Budget Nightmare at Pentagon
Change is coming to the Pentagon. The prevailing wisdom is that Secretary of Defense Robert Gates brings it. Real change is, indeed, in the wind, but it is not coming from Gates. The long overdue program terminations and overhead savings Gates pursues are surely welcome, but they are not bringing the re-birth the Pentagon desperately needs. Luckily, others seek to do what is needed.
Gates commands real respect. Against all odds, last year he and President Obama terminated the uber-expensive, underperforming F-22 fighter. This year, Gates seeks to end further production of the superfluous C-17 transport and kill off a second engine for the high cost, kluge-like F-35 "Joint Strike Fighter." Impressing many, he has also instructed the Pentagon to cut bureaucratic fat by $102 billion.
When you scratch the surface, it’s a little less impressive.
While Gates and Obama won that Titanic F-22 fight last year, they waffled on the C-17 and let 18 more be produced. This year, Gates says he means it on the C-17, but the C-17 porkers are laying in wait for him in the Senate where they have the votes, and the House C-17 porkers lust to tag along.
More problematic is Gates selection of the second F-35 engine to take a stand on. In 2009, the Government Accountability Office (GAO) repeated a previous internal DOD study saying the second engine, bought competitively, could save money. Nonetheless, Gates – now with Obama belatedly backing him – says he’ll get the bill vetoed if it endorses any competition between F-35 engines.
Gates’$102 billion reduction in overhead is a cumulative goal for five years, not one, and the bigger savings don’t arrive until the elusive (may-never-happen) out-years. This will be after Gates, maybe even Obama, is long gone. The first year savings ($7 billion) is a puny 1.2 percent of the 2012 Pentagon spending plan. The public schedule includes no savings in the next fiscal year, the one for 2011 that doesn’t even start until next October.
According to an internal Defense Business Board study, DOD spends 40 percent of its funds on overhead. If the whole $102 billion is saved, and if it all comes out of overhead (which is not the plan), DOD spending for bureaucratic fat will be reduced only 8.5 percent. The administrative bloat would go down, but only from 40 percent to 37 percent of total DOD spending.
Similar timidity and procrastination is recommended by the Chairman of the House Armed Services Committee, Congressman Ike Skelton, D-MO. Having finished shepherding the 2011 DOD authorization bill through the House of Representatives last month, Skelton now announces that next year will he look at saving money. The only sum he would identify is "X amount." Expect little to nothing from this diffidence, and you will not be disappointed.
Others are less timid. Congressman Barney Frank, D-MA, has put together an alternative DOD budget plan to reduce spending there by $1 Trillion over ten years. He has logic on his side: since 2000, the Pentagon’s "base" budget has gone up by the same amount ($1 Trillion), in addition to the $1 Trillion also spent on the wars in Iraq and Afghanistan.
Remarkably, two smart, tough Republicans have associated themselves with Congressman Frank, Walter Jones of North Carolina and Ron Paul of Texas. That Frank has this bipartisan support in this hyper-partisan age indicates that real change is occurring.
Another proposal, auguring even more fundamental change, has been offered. The proposal suggests a broad political coalition encompassing progressive Democrats, conservative Republicans, and government fundamentalists, such as libertarians and tea baggers.
Senator Tom Coburn, R-OK, is a member of President Obama’s National Commission on Fiscal Responsibility and Reform to control all federal spending. As the co-chair of the commission’s panel on discretionary spending, which includes the DOD budget, Coburn has sent a pretty interesting, eight page letter to all commission members. (Find it at Coburn’s website.)
Coburn outlines how our military forces have become smaller, older, and less ready to fight at the highest level of Pentagon spending – adjusted for inflation – since the end of World War II. (Both Republican and Democratic presidents, including Ronald Reagan and Barack Obama, have made it so, with the eager assistance of Congress.) Coburn offers several recommendations to reverse the corrosive tide, but the central theme is to freeze the defense budget unless and until it can pass an audit.
Pass an audit? What does that have to do with it?
Today, the Pentagon’s comprehension of its own material resources is a deep, dark void. It can’t track its own money; it cooks its own books to make them appear in balance, and then it makes new spending decisions based on the phony data. Nor can it accurately track its own property, even supplies to the troops fighting in Afghanistan. There are three decades of GAO and DOD Inspector General reports on this mess.
Coburn has the good sense to understand that you can’t fix a system you can’t measure and to have lost patience with empty promises that it will all be fixed – someday.
Imagine not just a Pentagon that can accurately track what it pays to contractors and every weapon program is audited regularly; imagine a Pentagon where the purposefully biased estimates for the cost, schedule, and performance of a new weapon are laughed out of the building until they get an auditable, accountable, independent assessment of what it will really cost, what it will actually do, and when it truly might arrive.
Moreover, the Coburn proposal makes the Barney Frank proposal plausible. A trillion dollars less spent as it is now would be the worst of both worlds, but that much less spent in the manner Coburn suggests, with competence and accountability, is the change everyone talks about but can’t produce.
Business as usual at the Pentagon may be about to meet its worst nightmare: a broad political coalition to put its undisciplined spending under severe restraint and to fundamentally reform the way it makes decisions.
WINSLOW T. WHEELER spent 31 years working on Capitol Hill with senators from both political parties and the Government Accountability Office, specializing in national security affairs. Currently, he directs the Straus Military Reform Project of the Center for Defense Information in Washington. He is author of The Wastrels of Defense and the editor of a new anthology: ‘America’s Defense Meltdown: Pentagon Reform for President Obama and the New Congress’.