DoD vows to become a leaner organization

Monday - 6/7/2010, 7:00am EDT

WFED's Jason Miller

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By Jason Miller
Executive Editor
Federal News Radio

After more than 15 years of expanding budgets, the Defense Department must face the same fiscal realities as most other agencies and become a much leaner organization.

Defense deputy secretary William Lynn announced some of the steps DoD plans to take over the next five years to reduce the bloating that comes from more than a decade of spending increases.

"In that kind of era, you will tend to find you developed over time [some] inefficiencies in the way you operate," says Lynn Friday during a press briefing at the Pentagon. "With 10 years of large increases, there will be efficiencies that can be found."

Lynn says DoD will transfer $100 billion over the next five years, starting in fiscal 2012 with a modestly aggressive goal of $7 billion, to mission areas that support the warfighter.

About two-thirds of the savings will come from the Pentagon's administrative and non-essential programs, while the other one-third will come from increased efficiencies in the warfighter programs, known as force structure and modernization accounts.

Lynn says non-essential programs make up about 40 percent of DoD's budget.

"The first and second of tracks clearly are about money and transferring money to force structure and modernization accounts," he says. "In the third track, money may be a byproduct of reducing staff or eliminating headquarters, but the primary goal is more agility and better operations. All of this is not just about the money, though money is important, this is an effort to operate within the budgets we have been given."

Lynn adds that DoD expects its budget to grow between 1-2 percent over the next five years, but it needs 2-to-3 percent growth to ensure it is fully supporting its warfighters and meeting its mission.

"If you are holding force structure constant, generally you need 2-to-3 percent real growth in order to service that force structure, refresh technology, recapitalize and modernize the force," he says. "Two-to-three percent proved over history and proved right, and what we are trying to do is get that 2-to-3 percent in the accounts needed without asking for an increase in the top line budget."

DoD will send guidance to all military services and component agencies for how to meet these goals. The Army, Navy and Air Force will be expected to transfer $2 billion each in 2012.

Lynn says every part of DoD is being asked to tighten their belts from the Office of the Secretary on down to the Combatant Commands.

Military services and component agencies have until July 31 to propose how they will save money in 2012. DoD then will review these submissions and send them to the White House as part of the 2012 budget request to Congress.

Lynn says DoD isn't stopping there either.

"There will be a cross-cutting departmental process to look for efficiencies," he says. "We have eight going on and this will be our ninth. We will focus on 6-or-7 groups looking at things like personnel policies, including medical costs Tricare, organizational restructuring, acquisition practices and logistics."

Staff from the Office of the Secretary will lead these cross-cutting groups. Lynn says DoD has tried to become more efficient in the past, but never to this extent. And the biggest difference is the services and component agencies can keep the savings they achieve, "giving them every incentive to find them."

"Most force structure and modernization accounts are in the services so that is where the money will be shifted," he says. "The fiscal situation is difficult to shift additional resources to anyone, including the defense so we feel it's our responsibility to go through this drill before asking for more resources."

DoD's decision to look for reductions comes after Secretary Robert Gates speech in May proposing ways to reduce military spending. And it comes after several lawmakers late last month called on President Obama to decrease the Pentagon's spending.

Reps. Barney Frank (D-Mass.), Ron Paul (R-Texas), and Walter Jones (R-N.C.), along with Sen. Ron Wyden (D-Ore.) wrote a letter to National Commission on Fiscal Responsibility and Reform asking to reduce military spending as part of government efforts to address the budget deficit.

"It is very clear that a serious effort to cut wasteful government spending, cannot unilaterally exempt defense spending from scrutiny," Wyden says in a release. "For too long even the suggestion that Congress consider cuts to the Pentagon's budget has been attacked as contrary to national security, when the reality is that calling an expenditure "defense spending" does not mean that it actually contributes to the national defense. Rather we should be scrutinizing military programs to make sure that taxpayer dollars are being spent efficiently and are going to the programs that will best support the troops and protect national security."

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