There are at least a half dozen proposals floating around Washington for reducing defense spending. From the deficit commission to the sustainable defense task force and now the Brookings Institution all these proposals employ the same old, tired approach to garnering the majority of their proposed savings, which is to cut procurement and reduce end-strength. None apparently appreciate that failure to replace aging platforms and systems with newer, more efficient models means an increase in both total numbers and operations and maintenance costs. The Air Force, for example, was able to reduce its inventory by some 250 F-16s because of the size of the planned buys of the F-35 Joint Strike Fighter (JSF). To now reduce that service’s acquisition of the JSF means rebuying the lost 250 F-16s also. Then there are the increased personnel, parts and operational costs associated with deploying more F-16s and the savings from the reduction in purchases of F-35s disappears. Whether it is reducing or eliminating the Expeditionary Fighting Vehicle, V-22, Littoral Combat Ship or Joint Light Tactical Vehicle, none of the proposals explain how the military should accomplish their respective missions absent the aforementioned capability or without an expensive modernization effort to upgrade existing platforms and systems.
But as the Defense Business Board (DBB) made clear in its report to the Secretary of Defense, a major source of cost dislocation in the defense budget is on the services side. The DBB identified a number of major trends that are adding costs to the defense program. These are:
— An explosion of overhead work;
— The application of ever more personnel to those tasks which has added immensely to costs;
— The excessive use of contractors;
— The use of a sizeable portion of the active military to perform not inherently government work or work that should be more appropriately assigned to DoD civilians;
— Ignoring proven business processes in areas like logistics and supply chain, knowledge based services, IT expenses, and contracted services:
— Unsustainable military entitlements; and
— The creation of new organizations and large staffs.
It makes little sense to recommend cutting force structure when over 560,000 members of the active duty force over the last decade, nearly 30 percent of those in uniform during this period, have never deployed, according to the DBB. Some 240,000 people serve in DoD’s various headquarters and agencies. In addition, some 340,000 uniformed personnel are performing commercial activities that should be done by civilians. Since uniform personnel are inherently much more expensive than their civilian counterparts, both government and private sector, shifting those people to warfighting tasks or eliminating their positions entirely would save more money than cuts on the margins to procurement programs.
The DBB also had the courage to take on the “sacred cow” of military compensation. It is clear to everyone who can read the figures that the military compensation system is increasingly unaffordable. The cost of military healthcare has gone up by 114 percent in the last decade. It is equally unsustainable, says the DBB, to pay military personnel and their families for 60 years to serve for only 20.
Defense Secretary Gates’ efficiency drive with its target of squeezing $100 billion out of overhead accounts is based on the analysis provided by the DBB. The initial steps taken by the Secretary, including the controversial measure of closing Joint Forces Command, must be accelerated significantly if the desired savings are to be achieved. But they must also be given time to bear fruit. It makes little sense to start the argument regarding savings in the defense budget with recommendations for procurement cuts when there is clearly so much fat to be trimmed from the overhead accounts.
Find Archived Articles: