Prospects for Defense Reforms in 2016 Fading Fast

The business reforms proposed by every defense secretary during the Obama administration will continue to be debated but there is little to no chance that significant actions will happen until after the nation elects a new president, defense industry experts said.

“Defense reforms” is a catchphrase for broad initiatives to inject more efficiency and modern management practices into the Defense Department and the military services. Reform proposals in recent years generally have ranged from changes in personnel and healthcare policies, an overhaul of the Pentagon’s weapons procurement process, and recommendations to close excess military bases and downsize defense bureaucracies.

Every Obama defense secretary — Robert Gates, Leon Panetta, Chuck Hagel and now Ashton Carter — has advocated reforms in some if not all of these areas but each has consistently run into a legislative buzz saw.

“Reforms go in cycles,” said Phillip Carter, director of the military, veterans and society program at the Center for a New American Security. During the Obama years, reform efforts have stalled because proposals have been put forth in isolation and nobody has been able to make a successful case to members of Congress who are reluctant to upset constituents, Carter said Dec. 14 at a CNAS conference in Washington, D.C.

The Senate Armed Services Committee started a series of hearings this year — expected to extend into 2016 — that have cast a spotlight on defense reforms. SASC Chairman Sen. John McCain, R-Ariz., has chided officials for what he characterized as gross inefficiencies and wasteful business practices at the Department of Defense. The committee is looking at how Congress and the Pentagon might go about restructuring bloated agencies and reducing overhead in order to cut costs and speed up the pace of innovation.

National security analyst Mackenzie Eaglen, of the American Enterprise Institute, said these hearings are valuable but not likely to move the needle in the foreseeable future.

The discussion is being framed as the start of a longer debate that could lead to a revision of the 1986 Goldwater-Nichols Act. That law set the foundation for today’s military command structure and has recently come under criticism by McCain and others who question whether it has outlived its usefulness. But at a time when the White House and the 2016 presidential field are consumed by domestic issues and the threat of Islamist terrorist groups, defense reform issues that are rather arcane like Goldwater-Nichols barely register.

The impetus for SASC reform initiatives is the “widespread belief that there has been disproportionate growth in civilians and contractor support,” Eaglen said. “There is a belief that the services have lost core authorities and the office of the defense secretary has become too centralized and too powerful.”

Also slowing down reforms are concerns by the service chiefs who worry that some of these proposals are not being “fully vetted,” said retired Air Force Gen. Craig R. McKinley, president and CEO of the National Defense Industrial Association and former chief of the National Guard Bureau.

“That’s going to be trouble as we go into the last year of this administration,” McKinley said at the CNAS event. “How many new things can we digest as we go into the next administration?” he asked.

With the Pentagon’s resources tied up by current conflicts and other pressing matters, limited attention can be paid to business or personnel reforms, McKinley said. “These are not necessarily overnight solutions.”

One of the efficiency initiatives proposed by Gates in the early days of the Obama administration targeted the so-called “back offices” of many defense agencies and combatant commands. Sweeping reforms of this sort are always tough, said McKinley. “It is very hard to change the culture [and get support for] divesting significant portions of staff that have been built up over time.”

The National Guard Bureau staff, for instance, grew from 450 in the 1980s to 4,000 today. The department is going to need leadership that “watches the personnel ‘shell game,’” said McKinley.
Eaglen warned that continuing procrastination is bad news for the military. Without reforms, the Pentagon is going to have to continue to absorb rising overhead and infrastructure costs within a flat top-line budget, she said. “There isn’t an additional dollar for defense without a reform agenda.”

The Obama years have been marked by constant battles between the White House and various factions in Congress over federal spending, and there is no longer a dominant bloc on Capitol Hill that will push for bigger defense budgets, she said.

“I’m concerned about the lack of a national security consensus in the middle,” Eaglen said. “To keep the military we have today and modernize it requires more money.” Following the rise of the conservative movement and the tea party, many lawmakers have chosen to stand firm against any increases to government spending, even during times of growing security threats. “The fringes have had the megaphone for too long,” Eaglen said. “The critical middle is now missing and will take time to rebuild.”

The same political gridlock that led to the Budget Control Act and abrupt reductions in military spending also has stalled personnel reforms that are needed to preserve the health of the all-volunteer force, Carter said. Initiatives to adjust compensation, healthcare and retirement benefits have lacked the consensus to move forward, so “we are locked in the status quo,” he said. In a zero-sum budget environment, the Pentagon will become financially overburdened by the cost of the current force and unable to invest in the force of the future, Carter said. The cost of military personnel, he said, has soared by 178 percent since the 1991 Persian Gulf War. There are “very powerful groups” that will shut down reforms at every turn, he said. “You have to make the total argument: How do we create the next generation of leaders?” Carter asked, with a personnel system that is wasteful and mismanages human capital.

Topics: Government Policy