The House passed the second Continuing Resolution of the year today, avoiding the direst scenario that had haunted many in American defense circles. But the CR’s passage does not mean anyone has avoided sequestration, as the mandatory budget cuts are known. And cutting $50 billion a year from the Pentagon budget for the next 10 years — which will happen under sequestration — will still mean serious cuts to what is, admittedly, the enormous defense bill we pay.

As many senior officials and lawmakers have pointed out, the manner in which these budget cuts must be implemented is the real problem. So far, it looks as if a program gets cut by 10 percent. Period. The Pentagon can’t make any choices about what to cut or when under sequestration and it can’t distribute the cuts across programs to lessen their effects or to ensure we can buy the weapons we really need without greatly increasing their units costs. Add to this congressional reluctance — born of fear — to cut troops’ pay and benefits and you face incredibly challenging strategic choices. I asked Loren Thompson, a member of our Board of Contributors, to detail how the military can cope with this. Read on. The Editor.

There is only one budget issue Democrats and Republicans now appear to agree on: cutting the defense budget. The Republican majority in the House wants to repeal Obamacare. The Democratic majority in the Senate wants to raise taxes a trillion dollars.

But, after wrangling over sequestration and tax increases for years, the two parties have backed into implicit agreement that military budgets can be cut. For instance, the fiscal 2014 budget resolution unveiled by House budget committee chairman and Republican spokesman Paul Ryan on March 12 would cut military outlays well below the 4 percent of gross domestic product that he and running mate Mitt Romney advocated during last year’s election campaign. Over a 10 year period, the Pentagon would get $2 trillion less than the previous Republican plan provided.

Democrats have also come around to defense cuts, now that they realize the alternative in any deficit-reduction scheme would be to slash entitlements. This emerging bipartisan consensus goes beyond mere numbers: both sides are determined to protect people in their defense cuts, meaning the generous benefits received by warfighters, veterans and their dependents. That is one entitlement that neither side looks willing to trim.

So while we are unlikely to see the “grand bargain” looked to for salvation by many in the Pentagon, one that reconciles Republican and Democratic philosophies of government in a balanced budget, we will see additional defense cuts in the future. In fact, the outlook is for steady erosion in the buying power of the Pentagon’s budget through the end of the decade, unless some big new threat comes along to rearrange political priorities.

If military leaders want to have any say in the fate of their services, then they need to identify what they can do without. The plaintive plea that Joint Chiefs Chairman Martin Dempsey keeps voicing in hearings, asking what missions Congress wants the military to give up, will never get a clear answer.

For its part, the Obama Administration has provided Pentagon planners with a template for cuts by unveiling its Asia-Pacific strategy last year. But that shift in strategic focus is so nebulous in its requirements that the administration proposed major cuts to the shipbuilding budget only a month after releasing its new strategy, which would appear to have required more ships. It is an open-ended pretext for reducing forward presence everywhere from Europe to Africa to the Middle East.

And the administration has given us a foreign policy to match. No big involvement in failed states like Libya and Syria, just small footprints using special forces and drones. It’s hard to argue for a bigger involvement given how the conflicts of the last decade turned out. With America on the road to energy independence, it will be increasingly difficult for Pentagon leaders to convince either party we need to secure Persian Gulf oil supplies. In this environment, it should be relatively easy for military planners to make cuts so long as they don’t commit the political sin of seeking to cut military pay and benefits. Granted, every analyst who looks at the compensation system comes to the same conclusion — we could cut pay and benefits without impairing the quality of the All Volunteer Force. But the political system won’t accept such cuts so the Pentagon is just wasting its time by trying.

The system is much more favorably disposed to cutting weapons. Despite all the conspiracy theories about how weapons makers manipulate Washington, the historical record shows that the Pentagon’s investment accounts have much less political protection than other types of military spending.

When former defense secretary Gates proposed a modest increase in the healthcare fees paid by warfighters, Congress was up in arms; when he killed the centerpiece of Army modernization — the Future Combat System — nobody noticed. Problem is, the administration has already spent four years following the path of least resistance by canceling or delaying weapons systems (as it acknowledged in its fiscal 2013 defense request). The Navy’s new destroyer and cruiser are gone. The Air Force’s F-22 fighter is gone. The Army’s next-generation air defense systems are gone. Chuck Hagel could go right on killing weapons programs for another four years, but by the end of his tenure America’s lead in military technology would be gone too. Besides, the Navy’s whole shipbuilding program amounts to barely 2 percent of the defense budget, so just cutting weapons won’t answer the mail on deficit reduction.

