DoD Buzz

Budget 'Catastrophe' Means DoD Cuts


The United States stands on "the brink of catastrophe" as the budget deficit keeps growing and national security spending must be a major part of the answer, former Sen. Pete Domenici told about 150 people on Capitol Hill today.

Domenici, speaking at an event organized by the Stimson Center, was moderately upbeat for the long term budget situation saying he believed the solutions might come from the Senate. When two reporters asked him if he was referring to the Continuing Resolution meant to complete funding for fiscal 2011, he said he was speaking on a broad basis about the budget deficit.

While it may be tempting to refer to World War II and other great cataclysms when US defense spending grew enormously, Domenici said today is different. Unlike the war, when huge bond drives sustained US spending and ensured that our debt was held internally, today China and other countries own significant portions of our debt. "I'm here today because all that is different. We don't own our own debt," he said. Domenici appeared as the co-chair of the Bipartisan Policy Center's Debt Reduction Task Force.

And an expert panel appearing with Domenici made clear the obstacles to rebuilding the defense budget to shrink how much the Pentagon spends, while keeping the military effective enough to ensure the U.S. can still achieve what it wants around the world.

It starts at the top. Defense Secretary Robert Gates met last summer with David Berteau, a defense expert at the Center for Strategic and International Studies, and Stimson Center's Gordon Adams, who also teaches at American University. They pressed the case that the Pentagon budget must shrink as part of the effort to reduce the deficit. Gates told them he was "not prepared to concede that" defense had to be part of budget solution.

The former head of the Defense Business Board, Michael Bayer, noted --as Defense Secretary Robert Gates has -- that most money at DoD goes to personnel and benefits. Headquarters have grown enormously over the past few years, with 67,000 thousand senior officers and civilians added to the ranks. They cost an average of $220,000 a year. And Tricare, pay raises and other benefits comprise a huge component of the defense budget. While corporations routinely target the most expensive part of their operations -- personnel and benefits -- neither the Pentagon nor Congress are comfortable doing this. Bayer offered the Army as an example of where other personnel costs have grown.

On Sept. 10, 2001, the Army had a budget of roughly $68 billion. That has grown to $220 billion, and more than $150 billion of that goes to pay contractors, Bayer said. And Berteau told the audience that this has not resulted in an Army with more people ready to fight. Some 50 percent of Army billets are labeled non-deployable so the service cannot put them in harm's way.

And cutting those costs will not be technically easy for DoD. Berteau said that the current DoD leadership -- in uniform and out -- lacks the skills and institutional knowledge to cut personnel and benefits. "Those skills don't exist there anymore," he said.

Best line of the seminar came from Berteau, speaking about the Navy and Air Force's relations as they try to craft an Air-Sea Battle strategy: "Their idea of a joint study is two studies with a joint introduction."

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