Hagel proposes fundamental Pentagon spending changes | USA Today

By: Tom Vanden Brook

WASHINGTON — Defense Secretary Chuck Hagel announced Wednesday his intent to “reform and reshape” the military — from paying personnel to buying weapons — to deal with deep budget cuts the Pentagon faces.

Hagel’s speech at the National Defense University was billed by the Pentagon as his first major policy address. It comes as the Pentagon pares $41 billion from its $600 billion budget forced by automatic budget cuts known as sequestration and about $500 billion more over the next decade if Congress and the White House don’t agree on a plan to reduce the federal deficit.

“This effort will by necessity consider big choices that could lead to fundamental change and a further prioritization of the use of our resources,” Hagel said. “Change that involves not just tweaking or chipping away at existing structures or practices but where necessary fashioning entirely new ones that are better suited to 21st-century challenges and initiatives.”

Hagel’s speech, however, lacked specific details about the type of cuts he’d make, said Todd Harrison, a military budget expert at the non-partisan Center for Strategic and Budgetary Assessments. Hagel did say the cuts could be done and quality maintained — a stance his predecessor, Leon Panetta, refused to take.

“He used the speech to frame the questions,” Harrison said of Hagel. “He stopped well short of providing any answers.”

Hagel’s predecessors also have targeted runaway spending on weapons systems and growth in personnel costs with limited success. Former Defense secretary Robert Gates killed plans for the Army’s suite of new ground-combat vehicles and the Marines’ landing craft and capped the purchase of the Air Force’s F-22 fighter. Those actions happened after billions had already been spent.

Personnel costs, particularly benefits, have continued to rise at unsustainable levels. Harrison has noted that personnel costs are growing so fast that they will consume the entire Pentagon budget by 2039.

If Hagel is serious about military entitlement reform, Harrison said, he could propose changes that trade health care benefits for something personnel value even more: higher pay.

Another Gates initiative, reducing the number of generals and admirals, appears to have been stymied as well. The ranks of three- and four-star officers has swelled by more than 100 since 2001. Gates called for a cut of 50 of them in 2010, but Hagel, in his speech, indicated little progress has been made.

“Today the operational forces of the military — measured in battalions, ship and aircraft wings — have shrunk dramatically since the Cold War era,” Hagel said. “Yet the three- and four-star command and support structures sitting atop these smaller fighting forces have stayed intact, with minor exceptions, and in some cases, they are actually increasing in size and rank.”

President Obama chose Hagel, a Vietnam-war veteran and two-term Senate Republican from Nebraska, in part because he supports Obama’s strategy of avoiding costly ground wars like those in Iraq and Afghanistan and to make tough budget choices. Hagel won Senate confirmation after a tough hearing in which Republicans questioned his support for Israel and opposition to Iran.

Hagel charged Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, and Deputy Defense Secretary Ashton Carter with leading a review of how the Pentagon will deal with its “strategic and fiscal challenges.”

Hagel noted that any serious attempt at change must confront the three main drivers of the Pentagon’s budget: weapons buying, compensation for troops and civilians, and overhead.

“Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel and develop replacements for aging weapons platforms will eventually crowd out spending on procurement, operations and readiness — the budget categories that enable the military to be and stay prepared,” he said.

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