Tougher Budget, So Batten Hatches

UPDATED: Gates To Ask Congress To Temper Pay, Benefit Increases

Tomorrow's speech by Defense Secretary Robert Gates at the Eisenhower Library will mark another milestone in his continuing effort to remake the U.S. military, this time with a renewed emphasis on how tight money is and how Congress must stop ruining the Pentagon's best laid plans by inserting unwanted funding. One of the biggest burdens Congress places on the Pentagon budget is the pay raise they insist on giving troops every year, along with benefits increases. He'll also press the four services and the rest of the Pentagon to tighten up their own management.

When Gates told the Navy that major changes are coming in a Monday speech before the Navy League, he signaled that tomorrow's speech would turn the fires up under Congress.

"In this year’s budget submission, the Department has asked to end funding for an extra engine for the Joint Strike Fighter as well as to cease production of the C-17 cargo aircraft – two decisions supported by the services and reams of analysis. As we speak, a fight is on to keep the Congress from putting the extra engine and more C-17s back in the budget –- at an unnecessary potential cost to the taxpayers of billions of dollars over the next few years. The issues surrounding political will and the Defense budget are ones I will discuss in more detail at the Eisenhower Library on Saturday," he said.

Congress, of course, will act in its own interests, reminding the Pentagon that it possesses the constitutional right to decide how much money is spent and on what it is spent. But Gates has proven masterful at undercutting the Hill and taking away the traditional trade space in the budget wars.

He will need that mastery as there are persistent rumors that Gates is compiling a list of big-hit programs to kill and thus present a package of significant, long-term cost savings as he did last April 6. Several senior Pentagon officials said much of this renewed pressure is being driven by the early budget discussions for the 2012-2013 budgets that are being built as we write. One of them said the services must really clamp down on internal cost growth.

A clear signal of just what may come down the lane was offered Thursday by Stephen Dagget, a Congressional Research Service defense budget expert. Daggett briefed the White House's National Commission on Fiscal Responsibility and Reform.

Most importantly, Daggett notes that procurement is the traditional "bill payer" in past economic declines. His first briefing slide lays out some of the options:

Growing costs require difficult choices just to stay in place;
No real growth or declining budgets would require trade-offs:
Limit personnel & O&M costs? DOD has tried.
Trim weapons procurement? Usual answer.
Reconsider size of the force? May be on the table, but requires adjustments in strategy.

Air Force Secretary Michael Donley, often seen as the service leader closest to Gates, sounded the budget call in remarks on Capitol Hill yesterday. In a zero sum budget environment, he said "the biggest threat to the defense budget is internal cost growth."

Meanwhile, Gates' clarion call to the Navy to scale back its carrier and to rethink its submarine force at the Navy League's annual conference was either ignored -- in traditional Navy fashion -- or deliberately rebuffed the day after.

"The Navy remains firmly committed to maintaining a force of 11 carriers for the next three decades," Sean Stackley, head of Navy acquisition, told the Senate Armed Services seapower subcommittee.

The country needs carriers, he said, and the number is based on "world-wide presence requirements, surge availability, training and exercise," etcetera.

As the budget net draws tighter, expect the services to try and rip and tear the net, or to try and sneak money through. Gates knows this is coming and he told the Navy League, and the Navy, that they need to keep their eye on the nation's interests. "Even so, it is important to remember that, as the wars recede, money will be required to reset the Army and Marine Corps, which have borne the brunt of the conflicts. And there will continue to be long-term -– and inviolable –- costs associated with taking care of our troops and their families," he said, adding that there will be no increase in the shipbuilding budget.