After two years in office, Chuck Hagel is stepping down as US defense secretary, deserving credit for managing budget challenges, an Afghanistan drawdown and ongoing global operations, and for launching new reform efforts.
Throughout his tenure, he pressed the case that budget and strategic change were vital. He directed cuts to Pentagon staff and also endorsed Deputy Secretary Bob Work¹s drive to develop new technologies, systems and concepts to counter advances by potential adversaries. Even Hagel¹s toughest critics lauded his service to the nation that included a tour in Vietnam, where he was twice wounded in action, and a dozen years as a Nebraska senator.
Meanwhile, across the Potomac, Hagel¹s former deputy and current nominee for secretary, Ash Carter, was busy readying for Senate confirmation this week as the Obama administration submits its 2016 request for $585 billion in defense funding. The White House will ask for $534 billion for the base DoD budget as well as another $51 billion to cover efforts to support Afghan forces and replace or refurbish war-worn equipment.
The good news is Carter is universally seen as both qualified and well-suited to become the nation¹s 25th defense secretary.
Nevertheless, the budget will be a battle. While some see a Republican-controlled Congress as good news for defense, others are skeptical as there is no consensus on future military spending while the White House seeks $35 billion more for DoD than current budget caps will allow.
Top Republican leaders have not made a priority of defense spending, and many GOP rank and file want to cut taxes and are loathe to increase defense spending, which would greenlight Obama to increase domestic spending. This long-running standoff will only be resolved if House and Senate budget leaders forge another compromise. While automatic spending cuts would trigger at the end of the year, they must make a deal soon so House and Senate authorization and appropriations committees have the necessary budget clarity to do their work.
DoD officials say they need more money to cover rising costs, weapons development and new technology investment, such as starting work on a sixth-generation fighter and improving readiness.
With the budget outlook cloudy, DoD is working to save money. While troops, civil service and civilian contractor levels all rose after 9-11, so far it is troops and contractors who have faced the sharpest cuts.
This is where the Defense Business Board — the panel that advises the defense secretary on business practices — has focused, arguing that cutting civilian personnel and increasing outsourcing of payroll and IT functions, among other things, would save $125 billion over six years starting in 2016.
DoD must set ambitious goals to become more efficient, but saving money is tough work. Throughout the Obama administration, considerable effort has been devoted to wringing as much efficiency as possible from defense operations.
The Pentagon can and must learn good ideas from the private sector. But while leading corporations can move fast in making sweeping changes, DoD is a public institution that is one of the world¹s largest organizations.
Virtually any decision has political implications and no big move is accomplished quickly nor easily.
Like changes to military compensation, which is a key issue where DoD has sought savings. In a bid to find a way forward in this politically charged area, Congress two years ago mandated the Military Compensation and Retirement Modernization Commission to identify ways to trim military compensation costs. The nine-member panel presented its recommendations last week and if all of 15 were adopted, DoD would up to $10 billion a year. They are highly thoughtful proposals, but each is fraught with challenges to convince service members and retirees and their representatives to embrace them.
The trouble with savings initiatives is that once introduced, spending tends to be cut in anticipation that efficiencies will make up the difference. This is tricky business. The week before the budget release, some on Capitol Hill suggested that if DoD can save that much each year, it clearly doesn¹t need more money from Congress.
Once in office, among Carter¹s top challenges will be building internal and external political support and smart policies to drive overdue changes that are lasting and yield realistic, reliable savings.