech systems. This review should not be seen as a sign that the Pentagon is retrenching from its global commitments, Hagel said. At the same time, he added, budget cuts will demand adjustments in future plans. “We cannot simply wish or hope our way to carrying out a responsible national security strategy and its implementation.”

The strategy review, he said, is about “matching missions with resources. … This effort will, by necessity, consider big choices that could lead to fundamental change.”

The Defense Department can no longer afford to just tweak or chip away at existing programs and forces, he said. “We need to challenge all past assumptions, and we need to put everything on the table.”

The Pentagon should not only adjust to lower levels of spending overall, but must also address internal spending imbalances that could hollow out the military in the long run, Hagel said. “In many respects, the biggest long-term fiscal challenge facing the Department is not the flat or declining top-line budget, it is the growing imbalance in where that money is being spent internally,” he said. “Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel, and develop replacements for aging weapons platforms will eventually crowd out spending on procurement, operations and readiness — the budget categories that enable the military to be and stay prepared.”

Hagel said he agreed with former Chief of Naval Operations retired Adm. Gary Roughead, who warned that, unless spending trends are reversed, the Pentagon will become an agency that will be less about protecting the nation than one that administers benefit programs and buys only limited quantities of “irrelevant and overpriced” equipment.

“Difficult decisions and strategic prioritizing remain to be done,” Hagel said. “I am concerned that despite pruning many major procurement programs over the past four years, the military’s modernization strategy still depends on systems that are vastly more expensive and technologically risky than what was promised or budgeted for.”

Although the president exempted personnel accounts from sequestration cuts, Hagel warned of future downsizing in both military and civilian ranks. “This will involve asking tough questions such as what is the right mix of civilian and military personnel across the department. … Within the force, what is the right balance between officers and enlisted and what is the appropriate distribution of troops performing combat, support and administrative duties.”

The Pentagon’s bloated overhead structure also must be pared back, Hagel said. The military’s top-heavy organization is financially unsustainable, he said. Most current command charts date back to the early years of the Cold War, Hagel noted. “Cost and efficiency were not major considerations,” he said. “Today the operational forces of the military — measured in battalions, ships, and aircraft wings — have shrunk dramatically since the Cold War. Yet the three- and four-star command and support structures sitting atop these smaller fighting forces have stayed intact, with minor exceptions, and in some cases they are actually increasing in size and rank.”

The Pentagon’s back office also will be targeted for cuts, he said. Reductions can be expected in the office of the secretary of defense, the Joint Staff, the combatant commands and the defense agencies and field activities, as well as offices that provide health care, intelligence and contracting support.

Hagel acknowledged that his predecessors Leon Panetta and Robert Gates both made serious attempts at taming cost growth in the bureaucracies, with limited success. Although the military should not be run like a corporation, he said, “that does not mean we don’t have a good deal to learn from what the private sector has achieved over the past 20 to 30 years, in which reducing layers of upper and middle management not only reduces costs and micromanagement, it also leads to more agile and effective organizations and more empowered junior leaders.”

But Hagel recognized that shaking up the status quo is easier said than done. "Dramatic changes," he said, ultimately might prove to be "unwise, untenable or politically impossible."

His call for fiscal responsibility and for changes in military posture come at a time when the Pentagon is under heavy criticism for having failed to plan for post-war spending cuts.

Current military budgets do not distinguish between "needs and wants,"  Benjamin Friedman, a national security analyst at the Cato Institute said at a recent conference hosted by the Project on Defense Alternatives.

A reexamination of the military structure has been long overdue, said retired Army Col. Douglas Macgregor. During World War II, he said, the U.S. military had eight four-star generals and admirals leading a force of more than 15 million personnel. Today, there are 38 four-stars leading an active-duty force of 1.4 million. What is needed today, he said, is not only to cut spending but also to develop a coherent national security strategy, which has not been done since 1989.

Gordon Adams, a professor of national security at American University and a former budget official during the Clinton administration, has blasted the Pentagon for living in denial about the coming defense drawdown. The process of sequestration, he said, has compelled defense leaders to begin to set priorities, but more needs to be done.

Friedman said both Democratic and Republican administrations have conflated ideological ambitions to “fix the world” with what the nation truly needs to be secure. The United States, he noted, no longer has the financial wherewithal to continue to go down that road.

Photo Credit: Defense Dept.