Austerity Week Ends At The Pentagon

Author(s): Loren B. Thompson, Ph.D.
Posted in: Defense

Issue Brief

The only people celebrating at the Pentagon last week were the Mexicans working on renovating the building. Wednesday was Cinco de Mayo, a holiday for honoring Mexican history and culture. But our notoriously dour defense secretary, Robert Gates, decided to begin and end the week with speeches casting doubt on the military’s ability to sustain its current level of global preparedness. On Monday, he launched an assault on both sea services under his jurisdiction, criticizing the high cost of warships. That speech, delivered at the Navy League’s annual exposition, puzzled many observers because the Pentagon only spends two percent of its budget on building vessels widely regarded to be a mainstay of America’s security posture. Then on Saturday, he delivered a more expansive critique of the way Congress and the military do business at the Eisenhower library, complaining about rising military healthcare costs, redundant commands, and a surfeit of general officers.

The Monday speech about warship costs will soon be forgotten by everybody but the Marine Corps, since the Corps will be the main target of any near-term cost cutting by the defense secretary. Steps have already been taken to rein in costs on warships outside the amphibious-warfare community, and there are a hundred authoritative studies explaining why the surviving programs cost what they do. The only big new program on the horizon in naval shipbuilding is the planned replacement for Trident ballistic-missile submarines, and it isn’t likely that Gates or his successors will run the risk of undermining the credibility of America’s nuclear deterrent by trying to pinch pennies in that effort. The government will spend what it must to assure that the sea-based backbone of our nuclear posture is secure.

The impact of the second speech will be determined mainly by how long Secretary Gates elects to stay in office, because no successor is likely to enjoy the latitude that he does in setting defense priorities. Having already cut over $300 billion in planned weapons expenditures from the budget since President Obama took office, it is natural for Gates to turn to other places where waste might be occurring. If all the budget cuts come from weapons, America will end up with an unbalanced, labor-intensive defense posture that fails to adequately leverage the warfighting and peacekeeping potential of new technologies. However, it is much easier to convince Congress it needs to cut weapons outlays than personnel costs, so the next step in military economizing isn’t likely to get very far if the defense secretary who won the war in Iraq decides to depart. Many insiders think Gates will go after this year’s midterm elections, which would leave little time to get items like healthcare costs under control.

One step that Gates could take quickly to reduce long-term personnel costs would be to halt the “insourcing” of jobs that have previously been contracted out to the private sector. The Obama Administration believes that the defense department needs to rebuild its organic capacity to manage contractors, perform systems engineering, and deliver logistics after a prolonged period during which such activities were routinely outsourced. However, relying on career civil servants to perform such services saddles the government with fixed, multi-decade costs for retirement and healthcare benefits at a time when it appears the need for support services will be declining. It is easy to get rid of contractors when their services are no longer needed, but getting rid of government workers is another matter. So why hire thousands of new civil servants just as the Iraq war is winding down and weapons programs are being canceled?