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Monday - Friday, 4-7 p.m.
In Depth with Francis Rose features daily interviews with top government executives and contractors. Listen live from 4 to 7 p.m. or download his archived interviews below.
Are recent cuts to DoD programs just the beginning?
Tuesday - 8/17/2010, 4:17pm EDT
Federal News Radio
The Pentagon has been working on reforming the way it does business, and Secretary Robert Gates has been at the forefront of those efforts.
Despite the fact that Gates recently announced he will be leaving before the 2012 elections, he is pushing forward with a variety of reforms in the hopes of saving billions of dollars.
The cuts really began in April, 2009, and mainly targeted weapons programs. This year, the focus shifted to bureaucracy and personnel, with one of most recent examples being the elimination of the U.S. Joint Forces Command in Virginia.
During a recent press conference, the Secretary explained why such cuts are necessary, as well as his plans for 2012.
Both attended a private briefing at the Pentagon with Secretary Gates last week.
Eaglen explains why he is pushing for so many changes.
"[He wants to] funnel that money back into military modernization, meaning the purchase of next generation systems for the military. That is because the Secretary has asked for, and received, a commitment from the President and OMB for a one percent real growth defense top line over the next several years, but he believes two to three percent growth is what's actually needed to pay the modernization bill. He's not going to get any more from the White House. He's charging the services to get creative and find that funding from within."
Some analysts worry that it is too much too soon, while others contend it might not be enough. Wheeler cites one of the proposals -- a 10 percent reduction per year, for three years, in support contractors -- and wonders if changes like this will be enough.
"The GAO put out a report a few weeks ago . . . that for most major Defense weapons programs, we have numbers for their costs, but we have very little confidence that those numbers are accurate. For the Joint Strike Fighter, for example, we have a new estimate of $358 billion for the 2,500 airplane buy, but anybody who's been watching that program knows that's going to do nothing but go up. Secretary Gates has laid out some useful ideas on reducing some of the bloat in the waist of the [Defense] budget. He's got a long way to go, however, to get a real handle on it. I'm fully in support of what he's doing, but he needs to do a lot more."
Additionally, he says DoD needs to look at other options for saving money, as well.
"It's certainly true that manpower costs are an unsustainable path in the [DoD] budget, but it's also true that hardware is on an unsustainable path. You will not solve the hardware problem by simply throwing more money at it. Internally transferring money from overhead to hardware in the Department of Defense will not solve the problem."
Eaglen says the burgeoning budget has been an ongoing problem for DoD for decades, and current budget development methodology isn't working.
"Most people dismiss the Future Years Defense Plan (FYDP) budget projections -- the out year projections -- as silly. The cost of doing business within [DoD] outpaces inflation by anywhere from 3 to 8 percent historically on average per year. Add into that the annual underfunding of everything, particularly programs and major weapons systems, then add to that the cost of doing business, particularly on the personnel side [which] outpaces inflation every year, but the budget doesn't go up. . . . So what you have is internal imbalances within the Defense budget that are enduring over time and that are going to cause major problems going forward."
Funding reviews of programs and personnel will continue until November, at which point Secretary Gates will look them over for inclusion of the 2012 budget submission. Eaglen posits that there could be more dramatic changes to come.
"I do think that this is an ongoing narrative and conversation that's not going to end. [Gates] has been giving these wink and nod previews, saying that the services have been charged to get creative -- and they really are going to. They're coming up with things I don't think we have even dreamed of yet, and that could be quite shocking when they hit the Hill come February."