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DoD plans overhead cuts

Aug. 26, 2014 - 11:33AM   |  
By ANDREW TILGHMAN   |   Comments
Robert Work
DoD planners are putting together a new round of budget cuts to support agencies, said Deputy Defense Secretary Robert Work. (Rob Curtis/Staff)

The Pentagon is gearing up a new effort to cut overhead and administrative costs. Specifically, the initiative will target the “Fourth Estate” — everything other than the military services and combatant commands, according to Deputy Defense Secretary Robert Work.

Targeted components for cuts include the Office of the Secretary of Defense and the 16 defense agencies, including the Tricare Management Agency and the Defense Logistics Agency. Those account for about 20 percent of the overall defense budget.

While the Pentagon has mounted efficiency reviews in the past, this one will be the first to directly involve private-sector experts from the Defense Business Board and the not-for-profit Business Executives for National Security, Work said in an interview.

Work, a retired Marine colonel who took over the Pentagon’s No. 2 position in May, said he understands why many service members are anxious about the future. As defense spending has begun to fall, training has slowed, falling force levels are making promotions harder and the entire compensation system is under review.

He said the darkest cloud hanging over DoD remains the spending caps known as sequestration. A deal on Capitol Hill last year offered a two-year fix, but with only about 13 months until that deal expires in fiscal 2016, the threat of sequestration remains.

At that point, the doomsday scenarios discussed — an urgent shrink of the Army and Marine Corps, aircraft carriers and fighter jets — may be back on the table.

“The members of the services are asking, ‘Can I continue to serve? Will I still have a job in the armed services?’ That’s the first level of uncertainty ... and we’re unable to tell them exactly how far down we’ll go because we hope that sequestration will not be triggered.”

If the budget squeeze does tighten again in 2016, “that is going to be even more of a problem,” he said.

How likely is that to happen? Nobody knows because Congress is unpredictable. For now, the Pentagon is drawing up spending plans that exceed the sequestration budget caps. However, he added, military leaders need to have a Plan B in case Congress does nothing. “We have to prepare for the eventuality that” the sequestration law remains on the books.

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CompensationWork said it's unclear whether the Pentagon will propose further cuts to military compensation. The top brass wants to curb personnel cost growth because it could limit new investment in training, weapons systems and cutting-edge technology. W

In March of last year, when sequestration took effect, “readiness went to hell,” Work said bluntly.

The two-year fix that Congress approved last year has allowed the services to resume training and maintenance, for the most part.

Even so, Work said, “We are in a readiness trough, without question. We’re not as deep as we would have been … Congress’ help in that regard really prevented a crisis.”

For now, there is enough money to fully fund units preparing for deployment and those designated as first responders, like the Army’s 82nd Airborne Division.

“Where we have a problem is in our surge forces,” Work said. “We are taking significant risk.”

Yet the deputy secretary avoids the term “tiered readiness,” which for many senior officers negatively evokes the post-Vietnam era and concerns of a “hollow force.”

“Instead of tiered readiness, I’d say ‘time-phased’ readiness, where we don’t have enough money to make sure everyone is C-1 or C-2 at any given time,” he said, referring to the internal readiness scale of “capability levels,” which ranges from C-1 for units fully ready for a wartime mission, to C-5 for units that are not trained or equipped properly for a deployment.

“Think of it as a conveyor belt. The guys at the top of the conveyor belt are the guys out on deployment,” he said.

Tension in Europe

Work said that if tensions between Russia and the West continue to mount, the Pentagon this fall may launch a far-reaching review of the U.S. force levels and military footprint in Europe.

Current efforts to ramp up readiness in Europe — which include deployments of some small U.S. units closer to the Russian border — are a temporary solution to what may be a long-term crisis.

A “program review” could come this fall as DoD prepares its annual budget request for submission early next year. Military leaders may consider fundamental questions about U.S. troop levels in Europe and how they should be positioned across the continent.

“Depending on how [the crisis] plays out, we would take a look in the [fiscal 2016 budget] and say … ‘Do we have to have more rotational forces in Europe than we have otherwise figured we were going to have? Should we station different types of forces in Europe?’ All those things would be on the table,” Work said.■

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