What the Pentagon needs is a way of cutting its people costs without running afoul of Congress or severely impairing readiness. One answer is to reduce headcount — not force structure, but the tens of thousands of uniform personnel who don’t contribute all that much to America’s military strength.

Three years ago, the Defense Business Board conducted a study that found 340,000 military personnel were engaged in performing “commercial” activities — activities not inherently governmental in nature. That’s as many uniform personnel as were deployed at the time. The same study found that after 10 years of fighting overseas, 40 percent of the force had never deployed. That doesn’t mean they weren’t doing useful things, but it does raise the question of why military personnel were being used.

Those military personnel cost a lot more than civilian workers or contractors. On a per capita basis, the business board estimated their average annual carrying cost at $160,000. That works out to $54 billion spent annually on employing uniform personnel in activities that civilians could perform. Unlike civilian workers, the board noted, military personnel could retire after 20 years of service and then collect generous benefits for the next four decades.

By substituting civilians for uniform personnel in these positions and downsizing the ranks of warfighters to those who are actually needed to fight wars, the Defense Department could reap sizable savings every year. It wouldn’t even need to adjust prevailing compensation rates to generate the savings, so long as it reduced the ranks of warfighters by replacing them with civilians in non-combat roles. It thus could cut the cost of military pay, healthcare and retirement while sidestepping a confrontation with Congress — and maybe avoid a divisive future debate about why personnel who never deployed get similar benefits to warfighters who repeatedly have been put in harms way.

Comments

  • robert_k

    What the author fails to take into consideration is the cost and infrastructure needed to convert these 340000 warfighters into businessmen. The majority of officers are sent to a graduate school prior to starting the commercial work. This adds an additional $50K – $100K to the cost of filling these positions with costly military personnel.

    http://www.defensenews.com/article/20120304/DEFFEAT05/303040004/War-Fighters-Not-Businessmen

  • bobbymike34

    I would describe myself as a ‘super-hawk’ when it comes to defense spending (My budget would be $1 trillion is was President) but am all for rational and reasonable savings and cuts of wasteful spending. The sequester is the wrong way to go about it and it could hurt military readiness and warfighting.
    The only thing I would add that with ten years of war we need to reset and modernize the force so for every dollar saved I would redirect 50 cents to S & T, R & D and new weapon systems.

  • laur

    Yes there is enormous fraud, waste & abuse in DOD, mostly in the areas of useless upper ranks who spend countless hours revising PowerPoint slides for anal generals who focus more on the font and color SNF less on the unnoticed lack of substantive content. All non war fighters well known for flying into combat zones once a month for the tax exclusion. This abuse has been addressed and possibly resolved but the point is there are far too many who reach a certain rank and have figured out how to game the system, contribute nothing but low morale, embarrassment and wasteful expenditures on things like top of the line office chairs and yet consistently receive promotion-gaining evaluations while never spending a day in an actual foxhole. This is a tragic byproduct of a career military. It seems to happen around the time of mid-major and E7 rank. Why was it so hard to find decent warriors above the rank of lieutenant colonel following 9/11. We end up with Sanchez in initial occupation Iraq? He was clueless, as was the ego maniac Franks who accepted the incompetent plans of his incompetent staff who thought GEN Clay’s Berlin was a good prototype, then declared victory,abandoned his troops to die in Iraq while he skipped back to Tampa to appropriate scarce & invaluable CENTCOM History Office resources in order to write his memoirs. As to your proposal to replace non-cost effective troops with civilians, know this: there were virtually no historical lessons from Desert Storm or of any experiences in the very unique mostly Muslim region of CENTCOM because the GS-14 assigned there for almost two decades had gotten away with doing as little as possible. He was untouchable as those involved in the State Dept. Benghazi tragedy. That’s what you get with GS civilians. And contractors-just look at how that desperate ploy turned D.C. into a boomtown. Finally, as for the rest of us little piggies who devoted most of our lives to a cause we believed in while getting “generous pay & benefits” we would welcome you to experience a large amount of that time in living conditions that would violate the lowest is Sec VIII standards, eating disgusting food (if at all), dealing with personal hygiene situations to be applauded for the incredible rate of white blood cell build up, complete loss of 1st & 4th Amendment rights, medieval medical & dental care (if at all), and then there,s the killing & dying part with the ever-present threat of capture, torture or an NBC attack. In all fairness, not all branches have it so bad but if you want any part of my physical or mental disabilities, I would gradually trade them for my “generous pay & benefits. The answer is never blanket punishment but better oversight & accountability, not to mention unrelenting enforcement of personal integrity and devotion to duty and the Oath of Office. Unfortunately, this is not a direction I see our society, culture or country going in.

