Secretary Gates’ Budget Proposal: Good for Defense, Bad for the National Debt

The National Commission on Fiscal Responsibility and other debt reduction panels wanted the Pentagon to contribute at least $150 billion to help trim the national debt. Others have asked for as much as a trillion dollars.
But they’re only going to get $78 billion.
Defense Secretary Robert Gates today unveiled an ambitious “reinvestment strategy” that would shift $150 billion from wasteful overhead and unneeded weapons programs to higher priority areas such as combat readiness. But he’s only willing to accept cuts of $78 billion to the defense budget top line over the next five years.
President Obama intends to request $553 billion for the Defense Department in fiscal year 2012, Gates said. That is $13 billion less than the Pentagon expected to receive a year ago, but represents about 3 percent real growth over the funding the department would receive in fiscal year 2011 under the current continuing resolution, and about 1.5 percent growth over the Appropriations Committees’ defense bills for 2011. The proposed five-year plan would reduce real growth in the top line in 2013 and in 2014, and drop to zero real growth in 2015 and 2016.
The bottom line is a $78 billion reduction to the five-year plan.
“Because of the rigorous reform efforts undertaken over the past year, it is possible for the Defense Department to absorb this reduction in the projected top line without significant impact to war fighting capability, although it will necessitate a reduction in the size of the Army and Marine Corps starting in fiscal 2015,” said a Pentagon news release. Savings generated by overhead efficiencies, the civilian staffing and pay freeze, and the future decrease in ground forces, when added together, are roughly equivalent to the $78 billion reduction in the top line.
Speaking to reporters at a Pentagon news conference, Gates was adamant about the need to maintain a high level of defense spending, despite calls for cuts as the nation faces a crushing debt. The proposals from debt commissions are “math, not strategy,” Gates said. The budget plan he’s sending to Congress next month “represents the minimum level of defense spending necessary given the complex and unpredictable array of security challenges the United States faces around the globe,” he said.
Gates suggested that while key U.S. allies such as the United Kingdom have moved to make significant cuts in defense spending, America is prepared to shoulder the fiscal burdens of being the world’s 911 force. “My message to allies is that this president understands and accepts our global responsibilities.”
Gates’ hawkish stance should not surprise anyone who has been following his budgetary decisions over the past two years. While he did ax major weapons programs — which collectively will save the Pentagon $300 billion — he never has called for reductions to overall defense spending. His push for efficiencies has been misreported in the news media as actual spending cuts, Gates noted. “A lot of the stories last year were about how I was cutting the defense budget by $100 billion. I was not cutting the defense budget by $100 billion. I was moving $100 billion of what I thought was waste and unnecessary spending to higher priority issues.”
The 2012-2016 budget blueprint is not calling for “absolute cuts” but rather marks the beginning of a decline in the rate of growth,” Gates said. Gates’ efficiency campaigns frequently have been mistaken for budget cuts because, for the Defense Department, slowing down the rate of growth requires some degree of fiscal discipline, after a decade of largesse.
“This budget has doubled in the past decade,” said Chairman of the Joint Chiefs of Staff Adm. Michael Mullen, who briefed reporters along with Gates. During that time, he said, “We’ve lost our ability to prioritize, to make hard decisions, to do tough analysis, to make trades.”
Now the Pentagon and the military services are about to make about $150 billion worth of such trades — $54 billion by OSD, $35 billion by the Air Force, $29 billion by the Army, $35 billion by the Navy and Marine Corps.
The Department of the Navy is proposing to use efficiencies savings to:
• Accelerate development of a new generation of electronic jammers;
• Speed up the repair and refurbishment of Marine equipment used in Iraq and Afghanistan;
• Develop a new generation of sea-borne unmanned strike and surveillance aircraft;
• Buy more of the latest model F/A18s and extend the service life of 150 of these aircraft as a hedge against more delays in the deployment of the Joint Strike Fighter;
• Purchase additional ships — including a destroyer, a littoral combat ship, an ocean surveillance vessel and fleet oilers.
The Navy’s proposed efficiencies savings of more than $35 billion over five years include:
• Reducing manpower ashore and reassigning 6,000 personnel to operational missions at sea;
• Using multi-year procurement to save more than $1.3 billion on the purchase of new airborne surveillance, jamming, and fighter aircraft;
• Disestablishing several staffs (but not the associated platforms) to include submarine-, patrol aircraft-, and destroyer-squadrons plus one carrier strike group staff;
• Disestablishing the headquarters of Second Fleet at Norfolk, Va., and transferring responsibility for its mission to the Navy's Fleet Forces Command.
With its savings, the Air Force will:
• Buy more Reaper UAVs and move key intelligence, surveillance and reconnaissance programs from the temporary war budget to the permanent base budget.  
• Increase procurement of the Evolved Expendable Launch Vehicle;
• Modernize the radars of F-15 fighters;
• Buy more simulators for JSF air crew training;
• Develop a new long-range, nuclear-capable penetrating bomber.
The Air Force’s proposed efficiencies measures totaling $34 billion include:
• Consolidating two air operations centers in the United States and two in Europe;
• Consolidating three numbered Air Force staffs;
• Saving $500 million by reducing fuel and energy consumption within the Air Mobility Command;
• Improving depot and supply chain business processes to sustain weapons systems, thus improving readiness at lower cost;
• Reducing the cost of communications infrastructure by 25 percent.
The Department of the Army would use its savings to:
• Provide improved suicide prevention and substance abuse counseling for soldiers;
• Modernize its battle fleet of Abrams tanks, Bradley fighting vehicles, and Stryker wheeled vehicles;
• Accelerate fielding to the soldier level of the Army's new tactical communications network.
• Accelerate procurement of Grey Eagle UAVs;
• Buy more MC-12 reconnaissance aircraft and begin development of a new vertical unmanned air system.
The Army’s proposed $29 billion in savings include:
• Terminating the SLAMRAAM surface to air missile, and the Non-Line of Sight Launch System, the next-generation missile launcher originally conceived as part of the Future Combat System;
• Reducing manning by more than 1,000 positions by eliminating unneeded task forces and consolidating six installation management commands into four;
• Saving $1.4 billion in military construction costs by sustaining existing facilities;
• Consolidating the service's email infrastructure and data centers, which should save $500 million over five years.
Of the $100 billion identified by the services, approximately $28 billion will also be used over the next five years by the Army, Air Force, Navy and Marine Corps to deal with higher than expected operating expenses such as fuel, maintenance, health care and training costs.
Headquarters and support bureaucracies in the Office of the Secretary of Defense, the combatant commands, and other defense agencies and field activities will be trimmed, said Gates. This effort - combined with a government-wide freeze on civilian salaries - will yield approximately $54 billion in additional savings. Overhead efficiencies will include further reducing contractor staff, consolidating IT support, culling redundant intelligence organizations, eliminating unnecessary reports and studies, freezing civilian staff levels and pay, downgrading overseas commands, decreasing the number of generals, admirals and civilian executives, and modest increases in TRICARE premiums on military retirees.
As far as big hardware program cancellations go, as expected, Gates announced plans to terminate the Marine Corps' Expeditionary Fighting Vehicle. He also stated that he is placing the Marine Corps' short take-off and vertical landing (STOVL) variant of the JSF on the equivalent of a two-year probation because of significant testing problems. As a result, the development of the Marine variant will be moved to the back of the overall JSF production sequence.  To fill the gap created from the slip in the JSF production schedule, the Department of the Navy will buy more Navy F/A-18s.

Topics: Defense Department, DOD Budget