Targeting business activities and overhead, which by some estimates account for upward of 40 percent of the Pentagon's budget, will make the department more responsive to service members on the battlefield while freeing up needed funds for the war-fighting effort, Pentagon comptroller Robert Hale said in an interview. (Chris Maddaloni / Staff)
Pentagon leaders will need to cut staff, streamline back-end support functions such as finance and accounting and eliminate low-priority programs to meet Secretary Robert Gates' budget savings mandate, his top fiscal adviser said last week.
The Defense Department hopes to generate about $68 billion in savings during the next five years by cutting support services and making other operational improvements. Those savings, along with another $34 billion in cuts to military forces and weapon system procurements, will be reinvested in military programs.
Targeting business activities and overhead, which by some estimates account for upward of 40 percent of the Pentagon's budget, will make the department more responsive to service members on the battlefield while freeing up needed funds for the war-fighting effort, Pentagon comptroller Robert Hale said in an interview.
"They're important. I don't want to suggest we can do without them. We wouldn't fight and win without them. But we hope that we can find ways to do them more efficiently or to eliminate lower-priority programs in order to have more funds for the forces and modernization," Hale said.
Defense agencies must find $1 billion in savings overall for 2012 and $17 billion through 2016. Each of the three services must generate $2 billion in savings for 2012 and $28.3 billion through 2016. Overall, the combined five-year savings equal $102 billion, or roughly 3.4 percent of the Pentagon's requested appropriations.
Pentagon agencies that perform back-office functions such as financing and accounting will be expected to find opportunities for automating services to make them more efficient and less costly to run, Hale said. But efficiencies alone won't generate the level of savings the Pentagon is requiring.
"We won't find savings of this magnitude from true efficiencies. We will need to look for some things we … can just not do," Hale said.
Some programs may be on the chopping block — even ones such as caring for wounded warriors — if leaders determine they are duplicative and could be consolidated or otherwise eliminated, he said.
"We need to look and see if we've got the most efficient mix to deliver that care. The care's critical, but we want to do it in a way that minimizes taxpayer needs," he said.
About 40 percent of the Pentagon's budget goes to pay and benefits for civilian employees and military members. To achieve major and lasting savings, Defense agencies and services will need to consider options for reducing management layers, shrinking staffs and cutting out overlapping or redundant divisions, Hale said.
"If there are going to be significant reductions we can then transfer into forces, there will have to be people reductions or people reallocations," he said.
Hale could not provide details on specific cuts that may be ordered. Defense agencies and services won't submit detailed plans on their proposed cuts until the end of July; those plans then will be reviewed by Hale and other Pentagon leaders, as well as by the White House, before becoming part of the official 2012 budget request submitted to Congress in February.
Raymond DuBois, who held numerous Pentagon leadership positions during the previous Bush administration, said streamlining headquarter divisions and even downgrading military officer ranks would set an important tone that the Pentagon is serious about rooting out wasteful spending and improving how the department functions.
"If I were secretary of the Army, I'd start with my own headquarters. I'd set an example. Why do we have a deputy chief of staff for personnel — a three-star general with his own staff — and the assistant secretary of the Army for manpower and reserve affairs with his own or her own staff? I would suggest that we should combine them," DuBois said.
"You could eliminate decision layers, which is one of the biggest problems that the military has had … [and] combine staff, and save time and money and personnel."
In addition to requiring agencies and services to scrub their books, the Pentagon is standing up teams to generate savings ideas that cut across jurisdictional boundaries. The teams will focus on six areas: broad organizational issues, personnel and health care, logistics, acquisition practices, administrative support, and fostering a culture of savings within the department.
The recommendations, due to the secretary in late September or early October, will be included in the budget proposal, Hale said.
DuBois said it's unclear how receptive Congress will be to the proposed cuts. Lawmakers consistently provide service members with higher pay raises than requested and have blocked attempts to increase military health insurance premiums and co-payments.
"You have a secretary of Defense now with enormous political capital, both within the building and in terms of the Congress. Having said that, when it comes to appropriations, Congress is in the front seat, and the secretary of Defense is in the back seat," he said. å