  • PM

    The author’s claim that pay and compensation can be cutting without hurting the all-volunteer force is simply false. History has shown when these cuts occur, retention and morale are deeply affected. This happened as recently as the late 80’s and early 90’s. Congress had to subsequently undue the pay/compensation cutbacks because retention fell so signficantly. The author needs to do a better job of studying history before making misleading claims.

  • PM

    Also, the author needs to stop referring to military pay and benefits as “generous”, implying they are excessive. Those benefits are earned thru a career of hardships that the servicemember and family are subjected to, which the general population never has to experience. Clearly, the author is not aware of those hardships.

    • http://defense.aol.com/ Colin Clark

      Trust me, the author is aware of those hardships. But benefits such as Tricare for life are generous — by anyone’s definition. The country may agree that they are suitable, but they are generous. The fact that the general population no longer experiences those hardships is because we have an all-volunteer force. Giving those volunteers a flexible and reasonable package of pay and benefits should be shaped by our strategy, each services’ needs and the general economic climate. As we draw down from from Afghanistan, Special Forces troops will bear most of the combat risk, which I think should result in their being the best paid troops, along with folks who engage in cyber warfare. Cyber warriors can leave the military once they get a few certificates and earn a hell of a lot more money. Granted, they have challenges in the military that they won’t in the civilian world, but the lure of lucre will be hard to resist — especially in peace time.

      Colin Clark
      Editor
      AOL Defense

      • PM

        Colin, your comments validate my point. We have an all-volunteer force that assumes all the burden of wartime service and they need to be adequately compensated, as they are right now. Drastic cuts will undermine the all-volunteer force as has happened many times in the past. Also, military personnel costs are not exploding out of control, as many “analysts” have indicated. They make up roughly the same % of the DOD budget (30%) as they did 30 years ago. In particular, military health care costs are not out of control (despite 2 wars in the last 10 years). DOD has underspent its health care budget over the last 3 years by $2.8 billion, because (by their own admission) health care costs have not risen at the expected rate. The whole argument to whack personnel costs is both reckless and unnecessary.

      • http://www.facebook.com/msgpcastle Paul Castle

        You might be the edior of something but you do not understand that the military not only puts most soldiers in harms way but does not compensate immediately as well as say the secret service. Any benefit a soldier (meaning all) receives is earnedwheather you like it or not.

      • http://www.facebook.com/joe.porter.33 Joe Porter

        Colin, there is no Tricare for life for service members, you need to do a little research your self sir, so no its not generous, and tricare is paid for from the meager salary enlisted and junior officers recieve

        • http://defense.aol.com/ Colin Clark

          Can’t let you get away with that. Here’s the official military website: http://www.tricare.mil/tfl

  • Tholzel

    “The plaintive plea that Joint Chiefs Chairman Martin Dempsey keeps voicing in hearings, asking what missions Congress wants the military to give up, will never get a clear answer.”
    EXACTLY like the Democrast when, after agreeing that, yes, some cuts are necessary, absolutely will not say WHICH cuts.

  • jack

    I Have this crazy idea that maybe we should make soldiers who do not want to stay in have the ability to leave rather than cutting pay or benefits and looking for ways to cut people who want to stay in.

