Winslow Wheeler's Take on Gates' Defense Spending Announcements

On Monday, Aug. 9, I was invited to a meeting with Secretary of
Defense Robert Gates immediately after his press conference announcing
some spending modifications. I also attended his press conference before
the on the record meeting.

The others invited to the same were David Berteau
(CSIS); Dov Zakheim (BAH); Eric Edelman (CSBA), Gordon Adams (Stimson);
James McAleese (McAleese Assoc.), John Nagl (CNAS); Loren Thompson
(Lexington); Mackenzie Eaglen (Heritage), and Thomas Donnelly (AEI).

Based on Gates' comments and the DOD press release, I
understand the announcements to include the following (with my comments
appended):

1)      10 percent reduction per year for three years in "support
contractors." (The total number of these contractors appears to be
unknown. One estimate is that the DOD contractors
number 790,000; other numbers in are higher. In any case, the
denominator for this 10 percent reduction appears to be unknown.  Also, it is unclear if this 10 percent reduction
pertains to all contractors or a subset. If the
correct number is 790,000, will there actually be three years of
reductions of 790,000 of these people?)

2)      A freeze of the number of OSD, defense agency, and COMCOM
"billets" at the 2010 level for three years. Plus,
no more OSD positions to replace contractors ("except for critical
needs") and a "clean sheet review" of what everybody is doing. This "rebaselining" will result in a minimum reduction
of 50 percent of the "growth in billets since 2000" and a reduction of
at least 50 generals-admirals and 150 senior civilians. (It
is not clear how much will result from this; a freeze at current levels
for the total OSD, etc bureaucracy is quite literally nothing, but a 50
percent reduction of the increase since 2000 will mean more.  However, on September
10, 2001 then-Secretary of Defense Rumsfeld complained about
the bloat and waste in the Pentagon bureaucracy back then. Permitting almost 50 percent of the bureaucratic growth
since then seems extremely modest.)

3)      Freeze and reduce the number of reports sent (by demand) to
Congress and reduce "advisory" study funding by 25 percent.  (While many of the report requirements that Congress
imposes are superfluous and address some sort of political issue by
appearing to do something, some reports to Congress [such as on the
F-35's cost growth] are important. This process
needs to be monitored to ensure the baby is not thrown out instead of
the bathwater.)

4)      Review and possibly eliminate some of the 65 boards and
commissions, costing $75 million per year, and cut their funding by al
least 25 percent. (Unmentioned but more important,
I believe, is to change to rules for membership on these various boards
and commissions: any person with any financial connection, directly or
indirectly, with defense manufacturers, investment firms, or DOD itself
should be excluded.)

5)      10 percent reduction in funding for intelligence advisory and
assistance contractors and a freeze of SES
positions in defense intelligence organizations. (Again,
the denominator for this 10 percent reduction appears to be an unknown. How can you downsize an operation you have not
measured?)

6)      Eliminate the office of the assistant secretary of defense
networks, integration and information, the Business Transformation
Agency, and Joint Forces Command. (Every long
journey must start with the first step; these eliminations are hopefully
the start of a very long list.)

7)      A task force will oversee the implementation of these measures
over the next 90 to 120 days.  (After Gates is
gone, the new secretary will be tested as the bureaucracy and Congress
try to walk most of this backward. From what I
know of the prime public candidates to replace Gates, the bureaucracy et
al. will largely succeed.)

Overall assessment:  Gates has
made it clear that he seeks to defend the defense budget from real cuts
that he expects from Congress (e.g. Barney Frank alternative budget,
which he mentioned in passing) and the deficit commission (which he said
he wants to talk to). None of the money he seeks
to save with these efforts would leave the defense budget; he simply
wants to transfer overhead spending to other parts of DOD.

While he explicitly did not, repeat not, say so, I
suspect Gates knows he will lose his fight against cuts and that he
seeks with these actions to help DOD survive the cuts that are coming. In doing so, these efficiencies are inadequate. They will not transform the Pentagon into something
that can survive significant budget reductions and be anything but the
same institution at a lower level of spending. That,
of course, will be a real disaster because even with dramatically
growing DOD budgets our forces have become smaller, older and less ready
to fight. 

On the other hand, I believe, Gates deserves credit for
starting a process to attempt to deal with the fringes of the defense
problem. He is the first secretary of defense to
attempt to do so in decades, and he is earnest in his efforts, I
believe. There is a long, long way to go, however. I and others have written at some length about what
needs to be done; those proposals are readily available upon request.

Strangely, the Pentagon says these new proposals
are part of the $102 billion, five year "savings" announced last May. While, again, nothing was said to indicate it, I
believe there is something strange about this $102 billion "savings." It's not just that it amounts to very, very little
over five years of DOD spending (and that it's not a savings but an
internal transfer), but I have come to suspect that it's a rather
meaningless number.  Instead, it is a device being
used to try to extract some efficiencies from the DOD bureaucracy and
DOD contractors, and when the real cuts start occurring, these same
ideas (and more importantly expansions of them) will be employed to
adjust to real cuts. 

Those real cuts are not coming from Capitol Hill.
Although there has been some hyperventilated talk about bigger than
usual cuts in the 2011 DOD appropriations bills coming out of the House
and Senate Appropriations Committees (up to $8 billion), much of those
cuts may be quite phony. Although the reports and
bills are not yet available from the HAC or SAC, a summary from the HAC
(at http://appropriations.house.gov/images/stories/pdf/def/FY11_defense_summary.7.28.10.pdf) makes me suspicious that they are up
to their usual tricks. Rather than programmatic
cuts, it may be that much of the reductions will be gimmicks (such as
"revised economic assumptions") and deferments of spending to future
years (such as "unobligated expenditure" and "civilian underexecution"
actions) that over the long run save nothing. Watch
this space when the details become available.

Also, the political porkers are queuing up to
make sure that their own pigs stay fat and someone else pays for budget
restraint. In this regard, check out the
incredibly selfish statements of the governor and congressional
delegation of Virginia that queued up in a hyper-flash to announce that
someone else needs to save money in the defense budget and that the
Norfolk-based Joint Forces Command (now fingered by internal studies, a
former commander, and the secretary of defense as useless) is just the
kind of defense spending they like. Shame on them. Also, the usual political hacks are trying to savage
the Obama administration for being anti-defense for daring to take a
penny of bloat from the Pentagon. In that regard,
see the public comments of the top ranking Republican on House Armed
Services, Congressman Howard "Buck" McKeon of California. 
 

Clearly, the change agents for the coming
adjustments in the defense budget will not be the congressional porkers
and hacks on committees like the appropriations and Armed Services
committees.