Gates Wants $100 Billion: Why Now?

The cost-savings and overhead reduction initiative Secretary of Defense Robert Gates is pushing has industry listening, and it only makes sense.  Does the Secretary see his legacy in play?  Perhaps.

After a decade of record-high defense spending, a spending downturn is all but inevitable, barring an impending war with Iran or having to back up Japan or South Korea in a scuffle with the North.

The heart of the matter is an excess in defense industrial capacity which has accumulated as a natural consequence of ten-years worth of increased defense spending.  

Stick A Fork In JFCOM?

The Defense Business Board has recommended U.S. Joint Forces Command be done away with.

Similarly, the DBB has also targeted elements of the Office of the Secretary of Defense itself, which has an approximate head count of 5000-plus and spends about $5.5 billion per year.

It will be interesting to see how this plays out, but it’s hard to envision anything so radical as the demise of Joint Forces Command.  After all, the intellectual opposite of “not in my backyard” is “not in my district.”

Say No to NATO?

Let’s see: Gates wants to cut $100 billion from the defense budget over the FYDP.  Ron Paul and Barney Frank want to cut $1 trillion from the defense budget over 10 years.

How can such things be done?  With great difficulty.  Such difficulty could include having the U.S. back away from its current funding for security free-riders (or nearly free-riders) such as many of those in NATO.

Here’s the money line from the link: “America’s membership in NATO is supposed to protect America, not make other states more secure by increasing the risk to Americans.”

It’s impossible to argue with that statement.

Cutting Capability To Create Strength?

The guidance for the services to come up with $2 billion in cuts for the FY2012 budget has been met with hosannas from the Secretary of the Army John McHugh.

The alleged carrot in this is that the services are supposed to be allowed to keep some of the savings.  I’m not sure how that would work because when Congress appropriates funds, it’s intended to go towards a particular use, and reapplying funding towards other programs is something Congress has become less and less enamored with through the years.  That’s why they keep lowering the threshold for the “reprogramming” funds from one program to another.

BTW,whatever happened to spending our way to prosperity?!

Too bad OSD didn’t come up with a–let’s say $5 billion bogey.  Oh, they did, but that’s two more years out, eh?  I guess then the Army will start to get really strong.

Gates Stares Down Congress Over Air Force Funding

It ain’t just the Air Force but it is about funding.

The pressure is no doubt on the Secretary to come up with something analagous to the peace dividend of the 1990s.  I’m sure he’s thinking about his legacy, but while budgets start with the services, OSD is a gigantic pass-through.

If OSD didn’t ‘fix’ the services’ requests, where would OSD’s value be?  But ‘fixing’ is almost always nibbling around the margins.  There are exceptions, but they prove the rule.

Those who really own the budget are Congress and the administration.

A more plausible approach for the Secretary (in my mind, anyway)–which would still be tilting at windmills–would be to attempt to find and cut the fat out of the bureaucracy. Easy to say, difficult to do, but I can dream.

Want to know why we have $500 hammers?  That’s what it costs to write a mil-spec for a hammer, staff it through the bureaucracy, have a contractor come up with a proposal, get bids from multiple contractors, transport and issue the hammer to someone who will use it (who probably already has at least one suitable substitute), get a hand-receipt for said item, and then to conduct the safety training required for the hammer.  Exaggerating?  Only slightly.

Now turn that ‘hammer’ into an SSBN(X) and what do you get?  An $11 billion submarine.

The real imbalance is with overhead, that is, the bureaucracy–the staffs, the evaluators, safety, quality assurance, the power point.

The lesson is Steven Covey’s law of the farm…you reap what you sow.