  • cassis

    Test

  • cassis

    BRAVO to poster PM- and SHAME on those who claim that these hard earned benefits are too generous! I cannot tell you how many times I have had to read these “analysts” and Business board “experts” claiming that these hard earned benefits are too generous for those who have been away from their families for long periods of time, whose spouses cannot find meaningful employment to save their life because no one will hire them because they might move again, being worried SICK because their loved one is deployed and who knows what shape they will be in when they come back (if they do!), when every knock in the door makes your heart leap in your throat.
    I find it very discouraging how many of these so called experts are so quick to call the benefits generous considering all these soldiers and their dependents go through. It must be easy peasy to make assumptions when yoy are in a climate controlled office, looking at numbers, when in fact many of those numbers are actual soldiers who have sacrificec a lot for you to be free.
    Tell me something: All i kerp hearing is that it is so unfair that only a small percentage of military personnel get this “lavish” (a term used by another analyst in another article) benefits/retirement package- well, I wonder why so few actually make it to that 20 yr mark?! If these benefits are so generous, then why doesn’t more of these analysts and Defense Business Board suits join the military to earn their lavish perks? And why are those who “got theirs” on the said Business Boards railing against these costs that are “out if control”?
    I’ll tell yoy my theory- first, military life is HARD, LONG, and oh right, you are signing up to possibly be seployed to a WAR ZONE. I guess sitting in that analysts’ chair is looking much better. Secondly, common sense would tell you that perhaps the reason these health care costs are higher now than in the past is because you have so many coming back from over a decade of war, with injuries and health problems. Send them off to war, but then pull tge rug out from under them when they need help, after giving so much.
    Maybe when many of these analysts bokunteer for a tour in ‘Stan away from their liced ones, work insanely long hours under less than idwal conditions, come home with physical or emotional injuries from said tour, have to move every few years and have a spouse that cannot find work, and has the pleasure if waking up at “zero dark 30″ after coming home late at night, THEN they can talk about these generous benefits!
    Btw, what many of these articles fail to mention is that the retirement pay is 50% of the BASE salary at 20 years (no housing alllowances, etc). I’m willing to bet the health and retirement perks of these analysts/business board number crunchers are more “lavish”.
    Don’t judge the whole force by a few personnel that you characterize as not as essential due to non deployments, etc. The sacrifices are REAL, and those benefits are WELL DESERVED!

    • PM

      Well said, Cassis!

  • JimBobJoe

    It is my understanding that the cost of health-care has affected the military in the same way as the rest of the country, which accounts for a huge amount in the increase in benefits. It spent $19 billion on health-care in 2001, which went up to $50.7
    billion in 2011. It is projected to reach $64 billion in 2015. Also, the cost of energy has increased immensely over the past 5 years. These 2 cost drivers are largely inelastic and have taken up a bigger piece of the budget pie at the expense of everything else. A lot of hidden inflation comes from these 2 variables, which permeate every facet of “the economy.” Not only is the defense budget paying for the militarys’ increased cost of health-care & energy, but it is paying for all the contractors increased cost in health-care & energy, as well.

    I’ve also read that America’s troops get “imminent danger pay,” which will be reduced as America pulls out of the Middle-East.

    In the long-term it looks like the energy costs will go down because the “energy revolution” going on in America, but health-care costs are anyone’s guess.

  • http://profiles.google.com/kensan1000 Ken Smith

    Plenty of ways to cut. Close our overseas bases, other countries get along fine without them, we have about twelve super carrier battle groups. In WW-ll we needed them to fight Japan. They are basically, today, just very expensive toys. We could cut our military spending in half and still be spending twice as much as Russia and China combined.

  • dan

    If they really want to save money the Government would allow the facilities to give back unused money given for a budget that’s unused without penalty, I worked at a base that had an excess many years , but was required to spend everything even if it was unneeded (have to spend it all) in order to receive their budget for the next year, There was things we bought that later in the year we gave away to be auctioned off at penny’s on the dollar.

    We should pass a law that requires that any and all “OIL” taken from OUR land Shall go to our people first until we have surpassed our usage demands before “ANY” can be exported!! We need to get out of OPEC and quit giving Money (Pay Offs) to middle eastern countries that hate us and burn our flags like Egypt, Libya, and Pakistan. We’re in financial ruins right now and we just keep borrowing money and getting further in dept., it has to stop, everyone knows that you can’t run your household like this… it’s no different. Its time for a change.