To Absorb Deep Cuts, DoD Would Shrink Army, Shed Aircraft Carriers and Fighter Squadrons

By Sandra I. Erwin
Defense Secretary Chuck Hagel and Navy Adm. James A. Winnefeld Jr., vice chairman of the
Joint Chiefs of Staff, brief reporters.
The Pentagon is building two sets of budgets for the 2015-2019 defense plan. One at the level proposed by President Obama, and another that lops off $52 billion per year in accordance to the Budget Control Act.
The exercise is one of the outcomes of the Strategic Choices and Management Review, or SCMR, that Defense Secretary Chuck Hagel kicked off four months ago to help prepare the Pentagon for the likelihood that it will have to slash spending by $500 billion between now and  2021. The review looked at how the Pentagon might absorb the first half of the BCA-mandated reductions.
Hagel unveiled the results of the study July 31 at a Pentagon news conference. He said he supports the president’s budget proposal but recognized that it is becoming an increasingly unrealistic scenario.
“Sequestration will continue in the absence of an agreement that replaces the Budget Control Act,” Hagel said.
The SCMR did not produce a detailed budget blueprint. “That was not the purpose of this review,” he said. “It generated a menu of options, not a set of decisions.”
The review concluded that, under sequestration, dramatic reductions would not be made proportionally across the military services but would be “informed by strategy,” Hagel said.
“We can strategically reduce the size of our ground and tactical air forces, even beyond the current drawdown," he said. More analysis will be required before these decisions are made, but there is clearly excess capacity in ground and air forces, he said. The current plan is for the Army to downsize to 490,000 active-duty troops and 555,000 in the reserves. The SCMR concluded that, under sequestration, the Army might have to slim down further, to between 380,000 and 450,000 in the active component and between 490,000 and 530,000 in the reserves. The Air Force might have to reduce as many as five tactical aircraft squadrons, retire bombers and cut the size of the C-130 cargo aircraft fleet with “minimal risk,” said Hagel. The Navy could see its carrier strike groups drop from 11 to eight or nine, and the Marine Corps could shrink from 182,000 to between 150,000 and 175,000.
Deep budget cuts demand that “we trade away size for high-end capability,” he said. “We would protect investments to counter anti-access and area-denial threats, such as the long range strike family of systems, submarine cruise-missile upgrades, and the Joint Strike Fighter,” said Hagel. “And we would continue to make cyber capabilities and special operations forces a high priority.”
Hagel already has directed the military services and civilian agencies to slash overhead costs and reduce staff by 20 percent, which could save $2 billion per year. Proposed changes to military compensation, health care and base closures could add up to $150 billion in savings over a decade. But that does not come close to meeting the sequestration threshold. “The reality is that cuts to overhead, compensation, and forces generate savings slowly,” Hagel said. “With dramatic reductions in each area, we do reach sequester-level savings, but only towards the end of a 10-year timeframe. Every scenario the review examined showed shortfalls in the early years of $30 billion to 35 billion.”
These shortfalls will be even larger if Congress is unwilling to enact changes to compensation or adopt other management reforms and infrastructure cuts that the administration proposed for fiscal year 2014, he said.
Leaders of key defense committees were briefed July 31 on the contents of the review.
Without congressional support for these initiatives, Hagel said, the only alternative is to dramatically downsize the force. A smaller force would still be “technologically dominant, but would be able to go fewer places and do fewer things, especially if crises occurred at the same time in different regions of the world.”
Cuts as mandated by sequestration would result in a decade-long “modernization holiday,” Hagel said. “The military could find its equipment and weapons systems, many of which are already near the end of their service lives, less effective against more technologically advanced adversaries,” he said. “We also have to consider how massive cuts to procurement, and research and development funding would impact America's private sector industrial base.”
Adm. James “Sandy” Winnefeld, vice chairman of the Joint Chiefs of Staff, called the SCMR a “deep and painful look at every corner of our institution.”
The timing of sequestration — deep and abrupt cuts beginning immediately — is damaging because it forces the Defense Department to “grab money out of modernization and readiness” accounts, instead of allowing the military to gradually downsize and shed unneeded capacity, Winnefeld said at the news conference.
Like Hagel, he insisted that, under any budget scenario, the Pentagon must rein in personnel costs, which consume nearly half of the Defense Department’s $525 billion budget. Compensation and benefits' costs have risen nearly 40 percent above inflation since 2001. “The department cannot afford to sustain this growth,” Hagel said.
The SCMR recommended changing military health care for retirees to increase use of private-sector insurance when available; changing how the basic allowance for housing is calculated so that individuals are asked to pay a little more of their housing costs; reducing the overseas cost of living adjustment; and continuing to limit military and civilian pay raises.
Hagel called on Congress to help the military cope with sequestration by allowing the Pentagon to delay the budget cuts so it has time to absorb them.
“Before this review, like many Americans, I wondered why a 10 percent budget cut was in fact so destructive,” he said. The analysis “showed in the starkest terms how a 10 percent defense spending reduction causes in reality a much higher reduction in military readiness and capability,” he said. “Unlike the private sector, the federal government — and the Defense Department in particular — simply does not have the option of quickly shutting down excess facilities, eliminating entire organizations and operations, or shedding massive numbers of employees, at least not in a responsible, moral and legal way,” said Hagel. “The fact is that half of our budget, including areas like compensation where we need to achieve savings, are essentially off limits for quick reductions.”
Given that reality, the “only way to implement an additional, abrupt 10 percent reduction in the defense budget is to make senseless, non-strategic cuts that damage military readiness, disrupt operations, and erode our technological edge.”
The SCMR proved that “making cuts strategically is only possible if they are back-loaded” beyond 2019, said Hagel. “If these abrupt cuts remain, we risk fielding a force that over the next few years is unprepared due to a lack of training, maintenance, and the latest equipment.”
Photo Credit: Defense Dept.

Topics: Defense Department, Civilian Workforce, Defense Watch, DOD Budget, DOD Leadership, Government Policy, Procurement

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