Defense Secretary Gates Sounds Alarm on Military Spending, Advocates Cuts
May 9th, 2010
The nation’s top civilian defense official has sounded his loudest alarm yet on military spending, calling for an across-the-board review of all Pentagon spending and operations.
In a Saturday speech at the Eisenhower Presidential Library in Abilene, Kan., Defense Secretary Robert Gates put the defense establishment and Congress on notice that the military must cut overhead, find a way to rein in explosive growth in medical spending and other personnel costs, and curb the exponentially rising costs of modern weapons systems.
Gates said that given current tough economic conditions, and given the typical annual spending increase of 2 percent to 3 percent above inflation needed to sustain readiness, “it is highly unlikely that we will achieve the real growth rates necessary to sustain the current force structure.”
Specifically and in the short term, Gates said he has directed every military service, command and staff and Pentagon department to take “a hard, unsparing look at how they operate — in substance and style alike” in preparing for the 2012 budget submission to Congress.
“The goal is to cut our overhead costs and transfer those savings to force structure and modernization within the programmed budget,” he said. “In other words, to convert sufficient ‘tail’ to ‘tooth’ to provide the equivalent of roughly 2 to 3 percent real growth — resources needed to sustain America’s combat power at a time of war and make investments to prepare for an uncertain future.
“Simply taking a few percent off the top of everything on a one-time basis will not do,” Gates said. “These savings must stem from root-and-branch changes that can be sustained and added to over time.”
Based on the 2011 request of $550 billion for spending not directly related to the wars in Iraq and Afghanistan, Gates’ call for spending cuts would have the services collectively take about $11 billion to $16.5 billion out of hide in the 2012 budget and apply it to warfighting force structure and modernization.
“Going forward,” Gates said, such overhead savings might be realized through:
• Reducing redundant “headquarters and secretariats” that do not directly support “real-world needs and missions.”
• Converting executive or flag-officer billets to lower grades to “create a flatter, more effective, and less costly organization.”
• Combining or eliminating commands or organizations that “conduct repetitive or overlapping functions, whether in logistics, intelligence, policy, or anything else.”
The speech ended a week in which Gates fired a shot across the Navy’s bow over its spending habits. During a trade show speech in Washington, D.C., he said the sea service can’t afford to keep buying hugely expensive ships at the expense of what he views as more efficient unmanned weapons systems.
At that same trade show, Chief of Naval Operations Adm. Gary Roughead warned that the sea services are being “challenged” by rising personnel costs. Marine Corps Commandant Gen. James Conway noted that while spending on care for wounded sailors and Marines is critical, there’s been no adjustment in health care costs for two decades.
“Unless it’s addressed, it’ll just eat our lunch,” Conway said.
Army Chief of Staff Gen. George Casey expressed similar concerns about rising personnel costs while speaking with reporters May 6.
“That’s my challenge,” Casey said, “finding the right balance between an Army that’s large enough to meet the demand and where the personnel costs meet the needs of the soldiers, civilians and families and at the same time don’t divert so much away from our ability to train, equip and support. And I don’t have an answer on that yet.”
Gates shares those concerns and indicated that rising health care costs top the list. “Leaving aside the sacred obligation we have to America’s wounded warriors, health care costs are eating the Defense Department alive, rising from $19 billion a decade ago to $50 billion — roughly the entire foreign affairs and assistance budget of the State Department,” Gates said.
Gates noted the ability of working-age military retirees who earn full-time salaries on top of their full military pensions to opt for Tricare health benefits, despite having available health coverage through their employer, “with the taxpayer picking up most of the tab.”
Gates said resistance among lawmakers to allowing Tricare fee increases “stems from an admirable sentiment” to care for troops and their families.
But he noted that such resistance, as well as Congress’s 11-year streak of adding half a percentage point to the annual military pay raise, benefits “a group that is older, more likely to have spouses and children, and thus far costlier to recruit, retain, house, and care for than the Eisenhower-era military that relied on the draft of young single men to fill out its ranks.”
Gates said he recognizes that the changes he’s calling for will ruffle feathers on Capitol Hill and within his Pentagon but said that the nation has come to a crossroads with regard to defense spending that demands action.
“What is required going forward is not more study,” Gates said. “Nor do we need more legislation. It is not a great mystery what needs to change. What it takes is the political will and willingness ... to make hard choices — choices that will displease powerful people both inside the Pentagon and out.”
Staff writers Philip Ewing and Joe Gould contributed to this report.